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ivil Appeal Nos.
204205 of 1975.
From the Judgment and Decree dated 9.8.
1974 of the Karnataka High Court in M.F. Appeal Nos.
582 and 584 of 197 1.
V.C. Mahajan (N.P.), Tarachand Sharma and C.V. Subba Rao for the Appellant.
K.R. Chaudhary (N.P.) for the Respondents.
The Judgment of the Court was delivered by M.M. PUNCHHI, J.
It is to establish a right of appeal in the appellate forum of the High Court that the Special Military Estates Officer, Bangalore, the common appellant in these two Civil Appeals by Special Leave, is here in this Court, challenging the common judgment and order of the High Court of Karnataka.
The facts leading to the present appeal are these.
Some lands, the extent and description of which is not material here, belonging to the first respondent in either of these two appeals, were requisitioned by the Union of India under Section 29 of the Defence of India Act, 1962 (hereafter referred to as the Defence Act) by issuing a notification to that effect on April 8, 1963.
The possession of such lands was taken by the military authorities on May 28, 1963.
The competent authority, being the Deputy Commissioner of the district, fixed Rs.280 per acre per annum as crop compensa tion.
Respondent No. 1 was not satisfied with the measure of compensation.
He sought a reference from the competent authority to an arbitrator.
The Arbitrator so appointed went into the matter and finally made an award on June 30, 8 1971, whereby he worked out rental compensation at the rate of Rs.6969.60 per acre per annum on the premises that the value of the land worked out to be Rs.1,16,160 per acre and if 6 per cent interest were to be awarded thereon the figure arrived at would be Rs.6969.60 per acre, which could well be the rental income per annum.
Obviously, the increase was sharply contrasted being Rs.280 per acre per annum as award ed by the competent authority and almost Rs.7,000 per acre per annum as awarded by,the Arbitrator.
The aggrieved Spe cial Military Estates Officer filed two appeals against the orders of the Arbitrator in the High Court of Karnataka at Bangalore, taking shelter under Section 11 of the Requisi tioning and Acquisition of Immovable Property Act, 1952 (hereafter referred to as the Requisitioning Act).
At the time of their final disposal, a preliminary objection was raised on behalf of the respondents that the appeals were not maintainable, which found favour with the High Court.
The appeals were consequently held not maintainable and accordingly dismissed.
This has led the appellant Special Military Estates Officer, to this Court.
It is not far history that the Defence Act was passed by the Parliament in the wake of the Chinese aggression, in order to provide, inter alia, special measures to ensure public safety and interest in the Defence of India and Civil Defence and other connected matters.
It had been passed when the Requisitioning Act was already in force.
Under the provisions of both the Acts, immovable property could be requisitioned.
Reference for the purpose may be had to section 3 of the Requisitioning Act and Section 29 of the Defence Act.
Under both Acts compensation on such requisi tion is determinable and payable and any person interested, being aggrieved by the amount of compensation so determined, can have an Arbitrator appointed to determine compensation.
The award of the Arbitrator on such determination under Section 8 is appealable under Section 11 of the Requisition ing Act before the High Court within whose jurisdiction the requisitioned property is situate.
The award of the Arbitra tor made under Section 30 in pursuance of the requisition made under Section 29 of the Defence Act is apparently final, though specifically not provided so, since no right of appeal against the award of the Arbitrator has been conferred thereunder on any authority.
The Defence Act ceased being applicable as it perished on January 10, 1968.
Simultaneously Section 25 in the Requisitioning Act was substituted.
The substituted Section 25 reads as follows: "25(1) Notwithstanding anything contained in this Act, any immovable property requisitioned by the Central 9 Government or by any officer or authority to whom powers in this behalf have been delegated by that Government, under the Defence of India Act, 1962, and the rules made thereun der (including any immovable property deemed to have been requisitioned under the said Act) which has not been re leased from such requisition before the th January, 1968, shall, as from that date, be deemed to have been requisi tioned by the competent authority under the provisions of this Act for the purpose for which such property was held immediately before the said date and all the provisions of this Act shall apply accordingly.
Provided that: (a) all determinations, agreements and awards for the pay ment of compensation in respect of any such property for any period of requisition before the said date and in force immediately before the said date, shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition as from the said date; (b) anything done or any action taken (including any orders, notifications or rules made or issued) by the Central Government or by any officer or authority to whom powers in this behalf have been delegated by that Government, in exercise of the powers conferred by or under Chapter VI of the Defence of India Act, 1962, shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this section was in force on the date on which such thing was done or action was taken.
(2) Save as otherwise provided in sub section (1), the provisions of the Defence of India Act, 1962, and the rules made thereunder, in so far as those provisions relate to the requisitioning of any such immovable property as is referred to in sub Section (1), shall as from the th January, 1968, cease to operate except as respect things done or omitted to be done before such cesser and Section 6 of the , shall apply upon such cesser of operation as if such cesser were ,a repeal of an enactment by a Cen tral Act.
10 The requisitioned property admittedly was not released before January 10, 1968, in terms of Section 25(1) of the Requisitioning Act, afore quoted, Since the requisition had not been released before January 10, 1968, from that day onwards it had to be treated deemingly to have been requisi tioned by the competent authority under the provisions of the Requisitioning Act for the purpose for which such property was held immediately before the said date and all the provisions of the said Act were to apply accordingly.
The objection to the maintainability of the appeals rested on proviso (a), afore quoted, on the ground that the word 'determination ' in the context meant determination only by the competent authority under the Defence Act and since such determination held the field and was in force immediately before January 10, 1968, no challenge thereto could be made by appealing against the same, on the premises that a provi sion amongst all the provisions of the Requisitioning Act provided an appellate forum challenging the same.
The objec tion was met on the argument that the word 'determination ' when considered in the context of the proviso, meant 'final determination ' and not merely determination of compensation at the level of the competent authority.
The High Court, as said before, upheld the objection, dismissing the appeals.
It is settled law that the right of appeal is a substan tive right conferred on a party by the statute.
The confer ring of right of appeal is not circumscribed by the right being available at the time of the institution of the cause in the court of the first instance.
The right of appeal in a given situation may already be available at the institution of the cause in the court of the first instance or may even be subsequently conferred.
In either situation, without any distinction, such right is conferred by statute.
Here, as would be seen, Section 25(1) substantively provides that the requisition of property under the Defence Act continuing upto January 10, 1968, is deemingly a requisition by the competent authority under the provisions of the Requisition ing Act and all the provisions of the said Act shall apply thereto accordingly.
Proviso (a) however, says that all determinations, agreements and awards for the payment of compensation in respect of any such property for any period of requisition before the said date and in force immediately before the said date, shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition as from the said date.
It is discernible from the scheme of things and from the reading of Section 25 of the Requisitioning Act as a whole that for the period of requisition before January 10, 1968, the determination for payment of compensation 11 under the Defence Act would remain untouched and unaltered for appeal had never been provided under that Act.
The reason is not far to seek, because the order of the compe tent authority under the Defence Act was for the purpose of Defence of India.
That purpose having gone with effect from January 10, 1968, the same determination for payment of compensation being applicable to the post date period was deemingly a requisition by the competent authority under the Requisitioning Act and since all the provisions of the said Act applied to such a requisition, the payment of compensa tion as from January 10, 1968, became appealable as an appeal is provided under this Act.
In that sense, the word 'determination ', so far as it related to the period of requisition prior to January 10, 1968, was a determination, final in character whether it was right or wrong as having been made under the Defence Act.
But for the period thereaf ter, the word 'determination ' in the context would mean 'final determination ' i.e. the determination of the compe tent authority if unchallenged and becoming final, and if appealed against, final determination by the appellate forum.
In this sense, the latter portion of proviso (a) cannot be allowed to eat away the applicability of all the provisions of the Requisitioning Act, inclusive that of appeal under Section 11 of the Act.
Thus a harmonious con struction of the said proviso with the whole of parent section persuades us to hold that the rate of compensation as determined by the competent authority under the Defence Act was valid uptil the period before January 10, 1968, but from that day onward the same rate of compensation per annum would keep applying till upset or altered in appeal, because deemingly from that date it is a requisition under the other Act and of a different worth and correctable in appeal.
The Arbitrator as it appears had passed both the awards on June 30, 197 1, pertaining to the period commencing from May 28, 1963, (the date on which the possession of the land requisi tioned was taken) and valid for the period following and ensuing.
Plainly the award was made covering a period not only prior to January 10, 1968 but to a period thereafter also.
As we have interpreted Section 25, the objection as raised before the High Court was valid for the period before January 10, 1968, but not beyond the period commencing thereafter.
The High Court 's view , in sustaining the objec tion for the later period as well, does not commend to us.
The Legislature by enacting Section 25 of the Requisitioning Act and on the perishing of the Defence Act, has more than impliedly made available a right of appeal regarding the rate of compensation for a property remaining under requisi tion for the post th January, 1968 period: recurring as the rate of compensation would be.
We hold it accordingly.
12 For the view above taken, we partially allow these appeals and remit these cases back to the High Court of Karnataka for disposal on merits in accordance with law.
We, however, make no order as to costs in the appeals before us.
N.V.K. Appeals allowed partly.
| IN-Abs | The Defence of India Act, 1962 was passed by Parliament in the wake of the Chinese aggression to ensure public safety and interest in the Defence of India and Civil De fence and other connected matters.
It had been passed when the was already in force.
Under the provisions of both these Acts, immovable property could be requisitioned.
Under both Acts compensation on such requisition was determinable and payable and any person interested, being aggrieved by the amount of compensation so determined, could have an Arbitrator appointed to determine the same.
The award of the Arbitrator on such determination under Section 8 was appeal able under Section 11 of the Requisitioning Act before the High Court within whose jurisdiction the requisitioned property was situated.
The award of the Arbitrator made under Section 30 in pursuance of the requisition made under Section 29 of the Defence Act was apparently final, though specifically not provided, since no right of appeal against the award of the Arbitrator had been conferred thereunder on any authority.
The Defence Act ceased being applicable as it perished on January 10, 1968.
Simultaneously Section 25 in the Requi sitioning Act was substituted.
Some lands belonging to the first respondent in either of the two appeals were requisitioned by the Union of India under Section 29 of the Defence of India Act, 1962 by issu ing a notification to that effect on 5 April 8, 1963 and possession was taken by the military authorities on May 28, 1963.
The requisitioned property was not released before January 10, 1968 in terms of Section 25(1) of the Requisitioning Act.
The Deputy Commissioner, the competent authority fixed Rs.280 per acre per annum as crop compensation.
Respondent No. 1 not being satisfied sought a reference from the compe tent authority to an arbitrator.
The arbitrator went into the matter and made an award on June 30, 1971.
The Special Military Estates Officer being aggrieved with the award filed two appeals against the orders of the Arbitrator in the High Court, taking shelter under Section 11 of the .
Since the properties that had been requisitioned had not been released before January 10, 1968, it had to be treated seemingly to have been requisitioned by the competent au thority under the provisions of the Requisitioning Act for the purpose for which such property was held immediately before the said date and all the provisions of the said Act were to apply.
Objections to the maintainability of the appeals were taken relying on proviso (a) to Section 25(1) on the ground, that the word determination ' in the context meant determina tion only by the competent authority under the Defence Act and since such determination held the field and was in force immediately before January 10, 1968, no challenge thereto could be made by appealing against the same, on the premises that a provision amongst all the provisions of the Requisi tioning Act provided an appellate forum challenging the same.
The High Court upheld the objection and dismissed the ap peals.
The Special Military Estates Officer appealed to this Court by special leave.
Partially allowing the appeals, the Court, HELD: 1.
The right of appeal is a substantive right conferred on a party by the statute.
The conferring of such right is not circumscribed by the right being available at the time of the institution of the cause in the court of the first instance.
In a given situation it may already be available at the institution of the cause in the court of first instance or 6 may even be subsequently conferred.
In either situation, without any distinction, such right is conferred by statute. [10E F] 2.
The Legislature by enacting Section 25 of the Requi sitioning Act and on the perishing of the Defence Act has more than impliedly made available a right of appeal regard ing the rate of compensation for a property remaining under requisition for the post 10th January, 1968 period, recur ring as the rate of compensation would be.
[11G H] 3.
From the scheme of things and from the reading of Section 25 of the Requisitioning Act as a whole, it is discernible that for the period of requisition before Janu ary 10, 1968, the determination for payment of compensation under the Defence Act would remain untouched and unaltered for appeal had never been provided under the Act.
The reason is not far to seek because the order of the competent au thority under the Defence Act was for the purpose of Defence of India Act.
That purpose having gone with effect from January 10, 1968, the same determination for payment of compensation being applicable to the cost date period was seemingly a requisition by the competent authority under the Requisitioning Act and since all the provisions of the said Act applied to such a requisition, the payment of compensa tion as from January 10, 1968, became appealable as an appeal is provided under this Act.
[10H; 11A B] 4.
The word 'determination ' so far as it related to the period of requisition prior to January 10, 1968, was a determination, final in character whether it was right or wrong as having been made under the Defence Act.
But for the period thereafter, the word 'determination ' in the context would mean 'final determination ' i.e. the determination of the competent authority if unchallenged and becoming final, and if appealed against, final determination by the appel late forum.
[11C D] 5.
A harmonious construction of the proviso to Section 25(1) with the whole of parent section indicates that the rate of compensation as determined by the competent authori ty under the Defence Act was valid uptil the period January 10, 1968, but from that day onward the same rate of compen sation per annum would keep applying till upset or altered in appeal, because deemingly from that date it is a requisi tion under the other Act and of a different worth and cor rectable in appeal.
[11D E] 6.
The latter portion of proviso (a) cannot therefore be allowed to eat away the applicability of all the provisions of the Requisition Act, 7 inclusive that of appeal under Section 11 of the Act.
[11 D] 7.
In the instant case, the arbitrator passed both the awards on June 30, 1971, pertaining to the period commencing from May 28, 1963, the date on which the possession of the land requisitioned was taken.
Plainly the award was made covering a period not any prior to January 10, 1968 but to a period thereafter.
Having regard to section 25 the objection as raised before the High Court was valid for the period before January 10, 1968, but not beyond the period commenc ing thereafter.
The case has therefore to be remitted back to the High Court for disposal on merits.
[11F, 12A]
|
ivil Appeal No. 5055 of 1989.
From the Judgment and Order dated 27.2.1989 of the Allahabad High Court in C.M.W.P. No. 12322 of 1984.
Satish Chandra, E.C. Agarwala, Atul Sharma, Ms. Purnima Bhatt and V.K. Pandita for the Appellants.
G.L. Sanghi, B.D. Agarwal, G. Ganesh, K.L. John and Ms. Shobha Dikshit for the Respondents.
531 The Judgment of the Court was delivered by SHARMA, J.
This case arises out of a proceeding under the Indian Stamp Act, 1899.
Special leave is granted.
A dispute between the appellants and the respondent No. 1, who are members of a family, was referred to an arbitrator, who made an award on 9.10.1973, and filed the same within a few days before the civil court for making it a rule of the court.
On objection by the present appellants, the prayer was rejected on 18.3.1976 and the order was confirmed by the High Court on 3.7.1981 in a regular first appeal.
An application for special leave was dismissed by this Court on 18.4.1983 and a prayer for review was also rejected.
It is stated on behalf of the appellants that in the meantime the respondent No.1 applied before the Collec tor for summoning the award and realising the duty and penalty.
A copy of the award was annexed to the application.
The respondent 's prayer was opposed by the appellants but was allowed by the Collector on 15.7.1983; and, on a request made to the civil court for sending the award, the civil court asked the office to do so.
The appellants moved the Chief Controlling Revenue Authority under section 56 of the Indian Stamp Act (hereinafter referred to as the Act) against the Collector 's order dated 15.7.1983.
The Authority in exercise of its revisional power set aside the impugned order of the Collector, inter alia, on the ground of lack of jurisdiction.
The respondent challenged this judgment before the High Court in a writ case which was allowed by the impugned judgment dated 27.2.1989.
The matter was remanded to the Collector to decide the case afresh in the light of the observations.
The High Court also doubted the power of the Chief Controlling Revenue Authority to entertain the appellants ' application under section 56 of the Act.
This judg ment is the subject matter of the present appeal.
Mr. Satish Chander, the learned counsel for the appellants, contended that there cannot be any doubt about the power of the Chief Controlling Authority to correct an erroneous order of the Collector.
Emphasis was laid on the language of section 56 suggesting its wide application.
The learned counsel was also right in arguing that the Authority is not only vested with jurisdiction but has the duty to quash an order passed by the Collector purporting to be under Chapters IV and V of the Act by exercising power beyond his jurisdiction.
To hold otherwise will lead to an absurd situation where a subordinate authority makes an order beyond its jurisdiction, which will have to be suf fered on account of its unassailability before a higher 532 authority.
This Court in Janardan Reddy and Others vs The State of Hyderabad and Others, ; , after refer ring to a number of decisions, observed that it is well settled that if a court acts without jurisdiction, its decision can be challenged in the same way as it would have been challenged if it had acted with jurisdiction, i.e., an appeal would lie to the court to which it would lie if its order was with jurisdiction.
We, therefore, agree with the appellants that the Chief Controlling Revenue Authority had full power to interfere with the Collector 's order, provided it was found to be erroneous.
Their difficulty, however, is that we do not find any defect in the Collector directing to take steps for the realisation of the stamp duty.
It was contended on behalf of the appellants that the respondent No. 1 had no locus standi to move the Collector for impounding the award and sub section (1) of section 33 of the Act had no application.
The learned counsel proceeded to say that in the circumstances it has to be assumed that the Collector acted suo motu under sub section (4) of the said section and since the proviso to sub section (5) directs that no action under sub section (4) shall be taken after a period of four years from the date of execution of the instrument, the Collector had no authority to pass the impugned order after about a decade.
In reply, Mr. G.L. Sanghi urged that the order for impounding the award was passed by the civil court itself on 18.3.1976, and the further orders of the Collector dated 22.7.1983 and of the civil court dated 27.8.1983 were passed merely by way of implementing the same.
The learned counsel is right in relying upon the concluding portion of the order of the civil court dated 18.3.1976 directing the impounding of the award and sending it to the Collector for necessary action.
It is true that further steps in pursuance of this judgment were not taken promptly and it was the respondent No. 1 who drew the attention to this aspect, but it cannot be legiti mately suggested that as the reminder for implementing the order came from the respondent, who was motivated by a desire to salvage the situation to his advantage, further steps could not be taken.
There is no question of limitation arising in this situation and it cannot be said that what had to be done promptly in 1976 would not be done later.
The orders of the Collector dated 15.7.1983 and 22.7.1983 must, therefore, in the circumstances, be held to have been passed as the follow up steps in pursuance of the civil court 's direction dated 18.3.1976, and no valid objection can be taken against them.
The Collector, therefore, shall have to proceed further for realisation of the escaped duty.
It was next contended that in any event the Collector did not 533 have the power to enquire into the correct valuation of the property which was the subject matter of the award.
Reliance was placed on the observations in Himalaya House Co. Ltd. Bombay vs Chief Controlling Revenue Authority, There is no merit in this point either.
The case comes from Uttar Pradesh where express provisions have been made by the insertion of section 47 A, authorising the Collector to examine the correctness of the valuation.
Lastly Mr. Satish Chandra argued that the respondent No. 1 is taking keen interest in the present proceeding in an attempt to illegally re open the question of making the award a rule of the court, which stood concluded by the impugned judgment of the High Court and the order of this Court dismissing the special leave petition therefrom and he can not be allowed to do so.
The reply of Mr. Sanghi has been that this aspect is not relevant in the present pro ceeding for realisation of the duty and need not be decided at this stage.
His stand is that an award which is not made rule of the court is not a useless piece of paper and can be of some use, say by way of defence in a suit.
He said that this question will have to be considered if and when the occasion arises.
Having regard to the limited scope of the present proceeding, we agree with Mr. Sanghi that we may not go into this aspect in the present case, but we would clari fy the position that on the strength of the present judgment it will not be open to the respondent to urge that the effect of the High Court decision dated 8.7.1981 and the orders of this Court dismissing the special leave petition therefrom and later the review application has disappeared or has got modified.
The appeal is disposed of in the above terms, but the parties are directed to bear their own costs of this Court.
G.N. Appeal disposed of.
| IN-Abs | A dispute between the appellants and respondent No. 1 was referred to an arbitrator who made an award and filed it before the civil court.
On objection by the appellants, the prayer for making the award a rule of the court was reject ed.
On appeal, the High Court confirmed the same.
This Court refused special leave and a petition for review was also dismissed.
Meanwhile, respondent No. 1 applied to the Collector for summoning the award and for realising the escaped duty and penalty.
The application was allowed.
The appellants moved the Chief Controlling Revenue Authority under Section 56 of the Indian Stamp Act, 1899 and the authority set aside the Collector 's order.
The respondents challenged the said order in a writ petition before the High Court which allowed the same and remanded the case to the Collector for deciding it afresh.
Aggrieved, the appellants filed this appeal by special leave, contending inter alia, that; (a) Respondent No. 1 had no locus standi to move the Collector for impounding the award: (b) the Collector had no authority to pass the im pugned order after a decade; and (c) the Collector did not have the power to enquire into the correct valuation of the property which was subject matter of the award.
Disposing of the appeal, this Court, HELD: 1.1 It is well settled that if a court acts with out jurisdiction, its decision can be challenged in the same way as it would have been challenged if it had acted with jurisdiction, i.e. an appeal would lie to the court to which it would lie if its order was with jurisdiction.
[532A] 530 1.2 There is no question of limitation arising and it cannot be said that what had to be done promptly in 1976 could not be done later.
The orders of the Collector dated 15.7.1983 and 22.7.1983 were passed as the follow up steps in pursuance of the civil court 's direction dated 18.3.76 and no valid objection can be taken against them.
The Col lector, therefore, shall have to proceed further for reali sation of the escaped duty.
[532G] 1.3 The Chief Controlling Revenue Authority had full power to interfere with the Collector 's order, provided it was found to be erroneous.
But this Court does not find any defect in the Collector directing taking of steps for reali sation of the stamp duty.
[532B] Janardan Reddy and Ors.
vs State of Hyderabad and Ors.
, ; , relied on.
The instant case comes from Uttar Pradesh where express provisions have been made by the insertion of Sec tion 47 A, authorising the Collector to examine the correct ness of the valuation.
Hence the Collector had the power to enquire into the valuation of the property which was the subject matter of the award.
[533A B] Himalaya House Co. Ltd., Bombay vs Chief Controlling Revenue Authority, , referred to.
It is clarified that on the strength of the present judgment it will not be open to the respondent to urge that the effect of the High Court decision dated 8.7.1981 and the order of this Court dismissing the special leave petition therefrom and later the review application have disappeared or have got modified.
[533D E]
|
vil Appeals Nos.
596 597 (NL) of 1986.
From the Judgment and Order dated 19.12.1985 of the Madras High Court in W.A. No. 1235/83 & W.A. No. 72 of 1984.
15 M.K. Ramamurthi, K.S. Jankiraman and Jitender Sharma for the Appellant.
T.S. Gopalan, P.N. Ramalingam and A.T.M. Sampath (NP) for the Respondents.
The Judgment of Court was delivered by RANGANATH MISRA, J. These are two ap.
peals by special leave at the instance of the Union representing the workmen and challenge is to the reversing decision of the Division Bench of the High Court in two writ appeals one filed by the employer Company and the other by the workmen through their union.
The State Government of Tamil Nadu by order dated 11.5.1981 made a reference under section 10(1)(d) of the Indus trial Disputes Act, 1947, (hereafter 'Act ' for short) to the Industrial Tribunal of the following disputes: "Whether the non employment of the following workers is justified; if not, to what relief are they entitled? To compute the relief, if any awarded in terms of money, if it could be so computed.
" A list of 186 workmen was appended to the reference.
The Union itself had come into existence on 1st of October, 1980.
It had written to the Company on 14.10.1980 that despite several years of service rendered by casual employ ees they were not being confirmed and were deprived of benefit and facilities applicable to permanent workmen.
Before the Tribunal the employer and the workmen filed their respective statements.
On 25.11.1981, on behalf of the workmen an amendment was sought which the Tribunal allowed.
The Company challenged the amendment by filing a writ peti tion before the High Court but the High Court was of the view that the propriety of the amendment could be assailed, if necessary, while challenging the award itself passed in due course.
The Tribunal held that 181 casual employees should be re employed with full back wages and 50 other casual employees should also be re employed but without back wages.
This direction was given on the ground that the requirement of section 25F of the Act had not been satisfied before termination which amounted to retrenchment.
16 The Company assailed the award by filing a writ petition before the High Court.
A learned Single Judge held that the relief of reinstatement with back wages should have been confined to 131 casual employees as they alone had worked for 240 days and set aside the award in respect of 50 others on the ground that they had not completed 240 days of serv ice.
Two writ appeals were filed before the Division Bench of the High Court Writ Appeal No. 1235 of 1983 by the Company challenging the affirming part of the award and Writ Appeal No. 72 of 1984 by the Union of the workmen negativing relief to fifty workmen.
The Division Bench went into the matter at great length.
It found that until the amendment had been made the workmen had a different claim from what was ultimately pressed before the Tribunal.
The Division Bench further found that there was great variation in the number of workmen for whom relief was claimed.
It took note of the fact that the Compa ny 's counter statement was filed on 1st of August, 1981, and till that date, the respective stands of the Union and the Company were clearly different.
The case of the Union until then was that there was non employment of employees on and from 13.10.1980 inasmuch as work to the casual employees was refused on that date; the Company 's case was that on 13.10.1980, 130 casual employees out of the list attached to the reference had actually worked and most of them had also worked on 14th and 15th of October, 1980.
On the 25th of November, 198 1, and amendment of the original claim state ment was sought by saying: "There were certain omissions and clerical cum typographical mistakes with regard to the narration of events and circum stances leading to the raising of dispute relating to the non employment of 186 workmen mentioned in the Annexure of the terms of reference and covered by this dispute.
" The amended statement proceeded to state: "On 15th October, 1980, the management told the workers who had worked on that day that their services were terminated and would not be permitted to work from 16th October, 1980.
A number of these workers were prevented entry at the gate on 16.10.1980.
The Union had decided to raise a dispute in respect of all these cases along with the earlier cases of non employment also.
" 17 The Division Bench found that an entirely new case was thus sought to be introduced changing the case of non em ployment on and from 13.10.1980, to non employment in the months of July, August, September and October, 1980, and a specific case of non employment on and from 16.10.1980.
After discussing at great length the oral and documentary evidence and the submissions advanced in the appeals the Division Bench summarised the position thus: "This whole litigation gives us an impression that though there may be a legitimate grievance of non confirmation of casual workers who have put in long terms of employment, the union seems to be wholly responsible for the situation in which the casual workers in dispute have found themselves in, a blatantly false case of non employment and termination of 141 persons was put up.
It was only at later stages that the union found that such a case cannot be successfully proved and indeed was false to the knowledge of the union and a case of termination on 16.10.
1980 was sought to be introduced by amending only a part of the claim statement.
As a result of this amendment, an inconsistency crept in the claim statement itself.
It is rather unfortunate that the Tribunal, by a very superficial approach, merely accepted the evidence that 131 persons were terminated when the evidence, as indicated above, not only runs counter to the initial statement, but is wholly insufficient and inadequate to prove that there was termination on the part of the company.
Merely telling a casual worker that there is no work is consistent with the status of casual workers and the compelling circumstances of the removal of the cards or a positive statement that no work would be given at all to the casual workers, is lacking in the instant case.
In our view, the award of the Tribunal is clearly vitiated because the Tribunal has not even considered the inconsistency in the stand taken by the union and the evidence has not been considered at all by the Tribunal.
We are, therefore, con strained in this case to take the view that it is not proved that the company terminated the employment of any of the employees who were casual workers, and the finding to the contra recorded by the Tribunal and confirmed by the learned Single Judge must be set aside." Thereafter the Division Bench examined the tenability of the 18 stand of the Union in its appeal and came to hold that the plea of retrenchment had not been established.
Thus, the appeal by the Company was allowed and the appeal of the workmen was dismissed.
That is how two appeals have been brought before this Court out of one and the same award.
We have heard counsel for the parties.
Written submis sions have also been filed in support of their respective stands.
We are inclined to take the view that the Division Bench has adopted too strict an approach in dealing with the matter.
It is true that the stand taken by the Union that work had not been provided on 13.10.1980 was wrong in view of the fact that a substantial number of casual workmen out of the 186 had really worked on the 13th and the two follow ing days.
The Union had mixed up its claim of confirmation with stoppage of work leading to retrenchment.
The Union obviously realised its mistake when the Company filed its counter statement making a definite assertion that bulk of the workmen had worked on 13th, 14th and 15th of October, 1980.
The Tribunal did examine the question of confirmation on the basis of days of work put in by the workmen.
It came to find that 131 persons out of the list of 186 appended to the reference had as a fact worked for 240 days.
The number of 186 was reduced to 181 on account of duplication or death.
The remaining 50, according to the Tribunal, had not completed 240 days of work and were, therefore, not entitled to confirmation.
We are of the view that in the facts and circumstances appearing on the record it was not appropriate for the Division Bench to dismiss the claim of the workmen altogether.
While it is a fact that the workmen had made tall claims which they had failed to substantiate, it was for the Tribunal and the High Court to appreciate the mate rial on the record and decide as to which part of the claim was tenable.
The finding of the Tribunal that 131 workmen had put in more than 240 days of work was arrived at on the basis of some evidence; it may be that better particulars and clear evidence should have been placed before the Tribu nal.
Quantum of evidence or appreciation thereof for record ing findings of fact would not come within the purview of High Court 's extraordinary jurisdiction under article 226 of the Constitution.
The finding of fact that workmen out of the list appended to the reference had completed 240 days or work should, therefore, not have been disturbed by the Division Bench of the High Court.
The Tribunal had given the relief on the basis that the statutory requirement of section 25F of the Act had not been complied with.
As the 19 Division Bench found, and we find no justification to take a different view, the case of termination of employment had indeed not been made out.
On that footing a direction for reinstatement with full back wages ought not to have been given.
We are, therefore, inclined to mould the relief available to the workmen.
The claim of the confirmation of 131 workmen as found by the Tribunal and upheld by the learned Single Judge of the High Court shall be restored.
Relief of back wages in the facts and circumstances would, however, not be granted except to the extent it has been covered by two interim orders of this Court dated 14.12.1986 and 5.5. 1988.
Such payments as have been made shall not be recovered.
Parties are directed to bear their respective costs through out.
Appeals allowed.
| IN-Abs | Under the , the State Government referred to the Industrial Tribunal the question whether the nonemployment of certain workmen in the appel lant Company was justified, and if not what was the relief to which they were entitled.
The employer and the workmen filed their respective statements before the Tribunal and the workmen sought an amendment which the Tribunal allowed.
The employer challenged the amendment by way of a writ petition before the High Court.
The High Court took the view that the amendment could be assailed while challenging the award itself.
The award was made and the employer assailed the same in a writ petition filed before the High Court.
The High Court confined the relief to 131 casual employees who have worked for more than 240 days and set aside the award in respect of 50 others since they did not complete 240 days of service.
Aggrieved, both the employer and the workmen filed appeals before the Division Bench.
The Division Bench found that until the amendment was made, the workmen had a different claim from what was ultimately pressed before the Tribunal, that there was great variation in the number of workmen for whom relief was claimed, and came to the conclusion that it was not proved that the employer terminated the services of any of the casual workers.
Thus, the appeal of the employer was allowed and that of the workmen dismissed.
Aggrieved, the workmen have filed these appeals by Special Leave.
14 Allowing the appeals in part, this Court, HELD: 1.
The stand taken by the Union that work had not been provided on 13.10.1980 was wrong in view of the fact that a substantial number of casual workmen out of the 186 had really worked on the 13th and the two following days.
The Union had mixed up its claim of confirmation with stop page of work leading to retrenchment.
The Union obviously realised its mistake when the Company filed its Counter statement making a difinite assertion that bulk of the workmen had worked on 13th, 14th and 15th of October, 1980.
The Tribunal did examine the question of confirmation on the basis of days of work put in by the workmen, It found that 131 persons out of the 186 worked for 240 days.
The number of 186 was reduced to 181 on account of duplication or death.
The remaining 50, according to the Tribunal, had not completed 240 days of work and were, therefore, not entitled to confirmation.
[18C D] 2.
While it is a fact that the workmen had made tall claims which they had failed to substantiate, it was for the Tribunal and the High Court to appreciate the material on record and decide as to which part of the claim was tenable.
The finding of the Tribunal that 13 1 workmen had put in more than 240 days of work was arrived at on the basis of some evidence; it may be that better particulars and clear evidence should have been placed before the Tribunal.
The Tribunal rightly gave the relief on the basis that Section 25F of the industrial Disputes Act had not been complied with.
[18E H] 3.
The claim of confirmation of 131 workmen as found by the Tribunal and upheld by the Single Judge of the High Court shall be restored.
Relief of back wages in the facts and circumstances would, however, not be granted except to the extent it has been covered by two interim orders of this Court dated 14.2.1986 and 5.5.1988.
Such payments as have been made shall not be recovered.
[19B C] 4.
Quantum of evidence of appreciation thereof for recording findings of fact would not come within the purview of High Court 's extraordinary jurisdiction under article 226 of the Constitution.
|
ION: Civil Appeal No. 4359 (NCE) of 1986.
From the Judgment and Order dated 30th Sept. 1986 of the Madhya Pradesh High Court in Election Petition No. 43 of 1985.
R.B. Mehrotra for the Appellant.
S.S. Khanduja for the Respondents.
The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J.
The appellant was one of the 11 contestants from Niwadi Legislative Assembly Constituency No. 34 of Madhya Pradesh Vidhan Sabha.
The election was held in the months of February/March 1985, the polling date of which was on 2.3.1985.
The appellant was a nominee of the Janta Party.
The first respondent was sponsored by the Congress Party.
As the first respondent had secured majority of votes i.e. by a margin of 5,000 votes over and above his next rival candidate, namely the appellant herein the first respondent was duly declared on 6.3.1985 as successfully elected.
The appellant presented an election petition in the High Court Madhya Pradesh at Jabalpur, calling in question ' the election of the first respondent alleging that the first respondent was guilty of adopting corrupt practices within the meaning of sub sections (2), (3) and (3A) of Section 123 of the Representation of People 's Act, 1951 (hereinafter referred to as the 'Act ').
It is hardly necessary to stress 583 that the pleadings were traversed and denied by the first respondent in his statement.
The High Court dismissed the election petition and hence by this appeal under Section 116A of the Act, the appellant challenges the correctness of the decision of the High Court.
Of the several issues framed upon the pleadings of the parties only issues 3, 4 and 5 are pressed before us as the main grounds in support of the appeal and the rest are given up.
Hence for the purpose of the present appeal, we have to examine and deal with these three relevant issues alone as set out by the High Court.
These issues are: "(3) Whether the nomination paper of Shri Pratap Singh, son of Mitilal, the respondent No. 11 had been improperly re jected? If so, whether the election is liable to be set aside under Section 100(1)(c) of the R.P. Act, 1951? (4) Whether the respondent No. 1 held a meeting at Niwadi on 28.2.1985 and told the electors that he would present silver shield to the electors of the polling booth recording maxi mum number of votes in his favour? If so, whether respondent No. 1 is guilty of corrupt practices under Section 123(1) of the Act? (5) Whether Shri Shital Prasad Sharma, S.D.O. (Revenue) and Shri Dubey, S.D.O. police accompanied with respondent No. 1 at various places between 9.2.1985 and 2 3 1985 and asked the electors to vote for him? Whether Shri Sharma distribut ed money in village Teharka and asked voters to vote for respondent No. 17 If so, effect.
The High court which has dealt with on the various aspects of the matter has held that the appellant has not substantiated all the charges levelled by him against the first respondent challenging the declaration of the first respondent as having been duly elected.
Normally, this Court in an appeal as the one on hand does not interfere on a finding of facts of this type unless there are prima facie good grounds to show that the High Court has gravely erred resulting in serious prejudice to the appellant.
We, therefore shall now examine whether there are any compelling reasons justifying our interference with the findings of the High Court.
This Court in a catena of decisions has laid down the principles as to the nature of pleadings in election cases, the sum and substance of which being: 584 (1) The pleadings of the election petitioner in his petition should be absolutely precise and clear containing all neces sary details and particulars as required by law vide Dharti pakar Madan Lal Agarwal vs Rajiv Gandhi, [1987] (Supp.) SCC 93 and Kona Prabhakara Rao vs M. Seshagiri Rao & Anr., (2) The allegations in the election petition should not be vague, general in nature or lack of materials or frivolous or vexatious because the Court is empowered at any stage of the proceedings to strike down or delete pleadings which are suffering from such vices as not raising any triable issue vide Manphul Singh vs Surinder Singh, [1974] 1 SCR 52; Kona Prabhakara Rao vs M. Seshagiri Rao & Anr., and Dhartipakar Madan Lal Agarwal vs Rajiv Gandhi, [1987] (Supp.) SCC 93.
(3) The evidence adduced in support of the pleadings should be of such nature leading to an irresistible conclusion or unimpeachable result that the allegations made, have been committed rendering the election void under Section 100 vide Jumuna Prasad Mukhariya & Others vs Lachhi Ram & Others, ; and Rahim Khan vs Khurshid Ahmed and Oth ers; , (5) The evidence produced before the Court in support of the pleadings must be clear, cogent, satisfactory, credible and positive and also should stand the test of strict and scru pulous scrutiny vide Ram Sharan Yadav vs Thakur Muneshwar Nath Singh and Others, ; (5) It is unsafe in an election case to accept oral evidence at its face value without looking for assurances for some surer circumstances or unimpeachable documents vide Rahim Khan vs Khurshid Ahmed & Ors., ; ; M. Narayana Rao vs G. Venkata Reddy & Others, ; ; Lakshmi Raman Acharya vs Chandan Singh & Ors., [1977] 2 SCR 412 and Ramji Prasad Singh vs Ram BilasJha and Others, ; 6.
The onus of proof of the allegations made in the election petition is undoubtedly on the person who assails an elec tion which has been concluded vide Rahim Khan vs Khurshid Ahmed and Others, ; ; Mohan Singh vs Bhanwar lal & Others; , and Ramji Prasad Singh vs Ram Bilas Jha and Others, ; 585 In the light of the above principles, we shall now examine the pleadings and the evidence adduced to establish the allegations in the election petition.
Reverting to the case, the first question that arises for consideration in relation to issue No. (3) is whether the nomination papers of the 11th respondent, Pratap Singh has been improperly rejected rendering the election of the returned candidate (first respondent) as void.
The 11th respondent (Pratap Singh) filed his nomination paper for contesting the election from this Niwadi constitu ency and delivered the same to the Returning Officer by his proposer as contemplated under Section 33(1) of the Act.
He also made a request to the Returning Officer to send some authorised person thereby enabling him to make and subscribe the oath as he was seriously iII and could not present himself either before the Returning Officer or any other authorised officer for making or subscribing the oath of affirmation as required under Article 173(a) of the Constitution of India.
The Returning Officer did not comply with the request of Pratap Singh and rejected his nomination on 7.2.85.
According to the petitioner, this rejection is improper and as such the election is liable to be set aside as per Section 100(1)(c) of the Act.
The plea of the appellant that the nomination paper has been improperly rejected, is countered by the respondent No. 1 in his written statement denying the plea of the appellant that he was seriously ill and stating that under Article 173 of the Constitution, it is only for the Election Commission to authorise some person enabling the candidate to make and subscribe the oath according to the form set out for the purpose in the Third Schedule; that the Returning Officer has no authority to send any Officer to any ailing candidate enabling him to subscribe the oath and that the respondent No. 11 neither approached the Election Commission nor made any such request to the Returning Officer.
It is seen from the additional document No. 9 that the 11th respondent sent the letter of request to the Returning Officer to appoint some authorised officer at Newadi so that he could subscribe his oath and along with that letter he had enclosed a medical certificate given by PW 2.
The cer tificate is issued by PW 2 (Block Medical Officer PHC, Newadi) certifying that respondent No. 11 was under his treatment as an OPD patient from 6.2.83 for bronchitis for which the 586 patient was advised rest atleast for three days.
In his evidence, PW 2 has stated that he could not say about the condition of the patient without reference to the certifi cate or the OPD register and he might have 'advised the 11th respondent to take rest as he usually advised the patients.
In the cross examination, he has deposed that the 11th respondent had no other ailment and that he was moving in the town.
On consideration of the oral and documentary evidence, the High Court rejected the plea of the appellant holding bronchitis is not a disease which would incapacitate a person from moving about and under those circumstances, there was no justification, whatsoever, for Pratap Singh not taking oath as required under Article 173 of the Constitu tion.
On carefully going through the material on record, we also agree with the view taken by the High Court that the 11th respondent was not suffering from any serious ailment which disabled him to take the oath before the Returning Officer.
It is not the case of the appellant that the Re turning Officer had any enmity against the 11th respondent or was favourably disposed towards the first respondent.
It is apposite to refer to the decision in Harjit Singh Mann vs section Umraon Singh and Others, ; in which this Court while dealing with the mandatory require ment of taking oath as contemplated under Article 173(a) has observed thus: "It is not in controversy that it was obliga tory under clause (a) of Article 173 of the Constitution for the appellant to make and subscribe, before a person authorised in that behalf by the Election Commission, an oath or affirmation according to the form set out for the purpose in the Third Schedule, and that he cannot be qualified to be chosen to fill a seat in the legislature of a State without doing so.
The importance of that requirement of the Constitution has been reiterated in sub:section (2) of Section 36 of the Act for ground (a) thereof provides that the Returning Officer shall reject a nomination paper on the ground that on the date fixed for the scrutiny of nominations the candidate, was inter alia, not qualified to be chosen to fill the seat in the Legislative Assembly under Article 173 of the Constitution.
The requirement for the making and subscribing the oath or affirmation was, therefore, clearly mandatory." As the 11th respondent has not taken the oath, before the person 587 authorised in that behalf by the Election Commission for no valid reason, we are in full agreement with the conclusion arrived at by the High Court that the plea of the appellant that the nomination paper of Pratap Singh has been improper ly rejected, is devoid of any merit.
The next contention is that the election of the returned candidate (first respondent) is to be declared void as the said election was tainted with corrupt practices within the mischief of Section 100(1)(b) of the Act.
What are corrupt practices are enumerated and defined in.
Section 123 of the Act.
The pleading on this aspect in the election petition reads thus: "The respondent No. 1 had organised a rally and a procession on 28.2.1985 at Niwadi.
That procession evitimately culminated into a public meeting.
Shri Ramratan Chaturvedi, Respondent No. 1 made a speech in that public meeting and told the electors that he will present a silver shield to the electors of that polling booth which would record the maximum number of votes in his favour.
Several electors from Niwadi Legislative Constituency were present in that meeting.
The respondent No. 1 thus promised a gratification to the electors to vote for him.
As the promise was given by the respondent No. 1 himself, he is guilty of corrupt practice under Section 123(1) of the R.P. Act, 1951 and his election is liable to be set aside under Section 100(1)(b) of the R.P. Act, 1951.
" The first respondent though admitted in his written statement that there was a procession, has denied of having addressed any public meeting on 28.2.85 promising any grati fication in the form of a silver shield to the electors of the polling booth where a maximum number of votes would be cast in his favour.
The appellant in support of his plead ings besides examining himself as PW 1 examined three more witnesses.
PW 14, PW 17 and PW 18.
The first respondent examined himself with another as RWs 1 and 3 respectively.
The evidence of PW 1 is chat he was informed by PW 16 that the first respondent in a public meeting at Niwadi, organised in connection with the election, promised that he would present a silver shield to the electors of the polling booth which would record a highest number of votes in his favour.
It is to be noted that the appellant who examined himself on 29.10.85 on which date itself the cross examina tion was 588 over, further examined himself on 8.4.86 i.e. after six months of the first examination and then deposed about this alleged promise.
Indisputably, this evidence is in the nature of hear say.
PW 16 claims to have attended the meet ing and 'heard the first respondent making the speech prom ising the voters that the particular booth where he would secure a highest number of votes would be awarded with a silver shield by him.
His further evidence is that those who attended the meeting, generally talked amongst themselves that those who would vote for Congress party would get that shield.
This witness in his crossexamination states that he did not ask anyone as to who would get the shield and where it would be kept and that he did not inform anyone else except the appellant.
He has further deposed the first respondent did not say that the shield would be awarded to the workers.
He admits that his brother Nathuram Ahirwar was a Janta Party leader and Member of the Legislative Assembly.
Needless to say that the appellant herein was a nominee of the Janta Party.
PW 16 nowhere in his evidence has mentioned the date of the alleged meeting.
PW 17 falls in line with PW 16 and states that he too attended the meeting in which the first respondent made the promise of gratification of awarding silver shield.
The evidence of PW 17 that the first respondent promised that the shield would be given only to the person who would procure a large number of votes in his favour is diametrically opposite to the evidence of PW 16 that the promise of presentation of shield was not for the workers who would procure more votes but only to the partic ular booth where he would secure highest number of votes.
PW17 belongs to the same caste to which PW 16 belongs.
PW 18 who was a sarpanch of Murara village has stated that the first respondent announced in the public meeting that he would award a shield to the polling stating where he would secure highest number of votes.
Admittedly, he was in the Socialist Party and that he could not say as to what was meant by silver shield nor he was told by anyone about it.
Not even a suggestion was made to the first respondent (RW 1) during the cross examination that he made such a promise in the public meeting.
PW 3, who was the Superintendent of Pre matric Harijan Hostel, Niwadi has testified to the fact that there was no rally started from harijan ashram.
He has also stoutly denied the suggestion that on 28.2.1985 there was a meeting within the precincts of Harijan Ashram in which the first respondent promised the award of silver shield.
According to him, no such meeting was ever held.
The High Court on analysis of the above oral evidence, after observing that the evidence adduced by the appellant is 'sketchy and insufficient to prove the corrupt practice ' concluded.
"that the charge of corrupt practice under Sec tion 123(1)(A) of the Act is not proved.
" 589 The learned counsel appearing on behalf of the appellant herein assails the conclusion of the High Court contending that the High Court has not approached and evaluated the evidence on PWs 1, 16 to 18 in the proper perspective and this observations that the evidence is 'sketchy and insuffi cient to prove the corrupt practices ' is unjustifiable and bereft of sound reasoning, which submissions are opposed by the counsel for the first respondent.
Before adverting to the contesting contentions of the parties, we shall examine the legal position with regard to the nature of the proceedings and the quality of evidence required in proof of allegations of corrupt practices. 'Bribery ' which is one of the corrupt practices enumer ated under Section 123 of the Act is defined in sub section (1) of that Section.
For the purpose of this case, we re produce the relevant part of that Section as the allegations contained in the election petition that the promise of gratification was a silver shield to the voters in general of a particular booth where the appellant would secure the highest number of votes in his favour: (1) 'Bribery ', that is to say (A) any gift, offer or promise by a candidate or his agent or by any other person with the consent of a candidate or his election agent of any gratification, to any person whomsoev er, with the object directly or indirectly of inducing (b) an elector to vote or refrain from voting at an election, or as a reward to (ii) an elector for having voted or refrained from voting.
The word 'gratification ' is not defined in the Act, but the Explanation to sub section (1) of Section 123 furnishes an indication as to what amounts to gratification in the view of the Parliament.
In Mohan Singh vs Bhanwarlal & Others, ; the Constitution Bench of this Court after making a reference to this Explanation observed as follows: 590 "The Explanation extends the expression 'gratification ' to include all forms of enter tainment and all forms of employment for reward but not payment of bona fide expendi ture incurred at or for the purpose of elec tion if duly entered in the account of elec tion expenses.
Gratification in its ordinary connotation means satisfaction.
In the context in which the expression is used and its delim itation by the Explanation, it must mean something valuable which is calculated to satisfy a person 's aim, object or desire, whether or not that thing is estimable in terms of money; but a mere offer to help in securing employment to a person with a named or unnamed employer would not amount to such gratification.
" In lqbal Singh vs section Gurdas Singh & Ors., ; Alagiriswa J. speaking for the Bench taking aid of Sections 161, 17 I(B) and 17 i(E) of the Indian Penal Code stated thus: "It would be noticed that the Explanation to Section 123(1) of the Representation of the People Act and the Explanation to Section 161 of the Indian Penal Code relating to gratifi cation are similar.
In addition, the Represen tation of the People Act refers to all forms of entertainment and all forms of employment for reward.
The employment for reward is covered by illustration (a) to section 161 of the Indian Penal Code.
The words "all forms of entertainment" in the Explanation to Section 123(1) of the Representation of the People Act apparently refer to offence of treating found in section 171 E of the Indian Penal Code.
When Parliament enacted the provision regarding bribery in the Representation of the People Act, it should have had before it the compara ble provision in the Penal Code.
It is to be noticed that the giving of any gratification with the object of inducing the receiver or any other person to vote is an offence while acceptance of gratification by a person either for himself or for any other person or for inducing any other person to vote is an of fence.
In other words giving is an offence if paid to the voter or such giving induces another person to vote.
It is not giving a gratification in order that he may induce another person to vote that is an offence whereas receipt of a gratification in order to induce another person to vote is an offence.
" 591 According to Section 123(1)(A)(b)(ii) of the Act, any gift, offer or promise by a candidate or his agent or by any other person with the consent of a candidate or his election agent of any gratification, to any person whomsoever, with the object, directly or indirectly of inducing an elector to vote or refrain from voting at an election is a corrupt practice.
See Harjit Singh Mann vs
section Umrao Singh and Others, ; It is an accepted principle that an election petition where corrupt practices are imputed must be regarded as proceedings of a quasi criminal nature wherein strict proof is necessary.
Since, a charge of corrupt practices, the consequence of which is not only to render the election of the returned candidate void, but in some cases to impose him a disqualification must be proved on appraisal of the evi dence adduced by both the parties particularly by the elec tion petitioner who assails the election of a returned candidate.
This principle has been reiterated and approved in a series of decisions.
See Manphul Singh vs Surinder Singh, [1974] 1 SCR 52; Rahim Khan vs Khurshid Ahmed, ; ; M. Narayana Rao vs G. Venkata Reddy & Others, ; ; Ram Sharan Yadav vs Thankur Muneshwar Nath Singh & Others, ; ; Ramji Prasad Singh vs Ram Bilas Jha & Others, ; and Lalroukung vs Haokholal Thangjom & Anr., ELR Vol As pointed out in M. Narayana Rao vs G. Venkata Reddy, ; ; this Court ordinarily and generally does not, as it ought not to, interfere with the findings of fact recorded by the High Court unless there are compelling reasons for the same, especially findings recorded on appre ciation of oral evidence.
Bearing in mind the above proposi tion of law, we shall scrutinise the evidence available on record and find out whether the conclusions arrived at by the High Court suffers from any infirmity warranting inter ference of the said conclusions.
As we have pointed out in the earlier paragraph of the judgment, PW 1 (appellant) only after a period of 6 months of his first examination in the Court came forward with this allegation that the first respondent made a promise of gratification.
Indisputably his evidence is in the nature of hear say.
PW 16 whose brother was a Janata Party leader and an M.L.A. does not mention even the date of the meeting in which the first respondent is said to have made the promise.
The evidence of PW 16 and PW 17 is inconsistent and contra dictory as we have pointed out supra.
There is no consistent evidence as to the 592 nature of the statement said to have been made by the first respondent.
Whilst PW 16 and PW 18 state that the first respondent promised the award of the silver shield to the particular polling booth where he would secure the highest number of votes, PW 17 states that the promise was only to the person who would procure a large number of votes.
There fore, in view of this inconsistent, unsatisfactory and vague evidence, no conclusion could be arrived at that the first respondent made the promise to any particular person or persons who would secure the highest number of votes in his favour.
There is absolutely no evidence that the first respondent made any promise of gratification to any elector or electors who would vote in his favour.
Similarly there is no evidence that voters were influenced by the alleged promise of gratification or the first respondent obtained any promise from the voters in return as a condition for the shield alleged to have been presented.
Thus the element of 'bargaining ' is completely absent in the present case.
Needless to say that it is necessary for the purpose of proving the corrupt practice of bribery to establish that there was an element of 'bargaining '.
See Harjit Singh Mann vs section Umrao Singh and Others, ; In this connection, reference can be made to a decision of this Court in lqbal Singh vs Gurdas Singh & Ors., ; In that case the election of the returned candidate was challenged by the appellant therein on various grounds, one of which being that the returned candidate or his agent held out an inducement to get gun licences issued for people who would vote for the returned candidate.
The Court rejected the plea on the ground that there was no evidence regarding bargaining of votes by promise of gun licences and there was no evidence of obtaining promise of votes from the voters in return.
For the reasons above mentioned, we come to the conclu sion that the appellant has not discharged the onus of proof cast upon him by adducing cogent, reliable and satisfactory evidence, but on the other hand he has miserably failed to establish the charge of corruption.
Now, we shall pass on to the last contention.
The charge under issue No. (5) is that Shri Shital Prasad Sharma, Sub Divisional Officer (Revenue) and Shri Dubey, Sub Divisional Officer, (Police), accompanied the first respondent to various places between 9.2.1985 and 2.3.
1985 and requested the electors to vote in favour of the first respondent and that Shri Sharma distributed money in the village Teharka and asked the voters to vote in favour of the first respondent.
593 It is found from the judgment of the High Court that this issue was earlier declared vague and it was thereafter the first part of the issue which was re cast as per the particulars substituted in the amended pleadings in para graph 6(a) of the election petition.
These allegations relate to the charge of obtaining or procuring the assist ance of the Government servants in service for the further ance of the prospects of the election of the first respond ent failing within the mischief of Section 123(7) of the Act.
These allegations are stoutly opposed by the first respondent inter alia contending that "these pleadings are in violation of the provisions contained in Section 83(b) of the Act as no details of the date and place of commission of each such practice have been mentioned and in absence there of, it is not possible for this respondent to effectively rebute such vague allegations", and the allegations that Shri Sharma distributed money to the voters are also too vague to be rebutted properly as the names of the voters to whom money is said to have been paid and also lack of par ticulars with regard to the date, time and the amount of money allegedly distributed.
In support of the above allegations, the appellant examined himself and six other witnesses of PWs 1, 11, 12, 14, 15, 16 and 18.
Barring this oral evidence, there is absolutely no contemporaneous documentary evidence.
Though the appellant filed the application in August 1985 under Section 86(5) of the Act praying for amendment of his elec tion petition, he has not testified to the amended pleadings in his examination held on 9.10.1985, but tendered evidence only on 8.4.1986 that is after six months of his earlier examination.
He has deposed that on 24.2.85 he saw the first respondent and Dubey, SDO (Police) going together in a jeep towards Orchha and that PW 11, Nathu Ram Naik told him that Dubey had asked him to vote in favour of the first respond ent.
He continued his evidence stating that he saw Dubey walking along with the first respondent in a rally organised by the Congress party and headed by the first respondent, that PWs 12 and 13 informed him on 28.2.1985 at Niwadi that when these two witnesses refused to vote for the first respondent at his request, the first respondent asked Dubey to persuade them to vote for him, that thereupon Dubey asked PWs 12 and 13 to vote for the first respondent lest they would not be permitted to sit in a temple presumably in the village.
He further deposed that on 24.2.1985 when he visit ed Prithvipur, he saw rally headed by the first respondent accompanied by Dubey and Sharma.
Later on, Shri Chaturbhuj Naik informed that both Dubey and Sharma took the resigna tions of Naik and others from Janata Party.
According to PW 11, the SDO (police) by name Dvivedi 594 asked him as well PWs 14 and 15 to work for the first re spondent and also threatened them that they would be falsely implicated in criminal cases if they failed to do so and that in consequence of it he and PW 15 resigned from the Janata Party and joined Congress party though they subse quently worked for the Janata Party candidate.
When this witness was confronted whether he had any documentary evi dence in support of his version, he stated that his joining the Congress Party appeared in the local newspaper but he was not having a copy of the same.
The evidence of PW 14 is that the SDO (police), Chaturvedi and SDO (Civil) whose name he does not know, were leading the rally and those two were sitting on the dias of a public meeting organised by the Congress Party and that both them threatened him and PW 11 to work for the first respondent.
PW 15 also speaks to the fact that SDO (Police), Chaturvedi called him as well PW 11 and some others and threatened all of them to resign from the Janata Party and work for the Congress and that when they refused to do so, they were all threatened by these two government officials, stating that they would be falsely implicated in criminal cases and that they out of fear resigned from the Janata Party and worked for the Congress Party.
Be it noted, whilst the name of the SDO (police) is mentioned by PW 1 as 'Dubey ' as mentioned in the amended pleading as well in issue No. (5), PWs 14 and 15 mention the name of the said Police Officer as 'Chaturvedi '.
PW 11 gives the name of the Officer as 'Dvivedi '.
The police officer, RW 6 swears his name as 'Dvivedi '.
Therefore, it follows that the insertion of the name as 'Dubey ' in the amended pleading is incorrect.
Thus, we find material and irreconcilable contradictions not only amongst the evidence of PWs but also between the pleading and the evidence even in respect of the name of the SDO (police) which create a legitimate suspicion as to whether Dubey was in any way concerned with the elec tion.
PW 12 does not mention the name of the police officer who threatened him to vote for the Congress as well the date of the meeting.
It is evidence of PW 16 that Sharma, SDO (Civil) asked all those persons attending the meeting in favour of the first respondent so that they could get the silver shield.
PW 18 who admits to have been a member of the Socialist Party has given the evidence falling in line with that of PW 16.
On consideration of the evidence of the above witnesses, the High Court has held "In view of this statement of the election petitioner, it must be held that there is no one like Shri Dubey, SDO (police) and, therefore, there would be no question of respondent No. 1 procuring assistance of Shri Dubey.
The distinction between Shri 595 Dubey and Shri Dvivedi is rather well known and even the election petitioner is aware of it.
Under the circumstances, there is no justification why proper plea in that behalf was not taken".
If we have to accept the evidence of PW 1 that the SDO (police) Dubey assisted the first respondent, then the evidence of the other witnesses giving a different name either as 'Chaturvedi ' or 'Dvivedi ' has to be rejected.
On the contrary, if the evidence of the other witnesses is to be accepted then their evidence does not support the issue No. (5) that one Dubey assisted the first respondent in his election.
The learned counsel appearing for the appellant pleaded that no importance should be attached to the varia tion regarding the name of the SDO (police) as the fact remains that SDO (police) had assisted the first respondent and procured votes in his favour.
We are unable to see any force in this submission.
Next coming to the allegations made against Sharma, SDO (Civil), PW 1 does not allege anything against him and as such on the basis of the evi dence of PW 1, it cannot be said by any stretch of imagina tion that Sharma had assisted and procured votes in favour of the first respondent within the mischief of Section 123(7) of the Act.
The evidence of the other witnesses relating to the alleged participation of Sharma in the election does not inspire confidence.
No acceptable evidence is available that Sharma distributed money.
In opposition to the evidence, let in on the side of the appellant, RW 6 (SDO police by name Dvivedi) has deposed that he was assigned duty at Dabra on 24.2.1985 in connec tion with the visit of the Prime Minister and that he was not in the Headquarters on that date and the distance be tween Niwadi and Dabra is about 80 kms.
RW 4(SDO (Civil) Sharma) has denied all the allegations made against him by the appellant.
Much argument was advanced on the basis of Exh.
P 6, a photograph showing that in a meeting addressed by Chaturvedi this witness was also present, but RW 4 ex plains that it was not a meeting of the Congress Party but was a public meeting held to facilitate first respondent on his return from foreign trip.
RW 1 in his evidence totally denied all the allegations covered by issue No. (5).
On a scrupulous examination of the evidence of the witnesses examined on the side of the appellant, we arrive at an irresistible conclusion that the appellant has misera bly failed to establish the allegations of corrupt practices within the mischief of Section 123(7) of the Act relating to issue No. (5).
Even assuming that RWs 4 and 6 had accompa nied the rally, as pointed out by the High Court, no ines capable inference can be drawn that these two officials were assisting the first respondent in procuring votes and proba bly they might have ac 596 companied the rally for maintaining the law and order.
Further, when the learned Judge of the High Court, who has very carefully marshalled the evidence, has not found it possible to candidly accept the evidence of these witnesses for the reasons assigned in the judgment, we find no reason to take a contrary view.
Moreover, we too after a close scrutiny of the evidence and the pleadings especially relat ing to issue No. (5), are in agreement with the views of the High Court and are fully satisfied that the appellant has miserably failed in substantiating his charges covered by issue No. 3 to 5 which are alone pressed before us as indi cated in the earlier part of this judgment and the judgment under appeal does not suffer from any legal infirmity re sulting in serious prejudice to the appellant.
In the result, the judgment of the High Court is upheld and the appeal is dismissed with costs.
Y. Lal Appeal dis missed.
| IN-Abs | Elections to the Madhya Pradesh Vidhan Sabha were held in the months of February/March 1985.
The appellant and Respondent No. 1 were the contesting candidates from Niwadi Legislative Assembly constituency No. 34.
Respondent No. 1 having secured majority of votes, was declared elected on 6.3.1985 to the Madhya Pradesh Vidhan Sabha.
The appellant challenged the election of the respondent No. 1 in the High Court of Madhya Pradesh Jabalpur alleging that the first respondent was guilty of adopting corrupt practices within the meaning of sub sections (2), (3) and (3A) of Section 123 of the Representation of Peoples Act, 1951.
Respondent No. 1 denied the allegations made in the election petition.
The High Court dismissed the Election Petition holding that the appellant had not substantiated all the charges levered by him against respondent No. 1.
Hence this appeal by the appellant.
Before this Court the appellant pressed only issues 3, 4 and 5 and gave up the rest.
Dismissing the appeal, this Court, HELD: An election petition where corrupt practices are imputed must be regarding as proceedings of a quasi criminal nature wherein strict proof is necessary.
Since, a charge of corrupt practice, the consequence of which is not only to render the election of the returned candidate void, but in some cases to impose on him a disqualification it must be proved on appraisal of the evidence adduced by both the parties particularly by the election petitioner who assails the election of a returned candidate.
[591B C] The element of bargaining is completely absent in the present case.
Needless to say that it is necessary for the purpose of proving the corrupt practice of bribery to estab lish that there was an element of bargaining.
[592C] 582 Dhartipakar Madan Lal Agarwal vs Rajiv Gandhi, [1987] Supp.
SCC 93; Kona Prabhakara Rao vs M. Seshagiri Rao & Anr., ; Manphul Singh vs Surinder Singh, [1974] 1 SCR 52; Jamuna Prasad Mukheriya & Ors.
vs Lachi Ram & Ors., ; ; Rahim Khan vs Khurshid Ahmed & Ors., ; ; Ram Sharan Yadav vs Thakur Muneshwar Nath Singh & Ors., ; ; Rahim Khan vs Khurshid Ahmed & Ors.; , ; Lakshmi Raman Acharya vs Chandan Singh & Ors., [1977] 2 SCR 412 and Ramji Prasad Singh vs Ram Bilas Jha & Ors., ; ; Mohan Singh vs Bhanwar Lal & Ors., ; ; Harjit Singh Mann vs section Umraon Singh & Ors., ; ; lqbal Singh vs section Gurdas Singh & Ors., ; ; Lalroukung vs Haokholal Thangam & Anr., ELR Vol , referred to.
|
Civil Appeal No. 90 of 1950.
Appeal against the Judgment and Decree dated the 22nd July 1948 of the High Court of Judicature at Calcutta (K. C. Mitter, and K.C. Chunder J J) in appeal from Original Decree No. 49 of 1942 arising 74 574 out of Decree dated the 8th September 1941 of the Subordi nate Judge at Asansole in Suit No. 1 of 1941.
Purusottam Chatterji (section N. Mukherjee, with him) for the appellants.
Panchanan Ghose, (P. C. Chatterjee, with him) for the respondent.
May 4. 'the following judgments were delivered : DAS J.
This appeal arises out of a suit filed by the appellants on January 2, 1941, in the Court of the Subordi nate Judge, Asansole.
That suit came to be filed in circum stances which may now be stated shortly.
A suit had been instituted by one Kumar Dakhineswar Malia against Rameswar Malia, Rani Bhaba Sundari and others for partition of the Searsole Raj Estate.
One Bhagabati Charan Mitra was appointed receiver of that estate in that suit.
On August 10, 1908, the said receiver with the permis sion of the Court which had appointed him as receiver grant ed two mining leases, each for 999 years one in respect of 5/16 share of the Malias in Mouza Monohar Bahal and the other in respect of 230 bighas in village Marich Kota to a firm then carrying on business under the name and style of Laik Banerjee & Company.
On the same day the said receiver with like permission mortgaged these properties to the said firm as security for the due repayment of the loan of Rs. 100,000 advanced by that firm.
The Malias joined the re ceiver in executing the aforesaid leases and the mortgage.
As a result of these transactions the firm of Laik Banerjee & Company became the lessees for 999 years of the two properties as well as the mortgagee of the lessors ' interest in the same.
By diverse processes not necessary to be detailed, the appellants have become the successors in interest of the mortgagors and the respondent Deva Prasanna Mukerjee has become the successor in interest of the mortga gee under the mortgage of August 10, 1908.
575 On March 31, 1922, Deva Prasanna filed suit No. 78 of 1922 for enforcing the mortgage of 1908.
Preliminary decree was passed in the last mentioned suit on ' July 31, 1928, and a final decree for sale was made I on February 26, 1929.
In execution of this final decree the mortgaged properties were sold at a Court i sale and were purchased by Deva Prasanna for ' Rs. 59,000.
This sale was confirmed by the Court on June 30, 1931.
A large sum remaining still due to Deva Prasanna, he applied for, and on October 30, 1935, obtained a personal decree for Rs. 1,27,179 0 6 against Raja Pramatha Nath Malia who had by inheritance acquired the lessors ' interest and become the borrower.
In 1936, Deva Prasanna started execution case No. 118 of 1936 for execution of the personal decree and attached certain properties alleging that the same belonged to the Raja.
The exact date of the attachment does not appear from the printed record.
The Raja as Sibait of a certain deity and his two sons, the appellants before us, objected to the attachment of these properties and filed a claim case.
Negotiations for settlement started and eventually, on January 30, 1937, a petition (exhibit 2) was filed in the exe cuting Court stating as follows : "The judgment debtor having made special requests to the decree holder for an amicable settlement of the aforesaid execution case, the decree holder has agreed to the same.
But some time is required to settle the talks and all the terms etc.
The judgment debtor has paid to the decree holder the costs of this execution amounting to Rs. 76 14 0, and he having made requests for this execution case being struck off for the present on keeping the attachment in force, the decreeholder has agreed to it.
It is, therefore, prayed that under the circumstances aforesaid, the Court may be pleased to strike off this execution case keeping the attachment in force." Neither the original nor a certified copy of the order made on that date by the executing Court on the 576 above petition is forthcoming but the parties have definite ly agreed that the order is substantially and correctly entered in column 20 of exhibit F which is a certified copy of extract from the Register of applications for executions of decrees relating to execution Case No. 118 of 1936.
The heading of column 20 is 'Date on which execution case was finally disposed of and purport of final order.
" The entry in column 20 under that head is: "D. H. admits receipt of Rs. 76 14/ as costs of this case from the J.D.
The execution case is dismissed for non prosecution the attachment already effected in this case continuing.
30th January 1937.
" The entry under column 11 of that very exhibit reads as follows : "Claim case automatically drops as the execution case is dismissed.
It is, therefore, rejected without any sort of adjudication.
30th January 1937.
" In May 1937, the Searsole Raj Estate came under the charge of the Court of Wards.
By a Kobala executed with the permission of the Board of Revenue Raja Pramatha Nath Malia and his two sons Kumars Pashupati Nath Malia and Kshitipati Nath Malia represented by Kumar Kshitipati Nath Malia as the Manager of the Searsole Raj Wards Estate conveyed a property known as Senapati Mahal to Deva Prasanna in full settlement of his claim under the personal decree against the Raja.
By an agreement of even date, Deva Prasanna agreed to reconvey Senapati Mahal to the Kumars if he was paid Rs. 90,000/ within two years from that date.
Senapati Mahal orginally belonged to the Raja but had been tranSferred by him to his two sons.
A creditor, however, had filed a suit under sec tion 53 of the Transfer of Property Act challenging that transfer and had actually got a decree declaring that trans fer as fradulent and void as against the creditors of the Raja 577 An appeal was filed by the Kumars which was pending at the date of the Kobala of January 4, 1939, and, in the circum stances, it was considered safer to join the Raja in the last mentioned Kobala in favour of Deva Prasanna.
On June 2, 1939, a petition was filed in the Court of the Subordinate Judge, Asansole, on behalf of Deva Prasanna as the decree holder.
It was headed "Money Execution Case No. 118 of 1936.
The relevant portions of this petition were as follows; "That the above execution case was disposed of on the 30th January 1937 with the attachment of the properties subsisting; since then the decree put into execution in the above case has been adjusted after remission of a large amount of interest by the out and out sale of certain properties by a registered Kobala dated 4th January 1939 . . . . . . . . .So there is no longer any need of the said attachment remaining subsisting.
It is, therefore, prayed that the attachment may be withdrawn.
" On the same day the following order was made on that petition: " Heard learned pleaders for the parties.
They jointly ask me to cancel the attachment (existing by special order) in Money exhibit 118 of 1936 though that case was dismissed.
Order The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned plead er for the decree holder and pleader of the judgment debtor according to the adjustment mentioned but not detailed in this petition of to day.
Make necessary notes and send this petition to the District Record Room.
" In the remarks column No. 22 in exhibit F the following entry was made : "The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned 578 pleader for the D.H. and the pleader of the Judgment Debtor according to the adjustment mentioned but not detailed in this petition of to day.
Dated 2nd June 1989.
" The Raja died in August, 1940, leaving the two appellants as his sons and legal representatives.
The Bengal Money Lend ers Act, 1940 (Bengal Act X of 1940) hereinafter called the Act, came into force on September 1, 1940.
On January 2, 1941, the appellants who, as the legal representatives of the Raja, became "borrowers" within the meaning of the Act filed the suit out of which the present appeal has arisen.
The suit was filed by the appellants against the respondent under section 36 of the Act praying for reopening the trans actions and taking accounts and for release from all liabil ities in excess of the limits specified by law.
In short, they asked the Court to give them relief by exercising the powers given to the Court by section 36 of the Act.
There was also a prayer for reconveyance of the Senapati Mahal.
The respondent filed his written statement setting up a variety of defences rounded on merits as well as on legal pleas in bar.
On May 8, 1941, the Subordinate Judge settled the issues and fixed June 9, 1941, "for a preliminary hear ing of the suit and particularly of such of the issues as have been based on the pleas in bar." Eventually, the case was taken up for preliminary hearing on September 4, 1941, and by his judgment delivered on September 8, 1941, the learned Subordinate Judge dismissed the suit on issue No. 2 which was as follows: "Does the plaint disclose a valid cause of action for the suit ?" The appellants preferred an appeal to the High Court at Calcutta.
Although the High Court (R.C. Mitter and K.C. Chunder JJ.) did not accept all the reasonings on which the learned Subordinate Judge had based his decision, they, however, agreed that the appellants could get no relief as the decrees in suit No. 78 of 1922 could not be reopened, as they were not passed in 579 "a suit to which this Act applies" and consequently dis missed the appeal.
The appellants have now come up on appeal before us after having obtained a certificate from the High Court under section 110 of the Code of Civil Procedure.
Learned Advocate appearing in support of this appeal before us has contended that the High Court was in error in holding that the decrees in Suit No. 78 of 1922 were not liable to be reopened under the second proviso to section 36 (1).
Learned advocate for the respondent while joining issue on this point also raised a point which, however, did not find favour with the High Court, namely, that the respondent as a bona fide assignee for value of the mortgage debt was protected by sub section (5) of section 36.
It is quite clear that if either of the two points is decided against the appellants, this appeal must fail.
The main provisions of section 36 (1)are in the follow ing terms : "Notwithstanding anything contained in any law for the time being in force, if in any suit to which this Act ap plies, or in any suit brought by a borrower for relief under this section, whether heard ex parte or otherwise, the Court has reason to believe that the exercise of one or more of the powers under this section will give relief to the bor rower, it shall exercise all or any of the following powers as it may consider appropriate namely, shall (a) reopen any transaction and take an account between the parties; (b) notwithstanding any agreement, purporting to close previous dealings and to create new obligations, reopen any account already taken between the parties; (c) release the borrower of all liability in excess of the limits specified in clauses (t) and (2) of section 30; (d) if anything has been paid or allowed in account on or after the first day of January, 1939, in respect of the liability referred to in clause (c), order 580 the lender to repay any sum which the Court considers to be repayable in respect of such payment or allowance in account as aforesaid; (e) set aside either wholly or in part or revise or alter any security given or agreement made in respect of any loan, and if the lender has parted with the security, order him to indemnify the borrower in such manner and to such extent as it may deem just.
" It will be noticed (a) that the provisions of this section apply notwithstanding anything contained in any law for the time being in force, (b) that the powers conferred on the Court or to be exercised either in any suit to which this Act applies or in any suit brought by a borrower for relief under the section and (c) that the Court is called upon to exercise all or any of the powers conferred on it by the section if the Court has reason to believe that the exercise of one or more of the powers will give relief to the borrower.
In the present case the borrowers have insti tuted a substantive suit for relief under section 36 and, therefore, if there was nothing also in the section and the Court had the requisite belief, the Court could exercise all or any of the powers and give relief to the borrowers in terms of the prayers of the plaint.
There are, however, two provisions to sub section (1) of section 36.
The relevant portion of the second proviso is expressed in the words following: "Provided that in exercise of these powers the Court shall not (i) * * * * (ii) do anything which affects any decree of a Court, other than a decree in a suit to which the Act applies which was not fully satisfied by the first day of January, 1939, or * * * *" The proviso makes it quite clear that in exercise of the powers the Court cannot reopen or otherwise affect a decree of a Court unless such decree is one which was passed in a suit to which this Act applies and ' which was not fully satisfied by January 1, 1939.
In the light of the decision of the Full Bench of the 581 Calcutta High Court in Mrityunjay Mitra vs Satis Chandra Banerji(1) which was approved by the Privy Council in Jadu Nath Roy vs Kshitish Chandra Acharyya(2), it has not been contended, in view of the fact that the personal decree for the balance remained unsatisfied on January 1, 1939, that the decrees in Suit No. 78 of 1922 were fully satisfied within the meaning of the above proviso.
Therefore, the only thing that remains to be ascertained is whether the decrees were passed in "a suit to which this Act applies.
" Section 2 (22) of the Act is as follows: "2.
In this Act, unless there is anything repugnant in the subject or context" (22) "Suit to which this Act applies "means any suit or proceeding instituted or filed on or after the 1st day of January, 1939, or pending on that date and includes a pro ceeding in execution (a) for the recovery of a loan advanced before or after the commencement of this Act; (b) for the enforcement of any agreement entered into before or after the commencement of this Act, whether by way of settlement of account or otherwise, or of any security so taken, in respect of any loan advanced whether before or after the commencement of this Act; or (c) for the redemption of any security given before or after the commencement of this Act in respect of any loan advanced whether before or after the commencement of this Act.
" The words "instituted or filed on or after the 1st day of January, 1939, or pending on that date" have been read and understood as qualifying the words "any suit or proceed ing" in the beginning of the definition as well as the words "proceeding in execution" occurring further down: see per Spens C.J. in Bank of ' Commerce Ltd. vs Amulya Krishna (3).
Accordingly, it has (1) I.L.R. 11944) 2Cal. 376; (2) L.R. 76 I.A. 179 at p. 190.
(3) ;A.I.R. 1944 F.C. 18.
582 been held in Ram Kumar De vs Abhoya Pada Bhattacharjee (1) that where a decree is such that the suit in which it was passed had terminated before January 1, 1939, and no pro ceeding in execution was started or was actually pending on or after that date it is not a decree in "a suit to which this Act applies"and cannot be reopened.
The same view was upheld by a Special Bench of the Calcutta High Court in Aparna Kumari vs Girish Chandra (2)which overruled two earlier decisions to the contrary.
The construction put upon section 2 (22)by the Special Bench and the reasons given by them appear to us to be well founded.
In the case now before us, the Suit No. 78 of 1922 was instituted and all the three decrees were passed long before the specified date.
The only question that has therefore, to be consid ered is whether any proceeding in execution was pending on or after that date.
The answer to this question will depend on the true meaning and effect of the orders made by the executing Court (i) on January 30, 1937, and (ii) on June 2, 1939.
As to (i) It is not disputed that the order of January 30, 1937, was made under Order XXI, rule57, as amended by the Calcutta High Court.
Order XXI, rule 57, is expressed in the following terms : "Where any property has been attached in execution of a decree but by reason of the decree holder 's default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date.
Upon the dismissal of such application the attachment shall cease.
" The marginal note of the rule is determination of at tachment.
The reason why rule 57 was introduced in the Code of 1908 has been explained by Rank in C.J. in Shibnath Singh Ray vs Sheikh Saberuddin Ahmad(3) as follows: (1) ; (2) (3) I.L.R. at pp.
421 422 583 "Rule 57 of Order XXI was a new provision introduced in 1908.
It is evident from the language of the rule itself, and it is still more evident from the circumstances under which it was passed, that it was intended to provide a remedy for the grievance or inconvenience which is apt to arise, where, after an attachment in execution, the applica tion for execution cannot further be proceeded with by reason of the decree holder 's default.
This was, and still is, a very common case.
The decree holder makes some informal arrangement to give the judgment debtor time with out obtaining full satisfaction of the decree ;the applica tion for execution is not further prosecuted; it is not withdrawn; neither party attends.
In these circumstances, the object of the rule is to say that the Court must make either an order for adjournment or an order of dismissal.
The reason why it was necessary to require the Court, if it did not adjourn a proceeding to a definite date, to dismiss the application for execution formally and definitely can be amply illustrated from the decided cases.
In the absence of a definite order of dismissal the files of the Courts became encumbered with a number of applications for execution which were water logged and derelict, and a practice arose whereby such applications were ordered to be 'struck off. ' This was a practice not justified by the Code and in cases where attachments in execution had already been entered, the question arose whether the effect of an order 'striking off ' was that the attachment made upon application for execution was itself struck off or whether it remained notwithstanding such an order.
Many other awkward and important questions arose out of this practice and the object of rule 57 was to ensure that this illogical and inconvenient practice should be stopped.
Applications for execution were to be definitely dismissed if they were not adjourned to a future date.
The object of the last sentence in rule 57 is to settle the question whether, when the application in execution is dismissed any attachment made under that application should fall to the ground or should subsist, and 584 the legislature has provided that it is to fall to the ground.
" The new rule thus ' introduced left two distinct courses open to the executing Court in the situation envisaged by the rule.
Each course had its advantage as well as its disadvantage.
Thus the adjournment of the execution pro ceedings kept the attachment alive without any special direction.
While the adoption of this course helped bona fide arrangement between the decree holder and the judgment debtor as to the time and manner of satisfaction of the decree it was calculated also to encourage desultory proceedings resulting in undesirable congestion in the files of the Executing Court by keeping alive so many execution proceedings.
On the other hand, while the dismissal of an application in the circumstances mentioned in the rule had the merit of preventing a congestion of the file by finally disposing of the application by a final order, it was calcu lated to discourage decreeholders from giving even reasona ble accommodation to the judgment debtor on account of the destruction of the attachment which left the judgment debtor free to deal with the property to the detriment of the decreeholder after the attachment ceased.
It was evidently with a view to preserve the advantage of a dismissal and at the same time to avoid the disadvantage of the rigid rule of cesser of the attachment that the Calcutta High Court amend ed rule 57 by adding the words "unless the Court shall make an order to the contrary" at the end of the last sentence of that rule.
The rule thus amended leaves three courses open to the Executing Court in case it finds it difficult to proceed with the execution case by reason of the default of the decree holder.
It may (1) adjourn the proceedings for good reason which will automatically keep the attachment alive or (2) simply dismiss the application which will automatically destroy the attachment or (3) dismiss the application but specifically keep alive the attachment by an express order.
The rule, as amended, therefore, contemplates three distinct forms of order, any one of which may be made by the Court in the 585 circumstances mentioned in the rule.
The question before us is as to the category in which the order made on January 30, 1937, in Execution Case No. 118 of 1936 falls.
It will be recalled that the order of January 30, 1937, was made on a petition (Exhibit 2) filed on that day in Execution Case No. 118 of 1936.
Great stress was laid by the learned advocate for the appellants on the words "struck off for the present" occurring in the body of that petition.
It will be noticed that those words formed part of the request of the judgmentdebtor which was being recited in the petition.
In the actual prayer portion the decree holder did not use the words "for the present" but only asked the Court "to strike off the execution case keeping the attachment in force.
" Further, apart from what the parties wanted, the Court made its intention clear in the very order that it passed and which is entered in column 20 of Exhibit F.
The Court regarded the willingness of the the decree holder to enter into a long and protracted negotiation with the judg ment debtor as evidence of unwillingness on the part of the decree holder to diligently prosecute the execution proceedings and accordingly dismissed the execution case for non prosecution but thought fit to expressly keep alive the attachment.
It is quite obvious that the Court made an order of the third kind mentioned above.
The three forms of order permissible under rule 57 as amended by the High Court are quite distinct and independent of each other and there is no room for their overlapping.
If the mere continuation of attachment will automatically convert an express order of dismissal of the execution application which is a final order into an order of adjournment which is not a final order then there was no point in the High Court taking the trouble of amending rule 57 at all.
The Court could by simply adjourning the proceedings automatically continue the attachment without any express direction in that behalf.
The fact that the Court gave an express direction that the attachment should continue clearly indicates that the 586 Court intended to make a final order of dismissal.
Again, the heading of column 20 in Exhibit F clearly indicates that only a final order is to be entered in that column.
The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal.
That the claim case was automatically dropped is yet another indication that the execution case was at an end.
The fact that the judgment debtor had paid the full costs of the execution case is also a feature which goes to show, to a certain extent at any rate if not deci sively, that the execution proceeding was finally disposed of by the order.
The following endorsement appears on the petition exhibit 2 (a), dated June 2, 1939: "Heard learned pleaders for the parties.
They jointly ask me to cancel the attachment (existing by special order) in Money exhibit 118 of 1936 though that case was dismissed." This endorsement also clearly shows that the Court itself understood that the order that it made on January 30; 1937, was a final order of dismissal and that the attachment had been continued by a special order.
On a consideration of all these matters I have not the least doubt in my mind that the order of January 30, 1937, was in form and in substance a final order of dismissal of the Execution Case No. 118 of 1936 and that the attachment was continued by a special order such as is contemplated and authorised by the amend ment made by the Calcutta High Court in rule 57.
Learned advocate for the appellants contended that if the execution case came to an end the attachment could not be left hanging in the air.
There is no substance in this argument.
Ordi narily, an attachment is supported by an execution case and if the execution case is simply dismissed the attachment must fail with it.
But rule 57, as amended, expressly empow ers the Court to dismiss an execution application but at the same time to keep alive the attachment by a special order.
That is what was done in this case.
Here the attachment does not, to use the expression of the learned advocate for the appellants, 587 hang in the air.
It rests upon the solid foundation of a special order which rule 57, as amended, in terms authorises the Court to make.
The continuance of the attachment, in the circumstances, needs no execution proceeding to support it.
Take the case of an attachment before judgment.
Under Order XXXVIII, rule 11, where after an order of attachment before judgment a decree is passed in favour of the plaintiff, it is not necessary upon an application for execution of such a decree to apply for re attachment of the property.
It means that the attachment continues and the judgmentdebtor cannot deal with the property to the disadvantage of the decree holder.
After the decree is passed, the attachment continues but nobody will say that although there has been no applica tion for the execution of the decree at any time by the decree holder there is, nevertheless, an execution proceed ing pending merely because the attachment continues.
Here also the attachment subsists and rests only upon the terms of Order, XXXVIII rule 11, and without any proceeding.
Such attachment cannot be called a proceeding in execution, for none was ever initiated after the decree was passed.
In my judgment, the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pend ing execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court.
As to (ii) Learned advocate for the appellants then contended that the petition (exhibit 2a) dated June 2, 1939, amounted to a proceeding in execution and as that was insti tuted and was pending after January 1, 1939 the proceedings came within the definition in section 2 (22)of "a suit to which this Act applies".
I do not think this argument is sound.
The petition (Ex.2a) was not really an application at all.
See Raja Shri Prakash Singh vs The Allahabad Bank Ltd. (1).
In substance, it was nothing but a certification by the decree holder of the satisfaction of the decree.
The mere fact (1) 33 C.W.N. 267; A.I.R. 1929 P.C. 19, 588 that the document was in the form of a petition could not convert what was really the usual certifying procedure into a proceeding in execution for recovery of a loan or for enforcement of any agreement.
It was purely an intimation given to the Court by the decreeholder that the decree had been satisfied out of Court and the prayer for withdrawal of the attachment was merely consequential and would follow as a matter of course on full satisfaction of the decree being recorded.
The order made on that petition also shows that the decree was recorded as adjusted and the attachment was cancelled.
In my judgment, that petition (exhibit 2a) was not an application such as would initiate a proceeding in execution for any of the purposes mentioned in clauses (a) or (b) or (c) of section 2 (22) of the Act.
For reasons stated above, the decrees sought to be reopened were not decrees made in "a suit to which this Act applies".
Suit No. 78 of 1922 was neither instituted on or after January 1, 1939, nor was it pending on that date, all the three decrees having been passed long before that date.
Nor was any proceeding in execution such as is contemplated by section 2 (22) instituted or pending on or after that date.
The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the petition of June 2, 1939, was not an application at all and was certainly not a proceeding in execution within the meaning of section 2 (22) of the Act.
This conclusion is sufficient to dismiss this appeal and it is not necessary for us to consider the other question raised by the respondent on the strength of section 36 (5) of the Act and I express no opinion on that question.
The result is that this appeal must stand dismissed with costs and I order accordingly.
KANIA C.J. I agree.
PATANJALI SASTRI J.
The facts bearing on the dispute in this appeal are fully stated in the judgment of ray brother Das which I have had the advantage of reading and it is unnecessary to recapitulate them here.
589 The appellant mortgagor seeks in these proceedings the reliefs provided by the Bengal Money lenders Act, 1940 (hereinafter referred to as the Act) in respect of a decree debt payable by him.
The respondent who represents the sub mortgagee decree holder invokes the protection of two exemptions contained in the Act: (1) Section 86 (1), proviso (ii), which exempts inter alia "any decree other than a decree in a suit to which this Act applies which was not fully satisfied by the first day of January, 1939".
This raises a dispute as to whether the respondent 's decree was passed in a suit to which the Act applies.
(2) Section 36 (5) which exempts "the rights of any assignee or holder for value if the Court is satisfied that the assignment to him was bona fide and that he had not received the notice re ferred to in clause (a) of sub section (1) of section 28".
This raises the question whether a sub mortgagee is an assignee within the meaning of the Act.
On the first question "a suit to which this Act applies" is defined in section 2 (22) as meaning "any suit or pro ceeding instituted or filed on or after the 1st day of Janu ary, 1939, or pending on that date and includes a proceeding in execution for (among other things) the recovery of a loan advanced before or after the commencement of this Act.
" This definition has been construed as requiring that the "pro ceeding in execution "referred to therein should be pending on 1st January, 1939, and the question accordingly arises whether the order of the executing court dated 30th January, 1937, which purported to dismiss the respondent 's execution case for non prosecution while continuing the attachment already effected, terminated the proceeding in execution which had resulted in the attachment.
It was said that the order was made in accordance with Order XXI, rule 57, of the Civil Procedure Code as amended by the Calcutta High Court and must, therefore, be taken to have been intended to put an end to the execution proceeding altogether.
I am not satisfied that such was the result of the dismissal.
The amendment which added the words "unless the court shall make an order to the contrary" 200 at the end of the rule envisages a dismissal of an "applica tion for execution" while at the same time continuing a subsisting attachment.
The dismissal of 30th January, 1987, must, therefore, be taken to be a dismissal of the execution application then before the court and cannot be taken to have any wider operation.
On the other hand, the continu ance, in express terms, of 'the attachment notwithstanding the dismissal, indicates that the proceeding which had resulted in the attachment was kept alive to be carried forward later on by sale of the attached property.
Attachment itself is a "proceeding in execution" and, so long.as it subsists, the proceeding in execution can well be regarded as pending.
In In re Clagett 's Estate; Fordham vs Clagett (1) Jessel M.R. declared that "a pending matter in any court of justice means one in which some proceeding may still be taken".
The attachment was cancelled by the court only on 2nd June, 1939, when the decree in question was recorded as adjusted and then, and not before, could execu tion of the decree be properly considered to have terminat ed.
In this view, a "proceeding in execution" was pending on the 1st day of January, 1939, and the respondent 's decree must be taken to have been passed "in a suit to which this Act applies ' ', with the result that the respondent 's claim to exemption under proviso (ii) to sub section (1) of sec tion 36 of the Act must fail.
I am, however, of opinion that the respondent 's claim to recover his decree debt is protected under section 36 (5).
There is no question here but that the submortgage to the respondent 's predecessor in title was bona fide.
Nor could he have received the notice referred to in clause (a) of ' sub section (1) of section 28 as the transaction took place long before the Act was passed.
It is not disputed that section 36 (5) applies to pre Act debts.
[See Renula Bose vs Manmatha Nath Bose(2)].
The only question, therefore, is whether the respondent as sub mortgagee is an assignee within the meaning of sub section (5) of section 36.
The learned (1) (2) L.R. 72 I.A. 156, 591 Judges in the court below held that he was not, following an earlier decision of their own court in Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya(1).
That decision, however, was reversed by the Privy Council in Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya(2) where their Lordships dealt with the question now before us in the following terms : "It was suggested, in the judgment of Mitter J. (with which Waight J. agreed), and in the argument for the re spondents that if a sub mortgagee were an `assignee ' within section 36, sub section (5), of the Act.
, certain difficul ties and anomalies would result.
Their Lordships cannot agree with this suggestion.
They express no view as to the position which arises if the sub mortgage contains only a charge on the original mortgage debt, but when it contains an assignment of that debt, and of all the rights of the mortgagee, the position appears to be free from difficulty.
Relief can be given to the original mortgagor as against the original mortgagee under section 36, but such relief must not affect the rights of the assignee by way of sub mort gage.
To take an imaginary case by way of illustration, let it be assumed that the amount due on the original mortgage, for principal and interest at the original rate, is Rs. 1,000, and the sum due on the sub mortgage by assignment, for principal and interest at the original rate, is Rs. 500.
Let it further be assumed that if relief could be given, and were given, under section 36 as against both mortgagee and sub mortgagee, the sums due to them respectively would be Rs. 800 and Rs. 400.
By reason of sub section (5), the sub mortgagee 's rights cannot be affected.
He can therefore, as assignee of the mortgage debt: claim his full Rs. 500, as against both mortgagor and original mortgagee.
But if the court gives the mortgagor relief as against the original mortgagee, the mortgagor will only be liable to pay to the original mortgagee Rs. 300, the balance of the reduced debt after paying the sub mortgagee in full.
As to contention (b), it is impossible to read subsec tion (5) of section 36 as referring only to an assignee (1) (2) L.R. 76 I.A. 74.
592 of a mortgage decree.
The words and that he had not received the notice referred to in clause (a)of subsection (1) of section 28 make it plain that an assignee of a mortgage debt is within the sub section, since section 28, sub section (1) is concerned only with assignment of debts" (pp. 83 84).
The sub mortgage here in question also contains an assignment of the debt due under the original mortgage debt and of "the entire interest" of the original mortgagee.
After reciting their original mortgage, the mortgagees proceed to state in the deed of sub mortgage: "We mortgage all that is at present due and that will in future become due to us, the first, second, third and fourth parties, on account of the said one lakh of rupees together with interest and the entire interest under the mortgage taken by us on the basis of the said Indenture in respect of five annas share of the said Niskar Mouza Mono harbahal and in respect of sixteen annas of the surface and underground rights in the said Mouza Marichkota and we make over the said Deed of Indenture to you".
The decision referred to above is, therefore, directly in point and rules the present case.
It was suggested that the said decision was inconsist ent with the earlier decisions of the same tribunal in Ram Kinkar Banerjee vs Satya Charan Srimani(1) and Jagadamba Loan Co. vs Raja Shiba Prasad Singh(2).
Stress was laid upon the expression "all the rights of the mortgagee" used by their Lordships in the passage quoted above, and it was pointed out that in the earlier decisions they held that in India a legal interest remained in the mortgagor even when the mortgage was in the form of an English mortgage, and that the interest taken by the mortgagee was not an absolute interest.
This proposition, it was said, implied that in a sub mortgage all the rights of the original mortgagee are not assigned to the sub mortgagee and that the mortgagee still retains a legal (1) 64 I.A. 50.
(2) 68 I.A. 67.
593 interest in the original mortgage.
This is a rather super ficial view of the matter.
In the earlier cases their Lordships were considering the quantum of interest trans ferred by a mortgagor to a mortgagee in a mortgage of leasehold interest for the purpose of determining whether or not there was privity of estate between the landlord and the mortgagee.
If the mortgage could operate as an assign ment of the entire interest of the mortgagor in the lease, the mortgagee would be liable by privity of estate for the burdens of the lease.
If on the other hand, it operated only as a partial assignment of the mortgagor 's interest, no such result would follow.
It was in determining that issue that their Lordships held that no privity of estate arose in India because a legal interest remained in the mortgagor and the interest taken by the mortgagee was not an absolute interest.
These cases had no bearing on the question, which arose in Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya (1) and arises in the present case, as to whether a sub mortga gee becomes an assignee of the mortgage debt and of the mortgagee 's right to recover the debt from the original mortgagor.
The Act affords relief to certain classes of debtors by curtailing pro tanto the rights of the creditors, subject to certain exceptions in regard to "assignments of loans".
In such a context the only relevant consideration could be whether the assignment is such as to establish a debtor and creditor relation between the assignee and the debtor so as to bring the case within the purview of the Act.
If the sub mortgagee obtained, by virtue of the sub mortgage, the right to sue the original mortgagor for recov ery of the mortgage debt, that would seem sufficient to make him an assignee within the meaning of the Act.
It was from this point of view that the question as to the nature of the right transferred to a sub mortgagee under his sub mortgage was considered in Promode Kumar Roy vs Nikhil Bhusan Mukho padhya(1) as it has to be considered in the present case, and the reference to the sub mortgage containing an assign ment of all the rights (1) 76 I,A. 74.
594 of the mortgagee must, in that context, be understood with reference to the sufficiency of the right assigned to enable the sub mortgagee to sue the original mortgagor in his own right, so as to bring the relevant provisions of the Act into play as between them.
The reservation made by their Lordships in the case of a sub mortgage containing only a charge on the original mortgage is significant and supports this view.
I do not consider, therefore, that there is any inconsistency between Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya(1) and the earlier decisions, and even if there be any such inconsistency it has no relevance to the present case.
In the result I agree that the appeal fails and should be dismissed with costs.
Appeal dismissed.
| IN-Abs | A decree on a mortgage was passed in a suit brought by the representatives in interest of a sub mortgagee in 1929 and a personal decree for recovery of the amount remaining due after the sale of the mortgaged properties was passed in 1935.
In 1936 the decree holder started execution of the personal decree and attached certain properties of the judgment debtor.
The decree holder filed a petition on January 30, 1937, praying that the execution case "may be struck off for non prosecution, keeping the attachment in force" in view of certain negotiations for amicable settle ment, and the court passed an order that the execution case "is dismissed for non prosecUtion, the attachment 573 already effected continuing".
On June 2, 1939, the decree holder filed a petition stating that the decree had been adjusted and attachment may be withdrawn.
The Bengal Money lenders Act came into force on September 1, 1940, and on January 2, 1941, the legal representatives of the judg ment debtor filed a suit under section 36 of the Act praying for re opening the transactions.
The question being whether any proceeding for execution was pending on or after January 1, 1939, within the meaning of the definition of "a suit to which this Act applies" contained in section 2 (22) of the Bengal Money lenders Act: Held, per KANIA C.J. and DAs J. That the order of January 30, 1937, was in form and in substance a final order of dismissal of the execution petition of 1936.
The attach ment continued not because there was a pending execution proceeding but because a special order for continuing the attachment was made under O. 21, r. 57 of the Civil Proce dure Code as amended by the Calcutta High Court, and not withstanding the fact that the attachment was continued there was no execution proceeding pending on January 1, 1939, and accordingly the decree sought to be reopened was not one passed in "a suit to which the Act applies" within the meaning of section 2 (22) of the Act and the Court had no power to re open the transactions under section 36 (2).
The petition of June 2, 1939, was also not a proceeding for execution but a mere certification by the decree holder of satisfaction of the decree.
PATANJALI SASTRI J.
The continuance of the attachment notwithstanding the dismissal of the execution petition, indicated that the proceeding which had resulted in the attachment was kept alive to be carried forward later on by sale of the attached property.
Attachment itself is "a proceeding in execution" and so long as it subsists, the proceeding in execution can well be regarded as pending.
In this view a proceeding in execution was pending on January 1, 1939, and the decree must be taken to have been passed in "a suit to which this Act applies ".
But inasmuch as the sub mortgage to the respondent 's predecessor in title was bona fide and he obtained by virtue of the sub mortgage the right to sue the original mortgagor for recovery of the mortgage debt, the decree holder was a bona fide assignee and his claim for the entire decree debt was protected by section 36 (5) of the Act.
Renula Bose v, Manmatha Nath Bose (L.R. 72 I.A. 156), Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya (50 C.W.N. 407) and Prom ode Kumar Roy vs Nikhil Bhusan Mukhopadhya (L.R. 76 I.A. 74) referred to.
|
Appeal No. 121 of 1955.
Appeal from the judgment and decree dated April 22, 1953/24th February, 1954, of the Allahabad High Court (Lucknow Bench) in F. C. Appeal No. 50 of 1947, arising out of the judgment and decree dated April 15, 1947, of the Court of the Civil Judge, Bahraich, in Regular Suit No. 25 of 1946.
section K. Dar, Ch.
Akhtar Hussain and C. P. Lal, for the appellants.
Niyamatullah, Onkar Nath Srivastava, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for respondent No. 1. 1958.
September 16.
The Judgment of the Court was delivered by 1289 GAJENDRAGADKAR J.
The suit from which this appeal arises relates to a shrine and tomb known as Darga Hazarat Syed Salar Mahsood Ghazi situated in the village of Singha Parasi and properties appurtenant to it.
The plaintiffs who have preferred this appeal are members of ' the Waqf Committee, Darga Sharif, Bharaich, and, in their suit, they have claimed a declaration that the properties in suit were not covered by the provisions of the United Provinces Muslims Waqfs Act (U. P. XIII of 1936) (hereinafter described as the Act).
The declaration, the consequential injunction and the two other subsidiary reliefs are claimed primarily against respondent 1, the Sunni Central Board of Waqf, United Provinces of Agra and Oudh.
Two trustees who did not join the appellants in filing the suit are impleaded as pro forma defendants 2 and 3 and they are respondents 2 and 3 before us.
It appears that respondent 1 purported to exer cise its authority over the properties in suit under the provisions of the Act and that led to the present suit which was filed on October 18, 1946 (No. 25 of 1946).
The appellants ' case is that the properties in suit are outside the operative provisions of the Act and not subject to the jurisdiction of respondent 1, arid so, according to the appellants, respondent 1 has acted illegally and without jurisdiction in assuming authority over the management of the said properties.
That is the basis of the reliefs claimed by the appellants in their plaint.
The appellants ' claim was resisted by respondent I on several grounds.
It was alleged that the properties in suit did form a waqf as defined by the Act and were covered by its operative provisions.
It was urged that respondent I was a duly constituted Sunni Central Board and it was authorised to exercise supervision over the management of the said waqf.
The case for respondent I also was that the appellants ' suit was barred by limitation and was incompetent inasmuch as before the filing of the suit the appellants had not given the statutory notice as required by section 53 of the Act.
On these pleadings several issues were framed by the 1290 learned trial judge; but the principal points in dispute were three : (1) Are the properties in suit governed by the Act ? (2) Is the suit in time ? and (3) Is the suit maintainable without notice as required by section 53 of the Act ? The learned trial judge held that the properties in suit cannot be held to be waqf as defined by the Act.
In his opinion it was not the village Singha Parasi but its profits free from land revenue that had been granted in trust for the shrine and its khadims; and since the usufruct of the profits was subject to the condition of resumption and since the profits had not been vested in the Almighty, the grant cannot be construed to be a waqf as contemplated by Muhamniadan Law.
On the question of limitation the learned judge held that section 5(2) of the Act applied to the suit ; but, according to him, though the suit was filed beyond the period of one year prescribed by the said section, it was within time having regard to the provisions of section 14 of the Limitation Act.
The plea raised by respondent 1 under section 53 of the Act was partly upheld by the learned trial judge; he took the view that the first three relief, , claimed by the appellants were barred but the fourth was not.
In the result the learned judge granted a declaration in favour of the appellants to the effect that " the shrine in question together with its attached buildings and the Chharawa were not waqf properties within the meaning of the Act.
" As a consequence, an injunction was issued restraining respondent 1 from removing or dissolving the committee of management of the appellants and respondents 2 and 3 " not otherwise than provided for under section 18 of the Act in so far as the management and supervision of those properties are concerned in respect of which the appellants were not being granted a decree for a declaration sought for by them in view of the absence of the notice under section 53 of the Act ".
The rest of the appellants ' claim was dismissed.
This decree was passed on April 15, 1947.
1291 Against this decree respondent I preferred an appeal in the High Court of Judicature at Allahabad (Lucknow Bench) and the appellants filed cross objections.
The High Court has reversed the finding of the trial court on the question as to the character of the properties in suit.
According to the High Court the said properties constituted waqf as defined by the Act.
The High Court has also held that the suit filed by the appellants was barred by limitation and was also in ' competent in view of the fact that the statutory notice required by section 53 of the Act had not been given by the appellants prior to its institution.
As a result of these findings the appeal preferred by respondent I was allowed, the appellants ' cross objections were dismissed, the decree passed by the trial court was set aside and the appellants ' suit dismissed (April 22, 1953).
The appellants then applied for and obtained a certificate from the High Court to prefer an appeal to this Court under article 133 of the Constitution.
That is how this appeal has come to this Court.
Though the dispute between the parties raises only three principal issues, the facts leading to the litigation are somewhat complicated ; and it is necessary to mention them in order to get a clear picture of the background of the present dispute.
It is believed that Syed Salar Mahsood Ghazi was a nephew of Muhammad Ghazni and he met his death at the hands of a local chieftain when he paid a visit to Bahraich.
On his death his remains were buried in village Singha Parasi by his followers and subsequently a tomb was constructed.
In course of time this tomb became an object of pilgrimage and veneration.
Urs began to be held at the shrine every year and it was attended by a large number of devotees who made offerings before the shrine.
It is partly from the income of these offerings that the tomb is maintained.
Certain properties were endowed by the Emperors of Delhi in favour of this tomb and accretions were made to the said properties by the savings from the income of the endowed properties and the offerings brought by the devotees.
164 1292 The tomb was managed by a body of persons known as Khuddams of the Darga.
This body had been looking after the Darga and the performance of ceremonies and other services at the shrine.
Whilst the management of the Darga was being thus carried on, Oudh came to be annexed in 1856 and the proclamation issued by Lord Canning confiscated all private properties and inams in the said State.
The properties attached to the Darga were no exception.
Fresh settlements were, however, subsequently made by the Government as a result of which previously existing rights were revived usually on the same terms as before.
This happened in regard to the properties appertaining to the Darga.
It would appear that in 1859 or 1860 a Sanad had been granted to Fakirulla who was the head of the khadims in respect of rent free tenure of the village Singha Parasi.
The grantee was given the right to collect the usufruct of the village which was to be appropriated towards the maintenance of the Darga.
The grantee 's son Inayatulla was apparently not satisfied with the limited rights granted under the Sanad and so he brought an action, Suit No. 1 of 1865, claiming proprietary rights in the said properties.
Inayatulla 's suit was substantially dismissed on November 11, 1870, by the Settlement Officer.
It was held that the proprietary rights of the Government in respect of the properties had been alienated for ever in favour of the charity and so the properties were declared to vest in the endowment.
Inayatulla 's right to manage the said properties under the terms of the grant was, however, recognized.
Soon after this decision, it was brought to the notice of the Chief Commissioner in 1872 that the khadims at the Darga were mismanaging the properties of the Darga and were not properly maintaining the Darga itself.
On receiving this complaint a committee of mussalmans was appointed to examine the affairs of the Darga and to make a report.
The committee submitted its report on February 20, 1877, and made recommendations for the improvement of the management of the Darga and its properties.
According to the committee, it was necessary to appoint a jury of five persons including two khadims to manage the Darga and its properties.
Meanwhile some of the lands appurtenant to the Darga had been sold and offerings made by the devotees as well as other properties had become the subject matter of attachment.
In the interest of the Darga, Government then decided to take possession of the properties under the provisions of Pensions Act, (XXIII of 1873.) This decision was reached after the Government had considered the report made by the Deputy Commissioner on August 31, 1878.
The result of declaring that the properties were governed by the provisions of the Pensions Act was to free the properties from the mortgages created by the khadims.
The management of the Darga and its properties by the Government continued until 1902.
During this period Inayatulla attempted to assert his rights once more by instituting a suit in the civil court in 1892.
In this suit Inayatullah and two others who had joined him claimed possession of the Darga together with the buildings appurtenant thereto and village Singha Parasi.
Their claim was decreed by the trial court; but on appeal the said decree was set aside on July 20, 1897.
The appellate court of the Judicial Commissioner held that Inayatulla 's allega tion that the proprietary interest in the properties vested in him was not justified.
Even so, the appellate court observed that it was not proper or competent for the Government to interfere in the management of the waqf and its properties; the Darga was a religious establishment within the meaning or Religious Endowments Act (XX of 1863) and the assumption of the management of the Darga and its properties was unauthorised and improper.
As a result of these observations the Legal Remembrancer to the Government of the United Provinces of Agra and Oudh filed a suit, No. 9 of 1902, under section 539 (present section 92) of the Code of Civil Procedure.
This suit ended in a decree on December 3, 1902.
By the decree the properties in suit were declared " to vest in the trustees when appointed ".
The decree further provided for a scheme for the management of 1294 the Darga and its properties.
The scheme thus framed came into operation and the trustees appointed under it began to manage the Darga and its properties.
The scheme appears to have worked smoothly until 1934.
In 1934 Ashraf Ali and others clamed (Suit No. 1 of 1934) that an injunction should be issued restraining the defendants from taking part in the management of the affairs of the Darga.
The plaintiffs also prayed that the defendants should be prohibited from spending monies belonging to the waqf on frivolous litigations due to party feelings.
On May 7, 1934, the learned District Judge expressed his regret that animosity and party feelings should find their way in the management of a trust and issued an order directing the defendant committee that no money out of the Darga funds should be spent either in the litigation pending before him, or in any other litigation, without the sanction of the court.
For nearly six years after the date of this order the Darga and its properties appear to have been free from any litigation.
This peace was, however, again disturbed in 1940 when a suit was filed (No. 1 of 1940) with the sanction of the Advocate General by five plaintiffs against the managing committee and its trustees for their removal and for the framing of a fresh scheme.
On October 16, 1941, the suit was decreed.
The managing committee and the trustees, however, challenged the said decree by preferring an appeal to the Chief Court.
Their appeal succeeded and on March 7, 1946, the decree under appeal was set aside, though a few minor amendments were made in the original scheme of management.
Whilst this litigation was pending between the parties, the United Provinces Muslim Waqfs Act (U.P. XIII of 1936) was passed in 1936 for better governance, administration and supervision of the specified muslim waqfs in U. P.
In pursuance of the provisions of the Act, respondent I was constituted and, under section 5(1), it issued the notification on February 26, 1944, declaring the properties in suit to be a Sunni Waqf under the Act.
After this notification was issued, respondent 1 called upon the committee of management of 1295 the waqf to submit its annual budget for approval and to get its accounts audited by its auditors.
Respondent I also purported to levy the usual contributions against the waqf under section 54 of the Act.
The members of the committee of management and the trustees with the exception of two persons held that the properties in suit did not constitute a waqf within the meaning of the Act and that respondent 1 had no authority or jurisdiction to supervise the management of the said properties.
That is how the appellants came to institute the present suit on October 18, 1946, against respondent 1.
That in brief is the back ground of the present dispute.
For the appellants Mr. Dar has raised three points before us.
He contends that the High Court was in error in coming to the conclusion that the properties in suit constituted a waqf over which respondent I can exercise its authority or jurisdiction and he argues that it was erroneous to have held that the appellants ' suit was barred by section 5(2) and was incompetent under section 53 of the Act.
Mr. Dar has fairly con ceded that if the finding of the High Court on the question of limitation or on the question of the bar pleaded under section 53 was upheld, it would be unnecessary to consider the merits of his argument about the character of the properties in suit.
Since we have reached the conclusion that the High Court was right in holding that the suit was barred under section 5(2) and was also incompetent under section 53 of the Act, we do not propose to decide the question as to whether the properties in dispute are waqf within the meaning of the Act.
The plea of limitation under section 5(2) as well as the plea of the bar under section 53 are in substance preliminary objections to the maintanability or competence of the suit and we propose to deal with these objections on the basis that the properties in dispute are outside the purview of the Act as alleged by the appellants.
Before dealing with the question of limitation, it would be useful to refer to the relevant part of the scheme of the Act.
Section 4 of the Act provides for the survey of waqfs to be made by the Commissioner of Waqfs appointed under sub section
(1) of section 4.
Subsection (3) requires the Commissioner to ascertain and determine inter alia the number of Shia and Sunni Waqfs in the district, their nature, the gross income of the properties comprised in them as well as the expenses incurred in the realisation of the income and the pay of the mutawalli.
The Commissioner has also to ascertain and determine whether the waqf in question is one of those exempted from the provisions of the Act under section 2.
The result of this enquiry has to be indicated by the Commissioner in his report to the State Government under subs.
Section 6 deals with the establishment of two separate Boards to be called the Shia Central Board and the Sunni Central Board of Waqfs.
Section 18 defines the functions of the Central Boards and confers oil them general powers of superintendence over the management of the waqfs under their jurisdiction.
After the Boards are constituted a copy of the Commissioner 's report received by the State Government is forwarded to them and, under section 5, sub section
(1), each Central Board is required as soon as possible to notify in the official gazette the waqfs relating to the particular sect to which, according to the said report, the provisions of the Act apply.
It is after the prescribed notification is issued by the Board that it can proceed to exercise its powers under section 18 in respect of the waqfs thus notified.
It is the notification issued by respondent under section 5 (1) and the subsequent steps taken by it in exercise of its authority that have led to the present suit.
Mr. Dar contends that the provisions of section 5 (2) do not apply to the present suit, and so the argument that the suit is barred by limitation under the said section cannot succeed.
It is clear that the notification was issued on February 26, 1944, and the suit has been filed on October 18, 1946.
Thus there can be no doubt that if the one year 's limitation prescribed by section 5 (2) applies to the present suit it would be barred by time unless the appellants are able to invoke the assistance of section 15 of the Limitation Act.
But, according to Mr. Dar, the present suit is outside section 5 (2) 1297 altogether and so there is no question of invoking the shorter period of limitation prescribed by it.
Let us then proceed to consider whether the present suit falls within the mischief of section 5 (2) or not.
Section 5 (2) provides that: " The mutawalli of a waqf or any person interested in a waqf or a Central Board may bring a suit in a civil court of competent jurisdiction for a declaration that any transaction held by the Commissioner of waqfs to be a waqf is not a waqf, or any transaction held or assumed by him not to be a waqf is a waqf, or that a waqf held by him to pertain to a particular sect does not belong to that sect, or that any waqf reported by such Commissioner as being subject to the provisions of this Act is exempted under section 2, or that any waqf held by him to be so exempted is subject to this Act.
" The proviso to this section prescribes the period of one year 's limitation to a suit by a mutawalli or a person interested in the waqif.
Sub section (4) of section 5 lays down that the Commissioner of the waqf 's shall not be made a defendant to any suit under sub section
(2) and no suit shall be instituted against him for anything done by him in good faith under colour of this Act.
The appellants ' argument is that before section 5 (2) can be applied to their suit it must be shown that the suit is filed either by a mutawalli of a waqf or any person interested in the waqf.
The appellants are neither the mutawallis of the waqf nor are they persons interested in the waqf.
Their case is that the properties in suit do not constitute a waqf under the Act but are held by them as proprietors, and that the notification issued by respondent I and the authority purported to be exercised by it in respect of the said properties are wholly void.
How can the appellants who claim a declaration and injunction against respondent I on these allegations be said to be persons interested in the waqf, asks Mr. Dar.
The word ' waqf ' as used in this subsection must be given the meaning attached to it by the definition in section 3 (1) of the Act and since the appellants totally deny the existence of such a waqf they cannot be said to be interested in the ' waqf '.
The 1298 argument thus presented appears prima facie to be attractive and plausible; but on a close examination of section 5 (2) it would appear clear that the words " any person interested in a waqf " cannot be construed in their strict literal meaning.
If the said words are given their strict literal meaning, suits for a declaration that any transaction held by the Commissioner to be a waqf is not a waqf can never be filed by a mutawalli of a waqf or a person interested in a waqf.
The scheme of this sub section is clear.
When the Central Board assumes jurisdiction over any waqf tinder the Act it proceeds to do so on the decision of three points by the Commissioner of Waqfs.
It assumes that the property is a waqf, that it is either a Sunni or a Shia waqf, and that it is not a waqf which falls within the exceptions mentioned in section 2.
It is in respect of each one of these decisions that a suit is contemplated by section 5, sub section
If the decision is that the property is not a waqf or that it is a waqf falling within the exceptions mentioned by section 2, the Central Board may have occasion to bring a suit.
Similarly if the decision is that the waqf is Shia and not Sunni, a Sunni Central Board may have occasion to bring a suit and vice versa.
Likewise the decision that the property is a waqf may be challenged by a person who disputes the correctness of the said decision.
The decision that a property does not fall within the exceptions mentioned by section 2 may also be challenged by a person who claims that the waqf attracts the provisions of section 2.
If that be the nature of the scheme of suits contemplated by section 5 (2) it would be difficult to imagine how the mutawalli of a waqf or any person interested in a waqf can ever sue for a declaration that the transaction held by the Commissioner of the waqfs to be a waqf is not a waqf.
That is why we think that the literal construction of the expression " any person interested in a waqf " would render a part of the sub section wholly meaningless and ineffective.
The legislature has definitely contemplated that the decision of the Commissioner of the Waqfs that a particular transaction is a waqf can be challenged by persons who do not accept the correctness of the said decision, and it is, this class of persons who are 1299 obviously intended to be covered by the words "any person interested in a waqf ".
It is well settled that in construing the provisions of a statute courts should be slow to adopt a construction which tends to make any part of the statute meaningless or ineffective; an attempt must always be made so to reconcile the relevant provisions as to advance the remedy intended by the statute.
In our opinion, on a reading of the provisions of the relevant sub section as a whole there can be no doubt that the expression "any person interested in a waqf " must mean "any person inter ested in what is held to be a waqf ".
It is only persons who are interested in a transaction which is held to be a waqf who would sue for a declaration that the decision of the Commissioner of the Waqfs in that behalf is wrong, and that the transaction in fact is not a waqf under the Act.
We must accordingly hold that the relevant clause on which Mr. Dar has placed his argument in repelling the application of section 5 (2) to the present suit must not be strictly or literally construed, and that it should be taken to mean any person interested in a transaction which is held to be a waqf.
On this construction the appellants are obviously interested in the suit properties which are notified to be waqf by the notification issued by respondent 1, and so the suit instituted by them would be governed by section 5, sub section
(2) and as such it would be barred by time unless it is saved under section 15 of the Limitation Act.
In this connection, it may be relevant to refer to the provisions of section 33 of the Indian Arbitration Act (X of 1940).
This section provides that any party to an arbitration agreement desiring to challenge the existence or validity of an arbitration agreement shall apply to the court and the court shall decide the question on affidavits.
It would be noticed that the expression " any party to an arbitration agreement " used in the section poses a similar problem of construction.
The party applying under section 33 may dispute the very existence of the agreement and yet the applicant is described by the section as a party to the 165 1300 agreement.
If the expression " any party to an arbitration agreement " is literally construed it would be difficult to conceive of a case where the existence of an agreement can be impeached by a proceeding under section 33.
The material clause must therefore be read liberally and not literally or strictly.
It must be taken to mean a person who is alleged to be a party to an arbitration agreement; in other words, the clause must be construed to cover cases of persons who are alleged to be a party to an arbitration agreement but who do not admit the said allegation and want to challenge the existence of the alleged agreement itself.
This liberal construction has been put upon the clause in several judicial decisions: Chaturbhuj Mohanlal vs Bhicam Chand Chororia & Sons Mathu Kutty vs Varoe Kutty (2) ; Lal Chand V. Messrs. Basanta Mal Devi Dayal & Ors.
We may also point out incidentally that in dealing with an application made under section 34 of the Arbitration Act, it is incumbent upon the court to decide first of all whether there is a binding agreement for arbitration between the parties; in other words, the allegation by one party against another that there is a valid agreement of reference between them does not preclude the latter party from disputing the existence of the said agreement in proceedings taken under section 34.
These decisions illustrate the principle that where the literal meaning of the words use& in a statutory provision would manifestly defeat its object by making a part of it meaningless and ineffective, it is legitimate and even necessary to adopt the rule of liberal construction so as to give meaning to all parts of the provision and to make the whole of it effective and operative.
Before we part with this part of the appellants ' case it is necessary to point out that the argument urged by Mr. Dar on the construction of section 5(2) is really inconsistent with the appellants ' pleas in the trial court.
The material allegations in the plaint clearly amount to an admission that the Darga and its appurtenant properties constitute a waqf Under the (1) (2) A.I.R. 1950 Mad.
(3) 1301 Act; but it is urged that they do not attract its provisions for the reason that the waqf in question falls within the class of exemptions enumerated in section 2 (ii)(a) and (c) of the Act.
" The Darga waqf ", says the plaint in para.
11, ,is of such a nature as makes it an exception from the purview of the Act as provided by section 2 of the Act ".
Indeed, consistently with this part of the appellants ' case,, the plaint expressly admits that the cause of action for the suit accrued on February 26, 1944, and purports to bring the suit within time by relying on sections 14, 15, 18 and 29 of the Limitation Act.
In their replication filed by the plaintiffs an attempt was made to explain away the admissions contained in the plaint by alleging that " if ever in any paper or document the word I waqf had been used as a routine or hurriedly then it is vague and of no specific meaning and its meaning or connotation is only trust or amanat " ; and yet, in the statement of the case by the appellants ' counsel, we find an express admission that the subject matter of the suit is covered by the exemptions of section 2, cls.
(ii) (a) and (ii) (c).
Thus, on the pleadings there can be no doubt that the appellants ' case was that the Darga and its properties no doubt constituted a waqf under the Act, but they did not fall within the purview of the Act because they belong to the category of waqfs which are excepted by section 2(ii) (a) and (c).
The argument based on the application of section 2 has not been raised before us and so on a consideration of the pleadings of the appellants it would be open to respondent 1 to contend that the appellants are admittedly interested in the waqf and their suit falls within the mischief of section 5 even if the words " any person interested in a waqf " are literally and strictly construed.
The next question which calls for our decision is whether the appellants ' suit is saved by virtue of the provisions of section 15 of the Limitation Act.
That is the only provision on which reliance was placed before us by Mr. Dar on behalf of the appellants.
Section 15.
provides for " the exclusion of time during which proceedings are suspended " and it lays down that " in computing the period of limitation prescribed for any 1302 suit or application for the execution of a decree, the ,institution or execution of which has been staved by an injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made and the day on which it was withdrawn, shall be excluded ".
It is plain that, for excluding the time under this section, it must be shown that the institution of the suit in question had been stayed by an injunction or order; in other words, the section requires an order or an injunction which stays the institution of the suit.
And so in cases falling under section 15, the party instituting the suit would by such institution be in contempt of court.
If an express order or injunction is produced by a party that clearly meets the requirements of section 15.
Whether the requirements of section 15 would be satisfied by the production of an order or injunction which by necessary implication stays the institution of the suit is open to argument.
We are, however, prepared to assume in the present case that section 15 would apply even to cases where the institution of a suit is stayed by necessary implication of the order passed or injunction issued in the previous litigation.
But, in our opinion, there would be no justification for extending the application of section 15 on the ground that the institution of the subsequent suit would be inconsistent with the spirit or substance of the order passed in the previous litigation.
It is true that rules of limitation are to some extent arbitrary and may frequently lead to hardship; but there can be no doubt that, in construing provisions of limitation, equitable considerations are immaterial and irrelevant and in applying them effect must be given to the strict grammatical meaning of the words used by them: Nagendra Nath Dey vs Suresh Chandra Dey (1).
In considering the effect of the provisions contained in section 15, it would be useful to refer to the decision of the Privy Council in Narayan Jivangouda vs Puttabai (2).
This case was an offshoot of the well known case of Bhimabai vs Gurunathgouda (3).
It is apparent that the dispute between Narayan and Gurunathgouda (1) (2) (1944) 47 Bom.
L. R. I. (3) P.C. 1303 ran through a long and protracted course and it reached the Privy Council twice.
The decision of the, Privy Council in Bhimabai 's case (1) upholding the validity of Narayan 's adoption no doubt led to a radical change in the accepted and current view about the Hindu widow 's power to adopt in the State of Bombay, but this decision was of poor consolation to Narayan because the judgment of the Privy Council in Narayan, Jivangouda 's case (2) shows that Narayan 's subsequent suit to recover possession of the properties in his adoptive family was dismissed as barred by time.
The dispute was between Narayan and his adoptive mother Bhimabai on the one hand and Gurunathgouda on the other.
On November 25, 1920, Gurunathgouda had sued Bhimabai and Narayan for a declaration that he was in possession of the lands and for a permanent injunction restraining the defendants from interfering with his possession.
On the same day when the suit was filed, an interim injunction was issued against the defendants and it was confirmed when the suit was decreed in favour of Gurunathgouda.
By this injunction the defendants were ordered " not to take the crops from the fields in suit, not to interfere with the plaintiff 's wahiwat to the said lands, not to take rent notes from the tenants and not to obstruct the plaintiff from taking the crops raised by him or from taking monies from his tenants ".
Two important issues which arose for decision in the suit were whether Narayan had been duly adopted by Bhimabai in fact and whether Bhimabai was competent to make the adoption.
These issues were answered against Narayan by the trial court.
Bhimabai and Narayan appealed to the Bombay High Court, but their appeal failed and was dismissed: Bhimabai vs Gurunathgouda (3).
There was a further appeal by the said parties to the Privy Council.
The Privy Council held that the adoption of Narayan was valid and so the appeal was allowed and Gurunathgouda 's suit was dismissed with costs throughout.
In the result the injunction granted by the courts below was dissolved on November 4, 1932.
Oil (1) (1932) 35 Bo . L. R. 200 P. C. (2) (1944) 47 Bom.
L. H. I. (3) 1304 November 25, 1932, Narayan and Bhimabai filed their suit to recover possession of the properties from Gurunathgouda.
They sought to bring the suit within time inter alia on the ground that the time taken up in litigating the former suit or at least the period commencing from the grant of temporary injunction on February 25, 1920 to November 4, 1932, when the injunction was dissolved by the Privy Council, should be excluded under section 15 of the Limitation Act.
This plea was rejected by the trial court and on appeal the same view was taken by the Bombay High Court.
Rangnekar J. who delivered the principal judgment exhaustively considered the relevant judicial decisions bearing on the question about the construction of section 15 and held that the injunction issued against Narayan and Bhimabai in Gurunathgouda 's suit did not help to attract section 15 to the suit filed by them in 1932: Narayan vs Gurunathgouda (1).
The matter was then taken to the Privy Council by the plaintiffs; but the Privy Council confirmed the view taken by the High Court of Bombay and dismissed the appeal: Narayan vs Puttabai (2).
In dealing with the appellants ' argument that the injunction in the prior suit had been issued in wide terms and in substance it precluded the plaintiffs from filing their suit, their Lordships observed that there was nothing in the injunction or in the decree to support their case that they were prevented from instituting a suit for possession in 1920 or at any time before the expiry of the period of limitation.
It appears from the judgment that Sir Thomas Strangman strongly contended before the Privy Council that since the title of the contending parties was involved in the suit, it would have been quite futile to institute a suit for possession.
This argument was repelled by the Privy Council with the observation that " we are unable to appreciate this point, for the institution of a suit can never be said to be futile if it would thereby prevent the running of limitation ".
There can be little doubt that, if, on considerations of equity the application of section 15 could be extended, this was pre (1) (2) (1944) 47 Bom.
L. R. I. 1305 eminently a cast for such extended application of the said provision; and yet the Privy Council construed the material words used in section 15 in their strict grammatical meaning and held that no order or injunction as required by section 15 had been issued in the earlier litigation.
We would like to add that, in dealing with this point, their Lordships did not think it necessary to consider whether the prohibition required by section 15 must be express or can even be implied.
There is another decision of the Privy Council to which reference may be made.
In Beti Maharani vs The Collector of Etawah (1), their Lordships were dealing with a case where attachment before judgment under section 485 of the Code of Civil Procedure had been issued by the court at the instance of a third party prohibiting the creditor from recovering and the debtor from paying the debt in question.
This order of attachment was held not to be an order staying the institution of a subsequent suit by the creditor under section 15 of Limitation Act of 1877.
" There would be no violation of it " (said order), observed Lord Hobhouse, " until the restrained creditor came to receive his debt from the restrained debtor.
And the institution of a suit might for more than one reason be a very proper proceeding on the part of the restrained creditor, as for example in this case, to avoid the bar by time, though it might also be prudent to let the court which had issued the order know what he was about ".
In Sundaramma vs Abdul Khader (2) the Madras High Court, while dealing with section 15 of the Limitation Act, has held that no equitable grounds for the suspension of the cause of action can be added to the provisions of the Indian Limitation Act.
It is true that in Musammat Basso Kaur vs Lala Dhua Singh (3) their Lordships of the Privy Council have observed that it would be an inconvenient state of the law if it were found necessary for a man to institute a perfectly vain litigation under peril of losing his property if he does not ; but this observation must be read in the context of facts with which (1) All. 198, 210, 211.
(2) (1932) I.L.R.56 Mad.
490, (3) (1888) 15 I.A. 211.
1306 the Privy Council was dealing in this case.
The respondent who was a debtor of the appellant had agreed to convey certain property to him setting off the debt against part of the price.
No money was paid by the respondent and disputes arose as to the other terms of the agreement.
The respondent sued to enforce the terms of the said agreement but did not succeed.
Afterwards when he sued for the debt he was met with the plea of limitation.
The Privy Council held that the decree dismissing the respondent 's suit was the starting point of limitation.
The said decree imposed on the respondent a fresh obligation to pay his debts under section 65 of the Indian Contract Act.
It was also held alternatively that the said decree imported within the meaning of article 97 of Limitation Act of 1877 a failure of the consideration which entitled him to retain it.
Thus it is clear that the Privy Council was dealing with the appellants ' rights to sue which had accrued to him on the dismissal of his action to enforce the terms of the agreement.
It is in reference to this right that the Privy Council made the observations to which we have already referred.
These observations are clearly obiter and they cannot, in our opinion, be of any assistance in interpreting the words in section 15.
It is in the light of this legal position that we must examine the appellants ' case that the institution of the present suit had been stayed by an injunction or order issued against them in the earlier litigation of 1940.
We have already noticed that Civil Suit No. 1 of 1940 had been instituted against the appellants with the sanction of the Advocate General for their removal and for the settlement of a fresh scheme.
The appellants were ordered to be removed by the learned trial judge on October 16, 1941; but on appeal the decree of the trial court was set aside on March 7, 1946.
It is the period between October 16, 1941, and March 7, 1946, that is sought to be excluded by the appellants under section 15 of the Limitation Act.
Mr. Dar contends that the order passed by the trial judge on October 16, 1941, made it impossible for the appellants to file the present suit until the final decision of the 1307 appeal.
By this order the appellants were told that they should not in any way interfere with the affairs of the Darga Sharif as members of the committee and should comply with the decree of the court by which they were removed from the office.
It is obvious that this order cannot be construed as an order or an injunction staying the institution of the present suit.
In fact the present suit is the result of the notification issued by respondent I on February 26, 1944, and the subsequent steps taken by it in the purported exercise of its authority under the Act.
The cause of action for the suit has thus arisen subsequent to the making of the order on which Mr. Dar relies; and on the plain construction of the order it is impossible to hold that it is an order which can attract the application of section 15 of the Limitation Act.
We have already held that the relevant words used in section 15 must be strictly construed without any consideration of equity, and so construed, we have no doubt that the order on which Mr. Dar has placed reliance before us is wholly out side section 15 of the Limitation Act.
We would, however, like to add that this order did not even in substance create any difficulty against the institution of the present suit.
The claim made by the appellants in the present suit that the properties in suit do not constitute a waqf and the declaration and injunction for which they have prayed do not infringe the earlier order even indirectly or remotely.
We must accord ingly hold that the High Court was right in taking the view that section 15 did not apply to the present suit and that it was therefore filed beyond the period of one year prescribed by section 5(2) of the Act.
That takes us to the consideration of the next preliminary objection against the competence of the suit under section 53 of the Act.
Section 53 provides that " no suit shall be instituted against a Central Board in respect of any act purporting to be done by such Central Board under colour of this Act or for any relief in respect of any waqf until the expiration of two months next after notice in writing has been delivered to the Secretary, or left at the office of such 166 1308 Central Board, stating the cause of action, the name, description and place of residence of the plaintiff and 'the relief which he claims; and the plaint shall contain a statement that such notice has been so delivered or left ".
This section is similar to section 80 of the Civil Procedure Code.
It is conceded by Mr. Dar that if section 53 applies to the present suit the decision of the High Court cannot be successfully challenged 'because the notice required by section 53 has not been given by the appellants before the institution of the present suit.
His argument, however, is that the notification issued by respondent I on February 26, 1944, did not refer to the Darga and offerings made by the devotees before the Darga and he contends that the present suit in respect of these properties is outside the provisions Of section 53 and cannot be held to be barred on the ground that the requisite notice had not been given by the appellants.
We are not impressed by this argument.
Column 1 of the notification in question sets out the name of the creator of the waqf as Shahan e Mughalia and the name of the waqf as Syed Salar Mahsood Ghazi.
In col. 2 the name of the mutawalli is mentioned while col. 3 describes the properties attached to the waqf.
The tomb of Syed Salar Mahsood Ghazi which is the object of charity in the present case is expressly mentioned in col. 1 and so it is futile to suggest that the tomb or Darga had not been notified as a waqf by respondent 1 under section 5(1).
In regard to the offerings we do not see bow offerings could have been mentioned in the notification.
They are made from time to time by the devo tees who visit the Darga and by their very nature they constitute the income of the Darga.
It is unreasonable to assume that offerings which would be made from year to year by the devotees should be specified in the notification issued under section 5(1).
We must, therefore, reject the argument that any of the suit properties have riot been duly notified by respondent I under section 5(1) of the Act.
If that be so, it was incumbent upon the appellants to have given the requisite notice under section 53 before instituting the present suit.
The requirement as to notice applies to 1309 suits against a Central Board in respect of their acts as well as to suits for any relief in respect of any waqf.
It is not denied that the present suit would attract the provisions of section 53 if the argument that the Darga and the offerings are not notified is rejected.
The result is that the suit is not maintainable as a result of the appellant 's failure to comply with the requirements of section 53.
We would accordingly confirm the finding of the High Court that the appellants ' suit is barred by time under section 5(2) and is also not maintainable in view of the fact that the appellants have not given the requisite notice under section 53 of the Act.
The result is that the appeal fails and is dismissed with costs.
Appeal dismissed.
| IN-Abs | The respondent No. 1, a Central Board constituted under the United Provinces Muslims Waqf Act, 1936, by a notification under section 5(1) Of the Act dated February 26, 1944, took into ' management the properties of a Darga Sharif and on October 18, 1946, the appellants, three of the five members of the Managing Committee of the said Darga Sharif, brought the suit, out of which the present appeal arises, for a declaration that the Darga properties did not constitute a waqf within the meaning of the Act and that the respondent No. 1 had no lawful authority to, issue the notification and assume management of the said properties.
It was urged on behalf of respondent No. 1 that the suit had not been brought within one year as prescribed by section 5(2) of the Act, and was as such barred by limitation; and, that since the notice prescribed by section 53 Of the Act had admittedly not been served on the respondent, the suit was incompetent.
It was found that in an earlier suit, brought with the sanction of the Advocate General, against the Managing Committee for their removal and the framing of a fresh scheme, a decree had been passed against the appellants on October 16 1941, and it directed them not to interfere with the affairs of the Darga as members of the said Committee and to comply with the direction removing them from office.
On appeal the said decree was set aside by the Chief Court on March 7, 1946.
It was contended on behalf of the appellants that section 5(2) Of the Act had no application and even if it had, the suit was within time by virtue of the provisions of section 15 of the Limitation Act.
Held, that the contentions raised on behalf of the appellants must be negatived.
The expression " any person interested in a waqf " used in section 5(2) Of the United Provinces Muslims Waqf Act, 1936, pro perly construed, means any person interested in a transaction that is held to be waqf by the Commissioner of Waqfs appointed under the Act and as such the appellants fell within that category.
Where a literal construction defeats the object of the statute and makes part of it meaningless, it is legitimate to adopt a liberal construction that gives a meaning to the entire provision and makes it effective.
Chaturbhuj Mohanlal vs Bhicam Chand Choroyia & Sons, , Mathu Kutty vs Varoe Kutty, A.I.R. 1950 Mad.
4 and Lal Chand vs Messrs. Basanta Mal Devi Dayal & Ors., , referred to.
Rules of limitation are arbitrary in nature and in construing hem it is not permissible to import equitable considerations, and effect must be given to tile strict grammatical meaning of he words used.
Section 15 of the Limitation Act can be attracted only where a suit has been stayed by an injunction or order and the test would be whether its institution would or would not be an act in contempt of the court 's order.
Nagendra Nath Dey V. Suresh Chandra Dey, (1932) 34 Bom.
R. 1065, Narayan Jivangouda vs Puttabai, (1944) 47 Bom.
L.R. Beti Maharani vs The Collector of Etawah, All. 198 and Sundaramma vs Abdul Khader, Mad. 490, relied on.
Musammat Basso Kaur vs Lala Dhua Singh, (1888) 15 I.A. 211, held inapplicable.
The order of the court in the earlier suit was neither an injunction nor an order of the nature contemplated by section 15 Of the Limitation Act and so that section was inapplicable.
Offerings made from time to time by the devotees visiting the Darga Sharif were by their very nature an income of the Darga, and failure to mention them in the notification under section 5(1) Of the Act, did not render the notification defective.
The provision as to notice under section 53 Of the Act was applicable to suits in respect of acts of the Central Board as well as suits for any relief in respect of the waqf.
|
ivil Appeal No. 4284 of 1988.
From the Judgment and Order dated 30.3.88 of the Central Admn.
Tribunal Hyderabad in O.A. No. 575 of 1987.
A.D. Singh, A. Subba Rao, C.V.S. Rao and P. Parmeshwaran for the Appellants.
K.T. Shastri Respondent in person.
The Judgment of the Court was delivered by SAWANT, J.
The appellants, Union of India and the Direc tor, Technical Development and Production (Air), Ministry of Defence, have preferred this appeal against the decision of the Central Administrative Tribunal, Hyderabad Bench, hold ing that respondent K.T. Shastry was entitled to remain in service upto the superannuation age of 60 years and was not liable to be retired at the alleged superannuation age of 58 years.
The relevant admitted facts are that the respondent was recruited as a Senior Scientific Officer on October 12, 1966 in the Defence Science Service.
He was posted in the Directorate of Technical Development and Production (Air), briefly called DTD & P. at the relevant time, the Defence Science Service had three units under it, namely, 1) Defence Research and Development Organisation (DRDO), 2) Director ate General of Inspection (DGI) and 3) Directorate of Tech nical Development and Production (Air) (DTD & P).
The recruitment when made was always to the Defence Science Service, and after the recruitment, the recruits were posted according to the exigency of the service, in any of the said three units.
Their 22 services were inter changeable and inter transferable be tween the three units.
All, the service conditions of the persons working in the three units including scales of pay, superannuation age, etc.
were the same and were regulated by the same set of Rules, viz. Defence Science Service Rules.
In the year 1979, the Defence Science Service was trifurcated and reconstituted as follows.
(1) Defence Research and Development Organisation (DRDO) was reconstituted as Defence Research and Development Serv ice (DRDS).
(2) Directorate of Technical Development and Production (Air) (DTD & P) was reconstituted as Defence Aeronautical Quality Assurance Service (DAQAS), and (3) Directorate General of Inspection (DGI) was reconstituted as Defence Quality Assurance Service (DQAS).
The appellant who was working in DTD & P became a member of DAQAS.
When the trifurcation was made, the Service Rules governing the three units had a common Rule which was Rule 12 in DAQAS and DQAS, and Rule 13 in DRDS which reads as follows: "Other conditions of service: (1) The conditions of service of the members of the service in respect of matters not expressly provided for in these Rules, shall mutatis mutandis and subject to any special orders issued by the Government in respect of the service, be the same as those applicable to officers (Civil ians) of corresponding status in similar scientific institu tions/organisations under the Government of India.
At the time the present controversy arose and the respondent approached the Administrative Tribunal, he was holding the post of Deputy Chief Scientific Officer.
By an Office Memorandum No. 7(3)/ 85 D(R & D) of the Government of India, Ministry of Defence, Department of Defence Research & Development dated 24.12.1985, the decision of the President was conveyed whereby Scientific and Technical personnel (gazetted) of D.R. and D.S. in the grade of Scientist 'E ' and above, would retire at the age of 60 years and those in the lower grade for which flexible complementing scheme was applicable would also retire at the age of 60 years provided they had been promoted to the grades they were holding at the time of attaining the age of 58 years within the preced ing five years.
Subsequently by OM No. 7(3)/85 D (R & D) dated 10.2.86, the said decision was extended to all 23 Scientific and technical personnel of the DRDO i.e. DRDS as listed in the Appendix 'A ' of that Memo.
By virtue of Rule 12 quoted above, this benefit given to the members of DRDS was also available to the members of DAQAS, since the said condition of service was not expressly provided for in the Service Rules.
The Tribunal, therefore, held that the re spondent was not liable to be retired at the age of 58 years his superannuation age being deemed to have been increased to 60 years in view of the OM dated 24.12.85 read with OM dated 10.2.86 referred to above.
It is this decision which is challenged before us by the appellants.
Mr. Subba Rao, learned counsel appearing for the appellants contended that the Government had a right to prescribe different conditions of service for the members belonging to the different units, and merely because the superannuation age of the members of the DRDS was increased, it could not be held that the respondent who belonged to another unit, viz. DAQAS, was entitled to the said benefit.
There is no dispute that the Government has power to vary the service conditions of the members of the services from time to time.
The question involved in the present appeal is, however, not whether the Government had such power.
The question is whether the respondent was also entitled to the benefit of the power so exercised in the facts and circum stances of the case.
The admitted facts are that in 1966 when the respondent was recruited to the Defence Science Service, the three units belonged to the said Service and the employees were recruited initially to that service and then sent to different units.
The service conditions of the employees belonging to the three units were the same and their services were inter changeable between the three units.
The Service Rules which applied to all the three units were also common, viz. Defence Science Service Rules.
The three units, therefore, belonged to and constituted one single service.
It is later in the year 1979, that the Defence Research Service was reconstituted into three dif ferent services as stated above.
However, at that time, admittedly no option was given to the employees working in the different units to opt for one or the other of the units.
It appears that those who were already working in either of the three units were deemed to belong to the respective newly constituted service.
This being so, their service conditions will have to run parallel and no discrim ination can be made between them by an unilateral action.
The classification made between them further has no rational basis and no nexus of such classification to the object sought to be achieved has been shown to us by Mr. Subba Rao appearing for the appellants.
In the circumstances, the denial of the benefit of the enhanced superannuation age to the members of one 24 unit while the same is granted to the members of the other unit amounts to discrimination, violative of Article 16 of the Constitution.
We are, therefore, satisfied that the decision of the Tribunal is both proper and valid, and there is no substance in the present appeal.
The appeal is, there fore, dismissed.
We are informed that in spite of the decision of the Tribunal and even pending this appeal when no stay was granted, the Appellant Union of India retired the respondent at the age of 58 years.
We have been unable to understand this indefensible action on the part of the Appellant nor could the learned counsel for the Appellants explain it to us.
We, therefore, direct the Appellants to reinstate the respondent in service within one week of this Order and to pay to him all his emoluments from the date of his arbitrary retirement till the date of his re instatement in service as if he had not been retired.
We further direct that he would continue in service till he attains the age of 60 years, unless of course for some other legal reasons, it becomes necessary to discontinue his services before that date.
We also understand that in the meanwhile the respond ent was paid all his retirement benefits.
The Appellant will not recover any amount so paid to the respondent.
The appeal is accordingly dismissed with aforesaid directions and with costs.
T.N.A. Appeal dis missed.
| IN-Abs | Respondent was recruited as a Senior Scientific Officer in the Defence Science Service which was subsequently tri furcated and reconstituted.
The Government of India enhanced the superannuation age of Scientific and Technical personnel of one of the newly constituted units upto 60 years by an order dated 24.12.1985.
The respondent who was working in one of the other units of the reconstituted service, filed an application in the Central Administrative Tribunal seeking a direction that he was entitled to the benefit of enhanced age of superannua tion upto 60 years as made applicable to the other unit which allowed the application.
Hence this appeal by the Union of India.
Dismissing the appeal, this Court, HELD: 1.
In view of Rule 12 of the Defence Aeronautical Quality Assurance Service Rules, 1979 the benefit of en hanced age of superannuation given to the members of one unit was also available to the members of the other unit since the said condition of service was not expressly pro vided for in the Service Rules.
At the time of reconstitu tion of the service no option was given to the employees working in the different units to opt for one or the other of the units.
Those who were already working in either of the three units were deemed to belong to the respective newly constituted service.
Therefore their service condi tions will have to run parallel and no discrimination can be made between them by an unilateral action.
The classifica tion made between them further has no rational basis and no nexus of such classification to 21 the object sought to be achieved has been shown.
In the circumstances, the denial of the benefit of the enhanced superannuation age to the members of one unit while the same is granted to the members of the other units amounts to discrimination, violative of Article 16 of the Constitution.
[23A, F, G, H, 24A] 2.
The decision of the Tribunal is both proper and valid.
The appellants are directed to reinstate the respond ent in service, who would continue in service till he at tains the age of 60 years.
[24A, C D]
|
Criminal Appeal No. 111 and 477 of 1979.
From the Judgment and Order dated 19.4.1978 of the Allahabad High Court in Criminal Appeal No. 661 of 1975.
N.P. Midha and B.D. Sharma for the Appellant in Crl.
A. No. 111 of 1979.
Prithvi Raj, Prashant Choudhary and D. Bhandari for the Respondent in Crl.
A. No. 111 of 1979 and Appellant in Crl.
A. No. 477 of 1979.
M. Qamaruddin and Mrs. M. Qamaruddin for the Respondent in Crl.
A. No. 477 of 1979.
The Judgment of the Court was delivered by AHMADI, J.
In Criminal Case No. 3 of 1975, three persons were put up for trial before the learned Special Judge, Sultanpur (U.P.).
The case arose out of the death of one Ram Dhiraj Tiwari in police custody.
Accused No. 1 Rafiuddin Khan (Respondent in Criminal Appeal No. 477 of 1979) was the Sub Inspector of Police Station Kure Bhar in District Sul tanpur at all material times during the commission of the crime.
Accused No. 2 Shamsher Ali (since acquitted) was posted at the said police station as Beat Constable No. 3.
His companion Accused No. 3 (Appellant in Criminal Appeal No. 111 of 1979) was the Head Moharrir of the said police station.
Crime No. 71 of 1971 under Section 395, IPC was registered at the said police station on 25.5.
1971 concern ing a dacoity committed at Village Khara within 32 the jurisdiction of the said police station.
In that connec tion one Jagdamba was arrested on 20.9.1971.
During interro gation by AI the said suspect is alleged to have made.a confessional statement involving Ram Dhiraj Tiwari.
On the basis of this information A 1 directed A2 and Ram Jas (PW 6) and Harakh, both police chowkidars, to apprehend Ram Dhiraj and produce him before him.
Pursuant thereto A2 and his companions apprehended Ram Dhiraj from his residence in village Khajapur on 19.10.1971 at about 11.00 a.m. in the presence of his mother Kamaraji (PW 7), sister 's husband Ram Niranjan Misra (PW 8) and labourer Jiyalal (PW 9).
After his arrest Ram Dhiraj was brought to police station Kure Bhar at about 4.00 p.m. on the same day and handed over to A1.
PW 8 and Ram Baran Dubey (PW 10) are stated to have followed him to the police station.
It is alleged that soon charge of A1, he was given a severe beating with lathi and dandas by A1 and two constables, whose identity is not established, with a view to extracting a confessional statement from him.
When PW 8 and PW 10 tried to intervene.
, A1 demanded a sum of Rs.2000 from them to refrain from ill treating Ram Dhiraj.
Thereupon PW 8 went to Village Pure Neelkanth three miles away to fetch Bindeshwari Prasad Shukla (PW 5) the husband of Ram Dhiraj 's eider sister.
On the arrival of PW 5 at the police station, A1 is alleged to have repeated his demand of Rs.2000.
Since the bribe was not paid A1 and his two compan ions renewed the torture with vengeance which lasted till about 9 or 10 p.m.
As a result of the merciless beating Ram Dhiraj was badly injured.
It is alleged that the fact that he was apprehended from his village and was brought to the police station on 19.10.1971 was not entered in the general diary register but a false entry was posted in the said general diary register regarding his arrest on the next day i.e. 20.10.1971, at about 6.00 a.m. from near a culvert in village Hanna Harora by A2 and his two chowkidars.
The defence version was that as he tried to resist arrest A2 and his two companions beat him up as a result of which he sustained the injuries in question.
Another entry was made in the same general diary on the same day purporting to transfer Ram Dhiraj to police station Sadar for admission to the District Jail.
General Diary Entry No. 14 was made to show that Ram Dhiraj was sent from Sardar police station at about 12.15 noon for admission to the District Jail as he had sustained injuries.
It, however, transpired later that Ram Dhiraj died at about 4.00 p.m. on the same day while he was being taken to the residence of one of the Magistrates at Sultanput for remand.
On his demise his dead body was taken to Kotwali Sultanpur where an entry No. 30 regarding his death was made in the general diary at about 4.20 p.m.
On 21.10.1971 an inquest 33 was made on the dead body and thereafter the dead body was sent for post mortem examination.
PW 1 Dr. Mitra performed the autopsy and found as many as 28 ante mortem injuries on the body of the deceased.
The prosecution case against A1 was that he was respon sible for having beaten the suspect Ram Dhiraj in the compa ny of two others which resulted in as many as 28 injuries to which he ultimately succumbed.
It was also alleged that he had demanded a bribe of Rs.2000 to desist from meting out third degree punishment to the suspect.
He was, therefore, charged under Section 304, 330, 201, 218/ 34, I.P.C., while his companion A3 was charged under Section 201 and 218, I.P.C.
All the three accused persons denied the charges levelled against them and claimed to be tried.
They however did not deny the fact that Ram Dhiraj died in police custo dy.
The case set up by A 1 was that he was away from the police station between 5.00 p.m. and 7.30 p.m., on 19.10.1971 and, therefore, the allegation that he had tor tured Ram Dhiraj is fabricated and wholly false.
A2 admitted the fact that Ram Dhiraj was arrested outside his village house at Khajapur on 19.10.1971 and was brought to the police station Kure Bhar on the same day at about 4.00 p.m.
He, however, denied having caused any injury to him during arrest.
A3 denied the prosecution allegation that he had deliberately and wilfully posted false entries in the Gener al Diary to help A 1.
The learned Special Judge before whom the accused were tried came to the conclusion that the deceased was arrested from his residence on 19.10.1971 as alleged by the prosecu tion and not from near the culvert of village Hanna Harora on 20.10.1971; that no beating was given to him at the time of his arrest and that he was beaten in police station Kure Bhar where he was taken on 19.10.1971 itself after his arrest by A1 and two other constables who could not be identified.
He also found that the fact that he was brought to the police station on 19.10.1971 was deliberately sup pressed and A3 omitted to perform his duty by not posting an entry in that behalf in the General Diary and instead post ing a false entry No. 10 (Exh.
Ka 13) on the next day, 20.10.1971.
He also found that a false entry was posted in the diary to show that he was sent to Sadar police station where he died before admission to jail.
Lastly he found that A2 had counter signed the general diary entry No. 10 without knowing the contents thereof.
On facts found proved, the trial court convicted A1 under Section 304 (Part II) and sentenced him to suffer Rigorous Imprisonment for 7 years, under Section 330 and sentenced him to suffer Rigorous Imprisonment for 3 years, under Section 201 and 218/34 and 161 I.P.C. and 34 under Section 5(1)(d) read with Section 5(2) of the Preven tion of Corruption Act, 1947 and sentenced him to Rigorous Imprisonment for 2 years on each count all substantive sentences to run concurrently.
A2 was acquitted of all the charges levelled against him.
A3 was, however, convicted under Sections 201 and 218 I.P.C. and was ordered to suffer Rigorous Imprisonment for 2 years on each count.
The sub stantive sentences were ordered to run concurrently.
Both the convicted accused preferred Criminal Appeal No. 661 of 1975 in the High Court.
The State did not question the acquittal of A2.
The High Court accepted the defence version that A1 was not at the police station on 19.10.1971 till 7.30 p.m. as proved through DWI and DW2 and, therefore, the prosecution version was unacceptable.
It also found that the three prosecution witnesses PW5, PW8 and PW 10 were not eye witnesses to the incident and hence their story about beat ing in the police station and the demand of bribe cannot be accepted.
It lastly held that A 1 could not be held respon sible for the omission to post an entry in the general diary about the arrival of the deceased to the police station at 4.00 p.m. as he himself had returned to the police station at 7.30 p.m.
On this line of reasoning the High Court al lowed A1 's appeal and set aside the conviction on all counts.
The High Court, however, maintained the conviction of A3 but reduced the sentence to Rigorous Imprisonment for 6 months.
Criminal Appeal No. 111 of 1979 is preferred by A3 questioning his conviction while Criminal Appeal No. 477 of 1979 is preferred by the State questioning the acquittal of A1.
As both these appeals arise out of the same judgment.
We think it would be convenient to dispose them of by this common judgment.
The fact that Ram Dhiraj died of injuries received by him after his arrest and while he was in police custody is not seriously disputed.
The prosecution version is that he was beaten in the police station on 19.10.1971 by A1 and his two companions after he was arrested from his residence and brought to the police station.
The defence version on the other hand is that the deceased was arrested on 20.10.1971 by A2 and his two companions from near a culvert in village Hanna Harora and he was beaten up by them as he resisted arrest.
Of course A2 has denied this in his statement re corded under Section 313 of the Criminal Procedure Code.
Be that as it may, both the prosecution as well as the defence version suggest that the deceased had received a beating at the hands of the police after his arrest.
The evidence of PW1, Dr. Misra shows that the deceased had received as many as 28 injuries.
by some blunt weapon or weapons which re sulted in his death due to 35 shock and haemorrhage on the afternoon of 20.10.197 1.
The trial court has come to a firm conclusion that these in juries were caused to the deceased in the police station after his arrest.
The High Court also opines that the "number of injuries speaks that most probably he had not received those injuries only during arrest and that he was subjected to severe assault sometime after his arrest".
Even this halting. finding recorded by the High Court shows that both the courts felt that the deceased was seriously beaten while in police custody.
The fact that Ram Dhiraj died a homicidal death is, therefore, rightly not contested before us.
Having regard to the rival versions, the crucial ques tion which must be answered is regarding the date, time and place of arrest.
It is not in dispute that an offence of dacoity at village Khera was registered at Police Station Kure Bhar on 25.5.1971.
One Jagdamba was arrested in that connection on 20.9.1971.
A1 was investigating that crime.
In the course of interrogation by A1, Jagdamba is stated to have revealed the name of Ram Dhiraj as his accomplice.
The evidence of PW 6 Chowkidar Ram Jas is that A1 had directed A2 to arrest Ram Dhiraj and produce him before him.
A2, PW 6 and Chowkidar Harakh then went to fetch Ram Dhiraj.
In the absence of any specific information, the first place to visit to locate the wanted man would be his residence.
PW 6 also deposed that the police party went in search of the deceased to his village and apprehended him from near his residence.
However, the evidence of PW 6 was challenged on the ground that he had in his statement before M.M. Swarup, Executive Magistrate, affirmed the defence of AI that the deceased was apprehended from near a culvert in village Harma Harora on 20.10.1971.
The learned trial Judge nega tived this contention as the certified copy of the statement said to have been made to M.M. Swarup in an enquiry under Section 176 of the Code of Criminal Procedure was inadmissi ble in evidence since the said enquiry could not be equated to a judicial proceedings and was, therefore, inadmissible in evidence.
He was of the view that the same could not be admitted in evidence under Section 90 of the Evidence Act.
In this view the proper course was to call for the original statement, confront the witness with the contradictory part and on proof use it as evidence to discredit the witness.
We agree with the learned trial judge that the contents of a certified copy of the statement recorded under Section 176 of the Code would not be admissible in evidence unless the contradiction is proved by putting it to the witness in cross examination and the maker has had an opportunity to admit or deny it.
In our view it has to be proved like any other previous state.meat.
The trial judge also opined that even if the statement was admis 36 sible under Section 90, Evidence Act that statement per se cannot efface his substantive evidence in court for the simple reason that at the time of recording of that state ment he was under the direct influence of A1 his superior, and was, therefore, not a free agent.
The learned trial judge was, therefore, of the opinion that the contradiction even if proved cannot militate against the truth of his statement.
The High Court has endorsed the finding of the trial court that as PW 6 was a chowkidar under the adminis trative control of A1 he could be prevailed upon to support the defence theory in t, he inquiry under Section 176.
The High Court also held that the short signature of PW 7 as 'Jassi ' in the General Diary Entry No. 10 must have been obtained by A3 to add sanctity to the defence version.
The High Court finally stated that even if absolute reliance is not placed on the evidence of PW 6 in this behalf, his evidence is duly corroborated by the evidence of other witnesses, viz., PW 7 Karamraji, PW 8 Ram Niranjan Misra and PW 9 Jai Lal, the mother, brother in law and labourer of the deceased.
These three witnesses have also deposed that the deceased was arrested from his village Khajapur at about 11.00 a.m. on 19.10.1971.
The High Court has rightly ob served that barring minor discripancies in their evidence as to dress of members of the police party, presence of others, etc., there is nothing brought out in their cross examina tion to discredit their evidence in this behalf.
The prose cution also examined PW 3 Baij Nath and PW 4 Mewa Lal, who have their shops near the culvert of village Hanna Harora to negative the defence version regarding the arrest of the deceased from there.
Therefore, both the courts have record ed a concurrent finding of fact that the deceased was ar rested on 19.10.1971 at about 11.00 a.m. from his village Khajapur.
That means that the entry in the general diary that the deceased was arrested on 20.10.1971 and was brought to the police station later can be brushed aside as false.
The need to make a false entry speaks for itself.
The next question is where, when and by whom were the injuries inflicted on the deceased.
The High Court observes that the medical evidence on record shows that the injuries found on the person of the deceased were caused on the evening of 19.10.1971.
In fact according to the High Court the medical evidence lends credence to the prosecution case that the deceased was arrested on 19.10.1971.
The High Court holds as under: "After considering the injuries of the deceased I have not the least doubt in my mind that those injuries were not caused to him during arrest, and that he was beaten some 37 times after his arrest and before he was sent to jail from police station Kure Bhar".
There is, therefore, no doubt that the High Court reached a firm finding that the arrest was made on 19.10.1971 at about 11.00 a.m. from village Khajapur and the injuries noticed by the medical officer on the person of the deceased at the time of the autopsy were inflicted after his arrest and not during the course of arrest.
Now it is not in dispute that A 1 was serving as the Station Officer of police station Kure Bhar on the 19/20.10.197 1.
He was in charge of the investigation of the dacoity case in which Jagdamba was arrested.
It was he who had interrogated Jagdamba and had secured a confessional statement from him.
The information divulged by Jagdamba necessitated the arrest of the deceased.
It is, therefore, reasonable to infer that AI would interrogate the deceased also.
Since the arrest was made from village Khajapur, the presence of PW 7, PW 8 and PW 9 at the time of the arrest cannot be doubted.
PW 8 and PW 10 deposed that they had followed the deceased to the police station after his ar rest.
PW 8, the brother in law of the deceased and PW 10 have deposed that after the deceased was taken to the police station he was subjected to third degree treatment by AI and two policemen whom they have not identified.
Both have stated on oath that A 1 and his two unidentified companions beat the deceased with lathi and danda to extract a confes sion from him and when they entreated A 1 not to beat the deceased, he demanded Rs.2000 from them.
PW 8 then went to village Desarwa of Pure Nilkanth to fetch PW 5, the husband of the eider sister of the deceased.
On the arrival of PW 5 at the police station he too requested A1 not to beat the deceased but Ai reiterated his demand for Rs.2000.
When the witness expressed his inability to meet the demand, AI resumed the ill treatment to the deceased.
It is true that PW 5 and PW 8 were the brother in law of the deceased and PW 10 his neighbour but that by itself, without anything more, was not sufficient to doubt their testimony which receives corroboration from medical evidence.
We are, therefore, of the opinion that unless there are sound grounds to reject their evidence it would not be proper to brush aside their evidence on the specious plea that they are interested witnesses.
Even though the High Court came to the conclusion that the deceased was beaten after his arrest, the High Court refused to place reliance on the direct testimony of these three witnesses insofar as the involvement of A1 is con cerned.
The first reason assigned is that since 38 the village of PW 5 is 11 or 12 miles from Khajapur which in turn is about 10 miles from Kure Bhar, it is not possible that he could have reached the police station by about 4.30 p.m.
In the first place the exact time of arrival of de ceased to the police station is not known.
Secondly when the witnesses spoke about the time factor they merely mentioned the approximate time and not the exact time of PW 8 's depar ture and return to the police station with PW 5.
We are, therefore, of the opinion that the evidence of the prosecu tion witnesses cannot be thrown overboard on such an infirm ground.
The High Court has also cast doubts on the evidence of PW 5 on the ground that he told a deliberate lie that there was no sentry at the police station to make his entry in the police station probable.
This too appears to us to be a weak reason for discarding his evidence.
His presence at the police station is established by the telegram that he sent to the superior police officers complaining about the beat ing given to the deceased.
We, therefore, do not think that the High Court was justified in refusing to act on his evidence on this ground.
In the application exhibit Ka 3 the name of A2 was mentioned as one of the constable who was assisting A1 in beating the deceased to extract a confession from him.
However, in the substantive evidence the witness did not name A2 but merely stated that A1 and two other constables had beaten the deceased.
The High Cort, therefore, inferred that he had wrongly named A2 as one of the assailants in exhibit Ka. 3 and was, therefore, not a reliable witness.
But both in the telegram, and application exhibit Ka. 3 the name of A1 is men tioned.
The omission to name A2 as one of the constables involved in the beating cannot absolve A1.
We are, there fore, inclined to think that the High Court was not right in refusing to act on the evidence of the witness on such consideration.
The High Court rejects the evidence of the three prose cution witnesses on the ground that the telegram was sent by PW 5 as late as 23.10.
In our opinion the High Court failed to appreciate that 19th and 20th were lost in trying to secure the release of the deceased from AI.
After the suspect died on the 20th the next day i.e., 21st was lost in post mortem examination and securing the dead body of the deceased for funeral.
His evidence discloses that the dead body was not delivered to him till 4.30 p.m.
On that day he went to village Khajapur and broke the news of death to PW 7 and other family members.
He has deposed that he sent the telegram only after he received threats from A 1.
The trial court has discussed this aspect of 39 the case in detail and has rightly pointed out that it was a difficult decision to take for PW 5 as he may not like to incur the wrath of A1.
But when A1 threatened him, he was left with no choice but to inform his superiors.
The High Court, with respect, has failed to properly appreciate and assess the situation.
After all everyone thinks twice before deciding to make so serious a complaint against a police officer.
We do not think there was so serious a delay as to throw out the evidence of the three witnesses on that ground.
PW 10 's evidence has been rejected on a very flimsy.
ground.
He is the neighbours of the deceased.
He was at the police station upto 7.00 or 8.00 p.m. and claims to have seen A1 beating the deceased.
His evidence is rejected on the ground that he was interested in getting the policemen punished because the deceased was beaten to death while in police custody.
It is further stated that all others associ ated with him are keen to see that somebody gets punished for the assault on the deceased.
We find it difficult to comprehend why this witness would falsely involve A1 if he was not responsible for the injuries caused to the deceased.
The conduct of this witness is branded as unnatural because he did not go to inform PW 7 and others about the death of the suspect.
Since PW 5 and PW 8 were aware of the death.
There was no need for PW 10 to inform the family members of the deceased as he would be justified in believing that PW 5 and PW 8 must have informed them.
We are, therefore, of the view that the High Court had rejected the evidence of PW 10 on thoroughly untenable grounds.
That brings us to the question whether the alibi set up by A1 can come to his rescue.
In this connection reliance is placed on the evidence of DW 1, Jaswant Singh, Station Officer, Machlishahr Police Station.
He claims to have come to Kure Bhar on 19.10.1971 for investigation of an offence under Section 363/366 I.P.C. of his police station.
He wants us to believe that he was at the Kure Bhar police station from 5.00 p.m. to 9.30 p.m.
According to him A1 was not at the police station till about 7.30 p.m.
Reliance is placed on the general diary entry dated 19.10.1971 to show that A 1 had left the police station at about 10.30 a.m. for Tikar and had returned to the police station at 7.30 a.m.
This entry is proved through DW 2.
Now according to DW 1 even though he had come to Kure Bhar for investigation, he him self remained at the police station throughout and sent his men with A.S.I. (II) of Kure Bhar to Dilawar Ka Purwa for investigation.
He wants us to believe that he came from his police station to investigate a crime but kept sitting at Kure Bhar police station throughout from 5.00 p.m. to 9.30 p.m.
Is this natural conduct? The obvious reason for so stating 40 is to discredit PW 5, PW 8 and PW 10 who have in unmistaka ble terms stated that A1 was at the police station and had beaten the deceased.
DW 1 stand belied by the general diary entry made at his police station on 20.10.1971 to the effect that on reaching Kure Bhar he took A.S.I. (II) of that police station and went to village Dilawar ka Purwa for investigation and returned to his police station at 4.00 p.m.
According to the said entry from Dilawar ka Purwa he went to Sultanpur where he passed the night, left for Ram nager next morning and returned to his police station via Durgaganj.
The learned trial judge dealt with this part of the defence evidence thus: "It is also improbable of belief that once station officer Jaswant Singh had taken care to come to Kurebhar in order to make the investigation of the crime of his police station, he had leisurely lingered on at PS Kurebhar and not person ally proceeded to make the investigation of the said case".
The learned trial judge observed that he appears to have come forward to help a member of his own fraternity.
The learned trial judge, therefore, came to the conclusion: "If general diary entries Nos. 15 and 21 may have been falsely incorporated, where is the guarantee that the gener al diary entry No. 17 which falls in between these, may not have been falsely incorporated".
The learned trial judge also felt that it was not possible to believe that an important police officer like A 1 would spend the whole day from 10.30 a.m. to 7.30 p.m. inquiring about an application at Village Tiker.
The learned judge in the High Court considers the ap proach of the learned trial judge unacceptable because: "Sub Inspector Juswant Singh has stated that he himself had stayed at Police Station Kurebhar and had sent other members of his party and an A.S.I. of Police Station Kurebhar to Dilawar Ka Purwa.
The mere fact that S.I. Jaswant Singh happens to be a Sub Inspector of Police is no ground to reject his testimony.
After all there should be some reason for a police officer posted at police station Machlishahr at Jaunpur to falsely depose for defending Rafi 41 Uddin Khan appellant.
If S.I. Jaswant Singh 's evidence is disbelieved in the present case, he himself incurs the risk of losing his job" This line of reasoning does not commend to us.
We fail to understand how the learned judge could persuade himself to accept the evidence of DW 1 on the specious plea that if he did not tell the truth he ran the risk of losing his job.
The leaned trial judge gave sound reasons for disbelieving the evidence of DW 1 that he did not stir out of Kure Bhar police station from 5.00 p.m. to 9.30 p.m.
The High Court failed to appreciate that on realising that the condition of the deceased had deteriorated, a false entry was made by A3 at the behest of A1 to show that (i) the deceased was not arrested on 19.10.1971 nor was he brought to the police station Kure Bhar by about 4.00 p.m. and (ii) that he was actually arrested by A2 from near the culvert of village Hanna Harora on 20.10.71 and was given a beating before actual arrest, a fact which is denied by A2 in his statement under Section 313 of the Code.
Thus the foundation for absolving himself from the responsibility of having ill treated the deceased was laid.
The trail court rightly holds that there is no guarantee that entry 17 is accurate when entries 15 and 21 are found to be false.
The entry in the case diary regarding crime No. 28 of Machlishahr recorded by A.S.I. Bankey Bihari who had accompanied DW 1 clearly men tions that when they reached Kure Bhar they met the Thana Adhiyakshakh (i.e. A 1) at about 5.00 p.m. which negatives the theory that A1 had left the police station at 10.30 a.m. and had not returned till 7.30 p.m. of 19.10.
Without coming to grips with the circumstances pointed out by the trial court for disbelieving DW 1, the High Court surpris ingly accepted his evidence as gospel truth only because he ran the risk of losing his job.
The High Court should have realised that cases are not unknown where police officer have given inaccurate accounts to secure a conviction or to help out a colleague from a tight situation of his creation.
The High Court should also have realised that it is general ly difficult in cases of deaths in police custody to secure evidence against the policemen responsible for resorting to third degree methods since they are in charge of police station records which they do not find difficult to manipu late as in this case.
It is only in a few cases, such as the present one, that some direct evidence is available.
In our view the reasons assigned by the High Court are too weak to stand judicial scrutiny.
We are aware that so far as A 1 is concerned, we are called upon to interfere in an acquittal appeal.
Since it is said that an acquittal 42 reinforces the presumption of innocence we have carefully considered the reasons given by the High Court for setting aside the conviction of A 1.
We are satisfied beyond any manner of doubt that the High Court completely misdirected itself.
We have dealt with the facts at some length to justify our interference under Article 136 of the Constitu tion.
Had we not been fully satisfied that gross injustice was done because the High Court misdirected itself we would not have interfered in exercise of our powers under Article 136 of the Constitution.
For the above reasons we dismiss Appeal No. 111 of 1979 preferred by A3 as we are satisfied that his conviction is correctly recorded.
We allow the State 's appeal No. 477 of 1979 and restore the conviction of A1 recorded by the trial court by setting aside his acquittal by the High Court.
On the question of sentence a fervent appeal was made by his counsel that having regard to the passage of time and the changed circumstances A1 should not be sent to jail and the sentence of fine should suffice.
We are unable to accede to this request.
The offence is of a serious nature aggravated by the fact that it was committed by a person who is sup posed to protect the citizens and not misuse his uniform and authority to brutally assault them while in his custody.
Death in police custody must be seriously viewed for other wise we will help take a stride in the direction of police raj.
It must be curbed with a heavy hand.
The punishment should be such as would deter others from indulging in such behaviour.
There can be no room for leniency.
We, therefore, do not think we would be justified in reducing the punish ment imposed by the trial court.
A1 is on bail.
Since the trial court 's order of his conviction and sentence is restored he will surrender to his bail within a week 's time to serve his sentence.
| IN-Abs | Three police personnel were charged with offences aris ing out of the death of one Ram Dhiraj Tiwari in police custody.
Rafiuddin Khan (accused No. 1) was the Sub Inspec tor of Police Station Kure Bhar, Shamsher Ali (accused No. 2) was a Beat Constable, and Gauri Shankar Sharma (accused No. 3) was the Head Moharrir.
The prosecution version was that AI directed A2 and two police chowkidars, to apprehend Ram Dhiraj, deceased, who was a suspect in a dacoity case.
Pursuant thereto, Ram Dhiraj was arrested from his residence on 19.10.1971 at about 11.00 a.m. and brought to the police station.
The prosecution case against A1 was that he was responsible for having beaten the suspect Ram Dhiraj in the presence of two other constables, whose identity was not established, which resulted in as many as 28 injuries to which he ultimately succumbed.
It was also alleged that A1 had demanded a bribe of Rs.2000 to desist from meeting out third degree punish ment to the suspect.
The case against A3 was that he delib erately and wilfully posted false entries in the General Diary to help A1.
The defence version on the other hand was that the deceased was arrested on 20.10.1971 by A2 and his companions from near a culvert in the village and he was beaten up by them as he resisted arrest.
The Trial Court accepted the prosecution version and convicted A1 under section 304 (Part II) section 330, sec tions 201 and 218/34 and 161, IPC, and under section 5(1)(d) read with section 5(2) of the Prevention of Corruption Act, 1947.
Accused No. 2 was acquitted of all charges.
Accused No. 3 was convicted under sections 201 and 218, IPC.
The High Court, however, accepted the defence version that A1 was not at the police station on 19.10.1971 till 7.30 p.m.
The High Court found that the three prosecution witnesses were not eye witnesses 29 30 to the incident and hence their story about beating in the police station and the demand of bribe could not be accept ed.
The High Court accepted the evidence of DW 1, Jaswant Singh, Station Officer, Machilishahr Police Station, who claimed to have come to Kure Bhar Police Station on 19.10.1971 for investigation of another offence.
According to DW 1, AI was not at the police station till about 7.30 p.m.
While dismissing the appeal filed by accused No. 3, and allowing the State appeal against the acquittal of accused No. 1, and restoring his conviction recorded by the trial court by setting aside his acquittal by the High Court, this Court, HELD: (1) Both the courts have recorded a concurrent finding of fact that the deceased was arrested on 19.10.1971 at about 11.00 a.m. from his village Khajapur.
That means that the entry in the general diary that the deceased was arrested on 20.10.1971 and was brought to the police station later can be brushed aside as false.
The need to make a false entry speaks for itself.
[36E F] (2) It is true that PW 5 and PW 8 were the brother in law of the deceased and PW 10 his neighbour, but that by itself, without anything more, was not sufficient to doubt their tastimony which receives corroboration from medical evidence.
Unless there are sound grounds to reject their evidence it would not be proper to brush aside their evi dence on the specious plea that they are interested witness es.
[37F G] (3) It is difficult to understand how the learned Judge could persuade himself to accept the evidence of DW 1 on the specious plea that if he did not tell the truth he ran the risk of losing his job.
The High Court should have realised that cases are not unknown where police officers have given inaccurate accounts to secure a conviction or to help out a colleague from a tight situation of his creation.
[41B] (4) The High Court should have realised that it is generally difficult in cases of deaths in police custody to secure evidence against the policemen responsible for re sorting to third degree methods since they are in charge of police station records which they do not find difficult to manipulate as in this case.
It is only in a few cases, such as the present one, that some direct evidence is available.
[41F G] (5) After carefully considering the reasons given by the High Court for setting aside the conviction of AI, this Court is satisfied beyond any manner of doubt that the High Court had completely misdi 31 rected itself and hence interference by this Court under Article 136 of the Constitution, was justified.
[42A B] (6) The offence is of a serious nature aggravated by the fact that it was committed by a person who is supposed to protect the citizens and not misuse his uniform and authori ty to brutally assault persons in his custody.
Death in police custody must be seriously viewed for otherwise we will help take a stride in the direction of police raj.
It must be curbed with a heavy hand.
The punishment should be such as would deter others from indulging in such behaviour.
There can be no room for leniency.
This Court does not think it would be justified in reducing the punishment imposed by the trial court.
[42D E]
|
Appeal No. 81 of 1990.
From the Judgment and Order dated 7.3.1989 of the Rajas than High Court in S.B. Civil (Misc.) Second Appeal No. 2 of 1976.
Guman Mal Lodha, Sushil K. Jain, B.P. Aggarwal and Sudhanshu Atreya for the Appellant.
C.M. Lodha and Surya Kant for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
1.
Heard learned counsel for both sides and special leave is granted.
This appeal by the auction purchaser is against the judgment of the High Court of Rajasthan, Jaipur Bench, dated March 7, 1989 made in S.B. Civil (Misc.) Second Appeal No. 2/76.
The facts, though many, relevant to dispose of the appeal are stated as under: 3.
S/Shri Gokulchand and Rekhchand, Respondents Nos.
5 and 6 herein, defendants 2 and 3 in O.S. No. 37/59 on the file of the Court of the Civil Judge, Jhalawar, obtained in another suit, an ex parte 27 money decree to recover Rs.5,557.10 against Bal Mukund and brought to sale the joint family house which is the disputed property in the present litigation.
Mohanlal, his minor son and his widow filed objections under Order 21 Rule 58 CPC which were rejected.
The sale was confirmed on October 24, 1958, and sale certificate was issued on November 28, 1958.
The respondents filed O.S. No. 37/59 under Order 21 Rule 63 CPC to set aside the sale.
The Trial Court by its judgment dated December 5, 1961 dismissed the suit, but on appeal, the District Judge at Kotah allowed the appeal and decreed the suit for resti tution of the plaint schedule property since possession had in the meantime, been taken.
Second Appeal No. 91/65 filed in the High Court was abated as a whole since Mohanlal died on May 1, 1968 and his legal representatives being Respond ents Nos.
2 to 4 were not brought on record by substitution.
When execution was levied for restitution, though the appel lant raised several objections to its executability but challenge was confined to two grounds, namely, the decree passed by the District Judge is a nullity as he lacked pecuniary jurisdiction to entertain the appeal against the decree in the suit admittedly valued at Rs.15,000 under Section 21(1)(a) of the Rajasthan Civil Courts Ordinance 1950, and it was entertainable by the High Court, and sec ondly, the decree being a declaratory one was incapable of execution, notwithstanding the direction for restitution of the plaint scheduled property.
The Executing Court dismissed the objection petition, but on appeal the order of the Executing Court was reversed.
On further appeal the High Court allowed the same, set aside the appellate order and directed the appellate court to transfer it to the appropri ate Civil Court for execution as per law.
As against it the present appeal has been filed.
The contention that the decree passed by the District Judge, Kotah, on appeal is a nullity is devoid of substance.
It is true that under Section 21(1)(a) of the Rajasthan Civil Courts Ordinance 1950, the District Court is empowered to entertain an appeal against the decree of a Trial Court of the value only upto Rs.10,000 and by operation of sub section (b) of section 21(1) the appeal would lie only to the High Court as the value of the suit was admittedly Rs.15,000.
But this is a suit laid under Order 21 Rule 63 CPC to set aside the sale by declaring the decree of Rs.5,557.10 to be invalid and does not bind them.
In Radha Kunwar vs Reoti Singh, AIR 19 and Phul Kumar vs Ghanshyam Mishra, 35 IA 22 PC it was held that the value of the amount of decree is the value for the purpose of the suit under Order 21 Rule 63 CPC.
Therefore, merely because the valuation of the pro 28 perty sold in execution had been put at Rs.15,000, the valuation of the suit under Order 21 Rule 63 CPC cannot be treated to be that valuation.
Accordingly, we hold that Section 21(1)(a) of the Ordinance is attracted.
Therefore, the decree of the Appellate Court in C.A. No. 157/61 on the file of the Court of the District Judge, Kotah, is not a nullity.
The only other question is whether the plaintiff is entitled to restitution of the property.
Once the decree which was the subject matter of execution was declared to be not binding on the plaintiffs, Mohanlal and his mother Bhuli Bai, the execution sale would not bind them and as a result they became entitled to restitution.
The decree does admit tedly contain a direction for restitution.
Therefore, it is not a mere declaratory decree but coupled with a decree for restitution of the plaint scheduled house.
Accordingly, the decree is executable.
To a question put by the Court whether in view of the long pendency of the proceedings it could not be equitable that the appellant should pay the proper value of the house or deliver possession thereof, the learned counsel for the appellant fairly stated that whatever amount be fixed by this Court, the appellant is prepared to pay the same.
The learned counsel for the respondents on the other hand rely ing upon the statement made in the objections dated April 28, 1973, filed by the appellant maintained that he had then claimed only a sum of Rs.11,900 in all, and the appellant would be entitled only for that amount.
On the other hand, the appellant having been in possession and enjoyment of the property, the respondents are entitled to the mesene prof its.
On the facts and in the circumstances and in considera tion of the fact that the litigation is pending for a long period, we are of the view that justice and equity would be met if we direct the District Court, Kotah, to assess the prevailing market value of the plaint scheduled house and the site as on date and direct the appellant to pay the value thereof within a time to be fixed by him.
If the respondents have not drawn the balance of the sale amount in the original suit filed by S/Shri Gokulchand and Rekhchand and after full satisfaction was recorded, the appellant is entitled to withdraw the said balance amount.
In case the amount was already withdrawn, the appellant is entitled to deduct the same from the amount fixed by the District Court.
In case the appellant fails to pay the value of the property assessed by the District Court as directed above, there shall be a direction for restitution of the plaint scheduled property as per the decree of the Appellate Court in C.A. No. 157/61.
The appeal is accordingly allowed, but, in the circumstances, without costs.
P.S. S Appeal allowed.
| IN-Abs | Under Section 21(1)(a) of the Rajasthan Civil Courts Ordinance, 1950 the District Court is empowered to entertain an appeal from a decree of the value of only upto Rs.10,000.
Appeals in other cases lie only to the High Court.
In the instant case, a joint family house was brought to auction in satisfaction of an ex parte money decree to recover Rs.5,557.10.
The respondent coparceners filed objec tions under Order 21 Rule 58 CPC, which were rejected.
The sale was confirmed in 1958 and the sale certificate issued.
They, thereupon, filed a suit under Order 21 Rule 63 CPC to set aside the sale, in which the valuation of the property sold in execution was put at Rs.15,000.
The trial court dismissed the suit.
The District Court, however, allowed the appeal and decreed the suit for resti tution of the property since possession had in the meantime been taken.
The appellant auctionpurchaser raised objections to the execution on the ground that the said decree was a nullity as the District Court lacked pecuniary jurisdiction to entertain the appeal against the decree in the suit valued at Rs.15,000 under Section 21(1)(a) of the Ordinance, and that the decree being a declaratory one was incapable of execution.
The executing court dismissed the objection petition but on appeal the order was reversed.
On further appeal, the High Court set aside the appellate order.
Allowing the appeal in part, the Court, HELD: The value of the amount of decree would be the value for the purpose of the suit under Order 21 Rule 63 CPC.
In the instant case, the suit was laid to set aside the sale by declaring the decree of 26 Rs.5,557.10 to be invalid.
Merely because the valuation of the property sold in execution had been put at Rs.15,000 the valuation of the suit under Order 21 Rule 63 CPC could not be treated to be that valuation.
Accordingly, Section 21(1)(a) of the Ordinance was attracted.
It could not, therefore, be said that the decree passed by the District Court for restitution of the property was a nullity.
Since, it was not a mere declaratory decree but coupled with a decree for restitution of the property, the plaintiff was entitled to execution.
[27G 28A, 28C] Radha Kunwar vs Reoti Singh, AIR 1916 PC 18 and Phul Kumar vs Ghanshyam Mishra, 35 IA 22 PC, referred to.
However, in view of the fact that litigation was pending for a long period, it would be equitable if the appellant is permitted to pay the proper value of the house.
The District Court is directed to assess the prevailing market value of the house and the site as on date.
The appellant to pay the value thereof within a time fixed by the District Court.
[28D, F]
|
Special Leave Petition (Civil) No. 8094 of 1988.
From the Judgment and Order dated 16.3.88 of the Andhra Pradesh High Court in (A.A.O.) No. 1152/86 & C.R.P. No. 2728 of 1986.
C. Sitaramiah and G. Prabhakar for the Petitioners.
R.F. Nariman, K. Prabhakar and R.N. Kishwani for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
The respondent R.V. Rayanim was, at all material times, a Class I contractor who had entered into an agreement with the Government of Andhra Pradesh for formation of earth dam in gorge portion from chainage 3360 to 3380 M of Raiwada Reservoir Project near Devarapalli village, Chodavaram Taluk, Distt.
Visakhapatnam, Andhra Pradesh.
Disputes and differences arose between the parties in respect of the aforesaid agreement.
A reference was made to the arbitrator as per the arbitrator clause in the agreement between the parties.
The respondent made eleven claims claiming various amounts, particulars whereof have been set out by the arbitrator as follows.
56 "I.Payment for forming cross (Rs. in lakhs) 15.89 bund and refund of the (subsequently reduced amount recovered.
to Rs.14.89 lakhs) II.Refund of Seigniorage 2.071 (withdrawn) Charges III.Escalation and damages 14.00 IV.Extra load for sand 1.075 (subsequently reduced to Rs.0.575 lakhs).
V.Payment for excavation 1.030 under water for probing diaphram wall VI.
Compensation for loss 1.500 suffered due to partial prevention by the department.
Compensation for loss 2.015 suffered due to non payment for the work done.
VIII.Refund of excess hire 0.730 charges recovered.
Overheads 0,960 X. Costs O. 100 XI.
(a) Interest on II and VIII at 24% from the date of recovery.
(b) On Rs.8.30 lakhs at 24% p.a. from 30.11.81 to 12.5.
(c) Interest at 24% on the award amount except II and VIII from the date of petition.
" The arbitrator gave a non speaking award dated 27th July, 1985 in favour of the respondent, amounting to Rs.19.39 lakhs, wherein he stated as follows: "Claim II has been withdrawn by the petitioner himself on the ground it was subsequently refunded by the respondents.
On the balance claims (I and III to X) according to my assessment, I award a consolidated amount of Rs.19.39 lakhs to the extent of the claims judged admissible.
The respond ents shall pay Rs.
Nineteen lakhs and thirty nine thousand to the petitioner.
" It is, therefore, apparent the claim No. II as mentioned above, 57 had been withdrawn.
On the balance claims I and III the arbitrator had awarded a consolidated amount of Rs.19.39 lakhs 'to the extent of the claims judged admissible '.
The respondent filed a proceeding before the Court to make the award rule of the Court.
The petitioner preferred an appli cation for setting aside the award.
By a common judgment dated 21st April, 1985, the Second Additional Judge, City Civil Court, Hyderabad, dismissed the petition of the peti tioner for setting aside the award and allowed the judgment in terms of the award.
The petitioner preferred an appeal and a civil review petition before the High Court of Hydera bad.
By a judgment dated 16th March, 1988 the division bench of the High Court dismissed the appeal and the revision of the petitioner.
It held that the non speaking award of the arbitrator was not liable to be set aside by the Court.
The petitioner has preferred this special leave petition challenging the said decision of the High Court.
The main contention which was sought to be urged on this case was that the award was a nonspeaking award and, as such, was bad.
On this ground, on or about 9th December, 1988 this Court directed that the matter should be taken up along with civil appeal No. 5645 and 5645A of 1986 pending before a larger bench.
At that time, the question was pending consid eration by the Constitution Bench of this Court.
This Court further directed on 9th December, 1988 that the entire amount of award, if not deposited in the trial court, should be deposited in the trial court within two months from that date, and upon the deposit being made the respondent will be at liberty to withdraw 50% of the amount which has not been withdrawn on furnishing security to the satisfaction of the trial court.
It was further recorded that 50% had already been withdrawn.
As mentioned hereinbefore, the main contention sought to be urged was that the award being a non speaking award, was bad in law.
In view of the decision of this Court in Raipur Development Authority etc.
vs M/s Chokhamal Contractors etc.
, Jmt.
Today 2 SC 285, this contention is no longer sustainable.
It was then contended that the award has pur ported to grant damages on the basis of escalation of cost and prices; and such escalation was not a matter within the doman of the bargain between the parties and having taken that factor into consideration the award was bad.
We have set out the relevant portion of the award.
From reading the award, as set out hereinbefore, it is clear that the arbi trator has considered the claim made on the basis of 'esca lation and damages ' but he has awarded a total sum of Rs.19.39 lakhs insofar as he finds admissible in respect of the claims which the arbitrator has adjudged.
It speaks no further.
In such a situation it is 58 not possible to contend that there was any exercise of jurisdiction by the arbitrator beyond his competence.
It is well settled that in matter of challenging the award, there are often two distinct and different grounds.
One is an error apparent on the face of the record and the other is that the arbitrator has exceeded his jurisdiction.
In the latter 's case the Court can look into the arbitration agree ment but under the former it cannot, unless the agreement was incorporated or recited in the award.
An award may be remitted or set aside on the ground that the arbitrator, in making it, had exceeded his jurisdiction and evidence of matters not appearing on the face of it, will be admitted in order to establish whether the jurisdiction had been exceed ed or not, because the nature of the dispute is something which has to be determined outside the award whatever might be said about it in the award or by the arbitrator.
See the observations of this Court in M/s Sudarshan Trading Co. vs Government of Kerala & Anr., ; Only in a speaking award the court can look into the reasoning of the award.
It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator; as to what impelled the arbitrator to arrive at his conclusion.
In the instant case the arbitrator has not awarded any amount on account of escalation of costs and expenses.
At last the arbitrator has not expressly awarded any amount on the ground of such escalation and if so, what amount, is not apparent on the face of the record.
In these circumstances, in our opinion, on the basis of well settled principles of law such an award, especially in view of the fact that excluding item No. III the remaining items would also be well over Rs.19.33 lakhs, it is not discernible on the face of the record that arbitrator has exceeded his jurisdiction in awarding damages on account of escalation of charges and expenses which were beyond the arbitration ambit.
The fact that the arbitrator has considered the claim made by the respondent on account of escalation, does not make per se the award to be bad.
Mr. C. Sitaramiah, learned counsel appearing for the appellant contended that the fact that the arbitrator has taken into consideration the question of escalation would make the award bad because it is not discernible whether he has awarded any amount on account of escalation.
We are of the opinion that this argument is not open.
In case of an error apparent on the face of the record, it has to be established that an item or an amount which the arbitrator had no jurisdiction to 59 take into consideration, has been awarded or granted.
That is not apparent on the face of the award in this case.
All that the award states is that he has considered the claim on the basis of escalation.
Such a consideration does not make the award on the face of it, bad on the ground of error apparent on the face of the record.
Indeed, the arbitrator, when a claim is made, has to take that into consideration either for acceptance or rejection of the claim made.
The award states that he has taken the claim made, into consid eration.
The award does not state that he has awarded any amount on that account.
There is neither any error apparent on the face of the record, nor any material to satisfy that the arbitrator has exceeded his jurisdiction in awarding the amount as he did.
In that view of the matter the special leave petition has no merit made must, therefore, fail, and is accordingly dismissed.
The petitioners were allowed to withdraw the awarded sum on furnishing security but in view of the deci sion now rendered, they will be entitled to take back the security.
We order accordingly.
The application is dismissed with aforesaid directions.
R.S.S. Petition dismissed.
| IN-Abs | The respondent contractor had entered into an agreement with the petitioner for formation of an earth dam.
Disputes and difference arose between the parties.
A reference was made to the arbitrator wherein the respondent made eleven claims out of which one claim was later withdrawn.
The arbitrator gave a non speaking award in favour of the re spondent amounting to a consolidated sum of Rs.19.39 lakhs.
The respondent flied a proceeding before the Court to make the award rule of the Court.
The petitioner preferred an application for setting aside the award which was dis missed.
The High Court dismissed the appeal and the revision of the petitioner.
Before this Court it was contended inter alia that the award purported to grant damages on the basis of escalation of cost and prices, and such escalation was not a matter within the domain of the bargain between the parties.
It was also contended that the fact that the arbitrator had taken into consideration the question of escalation would make the award bad because it was not discernible whether he had awarded any amount on account of excalation.
Dismissing the special leave petition, this Court, HELD: (1) In matters of challenging an award, there are often two distinct and different grounds.
One is an error apparent on the face of the record and the other is that the arbitrator has exceeded his jurisdiction.
In the latter case the Court can look into the arbitration agreement but under the former It cannot, unless the agreement was incorporated or recited In the award.
[58A B] M/s Sudarshan Trading Co. vs Government of Kerala & Anr., ; , referred to.
11 55 (2) Only in a speaking award the court can look into the reasoning of the award.
It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion.
[58D] (3) It is not discernible on the face of the record that the arbitrator has exceeded his jurisdiction in awarding damages on account of escalation.
All that the award states is that he has considered the claim on the basis of escala tion.
Such a consideration does not make the award, on the race of it, bad on the ground of error apparent on the face of the record. ' [58G H; 59A B] (4) The Arbitrator does not state that he has awarded any amount on that account.
There is neither any error apparent on the face of the record, nor any material to satisfy that the arbitrator has exceeded his jurisdiction in awarding the amount as he did.
[59B C]
|
No. 665 of 1988 (Under Article 32 of the Constitution of India).
Sanjay Parikh, M.L. Sachdev, C.S. Vaidyanathan, S.R. Bhat, S.R. Setia, S.C. Dhanda, H.K. Puri, Harish N. Salve, Rajiv Dutta, Anil Kumar and Sultan Singh for the Petition ers.
Raja Ram Agarwal, S.C. Manchanda, G.L. Sanghi, A.S. Nambiar, Ashok K. Srivastava, R.S. Rana, P.G. Gokhale, B.R. Agarwala, R.B. Hathikhanawala, C.M. Nayar, P.K. Manohar, P.N. Misra, Ms. Halida Khatoon and Santhanam for the Respondents.
G.L. Sanghi, Ms. Vrinda Grover, Miss Seita Vaidialingam, Kailash Vasudev and A.C. Gulathi for the Intervenor.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
In these several writ petitions, we are concerned with the question of harmonising the power of different States in the Union of India to legislate and/or give 735 appropriate directions within the parameters of the subjects in list II of the 7th Schedule of the Constitution with the principle of economic unity envisaged in Part XIII of the Constitution of India.
We are also concerned with the provi sions of exemption, encouragement/incentives given by dif ferent States to boost up or help economic growth and devel opment in those States, and in so doing the attempt of the States to give preferential treatment to the goods manufac tured or produced in those States.
The question essentially is the same in all the matters but the question has to be appreciated in the context of the provisions and the fact situation of the different States involved in these writ petitions.
It would, therefore, be appropriate to first deal with writ petition No. 803/88 (Niksin Marketing Associate & Ors.vs Union of India & Anr.) which is under article 32 of the Constitution by four petitioners.
Petitioner No. 1 in W '.P.
No. 803/88 is a partnership firm carrying on business in New Delhi.
Petitioner No. 2 is its partner and petitioner No. 3 is another partnership business carrying on business at Kanpur in U.P. consisting of petitioner No. 4 and other partners.
The petition chal lenges the constitutional validity of notification No. ST II7558/X 9(208) 1981 U.P. Act XV 48 order 85 dated 26th December, 1985 issued by Uttar Pradesh Govt.
u/s 4A of the Uttar Pradesh Sales Tax Act, 1948.
A prior notification No. ST II/604 X 9(208) 198 1 U.P. Act XV 48 Order 85 dt. 29th January, 1985 was superseded by the aforesaid notification dt. 26th December, 1985.
It also challenges the constitu tional validity of notification No. ST II/8202/X 9(208) 1981 issued by Uttar Pradesh Govt. u/s 8(5) of the which superseded a previous notification.
It also challenges the constitutional validity of section 4A of the Uttar Pradesh Sales Tax Act, 1948 as substituted by U.P. Act 22 of 1984 and also section 8(5) of the and consequentially all actions and proceedings taken by the respondent u/s 5A of the said Act.
The respondents to this application are the State of Uttar Pradesh, the Union of India, and the Commissioner of Sales Tax, Uttar Pradesh.
It is stated that the petitioners carry on the business of selling cinematographic films and other equipments like projectors, sound recording and reproducing equipment, industrial X ray films, graphic art films, Photo films etc.
in the State of Uttar Pradesh and in Delhi.
The petitioners sell the goods upon receiving these from the manufacturers from outside the State of U.P.
They are dealers on behalf of those manufacturers.
The petitioners are dealers of Hindu stan Photo Films Mfg. Co. Ltd., a Government of India under taking.
In 736 U.P. there is a single point levy of sales taX.
The State of U.P. had issued two notifications u/s 4A of the U.P. Sales Tax Act and u/s 8(5) of the exempting new units of manufacturers as defined in the Act in respect of the various goods for different periods ranging from 3 to 7 years as the case may be, from payment of any sales tax.
These notifications are annexed and terms thereof are set out in annexures A 1 & B 1 to the writ petition.
The notification dated 26th December, 1985 stated, inter alia: "The Governor is pleased to direct that in respect of any goods manufactured in an indus trial unit, which is a new unit as defined in the aforesaid Act of 1948 established in the areas mentioned in column 2 of the Table given below, the date of starting production whereof falls on or after the first day of October, 1982 but not later than 31st March, 1990, no tax under the aforesaid Act of 1956 shall be payable by the manufacturer thereof on the turnover of sales on such goods for the period specified in column 3 against each, which shall be reckoned from the date of first sale if such sale takes place not later than 6 months from the date of starting production subject to certain conditions mentioned.
" It is not necessary to set out the conditions.
In the annexure several districts have been mentioned.
In column 2 categories have been made for exemption and have been divid ed in 2 categories, one in case of units with capital in vestment not exceeding 3 lakhs of rupees and another in cases of the units with capital investment exceeding 3 lakhs of rupees.
For one the period of exemption is 5 years while for the latter it is 7 years.
Period of exemption various from 3 to 7 years in different districts.
More or less similar were the terms of notification dated 29th January 1985.
The case of the petitioners is that they did not ini tially feel the adverse effects or discrimination on account of these notifications.
Petitioners point out that the manufacturers covered by the said notification are entitled to sell the articles manufactured by them without liability to pay sales tax while the manufacturers in other States and non manufacturers of the same article selling the same goods in the State are liable to pay sales tax under the local Sales Tax Act as well as under the .
The petitioners found that they had become liable to pay sales tax on their sales at 12% + 10% surcharge 737 (13.2%) under the U.P. Sales Tax Act on photographic and graphic arts material and @ 8% + 10% surcharge (8.8%) on medical x ray films and chemicals and a minimum of 10% on their inter State turnover whereas the manufacturers in the State of U.P. and their dealers had no tax liability by virtue of the exemption granted under the impugned notifica tions.
Thus the petitioners contend that the goods sold by them became costlier by 8.8% to 13.2% depending on the item sold compared to the goods of manufacturers in the State of U.P.
They had given a chart illustrating the position.
They, hence, contended that they became subject to gross discrimi nation and their business was crippled and wanted to sustain the said contention by referring to a chart showing gross sale prices of the products in diverse States.
In the prem ises the petitioners challenge these provisions as ultra vires of the Constitution of India, the rights guaranteed under part XIII as also under articles 14 & 19(l)(g) of the Constitution.
The question is, are these notifications valid, proper and sustainable in the light of part XIII of the Constitu tion of India judged in the background of the said articles.
Appearing in support of the petition, Mr. Sanjay Parikh in writ petitions Nos.
790,665 and 1939 40/88, Mr. C.S. Vaidy nathan and Mr. S.C. Dhanda in writ petition No. 761/88, Mr. Harish N. Salve for the petitioners in writ petition No. 803/88.
Miss Seita Vaidialingam, Mr. G.L. Sanghi, Kailash Vasudev for the intervenors.
These petitions have been heard together.
Apart from the submission that the provisions impugned violate articles 19(l)(g) and 14 of the Constitution, and are in violation of the principles of natural justice, the main challenge to these provisions by Mr. Salve was that they violated the provisions of articles 301 to 305 of Part XIII of the Constitution of India.
The contention of the petitioners was that, subject to other provisions of Part XIII, trade, commerce and intercourse throughout the terri tory of India was enjoined to be free.
Article 302 of the Constitution empowers the Parliament by law to impose such restrictions on the freedom of trade, commerce or inter course between one State and another or within any part of the territory of India as may be required in the public interest.
Article 303 indicates the restrictions on the legislative powers of the Union and the States with regard to trade and commerce, and stipulates that, notwithstanding anything contained in article 302, neither Parliament nor the legislature of the States shall have power to make any law giving or authorising the giving of any preference to one State 738 over another or making or authorising the making of any discrimination between one State and another by virtue of any entry relating to trade and commerce in any list of the 7th Schedule.
Sub clause (2) of article 303 enjoins that nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.
Article 304 deals with restrictions on trade, commerce and intercourse among States, which is as follows: "304.Restrictions on trade, commerce and intercourse among States.
Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law (a) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and (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; Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.
" Article 305 saves certain existing laws and laws provid+ing for State monopolies.
Our attention was drawn to the decision of this Court in Atiabari Tea Co. Ltd. vs The State of Assam & Ors., ; There this Court was concerned with the Assam Taxation (on goods carried by Roads and Inland Waterways) Act, 1954 which was passed under entry 56 of list II of the 7th Schedule to the Constitution.
The appellants therein contended that the Act had violated the freedom of trade guaranteed by article 301 of the Constitution and as it was not passed after obtaining the previous sanction of the President as 739 required by article 304(b), it was ultra vires.
The respondent therein had urged that taxing laws governed only by Part XII and not Part XIII (which contained articles 301 & 304) and in the alternative that the provisions of Part XIII applied only to such legislative entries in the 7th Schedule as dealt specifically with trade, commerce and intercourse.
Gajendragadkar, Wanchoo and Das Gupta, JJ. held that the Act violated article 301 and since it did not comply with the provisions of article 304(b) it was ultra vires and void.
On the contrary, Chief Justice Sinha held that the Assam Act did not contravene article 301 and was not ultra vires.
According to the learned Chief Justice, neither the one extreme position that article 301 included freedom from all taxation nor the other that taxation was wholly outside the purview of article 301 was correct; and that the freedom conferred by article 301 did not mean freedom from taxation simpliciter but only from the erection of trade barriers, tariff walls and imposts which had a deleterious effect on the free flow of trade, commerce and intercourse.
Justice Shah on the other hand expressed the view that the Assam Act infringed the guarantee of freedom of trade and commerce under article 301 and as the Bill was not moved with the previous sanction of the President as required by article 304(b) nor was it validat ed by the assent of the President under article 255(c), it was ultra vires and void.
In construing the provisions with which we are concerned herein, in our opinion, it is instructive to remind our selves, as was said in James vs Commonwealth of Australia, [19361 AC 578 at 613, that the relevant provision of the Constitution has to be read not in vacuo but as occurring in a single complex instrument in which one part may throw light on another, and therefore, Gajendragadkar, J. as the learned Chief Justice then was, at p. 860 of the said re port, rightly in our opinion posed the problem as follows: "In construing article 301 we must, therefore, have regard to the general scheme of our Constitution as well as the particular provi sions in regard to taxing laws.
The construction of article 301 should not be determined on a purely academic or doctrinaire considerations; in construing the said Article we must adopt a realistic approach and bear in mind the essen tial features of the separation of powers on which our Constitution rests.
It is a federal constitution which we are interpreting, and so the impact of article 30 1 must be judged accordingly.
Besides, it is not irrelevant to remem ber in this connection that the Article 23 are construing imposes a constitutional limitation on the power of 740 the Parliament and State Legislatures to levy taxes, and generally, but for such limitation, the power of taxation would be presumed to ,be for public good and would not be subject to judicial review or scrutiny.
Thus considered we think it would be reasonable and proper to hold that restrictions freedom from which is guaranteed by article 301, would be such restric tions as directly and immediately restrict or impede the free flow or movement of trade.
Taxes may and do amount to restrictions; but it is only such taxes as directly and immedi ately restrict trade that would fall within the purview of article 30 1.
The argument that all taxes should be governed by article 301 whether or not their impact on trade is imme diate or mediate, direct or remote, adopts, in our opinion, an extreme approach which cannot be upheld.
If the said argument is accepted it would mean, for instance, that even a legisla tive enactment prescribing the minimum wages to industrial employees may fall under Part XIII because in an economic sense an addition al wage bill may indirectly affect trade or commerce.
We are, therefore, satisfied that in determining the limits of the width and ampli tude of the freedom guaranteed by article 301 a rational and workable test to apply would be: Does the impugned restriction operate directly or immediately on trade or its movement?"
It is in that light we must examine the impugned provision.
It is necessary to bear in mind that taxes may and sometimes do amount to restrictions but it is only such taxes as directly and immediately restrict trade that would fall within the mischief of article 301.
Mr. Salve, however, rightly reminded us that regulatory measures or measures imposing compensatory taxes for using trading facilities do not come within the purview of restrictions contemplated under article 301.
Here, it is necessary to refer to the deci sion of this Court in the Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491 which was a decision of a bench of this Court consisting of 7 learned Judges, and was concerned with the Rajasthan Motor Vehicles Taxation Act, 1951.
Sub section (1) of section 4 of that Act provided that no motor vehicle shall be used in any public place or kept for use in Rajasthan unless the owner thereof had paid in respect of it, a tax at the appropriate rate specified in the schedules to that Act within the time allowed.
The appellants therein were carrying on the busi ness of plying stage carriages in the State of Ajmer.
They held permits and plied their buses on diverse routes.
There was one route which lay 741 mainly in Ajmer State but it crossed narrow strips of the territory of the State of Rajasthan.
Another route, Ajmer to Kishangarh, was substantially in the Ajmer State, but a third of it was in Rajasthan.
Formerly, there was an agree ment between the Ajmer State and the former State of Kishan garh, by which neither State charged any tax or fees on vehicles registered in Ajmer or Kishangarh.
Later, Kishan garh became a part of Rajasthan.
On the passing of the Rajasthan Motor Vehicles Taxation Act, 1951, and the promul gation of the rules made thereunder, the Motor Vehicles Taxation Officer, Jaipur, demanded of the appellants payment of the tax due on their motor vehicles for the period from April 1, 1951 to March 31, 1954.
The appellants challenged the legality of the demand on the grounds that section 4 of the Act read with the Schedules constituted a direct and immedi ate restriction on the movement of trade and commerce with and within Rajasthan inasmuch as motor vehicles which car ried passenger and goods within or through Rajasthan had to pay tax which imposed a pecuniary burden on commercial activity and was therefore hit by article 301 of the Constitu tion and was not saved by article 304(b) inasmuch as the provi so to article 304(b) was not complied with, nor was the Act assented to by the President within the meaning of article 255 of the Constitution.
It was held by Das, Kapur, Sarkar and Subba Rao, JJ. as the learned Judges then were, that the Rajasthan Motor Vehicles Taxation Act, 1951 did not violate the provisions of article 301 of the Constitution of India and that the taxes imposed under the Act were compensatory or regulatory taxes which did not hinder the freedom or trade, commerce and intercourse assured by that article.
Das, Kapur and Sarkar, JJ. held that the concept of freedom of trade, commerce and intercourse postulated by article 301 must be understood in the context of an ordinary society and as part of a Constitution which envisaged a distribution of powers between the States and the Union, and if so understood, the concept must recognise the need and legitimacy of some degree of regulatory control, whether by the Union or the States.
Mr. Justice Subba Rao, as the learned Chief Justice then was, observed that the freedom declared under article 30 1 referred to the right of free movement of trade without any obstructions by way of barriers, inter State or intra State, or other impediments operating as such barriers; and the said freedom was not impeded, but on the other hand, promot ed, by regulations creating conditions for the free movement of trade, such as, police regulations, provisions for services, maintenance of roads, provision for aerodromes, wharfs etc., with or without compensation.
Parliament may be law impose restrictions, it was stated, on such freedom in the public interest, and the States also, in exercise of their legislative power, may impose similar restrictions, 742 subject to the proviso mentioned therein.
Laws of taxation were not outside the freedom enshrined either in article 19 or 301.
Mr. Justice Hidayatullah, as the learned Chief Justice then was, and Rajagopala Ayyangar and Mudholkar, JJ.
held that section 4(1) of the Rajasthan Motor Vehicles Taxation act, 195 1 offended article 301 of the Constitution, and as resort to the procedure prescribed by article 304(b) was not taken it was ultra vires the Constitution.
The pith and substance of the Act was the levy of tax on motor vehicles in Rajasthan or their use in that State irrespective of where the vehi cles came from and not legislation in respect of inter State trade or commerce.
A tax which is made the condition prece dent of the right to enter upon and carry on business is a restriction on the right to carry on trade and commerce within article 30 1 of the Constitution.
The act was not, in its true character, regulatory.
In judging the situation it would be instructive to bear in mind the obser vations of Mr. Justice Das at p. 5 12 of the report, where he observed that in evolving an integrated policy on this subject our Constitution makers seem to have kept in mind three main considerations which may be broadly stated thus: first, in the larger interests of India there must be free flow of trade, commerce and intercourse, both inter State and intra State; second, the regional interests must not be ignored altogether; and third, there must be a power of intervention by the Union in any case of crisis to deal with particular problems that may arise in any part of India.
At p. 523 of the report, it was reiterated that for the tax to become a prohibited tax it has to be a direct tax the effect of which is to hinder the movement part of trade.
Dealing with wide interpretation Justice Das observed at p. 523 5 of the said report as follows: "The widest view proceeds on the footing that article 301 imposes a general restriction on legislative power and grants a freedom of trade, commerce and intercourse in all its series of operations, from all barriers, from all restrictions, from all regulation, and the only qualification that is to be found in the article is the opening clause, namely, subject to the other provisions of Part XIII.
This in actual practice will mean that if the State Legislature wishes to control or regu late trade, commerce and intercourse in such a way as to facilitate its free movement, it must yet proceed to make a law under article 304(b) and no such bill can be introduced or moved in the Legislature of a State without the previous sanction of the President.
The practi 743 cal effect would be to stop or delay effective legislation which may be urgently necessary.
Take, for example, a case where in the inter ests of public health, it is necessary to introduce urgently legislation stopping trade in goods which are deleterious to health, like the trade in diseased potatoes in Australia.
If the State Legislature wishes to introduce such a bill, it must have the sanction of the President.
Even such legislation as imposes traffic regulations would require the sanction of the President.
The learned Judge reiterated that the Court will have to ascertain whether the impugned law in a given case affects directly the said movement or indirectly and remotely affects it.
Mr. Salve, however, sought to contend that as regards the local sales tax, there were broadly two well accepted propositions, namely, sales tax was a tax levied for the purpose of general revenue.
Secondly, it was neither a compensatory tax nor a measure regulating any trade.
Reli ance was placed on the observations of Mr. Justice Raghubar Dayal, J. in Firm A.T.B. Mehtab Majid & Co. vs State of Madras & Anr., ; but the context in which the said observations were made has to be examined.
That case dealt with a petition under article 32 of the Consti tution.
The petitioners therein were dealers in hides and skins in the State of Madras.
The main contention was that the tanned hides and skins imported from outside and sold inside the State were, under r. 16 of the Madras General Sales Tax Rules, subject to a higher rate of tax than the tax imposed on hides and skins tanned and sold within the State and this discriminatory taxation offended article 304 of the Constitution.
The contentions of the respondents therein were that sales tax did not come within the purview of article 304(a) as it was not a tax on the import.
of goods at the point of entry, that the impugned rule was not a law made by the State legislature, that the im pugned rule by itself did not impose the tax but fixed the single point at which the tax was imposed by sections 3 & 5 of the Act was to 744 be levied; and that the impugned rule was not made with an eye on the place of origin of the goods.
It was held that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they are not what can be termed to be compensatory taxes or regulating measures.
Reliance was also placed by Mr. Salve on the observa tions of Justice Raghubar Dayal in A. Hajee Abdul Shakoor & Co. vs State of Madras, 17 at 225.
See also the observations in State of Madras vs N.K. Nataraja Mudali ar; , at 847 and Andhra Sugars Ltd. & Anr.
vs State of Andhra Pradesh & Ors., ; where at p. 7 18 of the report it was reiterated that a sale tax which discriminates against goods imported from other States may impede the free flow of trade and is then invalid unless protected by article 304(a).
It is, however, necessary to bear in mind that in N.K.N. Mudaliar 's, case (supra) at p. 850 Mr. Justice Bachawat after referring to several cases observed as follows: "But, there can be no doubt that a tax on such sales would not normally offend Article 301.
That Article makes no distinction between movement from one part of the State to another part of the same State and movement from one State to another.
Now, if a tax on intra State sale does not offend Article 301, logically, I do not see how a tax on inter State sale can do so.
Neither tax operates directly or imme diately on the free flow of trade or the free movement of the transport of goods from the part of the country to the other.
The tax is on the sale.
The movement is incidental to and a consequence of the sale.
" There was a reference in the said judgment to the obser vations of Jagannathadas, J. in The Bengal Immunity Co. Ltd. vs State of Bihar, at 754 wherein it was stated: "Now it is not disputed that a tax on a purely internal sale which occurs as a result of the transportation of goods from a manufacturing centre within the State to a purchasing market within the same State is clearly permissible and not hit by anything in the Constitution.
If a sale in that kind of trade can bear the tax and is not a burden on the freedom of trade, it is difficult to see why a single point tax on the same kind of sale where a State boundary intervenes bet 745 ween the manufacturing centre and the consum ing centres need be treated as a burden, especially where that tax is ultimately to come out of the residents of the very State by which such sale is taxable.
Freedom of trade and commerce applies as much within a State as outside it.
It appears to me again, with great respect, that there is no warrant for treating such a tax as in any way contrary either to the letter or the spirit of the freedom of trade, commerce and ' intercourse provided under Article 301.
" It was contended that the ex hypothesi violates article 301 of the Constitution since it is a tax on inter State movement of goods.
Shah, J. in Mudali ar 's case (supra) at p. 84 1 of the report observed that tax under the on interState sales, it must be noticed, is in its essence a tax which encumbers movement of trade or commerce, if it (a) occasions the movement of goods from one State to another; (b) is effected by a trans fer of documents of title to the goods during their movement from one State to another.
It was contended by Mr. Salve that by exempting the local manufacturers from both local and central sales tax, the State Govt. has clearly made the imposition of both local and central sales tax discriminato ry and prejudicial to outside goods.
The goods of the local manufacturer, when sold by him, do not bear any tax whereas the goods imported from outside the State have to bear the burden of sales tax.
It was also contended that similarly, the goods of a 'local manufacturer, when exported from the State of U.P. do not have to bear tax, while goods brought into the State of U.P. and further ex , ported in competi tion with the local goods have to bear the tax, so there is clear discrimination against goods produced by manufacturers situated outside the State.
The discrimination within the meaning of article 301 read with article 304 arises where there is a difference in the rates of sales tax levied, it was sought to be emphasised by Mr. Sanjay Parikh for some of the peti tioners.
This proposition has been reiterated by this Court in a large number of cases, according to counsel, and we were referred to the observations in State of Madhya Pradesh vs Bhailal Bhai & Ors., ; at 268 9 and Mudal iar 's case (supra) where at p. 847 Shah, J. reiterated that imposition of differential rates of tax by the same State on goods manufactured or produced in the State and similar goods imported in the State is prohibited under article 304(a).
It was also reiterated by this Court in Rattan Lal & Co. & Anr.
vs The Assessing Authority & Anr.
, ; at 557 dealing with the Punjab General Sales Tax Act that when a taxing State was not imposing rates of tax on imported goods different from the rates of 746 tax on goods manufactured or produced, article 304 had no application.
So long as the rate was the same, article 304 was satisfied.
Reference was made to India Cement & Ors.vs State of Andhra Pradesh & Ors. whereas at p. 759 this Court observed that variation of the rate of inter state sales tax did affect free trade and commerce and created a local preference which was contrary to the scheme of Part XIII of the Constitution.
To similar effect are the observations to which Mr. Sanjay Parikh has referred us in Weston Electronics & Anr.
vs State of Gujarat & Ors.
Mr. Salve strongly relied on the observations of Justice Cardozo in C.A.F. Seeling Inc. vs Charles H. Baldwin, at 1038 where the learned Judge observed while he was dealing with article (1) section 8, clause (3) of the American Constitution which is known as the 'Commerce Clause ' "This part of the Constitution was framed under the dominion of a political philosophy less parochial in range.
It was framed upon the theory that the peoples of the several States must sink or swim together and that in the long run prosperity and salvation are in union and not division".
This passage has been cited with approval in this Court in Atiabari 's case (supra) by Gajendragadkar, J. as aforesaid.
We were referred to the observations of Firm A.T.B. Mehtab Majid & Co.s case ; at 445.
It was contended that the acceptance of the petitioner 's case would not conflict with the plenary power of the State to grant exemptions under the Act because statutory powers have to yield to constitutional inhibitions and, therefore, article 304(a) & (b) being envisaged to safeguard the eco nomic unity of the country, these must have precedence.
It was also contended that the petitions under article 301 read with 304(a) are clearly maintainable.
Reliance was placed in Smt.
In light of these, it was contended by the petitioners that the petition under article 32 is clearly maintainable.
The question as we see is, how to harmonise the con struction of the several provisions of the Constitution.
It is true that if a particular provision being taxing provi sion or otherwise impedes directly or immediately the free flow of trade within the Union of India then it will be violative of article 301 of the Constitution.
It has further to be borne in mind that article 301 enjoins that trade, commerce and 747 intercourse throughout the territory of India shall be free.
The first question, therefore, which one has to examine in this case is, whether the sales tax provisions (exemption etc.) in these cases directly and immediately restrict the free flow of trade and commerce within the meaning of article 30 1 of the Constitution.
We have examined the scheme of article 30 1 of the Constitution read with article 304 and the observations of this Court in Atiabari 's case (supra), as,also the observations made by this Court in Automobile Transport, Rajasthan 's case (supra).
In our opinion, Part XIII of the Constitution cannot be read in isolation.
It is part and parcel of a single constitutional instrument envis aging a federal scheme and containing general scheme confer ring legislative powers in respect of the matters relating to list II of the 7th Schedule on the State.
It also confers plenary powers on States to raise revenue for its purposes and does not require that every legislation of the State must obtain assent of the President.
Constitution of India is an organic document.
It must be so construed that it lives and adapts itself to the exigencies of the situation, in a growing and evolving society, economically, politically and socially.
The meaning of the expressions used there must, therefore, be so interpreted that it attempts to solve the present problem of distribution of power and rights of the different States in the Union of India, and anticipate the future contingencies that might arise in a developing organism.
Constitution must be able to comprehend the present at the relevant time and anticipate the future which is natural and necessary corollary for a growing and living organism.
That must be part of the constitutional adjudica tion.
Hence, the economic development of States to bring these into equality with all other States and thereby devel op the economic unity of India is one of the major commit ments or goals of the constitutional aspirations of this land.
For working of an orderly society economic equality of all the States is as much vital as economic unity.
The taxes which do not directly or immediately restrict or interfere with trade, commerce and intercourse throughout the territory of India, would therefore be excluded from the ambit of article 301 of the Constitution.
It has to be borne in mind that sales tax has only an indirect effect on trade and commerce.
Reference may be made to the Constitution bench judgment of this Court in Andhra Sugar Ltd. & Anr.vs State of A. P. & Ors., where this Court observed that normally a tax on sale of goods does not directly impede the free movement of transport.
See also the observations in Mudaliar 's case (supra) where at p. 851 it was observed that a tax on sale would not normally offend article 301.
That 748 article made nO distinction between movement from one part of State to another part of the same State and movement from one State to another.
In this connection, reference may also be made to the observations in Bengal Immunity 's case (supra).
Both the preceding cases clearly establish that if a taxing provision in respect of intra State sale does not offend article 30 1, logically it would not affect the freedom of trade in respect of free flow and movement of goods from one part of the country to the other under article 301 as well.
It has to be examined whether difference in rates per se discriminates so as to come within articles 301 and 304(a) of the Constitution.
It is manifest that free flow of trade between two States does not necessarily or generally depend upon the rate of tax alone.
Many factors including the cost of goods play an important role in the movement of goods from one State to another.
Hence the mere fact that there is a difference in the rate of tax on goods locally manufac tured and those imported would not amount to hampering of trade between the two States within the meaning of article 301 of the Constitution.
As in manifest, article 304 is an excep tion to article 30 1 of the Constitution.
The need or taking resort to exception will arise only if the tax impugned is hit by articles 301 and 303 of the Constitution.
If it is not then article 304 of the Constitution will not come into picture at all.
See the observations in Nataraja Mudaliar 's case (supra) at pp.843 6 of the report.
It has to be borne in mind that there may be differentiations based on consid eration of natural or business factors which are more or less in force in different localities.
A State might be allowed to impose a higher rate of tax on a commodity either when it is not consumed at all within the State or if it is felt that the burden falling on consumers within the State, will be more than that and large benefit is derived by the revenue.
The imposition of rates of sales tax is influenced by various political, economic and social factors.
Preva lence of differential rate of tax on sales of the same commodity cannot be regarded in isolation as determinative of the object to discriminate between one State and another.
Under the Constitution originally flamed revenue from sales tax was reserved for the States.
In V. Guruviah Naidu & Sons.vs State of Tamil Nadu & Anr.
The object is to prevent discrimination against imported goods by imposing tax on such goods at a rate higher than that borne by local goods since the difference between the two rates would constitute a tariff wall or fiscal barrier and thus impede the free flow of inter State trade and commerce.
The ques tion as to when the 'levy of tax would consti tute discrimination would depend upon a varie ty of factors including the rate of tax and the item of goods in respect of the sale of which it is levied.
The scheme of items 7(a) and 7(b) of the Second Schedule to the State Act is that in case of raw hides and skins which are purchased locally in the State, the levy of tax would be at the rate of 3 per cent at the point of last purchase in the State.
When those locally purchased raw hides and skins are tanned and are sold locally as dressed hides and skins, no levy would be made on such sales as those hides and skins have already been subjected to local tax at the rate of 3 per cent when they were purchased in raw form.
As against that, in the case of hides and skins which have been imported from other States in raw form and are thereafter tanned and then sold inside the State as dressed hides and skins, the levy of tax is at the rate of 1 1/2 per cent at the point of first sale in the State of the dressed hides and skins.
This levy cannot be considered to be discriminatory as it takes into account the higher price of dressed hides and skins com pared to the price of raw hides and skins.
It also further takes note of the fact that no tax under the State Act has been paid in respect of those hides and skins.
The Legisla ture, it seems, calculated the price of hides and skins in dressed condition to be double the price of such hides and skins in raw state.
To obviate and prevent any discrimina tion of differential treatment in the matter of levy of tax, the Legislature therefore prescribed a rate of tax for sale of dressed hides and skins which was half of that levied under item 7(a) in respect of raw hides and skins.
" The object is to prevent discrimination against the imported goods by imposing tax on such goods at a rate higher than that borne by local goods.
The question as to when the levy of tax would constitute discrimination would depend upon a variety of factors including the rate of tax and the item of goods in respect of the sale on which it is levied.
Every differentiation is not discrimination.
The word 'discrimination ' is not used in article 14 but is used in articles 16, 303 & 304(a).
When used in article 304(a), it involves an element of inten tional and purposeful differentiation thereby creating economic barrier and involves an element of an unfavorable bias.
Discrimination implies an unfair classification.
Reference may be made to the observations of this Court in Kathi Raning Rawat vs The State Of Saurashtra, ; where Chief Justice Shastri at p. 442 of the report reiterated that all legislative differentiation is not necessarily discriminatory.
The whole doctrine of classification is based on this and on the well known fact that the circumstances covering one set of provisions or objects may not necessarily be the same as these covering another set of provisions and objects so that the question of unequal treatment does not arise as between the provisions covered by different sets of circumstances.
Where the general rate applicable to the goods locally made and on those imported from other States is the same nothing more normally and generally is to be shown by the State to dispel the argument of discrimination under article 304(a), even though the resultant tax amount on imported goods may be different.
Here, reference may be made to Ratan Lal 's case (supra).
In the instant writ petition, in the State of U.P. those producers or manufacturers who do not come within the ambit of notifications, have to pay tax on their goods at the general rate described and there is no differentiation or discrimination qua the imported goods.
The question naturally arises whether the power to grant exemption to specified class of manufacturers for a limited period on certain conditions as provided by section 4A of the U.P. Sales Tax Act is violative of article 304(a).
It was contended by the petitioners that Part XIII of the Constitu tion was envisaged for preserving the unity of India as an economic unit and, hence, it guarantees free flow of trade and commerce throughout India including between State and State and as such article 304(a), even though an exception to article 301, yet applies where an exemption is granted by one State to a special class of manufacturers for a limited period on certain conditions.
It was so submitted that either a State should grant exemption to all goods irrespec tive of the fact that the goods are locally manufactured or imported from other States, else it would be violative of article 304 and 304(a).
It was submitted by the respondents that this is not the correct position.
This argument ignores the basic feature of the Constitution and also the fact that the concept of economic unity may not necessa 751 rily be the same as it was at the time of Constitution making for establishing new industries so as to be economically de veloped.
It was also submitted that if all the parts of India i.e. to say all the States are economically strong or developed then only can economic unity as a whole be assured and strengthened.
Hence, the concept of economic unity is ever changing with very wide horizons and cannot and should not be imprisoned in a strait jacket of the concept and notion as advocated by the petitioner.
Economic unity of India is one of the constitutional aspirations of India and safeguarding the attainment and maintenance of that unity are objectives of the Indian Constitution.
It would be wrong, however, to assume that India as a whole is already an economic unit.
Economic unity can only be achieved if all parts of whole of Union of India develop equally, economi cally.
Indeed, in the affidavits of opposition various grounds have been indicated on behalf of the respondents suggesting the need for incentives and exemptions, and these were suggested to be absolutely necessary for economic viability and survival for these industries in these States.
These were based on cogent and intelligible reasons of economic encouragement and growth.
There was a rationale in these which is discernible.
The power to grant exemption is always inherent in all taxing Statutes.
If the suggestions/submissions as advanced by the petitioners are accepted, it was averted, and in our opinion rightly, that it will destroy completely or make nugatory the plenary powers of the States.
If the exemption is based on natural and business factors and does not involve any intentional bias, the impugned notifications to grant exemption for limited period on certain specific conditions cannot be held to be bad.
Judged by that yardstick, the present notifica tions cannot be held to be violative of the constitutional provisions.
An examination of article 304(a) would reveal that what is being prohibited by this article which is really an exception to article 30 1 will not apply if article 301 does not apply.
In the instant case the general rate applicable to locally made goods is the same as that on imported goods.
Even supposing without admitting that sales tax is covered by article 301 as a tax directly and immediately hampering the free flow of trade, it does not follow that it falls within the exemption of article 304 and it would be hit by article 301.
Still the general rate of tax which is to be compared under article 304(a) is at par and the same qua the locally made goods and the imported goods.
752 Concept of economic barrier must be adopted in a dynamic sense with changing conditions.
What constitutes an economic barrier at one point of time often cease to be so at another point of time.
It will be wrong to denude the people of the State of the right to grant exemptions which flow from the plenary powers of legislative heads in list II of the 7th Schedule of the Constitution.
In a federal polity, all the States having powers to grant exemption to specified class for limited period, such granting of exemption cannot be held to be contrary to the concept of economic unity.
When all the States have such provisions to exempt or reduce rates the question of economic war between the States inter se or economic disintegration of the country as such does not arise.
It is not open to any party to say that this should be done and this should not be done by either one way or the other.
It cannot be disputed that it is open to the States to realise tax and thereafter remit the same or pay back to the local manufacturers in the shape of subsidies and that would neither discriminate nor be hit by article 304(a) of the Constitution.
In this case and as in all constitutional adjudications the substance of the matter has to be looked into to find out whether there is any discrimination in violation of the constitutional mandate.
Exercise of power under article 304(a) can be effective only if the tax or duty on goods imported from other States and the tax or duty imposed on similar goods manufactured or produced in that State is such that there is no discrimination.
Hidayatullah, J. as the learned Chief Justice then was, observed, at p. 883 of the report, that article 304(a) imposes no ban but lifts the ban imposed by articles 30 1 & 303 subject to one condition.
That article is enabling and prospective.
Counsel for the respondents drew out attention to articles 38 & 39 of the Constitution.
The striving for the attainment of the objects enshrined in these Articles is enjoined.
For achieving these objects the States have neces sarily to develop themselves economically so as to 753 secure economic unity and to minimise the inequalities and imbalances between State and State and region and region.
If the power to grant exemption has been conferred for achiev ing these objects on all, it is not possible to assail these as violative of article 304 as the latter article has to be interpreted in conjunction with others and not in isolation could validly classify new units producing edible oil as distinct and separate from other units and validly withdraw the exemption in relation to such units only.
It is true that the afore said observations were made in the context different from article 304(a) but basically the concept of equality embodied in articles 304(a) & 16 are the same.
article 14 enjoins upon the State to treat every person equal before the law while article 304(a) enjoins upon the State not to discriminate with respect to imposition of tax on imported goods and the locally made goods.
vs State of Andhra Pradesh & Ors., (supra); Weston Electronics vs State of Gujarat, (supra) and West Bengal Hosiery Assn.
& Ors.
vs State of Bihar & Anr.
, ; wherein it has been reiterated that difference in rate of sales tax is hit by articles 301 & 304 but the said conclusions were arrived at in the context of a controversy not in the present form and the question of exemption as such did not arise in these cases, as explained later.
These cases were not at all concerned with granting of exemption to a special class for a limited period on specific conditions of main taining the general rate of tax on the goods manufactured by all those producers in the State who do not fall within the exempted category at par with the rate applicable to import ed goods as we have read these cases.
Hence, it was not necessary in those decisions to consider the problem in its present aspect.
If, however, the said power is exercised in a colourable manner intentionally or purposely to create unfavorable bias by prescribing a general lower rate on locally manufactured goods either in the shape of general exemption to locally manufactured goods or in the shape of lower rate of tax, such an exercise of power can always be struck down by the courts.
That is not the situation in the instant cases.
The aforesaid decisions, therefore, are not authorities for the general proposition that while, main taining the general rate at par, special rates for certain industries for a limited period could not be prescribed by the States.
754 There was another subsidiary question in these matters as to whether the legislation in the shape of notification is law within the meaning of article 304 of the Constitution.
In The State of U.P. & Ors.vs Babu Ram Upad hya, [196] 12 SCR 679 at 702 this Court relied on a passage from Maxwell "On the Interpretation of Statutes" and held that a rule framed in the absence of any specific provision in the Act shall be deemed to be a part of the Act itself.
In the State of Tamil Nadu vs Hind Stone etc.; , at 757 this Court relied upon the aforesaid dictum in the case of Babu Ram Upadhya, (supra) and distinguished the decision in State of Mysore vs H. Sanjeeviah, ; cited on behalf of the petitioner.
This Court in Kailash Nath & Anr.vs State of U. P. & Ors., AIR 1957 SC 790 at 791 has held that the notification having been made in accord ance with the power conferred by the Statute has statutory force and validity and, therefore, exemption is as if con tained in the Act itself.
The U.P. Sales Tax Act by section 24(4) confers rule making powers on the State Government.
Section 25 confers powers on the State Government to issue notifications with retrospective effect.
Hence, it cannot be disput ed that the exemption notification is the exercise of the legislative power.
This Court in State of U.P. & Ors.vs Renusagar Power Co. & Ors., ; at 100 has held that the power to grant exemption is quasi legislative.
In M/s Narinder Chand Hem Raj & Ors.vs Lt. Governor, Adminis trator, U.T., Himachal Pradesh & Ors., at 751 it was held that the exercise of the power is legisla tive whether it is by the legislature or by the delegate.
In respect of the decisions aforesaid relied on behalf of the petitioner, on examination of the observations in India Cement 's case (supra) to the contrary to which stated hereinbefore on this aspect must be confined to the facts of that case alone as the said decision had no occasion to consider it in the full light.
In the aforesaid view of the matter the challenge in these petitions to the aforesaid exemptions cannot, in our opinion, be upheld.
The writ petitions dealing with the U.P. matters on the same conten tions, therefore, fail.
Writ petition No. 665/88 being M/s Video Electronics Pvt. Ltd. & Anr.
By that notification the State Government has differentiated between the manufacturers of electronics goods outside the State and within the State.
Under section 5 of the Punjab General Sales Tax Act (hereinafter referred to as 'the Act '), the State of Punjab had been imposing sales tax @ 10% + 2% surcharge on electronics goods sold within the State irrespective of their manufacture.
The State Govt. in pursuance of the powers conferred on it u/s 5 of the Act issued the notification date 11.12.1986 stating that the rate of sales tax payable by an electronic manufac turing unit existing in Punjab in cases of electronic goods specified in Annexure A of the petition within the State will be 1%.
Thus the rate of sales tax was brought down from 10% (+ 2% surcharge) to 1% while for similar goods manufac tured outside the State and sold within the respondent State, the rate of sales tax remained 10% (+ 2% surcharge).
It was contended that there was differentiation.
In support of this contention the petitioners reiterate more or less the same submissions, as indicated before.
It is true that there was difference in rate yet there was reason for this differentiation.
The State Government in its counter affida vit has stated that a lower rate of tax i.e. to say 1% in the case of new units and 2% in the case of existing units has been levied to boost this industry and to stop the existing industry shifting to neighboring States.
The pre vailing peculiar circumstances of Punjab were one of the factors indicated for the same.
The lower rate, it was reiterated, was imposed in view of the peculiar circum stances and also to attract new entrepreneurs from other States and from within the State.
It was contended that the said notification was issued in public interest in view of the peculiar position; and that while the States of Gujarat and Maharashtra are fully developed States, on the other hand, Punjab is comparatively a backward State in industry.
Unless some incentives are given, the industries which have already shifted to other States, will have further deterring effects.
Hence, in view of the situation the concessional rate was introduced and was not discriminatory.
As mentioned hereinbefore, reliance was placed mainly on H. Anraj vs Govt of Tamil Nadu, (supra) to which one of us was a party.
That was a decision dealing with lottery tick ets, and dealt with the question whether lottery tickets amounted to movable property so as to be within the purview of the Sale of Goods Act.
But in relation to the question relevant to the present purpose it was reiterated that the real question is, whether direct and immediate result of the impugned notification was to impose an unfavourable and discriminatory tax burden on the imported goods (in those cases lottery tickets of other 756 States) when they are sold within the State of Tamil Nadu as against indigenous goods (Tamil Nadu Government lottery tickets) when these are sold within the State, from the point of view of the purchaser and this question had to be considered from the normal business of commercial point of view.
It has to be reiterated that more or less all States used to issue and sell lottery tickets, hence, the lottery tickets from other States were specifically discriminated against in the sense that there was differentiation without any valid or justifiable reason.
That would certainly work as deterrent.
Trade, commerce and intercourse throughout the territory of India, come within article 301 of the Constitu tion.
It prevents imposing on goods imported from other States a tax to which similar goods in the State are not subject so as to discriminate between the goods so imported and goods produced locally.
In that light the decision in Anraj 's case has to be understood.
The cases of India Cement & Ors. vs State of Andhra Pradesh & Ors., (supra); Weston Electronics vs State of Gujarat & Ors., (supra) and West Bengal Hosiery Assn. & Ors.vs State of Bihar & Anr., (supra) were cases where there was a naked blanket preference in favour of locally manufactured goods as against goods coming from outside the State.
These cases, as we read these, dealt with a conferment of exemp tion without any reason or concession in favour of indige nous manufactured goods which was not available in respect of the goods imported into that State.
In case, however, of U.P. as well as State of Punjab the provisions which we have examined, proceeded on a different basis.
In these cases, it cannot be suggested, in our opinion, that there is discrimi nation against goods manufactured outside the State.
In case of Punjab an Overwhelmingly large number of local manufac turers of similar goods are subject to sales tax and, there fore, the general statement that the manufacturers within the State are favoured against the manufacturers outside the State, is incorrect.
Under the notifications in case of Punjab, only newly set up units are eligible to claim the benefits thereunder for a limited period of 5 years and that also only if they strictly comply with the terms and condi tions set out in the notification.
It has to be reiterated that sales tax laws in all the States provide for exemption.
It is well settled that the different entries in lists I, II and III of the 7th Schedule deal with the fields of legislation, and these should be construed widely, liberally and harmoniously.
And these entries have been construed to include ancillary or inciden tal power.
Power to grant exemption is inherent in all taxing legislations.
Economic unity is a desired goal, economic equilibrium and prosperity 757 is also the goal.
Development on parity is one of the com mitments of the Constitution.
Directive principles enshrined in articles 38 & 39 must be harmonised with economic unity as well as economic development of developed and under developed areas.
In that light on article 14 of the Constitu tion, it is necessary that the prohibition in article 301 and the scope of article 304(a) & (b) should be understood and construed.
Constitution is a living organism and the latent meaning of the expressions used can be given effect to only if a particular situation arises.
It is not that with chang ing times the meaning changes but changing times illustrate and illuminate the meaning of the expressions used.
The connotation of the expressions used takes its shape and colour in evolving dynamic situations.
A backward State or a disturbed State cannot with parity engage in competition with advanced or developed States.
Even within a State, there are often backward areas which can be developed only if some special recentives are granted.
If the incentives in the form of subsidies or grant are given to any part of units of a State so that it may come out of its limping or infancy to compete as equals with others, that, in our opinion, does not and cannot contravene the spirit and the letter of Part XIII of the Constitution.
If there is none, it will amount to hostile dis crimination.
Judge in this light, despite the submissions of Mr. Sanjay Parikh and Mr. Vaidyanathan, we are unable to accept the contentions that the petitioners sought to urge in this application.
The next petition is W.P. No. 1124/88 Computer Graphics (P) Ltd. & Anr.
vs Union of India & Ors., which challenges the concession given in favour of manufacturers in U.P. and Goa.
The same contentions were reiterated for the reasons discussed hereinbefore.
We are unable to accept this peti tion.
It may be relevant to refer to Associated Tanners Vizianagram, A. P. vs C.T. 0.
, Vizianagram, Andhra Pradesh & Ors., ; where it was stated that when a taxing statute was not imposing rates of tax on imported goods different from rates of tax on goods manufactured locally, article 304 had no application.
In case an exemption was granted applying the same rate the resulting tax might be somewhat higher but that did not contravene the equality clause contemplated by article 304.
In the instant writ petition in view of the terms of the notification impugned and the facts and the circumstances stated in the affidavit of the State Government as well as the interveners, Goa and Pondicherry, being comparatively under developed in electronic industry, in 758 our opinion, it cannot be said that there was violation of either Part XIII of the Constitution or Article 14 of the Constitution.
This application must also, therefore, fail.
Writ petition No. 70/89 Spartek Ceramics India Ltd. vs Union of India & Ors., under article 32 also challenges the notification under the and the U.P. Act as mentioned hereinbefore.
In the state of facts as appearing, this petition also fails.
We have considered the submissions and the statements made by the interveners in these matters.
Writ Petition No. 761/89 Weston Electronics Ltd. & Anr. vs State of Punjab & Anr., dealing with the notifications issued by the State of Karnataka and writ petition No. 1140/88 M/s Survo Udyog Pvt. Ltd. & Anr. vs State of Bihar & Anr., deal with the same controversy and with similar notification.
In view of the averments made which we have examined in detail on behalf of the concerned State Governments in the light of the principles we have reiterated before, we are of the opinion that the notifications impugned cannot be challenged and the petition cannot succeed.
We have also considered writ petition No. 10 16/88 M/s Disco Electronics Ltd. & Anr.vs State of U.P. & Others, and in light of the facts and the circumstances and the aver ments made in the background of the principles reiterated, we are unable to sustain the challenge to the impugned notifications.
In these matters we had the advantage of having the views of the interveners and we have considered the submissions made on their behalf.
In the aforesaid light the intervention applications are allowed, submissions considered and the aforesaid writ petitions are dismissed but in the facts and the circum stances of the case, there will be no order as to costs.
Y. Lal Petitions dismissed.
| IN-Abs | A common question of law having arisen for determination in these petitions filed under Article 32 of the Constitu tion, they are disposed of by a Common Judgment, though the petitioners dealers are different and carry on their busi ness in different states and have challenged the respective provisions of law by which their cases are governed.
The petitioners in WP 803/88 carry on the business of selling cinematographic Idms and other equipments like projector, sound recording and reproducing equipments, X Ray films etc.
in the State of U.P. and in Delhi.
The petition ers receive these goods from their manufacturers outside the State of U.P.
In U.P. there is a single point levy of Sales Tax.
The State of Uttar Pradesh issued two notifications under section 4A of the Uttar Pradesh Sales Tax Act and under Section 8(5) of the Central Sales Tax Act exempting new units of manufacturers as defined in the Act in respect of the various goods for different periods ranging from 3 to 7 years, from payment of Sales Tax.
The petitioners by these petitions challenge the constitutional validity of these Notifications.
They have also challenged the constitutional validity of section 4A of the Uttar Pradesh Sales Tax Act and sections 8(5) of the Central Sales Tax Act, and the proceedings taken by the Respondent under section 5A of 732 the said Act.
The case of the petitioners is that they are discriminated on account of these notifications as the manufacturers covered by these Notifications are entitled to sell the articles manufactured by them without liability to pay sales tax while the manufacturers in other states and non manufacturers of the same article selling the same goods in the State are liable to pay sales tax under the local Sales Tax Act as well as under the Central Sales Tax Act.
Their contention, therefore, is that they became subject to gross discrimination and their business was crippled.
In these premises the petitioners challenge the provisions as ultra vires the constitution being violative of the provi sions of Articles 301 to 305 of part III of the Constitution as also Articles 14 and 19 of the Constitution.
The Respondents counter the assertion of the petition ers.
According to them the contention put forward by the petitioners ignores the basic features of the Constitution and also the fact that the concept of economic unity may not necessarily be the same as it was at the time of the Consti tution making; the state which was technically and economi cally weak in 1950 cannot be allowed to remain in the same state of affairs.
The state has to give subsidy and grant exemptions/concessions for the economic development of the state to new industries.
It was urged that if all the states are economically strong or developed then only can economic unity as a whole be assured or strengthened.
Dismissing the petitions, this Court, HELD: Sales Tax Laws in all the States provide for exemp tion.
Power to grant exemption is inherent in all taxing Legislations.
Economic unity is a desired goal.
Development on parity is one of the commitments of the Constitution.
Directive Principles enshrined in Articles 38 and 39 must be harmonised with economic unity as well as economic develop ment of developed and under developed area.
[756H; 757A B] Taxes may sometime amount to restrictions but it is only such taxes as directly and immediately restrict trade that would fail within the mischief of article 301.
[740E] See Atiabari Tea Co. Ltd. vs The State of Assam & Ors., ; and Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491.
The taxes which do not directly and immediately restrict or 733 interfere with trade, commerce and intercourse throughout the territory of India would therefore be excluded from the ambit of article 30 1 of the Constitution.
It has to be borne in mind that sales tax has only an indirect effect on trade and commerce.
[747F] In the instant case, the general rate applicable to locally made goods is the same as that on imported goods.
Even supposing without admitting that Sales Tax is covered by article 301 as a tax directly and immediately, hampering the free flow of trade, it does not follow that it fails within the exemption of article 304 and it would be hit by article 30 1.
Still the general rate of tax which is to be compared under article 304(a) is at par, and the same qua the locally made goods and the imported goods.
[751G H] Concept of economic barrier must be adopted in a dynamic sense with changing conditions.
What constitutes an economic barrier at one point of time often ceased to be so at anoth er point of time.
It will be wrong to denude the people of the state of the right to grant exemptions which flow from the plenary powers of legislative heads in List III of the 7th Schedule of the Constitution.
[752A B] Basically the concept of equality embodied in Articles 304(a) and 16 are the same.
Article 14 enjoins upon the state to treat every person equal before the law while Article 304(a) enjoins upon the state not to discriminate with respect to imposition of tax on imported goods and the locally made goods.
[753C] It is not that with changing times the meaning changes but changing times illustrate and illuminate the meaning of the expressions used.
The connotation of the expressions used takes its shape and colour in evolving dynamic situa tions.
[757B C] James vs Commonwealth of Australia, at 613; Firm A.T.B. Mehtab Majid & Co. vs State of Madras & Anr., ; ; A. Hajee Abdul Shakoor & Co. vs State of Madras; , at 225; State of Madras vs N.K. Nataraja Mudaliar, ; at 847; Andhra Sugars Ltd. & Anr. etc vs State of Andhra Pradesh & Ors., ; ; Bengal Immunity Co. Ltd. vs State of Bihar, at 754; State of Madhya Pradesh vs Bhailal Bhai & Ors., ; at 268 9; Rattan Lal & Co. & Anr.
vs The Assessing Authority & Anr., ; at 557; India Cement & Ors.
vs State of Andhra Pradesh & Ors.
, ; ; Weston Electroniks & Anr.
vs State of Gujarat & Ors., 568 at 571; C.A.F. Seeling Inc. vs Charles H. Baldwin, at 1038; Smt.
Ujjam Bai vs State of U.P., [1963] 1 SCR 778 at 851; Coffee Board, Bangalore vs Joint Commercial Tax Officer, Madras & Anr.
, ; at 156; V. Guruviah Naidu & Sons vs State of Tamil Nadu & Anr., ; at 1070; Kathi Raning Rawat vs The State of Saurashtra, ; ; Kalyani Stores vs The State of Orissa & Ors., ; ; Bharat General & Tex tiles Industries Ltd. vs State of Maharashtra, 72 STC 354; H. Anraj vs Government of Tamil Nadu, ; West Bengal Hosiery Assn.
& Ors.
vs State of Bihar & Anr.
, ; ; State of U. P. & Ors.
vs Babu Ram Upadhya, ; at 702; State of Tamil Nadu, vs Hind Stone etc.; , at 757; State of Mysore vs H. Sanjeeviah, ; ; Kailash Nath & Anr.
vs State of U.P. & Ors.
, AIR 1957 SC 790 at 791; State of U.P. & Ors.
vs Renu sagar Power Co. & Ors., ; at 100; M/s Narinder Chand Hem Raj & Ors.
vs Lt. Governor, Administrator, U.T., Himachal Pradesh & Ors., at 751 and Associ ated Tanners Vizianagram A.P.v.
C.T.O., Vizianagram, Andhra Pradesh & Ors., ; , reffered to.
|
ivil Appeal No. 3395 of 1982.
From the Judgment and Order dated 4.6.1982 of the Punjab and 572 Haryana High Court in L.P.A. No. 936 of 1982 Shankar Das and H.K. Puri for the Appellant.
A.K. Ganguli, R.P. Srivastava, P. Parameshwaran, Ms. A. Subhashini and Dalip Sinha for the Respondents.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
The appellants are a public limited company having a factory at Faridabad and engaged in manu facturing air conditioning and refrigeration equipment of various kinds and descriptions.
They are holding a L 4 Licence to manufacture goods falling under Tariff Item No. 29A of the Central Excise Tariff.
As per classification lists submitted from time to time under rule 173B of the Central Excise Rules, 1944, the company had declared in Form I that they are engaged in the manufacture of goods falling under sub items (2) and (3) of Tariff Item No. 29A. Against gate pass Nos. 111, 112 and 113 dated January 21, 1970 and gate pass No. 116 dated January 22, 1970 the appellants had cleared from the factory cooling coils, condensors and compressors and supplied the same for putting up a cold storage plant to one M/s Ravi Cold Storage, Ahmedabad.
These parts were manufactured by the appellants in their factory at Faridabad and were cleared by them against the above mentioned gate passes after payment of a duty of Rs. 13.547.20 P.
Against gate pass Nos. 95, 90, 97 and 98 dated January 21, 1969 the appellants had cleared from the factory various parts of refrigerating and air conditioning appli ances and machinery for an Ice factory plant to one M/s Gujarat Industrial Investment Corporation Limited, Ahmeda bad.
These parts also were manufactured by the appellants in their factory at Faridabad and were cleared by them against gate passes referred to above after payment of a duty of Rs. 19,336.87 P.
On the ground that parts of the refrigerating and air conditioning appliances which they have removed under the above said gate passes are not excisable goods falling under Tariff Item No. 29A(3), they filed two refund applications.
The Assistant Collector of Customs rejected both these applications holding that the assessment was made correctly.
The appellants preferred two appeals agianst these orders before the Collector of Customs and Central Excise, Chandi garh, who by his common order dated December 20, 1971 dis missed the appeals.
Thereafter, the appellants filed writ petition in the High Court of Punjab and Haryana at Chandi garh.
This writ petition was 573 dismissed by a learned Single Judge holding that the goods supplied are parts of a refrigerating and air conditioning appliances, that a complete cold storage plant was not supplied to M/s Ravi Cold Storage, Ahmedabad or M/s Gujarat Industrial Investment Corporation Ltd. Ahmedabad, and that they will fall clearly within the purview of Tariff sub item (3) of Tariff Item 29 A.
An appeal preferred against this judgment was dismissed in limine by a Division Bench.
In order to understand the argument of the learned counsel for the appellants, it is necessary to set out Tariff Item 29 A in full at the relevant period, which reads as follows: Item No. Tariff Description Rate of Duty 29A. REFRIGERATING AND AIR CONDITIONING APPLIANCES AND MACHINERY, ALL SORTS, AND PARTS THEREOF (1) Refrigerators and other refrigerat Thirty ing appliances, which are ordinarily per cent sold or offered for sale as ready ad valorem assembled units, such as ice markers, bottle collers, display cabinets and water coolers.
(2) Air conditioners and other air Thirty conditioning appliances, which per cent are ordinarily sold or offered ad valorem for sale as ready assembled units, including package type of air conditioners and evaporative type of coolers.
(3) Parts of refrigerating and Forty air conditioning appliances per cent and machinery, all sorts.
ad valorem The argument of the learned counsel for the appellants was that sub items (1) and (2) deal with refrigerators and other refrigerating appliances and air conditioners and other air conditioning appliances respectively which are ordinarily sold or offered for sale as a ready 4514 assembled unit.
Therefore, in order to bring it within sub items (1) and (2) such refrigerating and air conditioning appliances should be complete assembled units and they must also be ordinarily sold or offered for sale as such ready assembled units.
The illustrative examples referred to in the two sub items make this clear according to them.
The cold storage plant and ice factory plant supplied to the factories concerned in this case as such are not such com plete assembled units which are ordinarily sold or offered for sale within the meaning of sub items (1) and (2).
From this premise they sought to interpret sub item (3) as mean ing that the goods that are covered by that sub item are parts of those refrigerating or air conditioning appliances which in its assembled form would have come as a complete unit under Tariff sub items (1) and (2) of Item 29A and are manufactured for sale.
In other words, they want to restrict the content of sub item (3) with reference to the items that may fall under sub items (1) and (2).
The further submission was that though in its sweep sub item (3) may appear to cover all and every part of refrigerating and air condition ing appliances and machinery of all sorts, the words "and parts therefore" in the heading controlled the meaning and restrict it in the context only to parts of a completed unit which as such completed unit would have come under sub items (1) and (2) of Item 29A.
In this connection, learned counsel has referred to certain decisions of the High Courts which we will refer to later.
By Finance Act of 1961 Item 29A and 40 were introduced in the First Schedule to the and those two entries read as follows: "29A. AIR CONDITIONING MACHI Twenty NERY, ALL SORTS.
per cent ad valorem.
REFRIGERATORS AND PARTS Twenty THEREOF.
SUCH AS ARE per cent SPECIALLY DESIGNED FOR USE ad valorem." WITH REFRIGERATORS.
The Notes on Clauses relating to the relevant clause in the Finance Bill 10 of 1961 stated that Item 29A proposes to levy an excise duty on air conditioning machinery and Item 40 proposes to levy an excise duty on refrigerators and "parts thereof.
" By the Finance Act 2 of 1962 a combined tariff entry in the form 575 prevailing in 1969 and 1970 was introduced and the Notes on Clauses relating to this amendment stated that the proposal is "to combine into one item the present tariff items 29A and 40 relating to 'Air conditioning Machinery ' and 'Refrig erators ' respectively as well as to make it more comprehen sive.
" Under the Government of India, Ministry of Finance, Department of Revenue, Notification No. 80/62 Central Ex cises, dated 24th April, 1962 as subsequently amended by Notifications dated 29th December, 1962, 23rd March, 1968 and 14th June, 1969 all parts of refrigerating and air conditioning appliances and machinery other than the "parts" mentioned below were exempt from the payment of excise duty leviable thereon: "(i) Cooling coils or evaporator (ii) Compressor (iii) Condenser (iv) Thermostat (v) Cooling unit, and in the case of absorption types of refrigerators in which there is no compressor, heater including Burners and Baffles in a Kerosene Operated absorp tion type refrigerator.
(vi) Starting Relay, controls (including expansion value and solenoid valves) and pressure switches (vii) Overload Protection/Thermal Relay (viii) Cabinet.
" There are a number of other notifications also exempting parts of refrigerating and air conditioning appliances and machinery, intended to be used for various purposes speci fied in the notifications, such as, use in refrigerating and air conditioning appliances or machinery which are installed or to be installed in any of the following establishments: "1.
Computer rooms.
Research and test laboratories 3.
Animal houses 4.
Telephone exchanges 5.
Broadcasting studios 6.
Trawlers 7.
Dams 8.
Mines and tunnels 9.
Thermal and hydel power stations 10.
576 Technical buildings of Military Engineering Service 11.
Any Hospital run by the Central Government, a State Govt., a Local Authority or a Public Charitable Institution and 12.
Any factory.
" Vide the Notification No. 93/76 CE dated 16.3.1976 issued under subitem (3) of Item 29A of the First Schedule.
there are various other notifications also issued under the same sub item which covers installation of air condition and refrigerating equipments of almost all categories.
The legislative history and the notifications of the Government show that sub item (3) of Item 20A is a compre hensive provision encompassing within it parts of all sons of air conditioning and refrigerating appliances and machin ery and the Government of India was issuing notifications of exemptions on the understanding that such parts are covered by sub item (3).
The language used in sub item (3) is also wide and comprehensive in its application and could not be given a restricted meaning.
Sub items (1), (2) and (3) are independent of each other and mutually exclusive.
The scope of sub item (3) is neither restricted nor controlled by the provisions of sub items (1) and (2).
It is well settled that the headings prefixed to sec tions or entries cannot control the plain words of the provision; they cannot also be referred to for the purpose of construing the provision when the words used in the provision are clear and unambiguous; nor can they be used for cutting down the plain meaning of the words in the provision.
Only, in the case of ambiguity or doubt the heading or sub heading may be referred to as an aid in construing the provision but even in such a case it could not be used for cutting down the wide application of the clear words used in the provision.
Sub item (3) so construed is wide in its application and all parts of refrigerating and air conditioning appliances and machines whether they are covered or not covered under sub items (1) and (2) would be clearly covered under that sub item.
Therefore, whether the manufacturer supplied the refrigerating or air condi tioning appliances as a complete unit or not is not relevant for the levy of duty on the parts specified in sub item (3) of Item 29A.
Strong reliance was placed by the learned counsel for appellants on the decision of the Allahabad High Court in Mother India Refrigeration Industries (P) Ltd. vs Superin tendent of Central Excise & Ors., All.
In that case the writ petitioners were the owners 577 Of a old storage plant.
The writ petitioners themselves installed and assembled the cold storage plant.
Part of the plant consisted of erecting locally what are called cooling coils and condensers.
Generally cooling coils and condensers contain a very long length of pipes made in a particular shape.
The petitioners in that case, however, bought pipes of various lengths, erected them one after the other and joined one with the other with a 'U ' shape bend.
These bends were welded.
The result was that the various pipes consti tuted an unit indesigning the plant.
This part of the plant was necessary in order to pass the cooling gas through it and thereby cool the chambers of the storage.
The petition ers bought the pipes and the bends from the market and got them placed at the factory site and got them welded.
The department, in the view that the conglomeration of pipes manufactured by the petitioner, constituted manufacture of cooling coils which are parts of refrigerating and air conditioning appliances and machinery covered by Item 29A(3) called upon the petitioners to pay excise duty on its value.
All the authorities found that the erection and installation by the petitioners, by laying pipes and joining them by welded bends, amounted to the manufacture of cooling coils and condensers as known to refrigeration technology.
The High Court accepted these findings.
However, it held that parts of refrigerating and air conditioning appliances which answer the description given in sub items (1) and (2) alone are liable to duty under Entry 29A(3) and not all parts used in refrigeration technology.
The learned judges reached this conclusion on the grounds that: "The heading of Entry 29A makes it clear that only parts of such refrigerating and air conditioning appliances and machinery as are covered by sub entries (1) and (2) alone are liable to duty.
In other words, the parts in question should be such as are ordinarily sold or offered for sale as ready.
assembled units.
On any other interpretation the words 'thereof ' occurring in the heading 29A will be redun dant.
An interpretation which makes any part of a statute redundant has to be discarded." and that "When an entry in the schedule specifically refers to and re stricts the applicability of duty to goods which are assembled units and which are generally offered for sale, the concept of sale is necessarily brought in.
As already seen, sub entry (3) takes it colour from sub entries (1) and (2) because of the specific directive of the heading by using the words 'parts thereof '.
" 578 We are afraid that both these reasons are fallacious and not acceptable.
As already stated neither can sub entry (3) be said to take its colour from sub entries (1) and (2) nor could those sub entries or heading curtail the plain meaning of the words used in sub entry (3).
We, therefore, hold that the Mother India Refrigeration Industries (P) Ltd. vs Supdt.
of Central Excise & Ors. 's, case (supra), was wrongly decided and accordingly we overrule the same.
The learned Judges have also relied on a Tariff Advice dated September 30, 1969 given under the Customs Act for the purpose of levying countervailing duty.
We shall deal with this ques tion when we consider that Tariff Advice in a latter part of this judgment.
The decisions of the Bombay High Court in Blue Star Ltd. vs Union of India & Anr., Bom.
and Joy Ice Cream, Bombay vs Union of India, Bom., related to the scope of Tariff item 29A(1) and not Item 29A(3) with which we are concerned.
In the view we have taken that sub entries (1) and (2) of Entry 29A cannot control or restrict the meaning of such entry (3) it is not necessary for us to go into the scope of Entry 29A (1) and (2).
These decisions, therefore, are no relevance.
The decision of the Kerala High Court in Calicut Refrig eration Co. vs Collector of Customs & Central Excise, Cochin & Ors., Ker., also does not touch upon the question with which we are concerned.
The decision of the Allahabad High Court in Chhibramau Cold Storage vs CEGAT, All.
and Goptal Cold Storage & Ice Factory vs Union of India & Ors., All., simply followed the decision in Mother India Refrigeration Industries (P) Ltd. vs Supdt.
of Central Excise & Ors., (supra) and, there fore, they do not advance the case any further.
On the other hand, we have a decision of the Gujarat Court in Anil Ice Factory & Anr.
vs Union of India & Ors., Guj., wherein M.P. Thakkar, Chief Justice, as he then was, referred to the Allahabad High Court judgment and dissenting from it held: "On taking a close look at Item 29A it will be seen that what is printed at the top of the entry as "caption" indi cates the nature of the goods covered by the entry.
It does not more than indicate what is the nature of the goods which are specified in the said entry.
(1), (2) and (3) are independent of each other.
Clause (3) in terms refers to goods which fall within the description of the said entry, 579 namely, "Parts of refrigerating and air conditioning appli ances and machinery, all sorts".
It is not disputed that cooling coils and condensers would fall within the category of "appliances and machinery".
Counsel however argues that we must first read the scope of cl.
(1) and cl.
(2) and draw an inference therefrom that the goods covered by entry, will attract excise duty only provided they are manufactured for sale.
We see no valid reason for reading the entry in that manner.
Each of the three sub clauses referes to different entries and specifies different rates of duty for the goods falling within the respective entries." and that "As we indicated earlier, in the first place the purpose of the caption is to provide a clue to the nature of the goods which are covered by the entry.
But even otherwise if the caption is read in the manner in which it has been worded it does not justify or warrant an inference that it related to goods which are manufactured for the purpose of sale.
Entry 29A adverts to goods which would fall within one or the other of the three classifications specified therein.
The description of each category of goods if clearly mentioned in col.
So far as CI.
(3) is concerned the tariff description is "parts of refrigerating and air conditioning appliances and machinery".
We cannot read the words 'manufactured for sale ' in entry No. 3 by drawing upon the theory of "Taking colour" which has no application in a case like the present one.
If we inject these words we would be re writing this section and we would be legislating which we cannot do.
" The learned counsel for the appellants then relied on the Trade Advice dated 30th September, 1969 given by the Central Board of Excise and Customs, New Delhi, in respect of classification of refrigerating machinery and ice making plant which are not sold or offered for sale as ready assem bled unit for purposes of countervailing duty under the Customs Act.
After referring to sub items (1) and (2) of Item 29A as covering complete plant and equipment which a re ordinarily sold or offered for sale as ready assembled units, had stated as follows, with reference to sub item (3): "Sub item (3) of item 29A of the Central Excise Tariff 580 refers to parts or ' machinery and appliances and complete plants which cannot be considered as "parts of machinery" would not be classifiable under sub item (3) to item 29A C.E.T. also.
" As may be seen from this paragraph it consists of two parts, the first portion referring to parts of machinery and appli ances and the second portion referring to complete plants which cannot be considered as parts of machinery.
The whole argument arose because of the composite sentence used in this paragraph.
It only means complete plants which are covered by Items (1) and (2) cannot be considered as parts on machinery and such complete plants would not be classi fiable under sub item (3) of Item 29A.
The reliance placed by the learned counsel on this notification does not in any way advance the case of the appellants.
In the foregoing circumstances, the appeal fails and it is dismissed with costs.
Y. Lal Appeal dismissed.
| IN-Abs | The appellant company was engaged in the manufacturing of airconditioning and refrigeration equipment under a proper licence.
On January 21, 1970 the appellant cleared from the factory cooling coils, condensers and compressors and supplied the same to M/s. Ravi Cold Storage, Ahmedabad for putting up a cold storage and paid duty of Rs.13,547.20 P in respect thereof.
Again on January 21, 1969, the appel lant cleared from the factory various parts of refrigerating and air conditioning appliances and machinery for an Ice factory plant to one M/s. Gujarat Industrial Investment Corporation Ltd., Ahmedabad and paid a duty of Rs. 19,336.87P.
Both the aforesaid goods were manufactured at the appellant 's factory.
Thereafter the appellant filed two refund applications of the said excise duty before the Assistant Collector of Customs, contending that the refrig erating and air conditioning appliances which they had removed on the aforesaid dates were not excisable goods failing under Tariff Item No. 29A(3).
The Assistant Collec tor of Customs rejected both the applications holding that the assessment was correctly made.
The appellant company preferred two appeals against these orders before the Col lector of Customs and Central Excise, Chandigarh, who dis missed both the appeals.
Thereupon the appellant filed a writ petition in the High Court.
The learned single Judge who heard the petition dismissed the same holding that the goods supplied are parts of a refrigerating and air condi tioning appliances, that a complete cold storage plant was not supplied to M/s. Ravi Cold Storage, Ahmedabad or M/s. Gujarat Industrial Investment Corporation Ltd., Ahmedabad and that they would fail clearly within the purview of Tariff sub item (3) of Tariff Item 29 A.
An appeal preferred against this judgment was dismissed by a Division Bench in limine.
Hence this appeal.
Before this Court also the appellant inter alia contended that 571 though in its sweep sub item (3) may appear to cover all and every part of refrigerating and air conditioning appliances and machinery of all sorts, the words "and parts thereof" in the heading controlled the meaning and restrict it in the context only to parts of a completed unit which as such completed unit would have come under sub items (1) and (2) of item 29 A. Dismissing the appeal, this Court, HELD: The legislative history and the notifications of the Government show that sub item (3) of item 29 A is a comprehensive provision encompassing within it all sorts of air conditioning and refrigerating appliances and machinery and the Government of India was issuing notifications of exemptions on the understanding that such parts are covered by sub item (3).
The language used in sub item (3) is also wide and comprehensive in its application and could not be given a restricted meaning.
Sub items (1), (2) and (3) are independent of each other and mutually exclusive.
The scope of sub item (3) is neither restricted nor controlled by the provisions of sub items (1) and (2).
[576C D] Whether the manufacturer supplies the refrigerating or airconditioning appliances as a complete unit or not is not relevant for the levy of duty on the parts specified in sub item (3) of item 29 A. [576F G] Complete plants which are covered by items (1) and (2) cannot be considered as parts of machinery and such complete plants would not be classifiable under sub item (3) of Item 29 A. [580B C] Mother India Refrigeration Industries Pvt. Ltd. vs Supdt.
of Central Excise and Ors., All, overruled.
Blue Star Ltd. vs Union of India and Anr., Bom.
; Joy Ice Cream, Bombay vs Union of India, Bom.; Calicut Refrigeration Co. vs Collector of Customs & Central Excise, Cochin and Ors.
, Ker.; Chhibramau Cold Storage vs CEGAT, ; Goptal Cold Storage & Ice Factory vs Union of India and Ors., and Anil Ice Factory & Anr.
vs Union of India and Ors., , referred to.
|
: Civil Appeal No. 509(N)of 1975.
From the Judgment and Order dated 25.7.1973 of the Madhya Pradesh High Court in First Appeal No. 118 of 1966.
A.K. Ganguli and C.N. Sreekumar for the Appellant.
R.B. Misra and S.K. Agnihotri for the Respondents.
The Judgment of the Court was delivered by M.M. PUNCHHI, J.
This appeal by special leave is against a judgment and decree in reversal passed by a Division Bench of the High Court of Madhya Pradesh at Jabalpur.
One has straightaway to come to grips with some basic facts of the case alongside the historic backdrop influenc ing their course.
The property in dispute is a medium sized house bearing No. 494/1, Partap Sagar Ward, known as Gulab Rai Wala House, in the city of Chhatarpur.
In the plaint filed by the District Collector, Chattarpur, dated May 5, 1962, it was valued at Rs.40,000 and its rental value barely as Rs.114.77 NP.
In British days, the State of Chattarpur, like other such States, was an independent State, under the paramountcy of the British Crown.
The British Crown was the suzerain power as acknowledged by the Indian States which owed a modified allegiance to it, but none to the Government of India.
On India having obtained independence the suzer ainty of the British Crown over the Indian States lapsed simultaneously because of section 7 of the Indian Independ ency Act, 1947.
It is a matter of history that immediately thereafter all but three of the Indian States acceded to the Dominion by executing Instrument of Accession.
Chattarpur was one such State.
The new Dominion of India was empowered to accept such like accessions by a suitable amendment in the Government of India Act, 1935.
The sovereignty of the acceding States was expressly recognised and safeguarded.
The identical Instrument of Accession, which each Ruler 45 signed, was in the exercise of his sovereignty in and over his State and clause 8 provided: "Nothing in this Instrument affects the continuance of my sovereignty in and over this State, or, save as provided by or under this Instrument, the exercise of any powers, au thority and rights now enjoyed by me as Ruler of this State or the validity of any law at present in force in this State." To put it differently, the effect of the accession was to retain full autonomy and sovereignty to the Rulers in their respective States except on three subjects, namely, Defence, External Affairs and Communications.
These alone were trans ferred to the Central Government of the new Domimon.
On March 13, 1948, thirty five States in Bundelkhand and Baghelkhand regions agreed to unite themselves into one State which was to be called the United State of Vindhya Pradesh.
Chattarpur being one such State in Bundelkhand area was a party thereto.
The signing thirty five Rulers had brought about the new State into being purely as a domestic arrangement between themselves and not as a treaty with the Dominion of India.
Obviously there was surrender of a frac tion of the sovereignty of each Ruler to the newly created State but there was no further surrender of sovereign powers to the Dominion of India beyond those already surrendered in 1947 relating to Defence, External Affairs and Communica tions.
Despite the readjustment, the sum total of the sover ignties which had resided in each before the covenant then resided in the whole and its component parts; none of it was lost to the Dominion of India.
The articles of the covenant, so far as they are rele vant for our purposes, are articles VI and XI, which are reproduced hereafter: "ARTICLE VI (1) The Ruler of each Covenanting State shall, as soon as may be practicable, and in any event not later than the 1st May, 1948, make over the Administration of his State to the Raj Pramukh; (a) all rights, authority and jurisdiction belonging to the Ruler which appertain, or are incidental to the Govern 46 ment of the Covenanting State shall vest in the United State and shall hereafter be exerciable only as provided by this Government or by the Constitution to be framed thereunder: (b) all duties and obligations of the Ruler pertaining or incidental to the Government of Covenanting State shall devolve on the United State and shall be discharged by it; (c) all the assets and liabilities of the Covenanting State shall be the assets and liabilities of the United State.
XXX XXX XXX XXX ARTICLE XI (1) The Ruler of each Covenanting State shall be entitled to the full ownership, use and enjoyment of all private properties (as distinct from State Properties) belonging to him on the date of his making over the Adminis tration of the State to the Raj Pramukh.
(2) He shall furnish to the Raj Pramukh before the 1st May, 1948 an inventory of all the immovable properties, securities and cash balances held by him as such private property.
(3) If any dispute arises as to whether any item of property is the private property of the Ruler or State Property, it shall be referred to a Judicial Officer to be nominated by the Government of India, and the decision of that person shall be final and binding on all parties con cerned." Despite the distinction drawn in Article XI, there was in reality no distinction between State property and the property privately owned by a Ruler, since the Ruler was the owner of all the property in the State.
For the purposes of arrangement of finance, however, such a distinction was practically being observed by all Rulers.
The apparent effect of the covenant was that all the property in the State vested in the United State of Vindhya Pradesh except private property which was to remain with the Rulers.
As is evident, the Ruler was required 47 under Article XI to furnish to the Raj Pramukh before May 1, 1948 an inventory of all immovable properties, securities and cash balances held by him as such private property.
Conceivably, on a dispute arising as to whether any item of property was or was not the private property of the Ruler and hence state property, it was required to be referred to a Judicial Officer to be nominated by the Government of India and the decision of that officer was to be final and binding on all parties concerned.
Despite the stern language of Article XI, requiring a Ruler to furnish the list of his private properties by May 1, 1948, the covenant did not contain any clause or article providing penal consequences which would or were likely to follow in the event of a Ruler not furnishing the list of private properties before that date.
Nothing is available in the covenant and none was pointed out to us that if a Ruler failed to furnish an inventory of his private properties before May 1, 1948, he was debarred from furnishing it at a later stage and that failure of his part had the effect of divesting him of title to his private properties.
The House in dispute was built by the then Ruler Mahara ja Sir Vishvanath Singh Ju Deo to accommodate Gulab Rai, his Private Secretary and that is how it acquired its name as Gulab Rai Wala house.
The parties were at variance about the subsequent user of the house whether it was for State pur poses or private purposes of the Ruler.
The factual undenied positioin is that the Ruler of Chattarpur on July 5, 1948 (vide Exhibit D 13 5) submitted a list to the Raj Pramukh of the United State of Vindhya Pradesh of his private proper ties, and in the said list the house in dispute, namely, Gulab Rai Wala house, was shown as the private property of the Ruler (by the then Maharaja Shri Bhawani Singh Ju Deo).
In the following month, on August 25, 1948, the said Mahara ja Shri Bhawani Singh Ju Deo made a gift of the house in dispute in favour of his father in law Dewan Shanker Partap Singh (now deceased and represented by his legal representa tives appellants).
His gift has become the subject matter of dispute in the suit, out of which this appeal has arisen, for grounds to be taken note of later at an appropriate stage.
By means of another agreement dated December 26, 1949, between the Governor General of India and the Rulers of the States forming the United State of Vindhya Pradesh, the covenant entered into on March 13, 1948, was abrogated.
The articles of this agreement, in so far as they are relevant for our purposes, read as under: 48 "ARTICLE I As from the first day of January, 1950, the Covenant entered into in March, 1948 by the Ruler of certain States in Bun delkhand and Baghelkhand for the formation of the United State of Vindhya Pradesh (hereinafter referred to as "the Covenant") shall stand abrogated.
ARTICLE II As from the aforesaid day, the United State of Vindhya Pradesh shall cease to exist and all the property, assets and liabilities of that State, as well as its right duties and obligations shall be those of the Government of India.
ARTICLE III The Ruler of each of the States specified in the Schedule to this agreement (hereinafter referred to as the Covenanting States ') hereby cedes to the Government of India, with effect from the aforesaid day, full and exclusive authority, jurisdiction and powers for, and in relation to, the gover nance of that State; and thereafter the Government of India shall be competent to exercise the said powers, authority and jurisdiction in such manner and through such agency as it may think fit.
XXX XX XX X XX ARTICLE VII (1) The Ruler of each Covenanting State shall be entitled to the full ownership, use and enjoyment of all private proper ties (as distinct from State Properties) belonging to him on the date of his making over the Administration of the State to the Raj Pramukh in pursuance of the Covenant. (2) If any dispute arises as to whether any item of property is the private property of the Ruler or State property, it shall be referred to a judicial officer to be nominated by the Government of India, and the decision of that officer shall be final and binding on all parties concerned. ' ' 49 This Agreement of the year 1949 paved the way for the Cen tral Government appointing a Chief Commissioner as Head of the Administration of Vindhya Pradesh, followed by the Parliament making it a Part 'C ' State in the year 195 1, followed by the creation of the State of Madhya Pradesh in the year 1956 under the States Reorganisation Act.
And such position continues till date.
As is prominent, under the covenant of March 13, 1948, and as repeated in the agreement of December 26, 1949, any dispute arising, whether any item of property was the pri vate property of the Ruler or State property, was to be referred to a Judicial Officer to be nominated by the Gov ernment of India and the decision of that officer was to be final and binding on all parties concerned.
It appears, however, that a letter dated January 22, 1950 (copy whereof was Exhibit P 9) was sent by Shri N.M. Buch, Secretary in the Ministry of States, New Delhi, to the Ruler suggesting that a Conference was held between him and the Ruler at Naugong from 16th to 18th September, 1949, and some deci sions were taken with regard to the private properties of the Ruler and the list of such property as finally emerging was Exhibit P 10 attached with the letter Exhibit P 9.
Item No. 22 in that list, being Gulab Rai Wala house, was shown to be State property as per decision taken in the said Conference.
From these documents, the High Court when re solving the claims of the State and the donee has taken the view that originally the property in dispute was claimed by the ruler as his private property but on agreement it was decided that it be State property, and further the legal effect thereof was that with effect from May 1, 1948, the date of agreement of merger, the property in dispute stood vested in the new Union.
The second factor which weighed with the High Court to conclude in the aforesaid manner was that listing of properties, whether State or private, was open to objection and could be settled by a Judicial Officer to be nominated by the Government of India, as per the articles aforereferred to, and a raiseable dispute could otherwise be settled amicably mutually, Mr. Buch 's letter being indicative of that.
On that basis, the gift deed dated August 25, 1948, was held by the High Court to be ineffec tive, the said property having already vested in the State with effect from a prior date on May 1, 1948.
And since after that date, the Ruler was incompetent to effect a valid gift deed in favour of anyone, the State 's claim of posses sion and mesne profits was held irresistable.
Undeniably, the Dewan Shanker Partap Singh was in pos session of the house in dispute when the suit was instituted by the State of Madhya Pradesh on May 5, 1962.
The suit was filed almost 14 years of 50 the gift in his favour.
The gift was challenged as null and void and ineffective for the reasons: (i) the gift deed was written on an ordinary paper; (ii) was unregistered, (iii) was not signed by any witness, (iv) did not bear the seal of the Maharaja, (v) prior to the date of the gift the power of the Maharaja was transferred to Vindhya Pradesh Government and the said house was not his private property, and (vi) the house in dispute was already declared to be the property of the Vindhya Pradesh Government as per terms of the cove nant between the ex Ruler of Chattarpur and the Government of India, and the Civil Court was not competent to question the legality of the conditions of the said covenant.
On that basis, possession of the house was claimed from the donee Dewan Shanker Partap Singh as also arrears of rent from August 25, 1949 onwards at the rate of Rs.114.77 NP, totall ing Rs.18,866, before the trial court.
The suit was contested by the defendant Shanker Partap Singh contending that (i) the gift of August 25, 1948, was not void and inoperative and that there was no legal re quirement to use a particular kind of paper for executing a gift deed; (ii) non registration thereof had no legal effect as the executant had admitted execution of the document, (iii) the Transfer of Property act was not applicable at the relevant time, (iv) the deed was signed by the Ruler and the absence of seal was of no consequence, (v) the property was the private property of the Maharaja, and (vi) finally the Ruler had every right to make such gift.
Besides, a number of other pleas were raised, which are unnecessary to be dealt with for the present purposes.
Similarly, the pleas in the replication, countering the pleas in the written state ment, also need not require any attention for the present purposes, for the way in which we propose to deal with this appeal.
The trial Court framed a number of issues which attract ed voluminous evidence to be led by the parties.
The Mahara ja of Chhatarpur was examined as defendant 's witness and owned making of the gift in favour of his father in law.
He admitted, however, that Shri Buch had met him in connection with the covenant, but he denied that he had received any letter Exhibit P 9 from Shri Buch or the lists Exhibits P 10 to P 12 regarding his private and State properties, were a part thereof.
His evidence was suggestive of there being no agreement between him and Shri Buch to change the list of properties.
The trial Court 's clear findings were that the property in dispute was not that of the Maharaja but that of the defendant, as it had been gifted to hun by the Maharaja on August 25, 1948, and that the house was mistakenly shown later as 'State property '.
In that view of the matter, the trial 51 Court dismissed the suit.
The appeal of the State of Madhya Pradesh was, however, allowed by the High Court on the view taken that the property in dispute had vested in the United States of Vindhya Pradesh on May 1, 1948, and that thereaf ter no valid gift could be made by the Ruler in favour of the defendant.
The High Court further held that whatever rights and powers the Ruler had as a sovereign ceased to exist after May 1, 1948, and the said date was fixed not later than May 1, 1948, and the gift deed made thereafter on August 25, 1948, could not give the defendant a valid title to the property on that basis.
With regard to damages, the High Court took the view that the rate of Rs.56 per mensem as at one time demanded initially by the State should be the basis for assessment of damages.
In that view of the matter, the suit of the State of Madhya Pradesh Government was decreed for possession, but reducing the damages to Rs.16,735.35 paise.
And this has given rise to the present appeal.
History of the covenant entered into by the Rulers and the final integration finds recognition in Virendra Singh and others vs State of Uttar Pradesh, ; The significant passage as available at page 4 19 of the report, is worthy of reproduction here: "After this, on 13th March, 1948, thirty five States in Bundelkhand and Baghelkhand (including Charkhari and Sarila) agreed to unite themselves into one State which was to be called the United State of Vindhya Pradesh.
In pursuance of this agreement each of the thirty five Rulers signed a covenant on 18th March, 1948, which brought the new State into being.
It is important to note that this was a purely domestic arrangement between themselves and not a treaty with the Dominion of India.
Each Ruler necessarily surren dered a fraction of his sovereignty to the whole but there was no further surrender of sovereign powers to the Dominion of India beyond those already surrendered in 1947, namely, Defence, External Affairs and Communications.
Despite the readjustment, the sum total of the sovereignties which had resided in each before the covenant now resided in the whole and its camponentparts: none of it was lost to the Dominion of India." (Emphasis supplied) Only a fraction of sovereignty to the whole was surrendered by the Ruler not his total sovereignty.
Though it was expected by Article XI of the covenant of the Ruler to submit a list of his private properties 52 before May 1, 1948, his individual sovereign power did not stand taken away after May 1, 1948.
He was still sovereign, as is our view, to submit the list beyond that date and there was no penal clause in the covenant to penalise him for belated observance or to treat belated observance non est.
It is the admitted case that factually the Ruler of Chattarpur had in his list of July 10, 1948, shown the property in dispute to be his private property and this was followed by a gift of it in writing on August 25, 1948, in favour of his father in law.
It is in the assertion of his sovereign power that he gave his list on July 5, 1948 (Exhibit D 13 5) and it is in assertion of the same sover eign power as also individual that he made the gift of the house in dispute to his father in law.
Support for such view is available in Virendra Singh 's case (supra) from the following passage occurring at page 429 of the report; " . .
The Rulers of Charkhari and Sarila retained at the moment of final cession, whatever measure of sovereignty they had when paramountcy lapsed, less the portion given to the Indian Dominion by their Instruments of Accession in 1947; they lost none of it during the interlude when they toyed with the experiment of integration.
There was then redistribution of some of its aspects but the whole of whatever they possessed before the integration returned to each when the United State of Vindhya Pradesh was brought to an end and ceased to exist.
Thereafter each acceded to the Dominion of India in his own right." (Emphasis supplied).
It is thus plain that the Ruler of Chhatarpur lost none.
of his sovereignty by integrating his State with other States except to the extent in which it was arranged or redistributed on some of its aspects.
It is in exercise of that sovereign power that the Ruler, in the manner indicated above, had set apart the property in dispute as one of his private properties, in the list submitted on July 5, 1948.
It is nobody 's case that he could not submit such a list on July 5, 1948.
Further, in exercise of his sovereign as also individual right over his private property, that he trans ferred the house in dispute to his father in law on August 25, 1948.
In these circumstances, the suggested Conference which took place later in September, 1949 between him and Shri N.M. Buch, Secretary in the Ministry of States, New Delhi, evident from letter Exhibit P 9 dated January 22, 1950, and the lists Exhibits P 10 to P 12, appended there with, is not of much significance.
In the first place, the Ruler denied when appearing as a witness in the trial as having received any such letter or the lists appended there with, sug 53 gestive of the fact that he had reconverted the donated property to be a State property.
In the second place, but for the said letter, purportedly issued at a time when the State of Chhatarpur had otherwise ceded to the Central Government vide agreement dated January 1, 1950, there was no direct evidence forth coming for such conference.
In the third place, even if such Conference had taken place in September 1949, as suggested, the minutes thereof cannot be treated as amounting to a divestiture of the gift made in favour of the father in law.
Fourthly, the Ruler had no sovereign power towards administering his State which had become part of the integrated United State in terms of Article VI of the covenant, and during the integration he could not exercise such a sovereign power, so as to take away the property of a private person and treat it as State property because the property in dispute having once vested in the defendant appellants could not be divested in the manner suggested.
And lastly, there was no raiseable ques tion or issue which the Ruler could, while sitting with Shri Buch, decide amicably without the aid of the Judicial Offi cer nominated by the Government entering upon such dispute, because before integration he owned his State and its properties and there could legitimately not arise a dispute as to which was his private property or State property and thus its settlement by a mutual consent did not arise.
Taking thus the totality of these circumstances in view, we are driven to the conclusion that the High Court committed an error that the Ruler lost his sovereign right to ear mark the property in dispute as his private property after May 1, 1948, or that the said property vested in the State with effect from that date or that the letter Exhibit P 9 of Shri N.M. Buch and the lists attached thereto, had the effect of divesting the appellants of the title to the property in dispute in favour of the State with effect from that date.
In that strain, factual position having not been denied, the validity of the gift dated August 25, 1948, cannot be ques tioned on the grounds enumerated in the plaint, due to exercise of sovereign power of the Ruler in the grant there of at that point of time.
Once that is held the claim for damages too caves in.
We hold it accordingly.
For the view above taken, we allow this appeal, set aside the judgment and decree of the High Court and dismiss the suit of the State of Madhya Pradesh with costs.
R.N.J. Appeal al lowed.
| IN-Abs | The question is whether the property in dispute was the private property owned by the Ruler or State property? On August 25, 1948 the then Maharaja of erstwhile Chhatarpur State made a gift of the house in dispute in favour of his father in law Dewan Shankar Partap Singh, now deceased and represented by his legal representative appellant.
This gift became the subject matter of dispute in the suit filed by the State of Madhya Pradesh in 1962.
The Trial Court 's clear findings were that the property in dispute was not that of the Maharaja as it had been gifted away by him to the de fendant and was mistakenly shown later as 'State Property '.
The High Court allowed the appeal of the State of Madhya Pradesh on the view taken by it that the property in dispute had vested in the United State of Vindhya Pradesh on May 1, 1948 and thereafter no valid gift could be made by the Ruler in favour of the defendant; and whatever rights and power the Ruler had as a sovereign ceased to exist after May 1, 1948 and the gift made thereafter could not give the defend ant a valid title to the property.
Allowing the appeal, this Court, HELD: The Ruler of Chhatarpur lost none of his sover eignty by integrating his State with other States except to the extent in which it was arranged or re distributed on some of its aspects.
It is in exercise of that sovereign power that the Ruler, had set apart the property in dispute as one of his private properties in the list submitted on July 5, 1948.
[52F] The High Court committed an error that the Ruler had lost his sovereign right to earmark the property in dispute as his private property after May 1, 1948 or that the said property vested in the State with effect from that date or that the letter Exhibit P 9 of Shri N.M. Buch 44 and the lists attached thereto had the effect of divesting the appellants of the title to the property in dispute in favour of the State with effect from that date.
[53E] Virendra Singh & Ors.
vs State of Uttar Pradesh, [1955] I SCR 415, referred to.
|
ivil Appeal No. 735 of 1975.
From the Judgment and Order dated 21.6.1974 of the Bombay High Court in Spl.
Civil Appln.
No. 15 of 1971.
U.U. Lalit and A.G. Ratnaparkhi for the Appellants.
M.S. Gupta for the Respondent.
68 The Judgment of the Court was delivered by SAWANT, J.
These proceedings arise under the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958 (hereinafter referred to as the Act).
The appellant Hiraji Tolaji was admittedly a protected lessee or tenant of the agricultural land being Survey No. 30 of Village Madha, Taluqa Chikhali District Buldana.
The land measures approxi mately 25 acres and 31 gunthas.
The respondent who is men tally disabled became the landlady of the land in question in quite queer circumstances which to say the least are indefensible in law.
Her father, one Mr. Brijlal Bansilal owned as many as 568 acres of land of which the suit lands are a part.
The lands admittedly are ancestral.
He effected first partition of his entire holding of lands on January 31, 1949 between himself on the one hand and his wife and a minor son on the other.
On December 16, 1950, he effected a second partition of the very same lands between himself on the one hand and his wife and his son on the other.
Again on June 29, 1959 he effected a third partition of the said lands between himself on the one hand and his wife and his two minor daughters including the respondent on the other.
There is further no dispute that it is in this third parti tion that the suit lands were given to the share of the respondent and the respondent became the alleged landlady w.e.f.
the date of the said partition.
It appears that sometime in 1962, the respondent through her guardian, namely her father Brij Lal initiated proceedings against the appellant for recovery of possession of the suit land on the ground of default in payment of rent for three years, namely 1959 60, 1960 61 and 196 1 62.
By his decision of April 30, 1963 the Tehsildar dismissed 'the application holding that the respondent was not a landlady since the partitions in question were illegal.
The Deputy Collector in appeal confirmed the said decision by his Order dated November 26, 1963.
The respondent 's revision before the Maharashtra Revenue Tribunal also failed when the Tribu nal rejected it by its decision of April 29, 1965.
In the Writ Petition filed before the High Court under Article 227 of the Constitution against the said decision of the three authorities below, the High Court by its Order dated October 4, 1966 remanded the matter to the Tehsildar for investiga tion into the validity of the partition.
Then started the second round of litigation.
On remand, the Tehsildar by his decision of March 16, 1968 held that the partition effected on June 29, 1959 (which was the only material partition so far as the respondent was con cerned) was bogus.
Hence the notice of demand and therefore the proceedings for recovery of possession pursuant thereto, were bad in law.
69 It appears that thereafter in a different proceeding the Maharashtra Revenue Tribunal on June 25, 1968 had held 'that the said partition was binding.
It is after this decision of the Tribunal as stated earlier in an altogether different proceeding, that the matter came up for hearing in appeal filed by the respondent before the Deputy Collector, against the decision of the Tehsildar given on March 2, 1968.
The Deputy Collector, therefore, followed the said decision of the Revenue Tribunal, and by his decision of April 16, 1969 held that the partition being valid, the respondent was the landlady of the suit land and, therefore, notice given by her, terminating the tenancy on the ground of default of rent and the proceedings filed for recovery of the suit land, were proper.
He also held that the appellant was in arrears of rent for three years as contended by the respond ent and, therefore, allowed the said application for evic tion of the appellant from the suit land.
Against the said decision, the appellant preferred a revision before the Revenue Tribunal and the Tribunal by its decision of September 15, 1970 confirmed the findings of the Deputy Collector.
Aggrieved by the decision, the appellant preferred a Writ Petition before the High Court under Article 227 of the Constitution, and the High Court by its impugned decision of June 21, 1974 dismissed the petition.
Hence this appeal.
Before the High Court, two obvious illegalities committed by the lower authorities were highlighted on behalf of the appellant.
The first illegality was that the property being admittedly ancestral, Brijlal could not have effected partition of the property between himself on the one hand and his wife and his daughter on the other.
In all the three partitions effected on July 31, 1949, December 16, 1950 and June 29, 1959, wife was one of the parties to the partitions.
In the third partition made on June 29, 1959 besides his wife, the other parties to the partition were two minor daughters.
Secondly, the same property is shown to have been partitioned by Brij Lal on three occasions.
Admit tedly, the partition of June 29, 1959 is between Brij Lal on the one hand and his wife and two minor daughters including the respondent on the other.
This partition was obviously contrary to the provisions of Hindu Law.
Hence the respond ent in any case could not have become a landlady of the suit land because it is in this third partition of June 29, 1959 that the said land is alleged to have gone to the share of the respondent.
The High Court dismissed this contention with regard to the patent illegality by giving a spacious reason that the question 70 referred to the Tehsildar in its earlier remand order, namely the validity or otherwise of the partition, was investigated by the three authorities and that they had given a finding upholding the partition.
The High Court further held that what was produced before the courts below was a family settlement and since the said family settlement created a right in favour of the respondent she should be held to have become the owner of the suit land.
Unfortunate ly, the High Court lost sight of the fact that the family settlement which is accepted by the Courts in lieu of parti tion, is a settlement which gives share to the parties as per their legal entitlement and not a settlement which is made or purported to have been made to circumvent the law.
A partition of the property can only be among the parties who have a preexisting right to the property.
Under the Hindu Law, a female, major or minor has no share in the ancestral property.
A female is given a share either in the self acquired property of the husband or the father, or in the share of the husband or the father in the coparcenary property after the property is partitioned.
There cannot, therefore, be a partition and hence a family settlement with regard to the ancestral property so long as it is joint, in favour of either the wife or the daughter.
Since this obvi ous illegality was ignored by the High Court, it will have to be held that the High Court 's decision was patently wrong.
The respondent, therefore, never became the landlady of the land and it was Brij Lal who continued to be the landlord of the same.
Hence the notice given by the respond ent and the proceedings for eviction adopted by her are misconceived.
Her application for possession of the land has, therefore, to be dismissed, 5.
The second obvious illegality which was brought to the notice of the High Court was that even assuming that the partition deed of June 29, 1959 was a valid document, the same has to be ignored since it could not confer the title of ownership on the respondent transferee in view of the provisions of Section 38(7) of the Act.
Under Section 46 of the Act, a protected tenant becomes the owner of the land on and from April 1, 1961.
Under section 38(1), however, a landlord is given a right to evict a tenant if he wants the land for bona fide personal cultivation.
The right to adopt the proceedings for possession of the land has to be exer cised on or before March 31, 1961.
The condition precedent to such application, however, is that the landlord should have given a notice to the tenant, for the purpose, on or before November 15,1961.
Under Section 38(2), the time to apply for possession is extended in the case of the landlord who is a minor, widow or a person subject to any physical or mental disability.
We are concerned in the present case with a person who is mentally disabled, since the respondent is alleged 71 to be a mentally disabled person.
Further the proviso to sub section (2) of Section 38 also makes it clear that where such person is a member of a joint family, the time given to the landlord to terminate the tenancy is not extended if atleast one member of the joint family is outside the cate gories of the disabled persons.
Such disabled person, fur ther, has to be the owner of the land on March 31,1961. 6.
The sum total of these provisions is that the appel lant in the present case would become the owner of the suit land on and from 1st April, 1961 if the respondent did not intervene as the landlady of the suit land before that date.
Admittedly, the respondent is alleged to have become the landlady by virtue of the partition effected on June 29, 1959.
Section 38(7) of the Act, however, states as follows: "Nothing in this section shall confer on a tenure holder who has acquired any land by transfer or partition after the 1st day of August 1953 a right to terminate the tenancy of a tenant who is a protected lessee and whose right as such protected lessee had come into existence before such trans fer or partition.
" It may be mentioned here that in some copies of the Act published by the Government Press, instead of the 1st day of August 1953, the date printed is 1st day of August 1963.
That is admittedly wrong.
We perused the Bombay Tenancy and Agricultural Lands (Vidarbha Region) (Amendment) Act 1963.
By that Amending Act, all that was done was to add the words "or partition" after the word "transfer" in Section 38(7).
No amendment was made of the date the transfer effected after which would not result in conferring title to the land.
In fact, the Amending Act also states that the amend ment was effected pursuant to the decision of the Full Bench of the Bombay High Court reported in 1969 Maharashtra Law Journal page 933 where the Court had taken the view that the "transfer" contemplated by the unamended provision of Sec tion 38(7) did not include transfer by partition.
It had, therefore, become necessary to include in the "transfer" also transfer by partition and, hence, the Amending Act was enacted only for the purpose of adding the words "or parti tion" after the words "by transfer" and "before such trans fer" in that Section.
The position that obtains under Section 38(7) after the Amending Act 1963 is, therefore, that any transfer of land effected after 1st August 1953 whether by way of parti tion or otherwise, has no effect of conferring on the trans feree a right to terminate the tenancy 72 of the tenant who was a protected lessee and whose right as such protected lessee had come into existence before such transfer or partition.
This amendment is admittedly retro spective in operation.
Even assuming, therefore, that the partition of June 29, 1959 was a valid one, it did not give a right to the respondent to terminate the tenancy of the appellant who was admittedly a protected lessee prior to August 1, 1953 and was on the land as such tenant on April 1, 1961.
The result therefore is that firstly, the respondent had not become the landlady of the suit land since the share given to her in the partition was prima facie illegal and contrary to the provisions of law.
Secondly, assuming that the partition was valid, the respondent had no right to terminate the tenancy of the appellant on any ground whatso ever.
The appellant was a tenant since prior to 1st August 1953 and had also continued to be such tenant till April 1, 1961.
Hence he became a statutory owner under Section 46 on and from April 1, 1961.
Any proceedings for evicting him on the ground that he was a tenant and, therefore, had fallen in arrears of rent could not have, therefore, been adopted in 1962.
It is unfortunate that the High Court lost sight of the ' said patent legal position and brushed aside the con tention in that behalf on the ground that the question involved was a question of law and fact.
We are unable to see what questions of fact were necessary to investigate for the disposal ot the said question.
It was a pure question of law arising out of the admitted facts on record.
Hence we allow the appeal, set aside the decision of the High Court and hold that the appellant had become a statutory owner of the suit land on and from April 1, 1961.
He was, therefore, not liable to be evicted at the hands of the respondent and the proceedings adopted by her were illegal and stand dismissed.
The respondent will pay the costs throughout.
R.S.S. Appeal al lowed.
| IN-Abs | The appellant was a protected lessee or tenant of the agricultural land in dispute, under the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958.
The respond ent became the landlady of the land on June 29, 1959 when her father effected a partition of his ancestral lands between himself, on the one hand, and his wife and his two minor daughters, including the respondent, on the other.
This was the third partition effected by the respondent 's father, who had earlier also twice partitioned the same lands.
Sometime in 1962, the respondent initiated proceedings against the appellant for recovery of possession of the suit land on the ground of default.
The Tehsildar dismissed the application holding that the respondent was not a landlady since the partition in question was illegal.
The Deputy Collector in appeal confirmed this decision, and the Maha rashtra Revenue Tribunal rejected the respondent 's revision.
In the Writ Petition filed before the High Court under Article 227 of the Constitution against the above decision of the three authorities below, the High Court remanded the matter to the Tehsildar for investigation into the validity of the partition.
On remand, the Tehsildar held that the partition effected on June 29, 1959 was bogus.
Thereafter, in a different proceeding the Maharashtra Revenue Tribunal had held that the said partition was bind ing.
Therefore, in the appeal against the decision of the Tehsildar, the Deputy Collector following the said decision of the Revenue Tribunal, held the partition valid and al lowed the respondent 's application for eviction.
The Revenue Tribunal, in revision, confirmed this order of the Deputy Collector.
67 The appellant preferred a writ petition before the High Court.
It was, inter alia, contended before the High Court that: (1) the partition was contrary to the provisions of Hindu Law; and (2)even assuming that the partition deed of June 29, 1959 was a valid document, the same had to be ignored since it could not confer the title of ownership on the respondent transferee in view of the provisions of section 38(7) of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958.
The High Court however dis missed the petition holding that what was produced before the courts below was a family settlement.
Allowing the appeal, this Court, HELD: (1) A partition of the property can only be among the parties who have a pre existing right to the property.
Under the Hindu Law, a female, major or minor has no share in the ancestral property.
A female is given a share either in the self acquired property of the husband or the father, or in the share of the husband or the father in the coparce nary property after the property is partitioned.
There cannot, therefore, be a partition and hence a family settle ment with regard to the ancestral property so long as it is joint, in favour of either the wife or the daughter.
[70C D] (2) The position that obtain under section 38(7) after the Amending Act of 1963, is that any transfer of land effected after 1st August 1953 whether by way of partition or otherwise, has no effect of conferring on the transferee a right to terminate the tenancy of the tenant who was a protected lessee and whose right as such protected lessee had come into existence before such transfer or partition.
This amendment is admittedly retrospective in operation.
[71G H; 72A] (3) The appellant was tenant since prior to 1st August 1953 and had also continued to be such tenant till April 1, 1961.
Hence he became a statutory owner under section 46 of the Act on and from April 1, 1961.
Any proceedings for evicting him on the ground that he was a tenant and, there fore, had fallen in arrears of rent could not have, there fore, been adopted in 1962.
[72C D]
|
vil Appeal Nos.
1052 53 of 1990.
90 From the Judgment and Order dated 4,7.1986 of the Orissa High Court in OJC.
1007 and 1008 of 1983.
A.K. Panda for the Appellants.
Kundan Lal Jagga and K.K. Gupta for the Respondents.
The following Order of the Court was delivered: ORDER Special leave granted.
Agruments heard.
These two appeals on special leave arise out of the common judgment of the High Court of Orissa made in O.J.C. Nos.
1007 and 1008 of 1983 decided on July 4, 1986 whereby the High Court set aside and quashed the impugned orders made by the Special Officer, Land Reforms, Central Division, Cuttack in O.L.R. Revision No. 131 of 1982 as well as O.L.R. No. 142 of 1982.
The matrix of the case in O.J.C. No. 1007 of 1983 is that on July 30, 1977, the respondent No. 2, Paramanand Sethi filed case No. 85 of 1977 under section 22 of the Orissa Land Reforms Act, against S/Shri B. Mohapatra, Pra fulla Kumar Pati and Gadadhar Pati (Respondent Nos. 1, 3 and 4) for restoration of lands sold to respondent Nos. 1, 3 and 4 on the ground that respondent No. 2 was a member of the Scheduled Caste (Dhoba Community) and the sales in question were hit by the provisions contained in section 22 of the Orissa Land Reforms Act, 1960.
The respondent No. 2 filed a caste certificate of the Additional Tehasildar, Betanoti wherein the respondent No. 2 was shown as belonging to 'Dhoba ' by caste which is recognised as a Scheduled Caste.
He also filed the record of rights in the name of Arjun Sethi, father of respondent No. 2 which showed the caste of Arjun Sethi as 'Dhoba '.
The respondent No. 5, Smt.
Nilamani Sethi, wife of Late Bhanu Sethi also filed O.L.R. Misc.
Case No. 21 of 1979 under Section 22 of the Orissa Land Reforms Act stating inter alia that the sale made by her in favour of respondent No. 1 who admittedly belonged to Brahmin Caste is void as the said sale was made without the permission of the Revenue Officer as mandatorily required under the provisions of the aid Act.
She produced the Caste certificate issued by tile Tehasildar, Betanoti which showed that she belonged to 'Dhoba ' caste 91 which is recognised as a scheduled caste.
She further filed two caste certificates issued by the two M.L.As.
which certified that she belonged to a scheduled caste, (Dhoba).
The Revenue Officer, vide his order dated March 19, 1979 rejected the case No. 85 of 1977 filed by the respondent No. Paramanand Sethi.
The respondent No. 2 filed O.L.R. Appeal No. of 1979 in the court of Additional District Magistrate, Mayutbhanj and the same was allowed vide judgment and order dated December 1980.
The Additional District Magistrate while allowing the appeal observed as follows: "It is a known fact that there is no community called 'Raj aka ' community which is different from Dhoba community.
Rajaka is only a literary word for the common term Dhoba.
While mentioning his caste as 'Rajaka ' the appellant has not ceased to be a 'Dhoba '.
The certificate given by the Addl.
Tehasildar, Betanoti and the entry in the R.O.R. confirm the assertion of the petitioner that he is a Dhoba by caste.
In the circumstances, the petitioner must be held to be a S.C, person and for that matter, his brothers and mother are also the members of a S,C, According to Section 22 of the Orissa Land Reforms Act previous permission from the Revenue Offi cer should have been obtained by them before transferring their lands to the respondents.
Since this statutory re quirement has not been met, the transfers are illegal.
The suit land must, therefore, be restored to the transferors.
" Against the said judgment and order, the respondent No. 1 filed O.L.R. Revision No. 131 of 1982 before the Special Officer, Land Reforms, Central Division, Cuttack, The said Revision Case was dismissed vide judgment and order dated March 4, 1983 on the finding that there were records of competent authorities like Addl.
Tehasildar, Betanoti and the record of rights showing that the caste of Paramanand Sethi is 'Dhoba '.
it has been further observed that: "As per the Oriya Bhasakosha the definition of 'Dhoba ' is 'Rajaka Washerman '.
Hence, there is no conflict regarding what is the meaning of 'Rajaka '.
It is merely a synonym of the word 'Dhoba '.
The Sanskrit lot 'Dhoba ' is 'Rajaka '.
Just because the word 'Rajaka ' does not find mention in the Presidential Order does not exclude it from the purview 92 of such an order. 'Dhobas ' are Scheduled Castes and 'Rajaka ' is a synonym of 'Dhoba '.
Now, that the High Court has so eloquently laid down the law in this regard, there is no reason to deny protection to the weaker sections on a mere technicality. 'This denial would be contrary to the spirit of the Orissa Land Reforms Act, itself." O.L.R. Misc.
Case No. 21 of 1979 filed by the respondent No. 5, Smt.
Nilamani Sethi was allowed vide order dated March 10, 1980 by the Revenue Officer directing the restora tion of the suit lands to respondent No. 5 under Section 23 of the Orissa Land Reforms Act.
The respondent No. 1 filed O.L.R. Appeal No. 42 of 1980 in the Court of Additional District Magistrate, Mayurbhanj. 'The said appeal was dis missed vide judgment and order dated February 21, 1981 holding that the transferor had amply proved that she was Dhoba which is a Scheduled Caste by producing documentary evidence.
She, therefore, does not cease to be a Dhoba even if she has described herself in the various deeds as Rajaka.
Since the transfer of the suit lands had been made to the respondent No. 1, Prafulla Kumar Pati who is a brahmin by caste without obtaining prior written permission of the Revenue Officer as required under Section 22 of the Orissa Land Reforms Act, the transactions had been rightly declared as void by the Revenue Officer. 'The suit lands must there fore, be restored to the possession of the respondent No. 5.
Against this order, respondent No. 1 filed O.L.R. Revi sion No. 142 of 1982 before the Special Officer, Land Re forms, Central Division, Cuttack and the same was dismissed vide judgment and order dated February 2, 1983.
The respondent No. 1 thereafter filed two writ petitions called O.J.C. Nos. 1007 and 1008 of 1983 against the judg ments and orders dated March 4, 1983 and February 2, 1983 respectively passed by the Special Officer, Land Reforms, Central Division, Cuttack.
Both these writ petitions were heard and disposed of by a common judgment impugned in these two appeals on special leave whereby the High Court, Orissa set aside and quashed the judgments and orders passed by the Special Officer, I.and Reforms, Central Division, Cuttack and allowed the writ petitions observing inter alia that: "Considering the cases in hand in the light of the above discussions, I have no hesitation to come to the conclusion that the Revenue Authorities have committed a serious 93 error of law in coming to the conclusion that 'Rajaka ' caste was included within the notified caste/community of 'Dhoba ' as their nature of work was similar.
Although it is unneces sary to make any further discussion, I must point out that even on a reference to the Bhashakosha it could not be categorically said that 'Rajaka ' was a caste which could not be said to be a class of washerman as the Bhashakosha itself gives other meanings of this word.
" Against this judgment and order, the instant appeals on special leave have been filed.
Before proceeding to decide the question whether the respondent Nos. 2 and 5, the trans ferors belonged to the scheduled caste Dhoba Community as mentioned in item No. 26 of the List of Scheduled Castes in the Scheduled Caste Order, 1950 in the State of Orissa, it is relevant to refer to the provisions of Section 22 and Section 23 of the Orissa Land ,Reforms Act, 1960 (Orissa Act 16 of 1960): Section 22: Restriction on alienation of land by Scheduled 'Tribes.
(1) Any transfer of a holding or part thereof by a raiyat, belonging to a Scheduled Tribe shall be void except where it is in favour of (a) a person belonging to a Scheduled Tribe; or (b) a person not belonging to a Scheduled 'Tribe when such transfer is made with the previous permission in writing of the Revenue Officer: Provided that in case of a transfer by sale the Revenue Officer shall not grant such permission unless he is satis fied that a purchaser belonging to a Scheduled Tribe willing to pay the market price for the land is not available, and in case of a gift unless he is satisfied about the bona fides thereof.
(2) The State Government may having regard to the law and custom applicable to any area prior to the date of commence ment of this Act by notification direct that the restric tions provided in sub section (1) shall not apply to lands situ ated in such area or belonging to any particular tribe throughout the State or in any part of it.
94 (3) Except with the written permission of the Revenue Offi cer, no such holding shall be sold in execution of a decree to any person not belonging to a Scheduled Tribe.
(4) Notwithstanding anything contained in any other law for the time being in force where any document required to be registered under the provisions of Cl.
(a) to Cl.
(e) of sub section (1) of section 17 of the (16 of 1908) purports to effect transfer of a holding or part thereof by a raiyat belonging to a Scheduled Tribe in favour of a person not belonging to a Scheduled Tribe, no register ing officer appointed under that Act shall register any such document, unless such document is accompanied by the written permission of the Revenue Officer for such transfer.
(5) The provisions contained in sub Ss. 1 to 4 shall apply, mutatis mutandis, to the transfer of a holding or part thereof of a raiyat belonging to the Scheduled Castes.
(6) Nothing in this section shall apply (a) to any sale in execution of a money decree passed, or to any transfer by way of mortgage executed, in favour of any scheduled bank or in favour of any bank to which the Orissa Co operative Societies Act, 1962 (Orissa Act 33 of 1962) applies; and (b) to any transfer by a member of a Scheduled Tribe within a Scheduled Area.
Section 23: Effect of transfer in contravention of section 22.
(1) In the case of any transfer in contravention of the provi sions of sub section (1) of section 22 the Revenue Officer on his own information or on the application of any person interest in the land may issue notice in the prescribed manner calling upon the transferor and transferee to show cause why the transfer should not be declared invalid.
Section 22 clearly enjoins that a person belonging to Scheduled Tribe can not make a valid transfer of his lands in favour of a person not belonging to the Scheduled Tribe without obtaining the previous 95 permission in writing of the Revenue Officer to such trans fer.
Subsection 5 of the said section further provides that the provisions contained in sub section 1 to 4 shall apply, mutatis mutandis to the transfer of a holding or part there of a raiyat belonging to the Scheduled Castes.
Section 23 B of the said Act further provides that if the validity of the transfer of any holding or part thereof is in question, the burden of proof that the transfer was valid shall, notwith standing anything contained in any other law for the time being in force, lie on the transferee.
In this case, the transfers made by the respondent Nos. 2 and 5 in favour of respondent No. 1, Prafulla Kumar Pati who admittedly belongs to Brahmin caste are hit by the provisions of Section 22 of the said Act in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers.
It has been submitted on behalf of the respondent Nos. 2 and 5 that they belong to Dhoba (Dhobi) community which is one of the Sched uled Caste in the State of Orissa under the Scheduled Caste Order, 1950.
It has been further contended that the father of the respondent No. 2 has been recorded as belonging to Dhoba community in the finally published record of rights which has been annexed as Annexure 'B ' to these appeals.
It has also been submitted on behalf of the respondent Nos. 2 and 5 that the caste certificates granted by the Tehsildar, Betanoti as well as by the two local M.L.As.
clearly estab lished that the respondent Nos. 2 and 5 belong to Dhoba community and as such they are Scheduled Castes.
Much argu ment has been advanced on the mentioning of the caste of these two respondents as 'Rajaka ' in the alleged deeds on the ground that the caste 'Rajaka ' as mentioned in the sale deeds did not find place in the List and instead the Caste 'Dhoba ' appears in Item 26 of the List of Scheduled Castes in the State of Orissa under the Constitution of Scheduled Caste Order, 1950 as made under Article 341 of the Constitu tion of India.
It has been urged in this connection that the Caste 'Rajaka ' as mentioned in the deeds can not be taken to be synonym of caste 'Dhoba ' and no evidence can be adduced to that effect to prove that 'Rajaka ' included within the notified caste, commentary of 'Dhoba ' as held by the High Court.
We are unable to accept this contention advanced on behalf of the respondent Nos. 1, 3 and 4 on the ground that the caste of the respondent No. 2 and 5 was mentioned in the caste certificates granted by the Tehsildar, Betanoti as 'Dhoba '.
Moreover, in the finally published record of rights the caste of the father of respondent No. 2 had been record ed also as 'Dhoba ' which undoubtedly is a Scheduled 96 Caste under the Scheduled Castes Order, 1950 issued under the provisions of Article 341 of the Constitution of India.
It is also pertinent to mention that 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Puma Chandra Oriya Bhasakosha which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman.
As such, the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable.
It is pertinent to refer in this connection to the observations of the Supreme Court in B. Basavalingappa vs D. Munichinnappa, ; at 320 wherein it has been observed that: "Ordinarily therefore it would not have been open in the present case to give evidence that the Voddar caste was the same as the Bhovi caste specified in the Order for Voddar caste is not mentioned in brackets after the Bhovi caste in the Order.
But that in our opinion does not conclude the matter in the peculiar circumstances of the present case.
The difficulty in the present case arises from the fact (which was not disputed before the High Court) that in the Mysore State as it was before the re organisation of 1956 there was no caste known as Bhovi at all.
The Order refers to a scheduled caste known as Bhovi at the Mysore State as it was before 1956 and therefore it must be accepted that there was some caste which the President intended to include after consultation with the Rajpramukh in the Order, when the Order mentions the caste Bhovi as a scheduled caste.
It cannot be accepted that the President included the caste Bhovi in the Order though there was no such caste at all in the Mysore State as it existed before 1956.
But when it is not disputed that there was no caste specifically known as Bhovi in the Mysore State before 1956, the only course open to courts to find out which caste was meant by Bhovi is to take evidence in that behalf.
" In the instant case, referring to this decision even though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ', there is no such caste mentioned in the Constitution of Scheduled Caste Order, 1950.
In such circumstances, relying on the aforesaid observation of this Court, it is necessary and also incumbent on the Court to consider as to what caste the respondent Nos. 2 and 5 belong to.
Moreover, considering the record of 97 rights as well as the various certificates issued by the revenue authorities and the local M.L.As.
referred to here inbefore wherein the transferors have been described as belonging to 'Dhoba ' community, the irresistible conclusion that follows is that the respondents transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa.
In the premises aforesaid the judgment and order of the High Court referred to in O.J.C. Nos. 1007 and 1008 of 1983 are liable to be set aside.
We, therefore, set aside the same and affirm the order of the Special Officer, Land Reforms, Central Division, Cuttack passed in O.L.R. Revision No. 131 of 1982 and O.L.R. No. 142 of 1982.
The respondent Nos. 1, 3 and 4 are directed to restore the lands in ques tion to the possession of the respondent Nos. 2 and 5 forth with.
The appeals are allowed without any order as to costs.
T.N.A. Appeals allowed.
| IN-Abs | Respondent No. 2, a scheduled caste, filed a case for restoration of lands sold to respondent Nos. 1, 3 and 4, non scheduled castes, on the ground that the sale was in viola tion of section 22 of the Orissa Land Reforms Act, 1960 as the requisite permission of the Revenue Officer was not obtained.
In the sale deed the transferor Respondent was described as 'Rajaka ' while in the caste certificate he was mentioned as ' Dhoba '.
The Revenue Officer rejected the ease.
Respondent No. 2 filed an appeal which was allowed by the Additional District Magistrate.
Against the order of Additional District Magistrate a revision was preferred by respondent No. 1 which was dismissed by the Special Officer, Land Reforms by holding that merely because the word 'Raja ka ' does not find mention in the Scheduled Caste Order, 1950 does not exclude it from the purview of such an order.
In the connected appeal respondent No. 5 filed a case for restoration of land sold to respondent No. 1 which was allowed by the Revenue Officer.
The appeal filed by respond ent No. 1 was dismissed by the Additional District Magis trate.
A Revision preferred by Respondent No. 1 was also dismissed by the Special Officer Land Reforms.
Respondent No. 1 filed writ petitions in the High Court which quashed the orders made by the Special Officer, hold ing that the Revenue Authorities committed a serious error of law in holding that 89 'Rajaka ' caste was included within the notified caste/commu nity of Dhoba '.
In these appeals it was contended on behalf of transfer ee respondents that the Caste 'Rajaka ' mentioned in the sale deeds cannot be taken to be synonym of caste 'Dhoba ' men tioned in Item 26 of the List in Scheduled Castes Order, 1950.
Allowing the appeals, this Court, HELD: 1.
Though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ' there is no such caste mentioned in the Consti tution (Scheduled Castes) Order, 1950.
In such circum stances, it is necessary and also incumbent on the Court to consider as to what caste they belong to.
[96B] B. Basavalingappa vs D. Munichinnappa, [1965] 1 S.C.R. 316, followed.
2. 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Purna Chandra Oriya Bhasakosh a which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman.
Therefore the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable.
[96A] 3.
In the record of rights as well as the various cer tificates issued by the revenue authorities and the local M.L.As the transferors have been described as belonging to 'Dhoba ' community.
The irresistible conclusion that follows is that the respondent transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa.
[96H, 97A] 3.1 Therefore the transfers made by respondent Nos. 2 and 5 in favour of respondent No. 1, who admittedly belongs to Brahmin caste, are hit by the provisions of Section 22 of the Orissa Land Reforms Act, 1960 in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers.
[95C] [The transferee respondents directed to restore the lands in question to the possession of the transferor respondents forthwith.] [97C]
|
ivil Appeal No. 140 of 1990.
From the Judgment and Order dated 8.2.89 of the Madras High Court in L.P.A. No. 131 of 1987.
A.K. Sen, N.D.B. Raju, K. Rajeshwaran and N, Ganapathy for the Appellants.
K.R. Choudhary and V. Balachandran for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Special Leave is granted.
This appeal is from a decision of the Madras High Court which denied the appellants claim for setting aside a judi cial sale.
The facts giving rise to the appeal, as found by the Courts, may be summarised as follows.
Arumugham respondent 1 obtained money decree on the basis of a promissory note from the Subordinate Judge, Salem, in O.S. No. 388/1968.
Sethuramalingam the judgment debtor appealed to the High Court but could not get the decree stayed.
He could not furnish security for the decre tal amount which was a condition for stay.
The decree was put into execution notwithstanding the pendency of the appeal.
In February 1973, his two items of properties; (i) three houses and (ii) 10.93 acres of land were brought to court sale.
They were purchased by Kuppa Goundar, respondent No. 2 for Rs.7550 and Rs.15,050 respectively.
In October 1975, the High Court allowed the appeal on merits.
The promissory note which was the basis of the suit was disbe lieved and rejected.
The trial court judgment was set aside and the plaintiff was non suited.
Thereupon the judgment debtor moved the executing court for setting aside the sale.
He has alleged inter alia, that the sale 81 was vitiated by material irregularities and properties were deliberately sold for under value.
The sale was collusive between decree holder and the auction purchaser.
The latter was sambandhi of the former and just a name lender.
It was also his contention that since the decree has been reversed, the sale should be nullified and restitution should be ordered.
The Court rejected all the contentions relating to material irregularities for want of satisfactory evidence.
The Court also held that subsequent reversal of the decree could not be depended upon since the sale has been confirmed in favour of the auction purchaser who was a stranger to the litigation.
The judgment debtor appealed to the High Court and succeeded at first instance, before learned single Judge.
The learned Judge found in effect that (a) the sale was vitiated by material irregularities resulting in fetch ing a low price to properties; (b) the decree holder and auction purchaser are close relatives and the sale seems to be collusive; and (c) after the Court sale they seemed to have entered into an agreement for selling the second item of properties for Rs.96,000.
With these conclusions the sale was set aside.
But on appeal, the Division Bench of the High Court has expressed contrary views on all those points and reversed the decision of learned single Judge. 'the judgment debtor died during the pendency of the appeal before the High Court.
His legal representatives have now appealed.
Mr. A.K. Sen, learned counsel for the appellants raised a number of questions.
The important and central issue, however, relates to the underlying jurisdiction of the Court to set aside the confirmed sale upon subsequent reversal or modification of the decree.
The question is whether the auction purchaser 's interest should be protected as against the judgment debtor who has since succeeded in getting rid off the decree against him.
There are two authorities of this Court bearing on the question: (i) Janak Raj vs Gurdial Singh and Anr., ; and (ii) Sardar Govindrao Mahadik and Anr.
vs Devi Sahai & Ors.
, ; In Janak Raj case, the appellant was a stranger to the suit in which there was an ex parte money decree.
In the execution of the decree, the immovable property of the judgment debtor was brought to sale in which the appellant became the high est bidder.
The judgment debtor filed an application for setting aside the ex parte decree and the court allowed it before confirming the sale.
Thereupon the judgment debtor objected to the confirmation of sale on the ground that the auctionpurchaser was in conspiracy and collusion with the decree holder and as such not entitled to have the sale confirmed.
The execution court, 82 however, overruled the objection and confirmed the sale, Mitter, J., agreed with that view and observed (at 79): "The result is that the purchaser 's title relates back to the date of sale and not the confirmation of sale.
There is no provision in the Code of Civil Procedure of 1908 either under O. XXI or elsewhere which provides that the sale is not to be confirmed if it be found that the decree under which the sale was ordered has been reversed before the confirmation of sale.
It does not seem ever to have been doubted that once the sale is confirmed the judgmentdebtor is not entitled to get back the property even if he succeeds thereafter in having the decree against him reversed. 'The question is, whether the same result ought to follow when the reversal of the decree takes place before the confirma tion of sale.
There does not seems to be any valid reason for making a distinction between the two cases.
It is certainly hard on the defendant judgment debtor to have to lose his property on the basis of a sale held in execution of a decree which is "not ultimately upheld.
Once however, it is held that he cannot complain after confirmation of sale, there seems to be no reason why he should be allowed to do so because the decree was reversed before such confirmation.
The Code of Civil Procedure of 1908 contains elaborate provisions which have to be followed in cases of sales of property in execu tion of a decree.
It also lays down how and in what manner such sales may be set aside.
Ordinarily, if no application for setting aside a sale is made under any of the provisions of rr. 89 to 91 of O. XXI, or when any application under any of these rules is made and disallowed, the court has no choice in the matter of confirming the sale and the sale must be made absolute.
If it was the intention of the Legis lature that the sale was not to be made absolute because the decree had ceased to exist, we should have expected a provi sion to that effect either in O. XXI or in Part II of the Code of Civil Procedure of 1908 which contains sections 36 to 74 (inclusive) . . " Finally, the learned judge rounded off the judgment thus (at 86): " . .
The policy of the Legislature seems to be that 83 unless a stranger auction purchaser is protected against the viccissitudes of the fortunes of the suit, sales in execu tion would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modified.
The Code of Civil Procedure of 1908 makes ample provision for the pro tection of the interest of the judgment debtor who feels that the decree ought not to have been passed against him. ' ' In Sardar Govindrao Mahadik, D.A. Desai, J., while referring to the principle in Janak Raj case said (at 224): "Ordinarily, if the auction purchaser is an outsider or a stranger and if the execution of the decree was not stayed of which he may have assured himself by appropriate enquiry, the court auction held and sale confirmed and resultant sale certificate having been issued would protect him even if the decree in execution of which the auction sale has been held is set aside.
This proceeds on the footing that the equity in favour of the stranger should be protected and the situa tion is occasionally reached on account of default on the part of the judgment debtor not obtaining stay of the execu tion of the decree during the pendency of the appeal.
" The learned Judge further said: "But what happens if the auction purchaser is the decree holder himself? In our opinion, the situation would materi ally alter and this decree holder auction purchaser should not be entitled to any protection.
At any rate, when he proceeds with the execution he is aware of the fact that an appeal against the original decree is pending.
He is aware of the fact that the resultant situation may emerge where the appeal may be allowed and the decree which he seeks to execute may be set aside.
He cannot force the pace by exe cuting the decree taking advantage of the economic disabili ty of a judgment debtor in a money decree and made the situation irreversible to the utter disadvantage of the judgment debtor who wins the battle and loses the war.
Therefore, where the auction purchaser is none other than 84 the decree holder who by pointing out that there is no bidder at the auction, for a nominal sum purchases the property, to wit, in this case for a final decree for Rs.500, Motilal purchased the property for Rs.300, atrocious situation, and yet by a technicality he wants to protect himself.
To such an auction purchaser who is not a stranger and who is none other than the decree holder, the court should not lend its assistance." In Janak Raj case, a stranger auction purchaser was protected against vicissitudes of fortunes of the litiga tion.
In S.G. Mahadik case such protection was not afforded to auction purchaser who happens to be the decree holder himself.
The reason seems to be that the decree holder is not a stranger to the suit.
Indeed, he is not since he is eonomine party to the appeal against the decree which he seeks to execute.
He is aware of the fact that due to eco nomic hardship the judgment debtor was unable to have the decree stayed.
He however, does not wait for final outcome of the litigation which he has initiated.
He exploits the helpless situation of the judgment debtor and hastens the execution of the decree.
The Court, therefore, should not lend its assistance to him to retain the property purchased if the decree is subsequently reversed. 'There is thus a distinction maintained between the decree holder who purchases the property in execution of his own decree which is afterwards modified or reversed, and an auction purchaser who is not party to the decree.
Where the purchaser is the decree holder, he is bound to restore the property to the judgment debtor by way of restitution but not a stranger auction purchaser.
The latter remains unaf fected and does not lose title to the property by subsequent reversal or modification of the decree. 'The Courts have held that he could retain the property since he is a bona fide purchaser. 'This principle is also based on the premise that he is not bound to enquire into correctness of the judgment or decree sought to be executed.
He is thus distin guished from an eonomine party to the litigation. 'There cannot be any dispute on this proposition and it is indeed based on a fair and proper classification. 'The innocent purchaser whether in voluntary transfer or judicial sale by or in execution of a decree or order would not be penalised.
The property bona fide purchased ignorant of the litigation should be protected. 'The judicial sales in particular would not be robbed off all their sanctity.
It is a sound rule based on legal and equitable considerations.
But it is 85 difficult to appreciate why such protection should be ex tended to a purchaser who knows about the pending litigation relating to the decree.
If a person ventures to purchase the property being fully aware of the controversy between the decree holder and judgment debtor, it is difficult to regard him as a bona fide purchaser.
The true question in each case, therefore, is whether the stranger auction purchaser had knowledge of the pending litigation about the decree under execution.
If the evidence indicates that he had no such knowledge he would be entitled to retain the property purchased being a bona fide purchaser and his title to the property remains unaffected by subsequent reversal of the decree. 'The Court by all means should protect his purchase.
But if it is shown by evidence that he was aware of the pending appeal against the decree when he purchased the property, it would be inappropriate to term him as a bona fide purchaser.
In such a case the Court also cannot assume that he was a bona fide or innocent purchaser for giving him protection against restitution.
No assumption could be made contrary to the facts and circumstances of the case and any such assumption would be wrong and uncalled for. 'The Patna High Court in Chhota Nagpur Banking Associa tion vs C.T.M. Smith & Anr., [1943] Patna 325 expressed a similar view.
Fazl Ali, CJ., as he then was, said (at 327) that where there is clear and cogent evidence that a strang er purchaser was fully aware of the merits of the controver sy in regard to the property purchased by him and was also aware that the validity of the decree was under challenge, there is no room for presumption that he was a bona fide purchaser.
Reference may also be made to the decision of the Sind Judicial Commissioner 's Court in Jamnomal Gurdinornal vs Gopaldas and Anr., AIR 1924 Sind 101 where similar com ment was made. 'The Madras High Court in R. Raghavachari v.M.A.Pakkiri Mahorned Rowther and Ors., AIR 19 has however, taken a contrary view.
It was held that restitution under Section 144 CPC cannot be demanded as against a bona fide purchaser who was not a party to the decree. 'The High Court also remarked that the reversal of the decree by the appel late Court or the knowledge of the purchaser about the pendency of the appeal makes no material difference to the operation of that rule.
This proposition, we are, however, unable to accept.
In our opinion, the person who purchases the property in court auction with the knowledge of the pending appeal against the decree cannot resist restitution.
His knowledge about the pending litigation would make all 86 the difference in the case.
He may be a stranger to the suit, but he must be held to have taken calculated risk in purchasing the property.
Indeed, he is evidently a specula tive purchaser and in that respect he is in no better posi tion than the decree holder purchaser.
The need to protect him against restitution therefore, seems to be unjustified.
Similarly the auction purchaser who was a name lender to the decree holder or who has colluded with the decree holder to purchase the property could not also protected to retain the property if the decree is subsequently reversed.
There is one other aspect which is more important than what we have discussed hitherto.
It was emphasized by Lord Cairns in Rodger vs The Comptoir D ' Escompte De Paris, [1869 71] LR 3 P.C. 465 at 475: ". that one of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the suitors, and when the expression "the act of the Court", is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of Appeal, but the act of the Court as a whole, from the lowest court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case.
It is the duty of the aggregate of those Tribunals, if I may use the expres sion, to take care that no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court.
" This is also the principle underlying Section 144 of the Code of Civil Procedure.
It is the duty of all the Courts as observed by the Privy Council "as aggregate of those tribu nals" to take care that no act of the court in the course of the whole of the proceedings does an injury to the suitors in the Court.
The above passage was quoted in the majority judgment of this Court in A.R. Antulay vs
R.S. Nayak and Ors.
, ; at 672.
Mukherjee, J., as he then was, after referring to the said observation of Lord Cairns, said (at 672): "No man should suffer because of the mistake of the Court.
No man should suffer a wrong by technical procedure of irregularities.
Rules or procedures are the handmaids of justice and not the mistress of the justice.
Ex debito justitiae, we must do justice to him.
If a man has been wronged so long as it lies within the human machinery of administration of justice that wrong must be remedied.
" 87 It is well to remember that the Code of Civil Procedure is a body of procedural law designed to facilitate justice and it should not be treated as an enactment providing for punishments and penalties. 'he laws of procedure should be so construed as to render justice wherever reasonably possi ble.
It is in our opinion, not unreasonable to demand resti tution from a person who has purchased the property in court auction being aware of the pending appeal against the de cree.
We have carefully considered the evidence in the case.
The judgment debtor who has been examined in the case has stated that the auction purchaser is a sambandhi of the decree holder. 'the decree holder 's daughter has been given in marriage to the son of auction purchaser.
That evidence remains unchallenged.
The evidence further indicates that after the purchase both of them have entered into an agree ment with a third party for sale of the second item of properties for Rs.96,000 and a case seems to be pending on the basis of that agreement.
The evidence also discloses that the auction purchaser had no money of his own to pur chase the property.
These circumstances are sufficient to hold that the auction purchaser was not a bona fide purchas er.
The auction sale in his favour must, therefore, fall for restitution. 'he Court cannot lend assistance for him to retain the property of the judgment debtor who has since succeeded in getting rid of the unjust decree.
In the result the appeal is allowed, the judgment of the Division Bench of the High Court is reversed and that of learned single Judge is restored.
The appellants, however, must pay the costs of this appeal to the auction purchaser which we quantify at Rs.5,000.
R.S.S. Appeal allowed.
| IN-Abs | Respondent No. 1 obtained a money decree against the original appellant, who has been substituted by legal heirs, on the basis of a promissory note.
The appellant appealed to the High Court but could not get the decree stayed because he was unable to furnish security for the decretal amount.
The decree was put into execution notwithstanding the pend ency of the appeal, and two items of appellant 's properties were purchased by respondent No. 2 at the court sale.
Later, the High Court allowed the appellant 's appeal on merits and set aside the decree.
Thereupon, the appellant moved the executing court for setting aside the court sale inter alia on the ground that (1) the sale was vitiated by material irregularities and properties were deliberately sold for under value; (2) the sale was collusive between decree holder and the auction purchaser; the latter, being the sambandhi of the former, was just a name lender; and (3) since the decree had been reversed, the sale should be nullified and restitution should be ordered.
The executing court rejected these con tentions and held that subsequent reversal of the decree could not be depended upon since the sale had been confirmed in favour of the auction purchaser who was a stranger to the litigation.
The learned Single Judge of the High Court, however, allowed the appellant 's appeal and held inter alia that (a) the sale was vitiated by material irregularities resulting in fetching a low price; and (b) the decree holder and auction purchaser were close relatives and the sale seemed to be collusive.
But on appeal, the Division Bench reversed the decision of the learned Single Judge.
Allowing the appeal, this Court, HELD: (1) A distinction is maintained between the decree holder who purchases the property in execution of his own decree which is 79 afterwards modified or reversed, and an auction purchaser who is not party to the decree.
[84E] (2) Where the purchaser is a decree holder, he is bound to restore the property to the judgment debtor by way of restitution but not a stranger auction purchaser.
The latter remains unaffected and does not lose title to the property by subsequent reversal or modification of the decree, and could retain the property since he is a bona fide purchaser.
This principle is also based on the premise that he is not bound to enquire into correctness of the judgment or decree sought to be executed.
He is thus distinguished from an eonomine party to the litigation.
[84E F] Janak Raj vs Gurdial Singh, ; and Sardar Govindrao Mahadik vs Devi Sahai, ; , referred to.
(3) The true question in each case is whether the stranger auction purchaser had knowledge of the pending litigation about the decree under execution.
If it is shown by evidence that he was aware of the pending appeal against the decree when he purchased the property, it would be inappropriate to term him as a bona fide purchaser.
Indeed, 'he is evidently a speculative purchaser and in that respect he is in no better position than the decree holder purchas er.
[85B C] Chhota Nagpur Banking Association vs C.T.M. Smith, [1943] Patna 325 and Jamnomal Gurdinomal vs Gopaldas, AIR 1924 Sind 101, referred to.
R. Raghavachari vs M.A. Pekkiri Mahomed Rowther, AIR 1917 Mad 250, overruled.
(4) Similarly, the auction purchaser who was a name lender to the decree holder or who has colluded with the decree holder to purchase the property could not also be protected to retain the property if the decree is subse quently reversed.
[86B] (5) The Code of Civil Procedure is a body of procedural law designed to facilitate justice and it should not be treated as an enactment providing for punishment and penal ties.
The laws of procedure should be so construed as to render justice wherever reasonably possible.
[87A B] Rodger vs The Comptoir De Paris, [1869 71] LR 3 PC.
465 at 475 80 and A.R. Antulay vs R.S. Nayak, ; , referred to.
(6) The evidence on record is sufficient to hold that the auction purchaser was not a bona fide purchaser.
The auction sale in his favour must, therefore, fall for resti tution.
The Court cannot lend assistance for him to retain the property of the judgment debtor who has since succeeded in getting rid of the unjust decree.
[87D E]
|
l Appeal No. P 409 of 1958.
Appeal by special leave from the judgment and order dated May 13, 1958, of the Punjab High Court at Chandigarh in First Appeal from Order No. 24 of 1958.
C. B. Aggarwala and Naunit Lal, for the appellant.
H. section Doabia, K. R. Chaudhury and M. K. Ramamurty, for the respondent No. 1. 1958.
September 30.
This appeal by special leave has been filed against the decision of the Punjab High Court confirming the order passed by the Election Tribunal by which the appellant 's election has been declared to be void.
The appellant Shri Baru Ram was elected to the Punjab Legislative Assembly from the Rajaund constituency in the Karnal District.
Initially seventeen candidates had filed their nomination papers in this constituency.
Out of these candidates, thirteen withdrew and the nomination paper filed by Jai Bhagawan was rejected by the returning officer.
That left three candidates in the field.
They were the appellant Baru Ram, Mrs. Prasanni and Harkesh, respondents 1 and 2 respectively.
The polling took place on March 14, 1957, and the result was declared the next day.
Since the appellant had secured the largest number of votes he was declared duly elected.
Soon thereafter Mrs. Prasanni, respondent 1, filed an election petition in which she alleged that the appellant had committed several corrupt practices and claimed a declaration that his election was void.
The appellant denied all the allegations made by respondent 1.
The election tribunal first framed six preliminary issues and after they were decided, it raised twenty nine issues on the merits.
The tribunal was not 1406 satisfied with the evidence adduced by respondent I to prove her allegations in respect of the corrupt practices committed by the appellant and so it recorded findings against respondent 1 on all the issues in regard to the said corrupt practices.
Respondent I had also challenged the validity of the appellant 's election on the ground that the returning officer had improperly rejected the nomination paper of Jai Bhagawan.
This point was upheld.
by the election tribunal with the result that the appellant 's election was declared to be void.
The appellant then preferred an appeal to the Punjab High Court.
He urged before the High Court that the election tribunal was in error in coming to the conclusion that the nomination paper of Jai Bhagawan ' had been improperly rejected.
This contention was accepted by the High Court and the finding of 'the tribunal on the point was reversed.
Respondent 1 sought to support the order of the election tribunal on the ground that the tribunal was not justified in holding that the appellant was not guilty of a corrupt practice under section 123(7)(c).
This argument was also accepted by the High Court and it was held that the appellant was in fact guilty of the said alleged corrupt practice.
In the result, though the appellant succeeded in effectively challenging the only finding recorded by the tribunal against him, his appeal was not allowed because another finding which was made by the tribunal in favour of the appellant was also reversed by the High Court.
That is why the order passed by the tribunal declaring the appellant 's election to be void was confirmed though on a different ground.
It is this order which is challenged before us by Mr. Aggarwal on behalf of, the appellant and both the points decided by the High Court are raised before us by the parties.
At the hearing of the appeal Mr. Doabia raised a preliminary objection.
He contends that the present appeal has been preferred beyond time and should be rejected on that ground alone.
The judgment under appeal was delivered on May 13, 1958, and the petition for leave to appeal under article 136 of the Constitution 1407 has been filed in this Court on September 2, 1958.
It is common ground that the appellant had appliedfor leave to the Punjab High Court on June 9, 1958,and his application was dismissed on August 22, 1958.If the time occupied by the appellants application for leave is taken into account, his appeal would be in time; on the other hand, if the said period is not taken into account, his application would be beyond time.
Mr. Doabia argues that the proceedings taken on an election petition are not civil proceedings and so an application for leave under article 133 of the Constitution was incompetent; the time taken in the disposal of the said application cannot therefore be taken into account in computing the period of limitation.
On the other hand, Mr. Aggarwal urges that section 116A (2) of the Representation of the People Act (43 of 1951) (hereinafter called the Act) specifically provides that the High Court, in hearing an appeal presented to it shall have the same powers, jurisdiction and authority and follow the same procedure with respect to the said appeal as if it were an appeal from an original decree passed by a civil court situated within the local limits of its civil appellate jurisdiction.
The result of this provision is to assimilate the election proceedings coming before the High Court in appeal to civil proceedings as contemplated by article 133 of the Constitution and so, according to him, it was not only open to the appellant but it was obligatory on him to make an application for leave to the Punjab High Court under the said article.
That is why the time occupied by the said proceedings in the Punjab High Court must be excluded in deciding the question of limitation.
We do not propose to deal with the merits of these contentions.
It is not seriously disputed by Mr. Doabia that parties aggrieved by orders passed by High Courts in appeals under section 116A of the Act generally apply for leave under article 133 and in fact such applications are entertained and considered on the merits by them.
It is true that Mr. Doabia 's argument is that this practice is erroneous and that article 133 has no application to the appellate decision of the High Court under section 116A 179 1408 of the Act.
Assuming that Mr. Doabia is right, it is clear that the appellant has merely followed the general practice in this matter when he applied for leave to the Punjab High Court; his application was entertained, considered on the merits and rejected by the High Court.
Under these circumstances we think that even if we were to hold that article 133 has no application, we would unhesitatingly have excused the delay made in the presentation of the appeal; and so we do not think we can throw out the appeal in limine on the ground of limitation.
If necessary we would excuse the delay alleged to have been made in presenting this appeal.
On the merits, Mr. Aggarwal contends that the finding of the High Court that the appellant has committed a corrupt practice under section 123(7)(c) is not supported by any evidence.
Before dealing with this argument it would be relevant to consider the legal position in the matter.
Corrupt practice as defined in section 2(c) of the Act means " any of the practices specified in section 123 ".
Section 123(7)(c) provides inter alia that the obtaining or procuring or abetting or attempting to obtain or procure by a candidate any assistance other than giving of vote for the furtherance of the prospects of that candidate 's election from any person in the service of the Government and who is a member of the armed forces of the Union, is a corrupt practice.
The case against the appellant as set out by respondent 1 in her election petition on this point is that the appellant secured the assistance of Puran Singh who is a member of the armed forces of the Union.
It was alleged that Puran Singh " actively canvassed for the appellant on March 11th to 13th, 1957, in his village and so much so that he subsequently served as his polling agent at polling booth No. 15 at village Kotra on March 14, 1957 ".
Both the tribunal and the High Court are agreed in holding that it had not been proved that Puran Singh actively canvassed for the appellant on March 11th to 13th as alleged by respondent 1.
They have, however, differed on the question as to whether the appellant had appointed Puran Singh as his polling agent for the 1409 polling booth in question.
It would thus be seen that the point which falls for our decision in the present appeal lies within a very narrow compass.
Did the appellant secure the assistance of Puran Singh by appointing him as his polling agent ? Going back to section 123, explanation (2) to the said section provides that " for the purpose of cl.
(7) a person shall be ' deemed to assist in the furtherance of the prospects of a candidate for election if he acts as an election agent or polling agent or a counting agent of that candidate ".
In other words, the effect of explanation (2) is that once it is shown that Puran Singh had acted as polling agent of the appellant, it would follow that the appellant had committed a corrupt practice under section 123(7)(c).
But it is important to bear in mind that before such a conclusion is drawn the provisions of section 46 of the Act must be taken into account.
Section 46 authorises a contesting candidate to appoint in the prescribed manner such number of agents and relief agents as may be prescribed to act as polling agents of such candidate at each polling station provided under section 25 or at the place fixed under subs.
(1) of section 29 for the poll.
There can be no doubt that, when explanation (2) to section 123 refers to a person acting as a polling agent of a candidate, it contemplates the action of the polling agent who is duly appointed in that behalf by the candidate under section 46.
It is only when it is shown that a person has been appointed a polling agent by the candidate and has in consequence acted as such agent for the said candidate that explanation (2) would come into operation.
If, without being appointed as a polling agent by the candidate, a person fraudulently, or without authority, manages to act as the polling agent of the said candidate, explanation (2) would not apply.
That being the true legal position the short point which arises for our decision is whether the appellant had appointed Puran Singh as his polling agent and whether Puran Singh acted as such polling agent at the polling booth No. 15 at Kotra.
What then are the facts held proved by the High Court in support of its conclusion against the appellant 1410 under section 123(7)(c) ? The first point which impressed the High Court is in respect of the writing by which the appellant is alleged to have appointed Puran Singh as his polling agent.
The printed prescribed forms were not available to the candidates and so they had to copy the prescribed form for the purpose of appointing their polling agents.
This position is not disputed.
The form by which Puran Singh is alleged to have been appointed the appellant 's polling agent contains a glaring mistake in that while reciting that the polling agent agreed to act as such polling agent the form says " I agree to act as such following agent " (P. W. 48/1).
The same glaring mistake is to be found in the form by which the appellant admittedly appointed Pal Chand to act as his polling agent at the same polling booth.
The High Court thought that the identity of this glaring mistake in both the forms coupled with the similarity of the handwriting of the rest of the writing in them showed that the two forms must have been written by the same scribe.
This is a finding of fact and it may be accepted as correct for the purpose of our decision.
It would, however, be relevant to add that it is not at all clear from the record that the same scribe may not have written similar forms for other candidates as well.
There is no evidence to show that the scribe who made this glaring mistake had been employed as his own scribe by the appellant.
The High Court was also disposed to take the view that Puran Singh in fact had acted as the polling agent on the day of the election at the said polling booth.
Respondent 1 had examined herself in support of this plea and Banwari Lal whom she examined supported her in that behalf.
The tribunal was not impressed by the evidence of these two witnesses; and it has given reasons for not accepting their evidence as true or reliable.
It is unnecessary to emphasize that, in dealing with an appeal under section 116A of the Act, High Courts should normally attach importance to the findings of fact recorded by the tribunal when the said findings rest solely on the appreciation of oral evidence.
The judgment of the High Court does not show that 1411 the High Court definitely accepted the evidence of the two witnesses as reliable; in dealing with the question the High Court has referred to this evidence without expressly stating whether the evidence was accepted or not; but it may be assumed that the High Court was disposed to accept that evidence.
In this connection, we would like to add that it is difficult to understand why the High Court did not accept the criticism made by the tribunal against these two witnesses.
If we consider the verifications made by respondent I in regard to the material allegations on this point both in her petition and in her replication, it would appear that she had made them on information received and not as a result of personal knowledge; that being so, it is not easy to accept her present claim that she saw Puran Singh working as polling agent; but apart from this consideration, the evidence of respondent 1, even if believed, does not show that Puran Singh was working as a polling agent of the appellant ; and the statement of Banwari Lal that Puran Singh was working as the appellant 's polling agent loses much of its force in view of his admission that he had no knowledge that Puran Singh had been appointed by the appellant as his polling agent.
Even so, we may assume, though not without hesitation, that Puran Singh did act as appellant 's polling agent as alleged by respondent 1.
in dealing with this question the High Court appears to have been considerably influenced by the statement made by Jangi Ram whom the appellant had examined.
In his cross examination, Jangi Ram stated that Jagtu and Pal Chand were the agents of Shri Baru Ram, but he added that Puran Singh was not at the polling booth.
It may be mentioned that the appellant 's case was that he had appointed only one polling agent at Kotra; and this allegation, according to the High Court, was disproved by the statement of Jangi Ram inasmuch as he referred to two polling agents working for the appellant.
In considering the effect of this statement, the High Court has failed to take into account the positive statement of the witness that Puran Singh was not at the polling 1412 station at all.
The evidence of the witness may be rejected if it appears to be unreliable; but if it is accepted, it would not be fair to accept it only in part and to hold that two polling agents had been appointed by the appellant one of whom was Puran Singh.
There is another serious infirmity in the inference drawn by the High Court from the statement of Jangi Ram ; that is that Jagtu to whom the witness has referred as a polling agent of the appellant appears in fact to have acted as a polling agent of Harkesh, respondent 2.
Jhandu, another witness examined by the appellant has stated so on oath and his statement has not been challenged in cross examination.
Thus, reading the evidence of Jhandu and Jangi Ram, it would be clear that Jangi Ram was right when he said that Jagtu was acting as a polling agent but he was wrong when he thought that Jagtu was the polling agent of the appellant.
If the attention of the High Court had been drawn to the unchallenged statement of Jhandu on this point, it would probably not have drawn the inference that Jangi Ram 's evidence supports the case of respondent I about the appointment of Puran Singh as the appellant 's polling agent.
The next ' circumstance on which reliance has been placed in the judgment of the High Court is that Puran Singh has signed the prescribed form appointing him as the polling agent and he must have presented it to the returning officer.
The prescribed form requires that a candidate appointing his polling agent and the polling agent himself should sign the first part of the form.
Then the polling agent is required to take the form to the returning officer, sign in token of his agreeing to work as a polling agent before the said officer and present it to him.
The High Court has found that Puran Singh must have signed the form and presented it as required by law.
Puran Singh was examined by respondent 1; but when he gave evidence, he was allowed to be treated as hostile and cross examined by her counsel.
Puran Singh denied that he had acted as the appellant 's polling agent and that he had signed the form and presented it to the returning officer.
It, however, appears that Chand 1413 Jamadar to whose platoon Puran Singh is attached gave evidence that the signature of Puran Singh on the form in question (P.W. 48/1) appeared to be like the signatures on acquittance rolls which had been admittedly made by him.
On the same question hand writing experts were examined by both the parties.
Mr. Om Parkas was examined by respondent I and he stated that he had compared the admitted signatures of Puran Singh with the disputed signature and had come to the conclusion that Puran Singh must have made the disputed signature.
On the other hand, Mr. Kapur whom the appellant examined gave a contrary opinion.
The tribunal thought that in view of this conflicting evidence it would not be justified in finding that Puran Singh had signed the form.
The High Court has taken a contrary view.
Mr. Aggarwal for the appellant contends that the High Court was in error in reversing the finding of the tribunal on this point.
There may be some force in this contention ; but we propose to deal with this appeal on the basis that the finding of the High Court on this question is right.
The position thus is that, according to the High Court, Puran Singh signed the form appointing him as the appellant 's agent and presented it before the officer.
Puran Singh was seen at the polling booth and the scribe who wrote the form in question also wrote the form by which the appellant appointed Pal Singh as his polling agent at the same booth.
The High Court thought that from these circumstances it would be legitimate to infer that the appellant had appointed Puran Singh as his polling agent and had in fact signed the form in token of the said appointment.
It is the correctness of this finding which is seriously disputed by Mr. Aggarwal before us.
It is significant that from the start the parties were at issue on the question as to whether Puran Singh had been appointed by the appellant as his polling agent; and so respondent 1 must have known that she had to prove the said appointment in order to obtain a finding in her favour on issue 29 under section 123 (7)(c) of the Act.
Respondent I in fact led evidence to prove the signature of Puran Singh but no attempt 1414 was made by her to prove the signature of the appellant on the said form.
The appellant had specifically denied that he had appointed Puran Singh as his polling agent and when he stepped into the witness box he stated on oath that he had not signed any form in that behalf.
Under these circumstances, it was clearly necessary for respondent I to examine competent witnesses to prove the appellant 's signature on the form.
It is true that the appellant 's signature on the form appears to have been overwritten, but it is only the expert who could have stated whether the overwriting in question made it impossible to compare the said signature with the admitted signatures of the appellant.
It appears that after the whole of the evidence was recorded, respondent woke up to this infirmity in her case and applied to the tribunal for permission to examine an expert in that behalf.
This application was made on February 6, 1958; and the only explanation given for the delay in making it was that it was after the appellant denied his signature on oath that respondent I realized the need for examining an expert.
The tribunal rejected this application and we think rightly.
In its order the tribunal has pointed out that respondent I had been given an opportunity to examine an expert and if she wanted her expert to give evidence on the alleged signature of the appellant her counsel should have asked him relevant questions when he was in the witness box.
Thus the position is that there is no evidence on the record to support the case of respondent I that the said alleged signature has in fact been made by the appellant.
The only relevant evidence on the record is the statement of the appellant on oath that he had not signed the form in question.
Mr. Doabia fairly conceded that there was no legal evidence on this point; but his argument was that from the other findings of fact recorded by the High Court it would be legitimate to infer that the appellant had made the said signature.
In our opinion this contention is wholly untenable.
It must be borne in mind that the allegation against the appellant is that he has committed a corrupt practice and a finding 1415 against him on the point would involve serious consequences.
In such a case, it would be difficult to hold that merely from the findings recorded by the High Court it would be legitimate to infer that the appellant had signed the form and had in fact appointed Puran Singh as his polling agent.
Mr. Doabia argues that it is not always absolutely necessary to examine an expert or to lead other evidence to prove handwriting.
It would be possible and legal, he contends, to prove the handwriting of a person from circumstantial evidence.
Section 67 of the Indian Evidence Act provides inter alia that if a document is alleged to be signed by any person the signature must be proved to be in his handwriting.
Sections 45 and 47 of the said Act (I of 1872), prescribe the method in which such signature can be proved.
Under section 45, the opinion of the handwriting experts is relevant while under section 47 the opinion of any person acquainted with the handwriting of the person who is alleged to have signed the document is admissible.
The explanation to the section explains when a person can be said to be acquainted with the handwriting of another person.
Thus, there can be no doubt as to the manner in which the alleged signature of the appellant could and should have been proved; but even assuming that the signature of the appellant can be legally held to be proved on circumstantial evidence the principle which governs the appreciation of such circumstantial evidence in cases of this kind cannot be ignored.
It is only if the court is satisfied that the circumstantial evidence irresistibly leads to the inference that the appellant must have signed the form that the court can legitimately reach such a conclusion.
In our opinion, it is impossible to accede to Mr. Doabia 's argument that the facts hold proved in the High Court inevitably lead to its final conclusion that the appellant had in fact signed the form.
It is clear that in reaching this conclusion the High Court did not properly appreciate the fact that there was no legal evidence on the point and that the other facts found by it cannot even reasonably support the 180 1416 case for respondent 1.
We must accordingly reverse the finding of the, High Court and hold that respondent I has failed to prove that the appellant had committed a corrupt practice under section 123(7)(c) of the Act.
This finding, however, does not finally dispose of the appeal because Mr. Doabia contends that the High Court was in error in reversing the tribunal 's conclusion that the nomination paper of Jai Bhagawan had been improperly rejected.
Mr. Aggarwal, however, argues that it is not open to respondent I to challenge the correctness of the finding of the High Court on this point.
In support of his objection, Mr. Aggarwal has referred us to the decision of this Court in Vashist Narain Sharma vs Dev Chandra (1).
In this case, when the respondent, having failed on the finding recorded by the tribunal in his favour, attempted to argue that he could support the decision of the tribunal on other grounds which had been found against him, this Court hold that he was not entitled to do so.
The provision of the Code of Civil Procedure which permits the respondent to adopt such a course, it was observed, has no application to an appeal filed by special leave under article 136.
"We have no appeal before us on behalf of the respondent ", observed Ghulam Hasan J. " and we are unable to allow that question to be reagitated ".
Mr. Doabia challenges the correctness of these observations.
He relies on section 116A of the Act which empowers the High Court to exercise its jurisdiction, authority and power, and to follow the same procedure, as would apply to appeals preferred against original decrees passed by a civil court within the local limits of its civil appellate jurisdiction.
There is no doubt that, in an ordinary civil appeal, the respondent would be entitled to support the decree under appeal on grounds other than those found by the trial court in his favour.
Order 41, rule 22 of the Code of Civil Procedure, which permits the respondent to file crossobjections recognize the respondent 's right to support the decree on any of the grounds decided against him by the court below.
In the present case no appeal (1)[1955] 1 S.C.R. 509.
1417 could have been preferred by respondent I because she had succeeded in obtaining the declaration that the appellant 's election was void and it should therefore be open to her to support the final conclusion of the High Court by contending that the other finding recorded by the High Court which would go to the root of the matter is erroneous.
Prima facie there appears to be some force in this contention; but we do not think it necessary to decide this point in the present appeal.
Mr. Aggarwal 's objection assumes that respondent I should have preferred a petition for special leave to appeal against the finding of the High Court on the issue in question; if that be so, the application made by her for leave to urge additional grounds can be converted into a petition for special leave to appeal against the said finding, and the delay made in filing the same can be condoned.
As in the case of the preliminary objection raised by respondent 1 against the appellant on the ground of limitation, so in the case of the objection raised by the appellant against respondent I in this matter, we would proceed on the basis that we have condoned the delay made by respondent 1 in preferring her petition to this Court for leave to challenge the finding of the High Court that the nomination form of Jai Bhagawan had been properly rejected.
That is why we have allowed Mr. Doabia to argue this point before us.
We may add that the two points of law raised by the respective objections of both the parties may have to be considered by a larger Bench on a suitable occasion.
On the merits, Mr. Doabia 's case is that the returning officer was not justified in rejecting Jai Bhagawan 's nomination under section 36(2)(b) of the Act.
The facts on which this contention is raised are no longer in dispute.
Mr. Jai Bhagawan who presented his nomination paper to the returning officer on January 29, 1956, was admittedly not an elector in the constituency of Rajaund in the District of Karnal.
It is alleged that he was a voter in another constituency.
When his nomination paper was presented, he did not produce a copy of the electoral roll of the said constituency or of the relevant part thereof or a certified copy of the 1418 relevant entries in the said roll; nor did he produce any of these documents on the first of February which was fixed for scrutiny of the nomination papers.
When the returning officer noticed that the candidate had not produced the relevant document, he gave him, at his request, two hours time to produce it.
The candidate failed to produce the document within the time allowed and thereupon the returning officer rejected his nomination paper tinder section 36 (2)(b) of the Act.
It is true that the candidate subsequently purported to produce before the officer his affidavit that his name was entered as a voter in the list of voters (No. 1074, Constituency No. 6, Karnal Baneket No. 21, Vol. 10), but the returning officer refused to consider the said affi davit because he had already rejected his nomination paper under section 36(2)(b).
Thus the rejection of the nomination paper was the result of the candidate 's failure to produce any of the prescribed documents before the returning officer.
On these facts the question which arises for decision is whether the returning officer was justified in rejecting the nomination paper under section 36(2)(b).
Section 33 of the Act deals with the presentation of nomination papers and prescribe , the requirements for valid nomination.
It would be relevant to refer to sub sections
(4) and (5) of this section.
Sub section (4) provides that on the presentation of the nomination paper, the returning officer shall satisfy himself that the names and electoral roll numbers of the candidate and his proposer as entered in the nomination paper are the same as those entered in the electoral roll.
The proviso to this sub section requires the returning officer to permit clerical or technical errors to be corrected.
Under this sub section it would have been open to Jai Bhagawan while presenting his nomination paper to produce one of the prescribed documents to show his electoral roll number on the roll of his constituency.
However, his failure to do so does not entail any penalty.
Sub section (5) of section 33 deals with the stage of the scrutiny of the nomination papers and it provides that where a candidate is an elector of a different constituency, a copy of the electoral 1419 roll of that constituency or the relevant part thereof or a certified copy of the relevant entry of such roll shall, unless it is filed along with the nomination paper, be produced before the returning officer at the time of the scrutiny.
It is thus clear that when the stage of scrutiny is reached the returning officer has to be satisfied that the candidate is an elector of a different constituency and for that purpose the statute has provided the mode of proof Section 36, sub section
(7) lays down that the certified copies which are required to be produced under section 33 (5) shall be conclusive evidence of the fact that the person referred to in the relevant entry is an elector of that constituency.
In other words, the scheme of the Act appears to be that where a candidate is an elector of a different constituency he has to prove that fact in the manner prescribed and the production of the prescribed copy has to be taken as conclusive evidence of the said fact.
This requirement had not been complied with by Jai Bhagawan and the returning officer thought that the said non compliance with the provisions of section 33(5) justified him in rejecting the nomination paper under section 36(2)(b) of the Act.
The question is whether this view of the returning officer is right.
Section 36 of the Act deals with the scrutiny of nominations and the object of its provisions as shown by sub section
(8) is to prepare a list of validly nominated candidates, that is to say, candidates whose nominations have been found valid and to affix it to the notice board of the returning officer.
Sub section (1) of section 36 provides that on the date fixed for the scrutiny of nominations each candidate and one other person duly authorized may attend at such time and place as the returning officer may appoint and the returning officer is required to give them all reasonable facilities for examining the nomination papers of all candidates which have been duly delivered.
Sub section (2) then deals with the scrutiny of the nomination papers and provides that the returning officer shall decide all objections which may be made to any nomination and may either on such objection, or on his own motion, after such summary enquiry, if any, as he thinks 1420 necessary, reject any nomination on any of the grounds mentioned in cls.
(a), (b) and (c) of the said sub section.
It is obvious that this enquiry must be summary and cannot be elaborate or prolonged.
In fact, sub section
(5) directs that the returning officer shall not allow any adjournment of the proceedings except when such proceedings are interrupted or obstructed by riots, by open violence or by causes beyond hip, control and the proviso to this sub section adds that in case an objection is made the candidate concerned may be allowed time to rebut it not later than the next day but one following the date fixed for scrutiny, and the returning officer shall record his decision on the date to which the proceedings have been adjourned.
Sub section (2) (b) deals with cases where there has been a failure to comply with any of the provisions of section 33 or section 34.
There is no doubt that in the present case there was failure on the part of Jai Bhagawan to comply with section 33(5) and prima facie section 36(2)(b) seems to justify the rejection of his nomination paper on that ground.
Section 33(5) requires the candidate to supply the prescribed copy and section 36(2)(b) provides that on his failure to comply with the said requirement his nomination paper is liable to be rejected.
In other words, this is a case where the statute requires the candidate to produce the prescribed evidence and provides a penalty for his failure to do so.
In such a case it is difficult to appreciate the relevance or validity of the argument that the requirement of section 33(5) is not mandatory but is directory, because the statute itself has made it clear that the failure to comply with the said requirement leads to the rejection of the nomination paper.
Whenever the statute requires a parti cular act 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 accept the argument that the failure to comply with the said requirement should lead to any other consequence.
It is, however, urged that the statute itself makes a distinction between defects which are of a substantial character and those which are not of a substantial 1421 character.
This argument is based upon the provisions of section 36(4) of the Act which provides that the returning officer shall not reject any nomination paper on the ground of any defect " which is not of a substantial character ".
The failure to produce the requisite copy, it is urged, may amount to a defect but it is not a defect of a substantial character.
We are not impressed by this argument.
There is no doubt that the essential object of the scrutiny of nomination papers is that the returning officer should be satisfied that the candidate who is not an elector in the constituency in question is in fact an elector of a different constituency.
The satisfaction of the returning officer is thus the matter of substance in these proceedings; and if the statute provides the mode in which the returning officer has to be satisfied by the candidate it is that mode which the candidate must adopt.
In the present case Jai Bhagawan failed to produce any of the copies prescribed and the returning officer was naturally not satisfied that jai Bhagawan was an elector of ' a different constituency.
If that in substance was the result of Jai Bhagawan 's failure to produce the relevant copy the consequence prescribed by section 36(2)(b) must inevitably follow.
It is only if the returning officer had been satisfied that Jai Bhagawan was an elector of a different constituency that his nomination papers could have been accepted as valid.
It is well settled that the statutory requirements of election law have to be strictly observed.
As observed by Mahajan C. J. who delivered the judgment of this Court in Jagan Nath vs Jagwant Singh(1) ". an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the court possesses no common law power ".
The learned Chief Justice has also added that ". it is a sound principle of natural justice that the success of a candidate who has won at an election should not be lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law." In this connection we may usefully refer to another decision of this Court in Rattan Anmol (1)[1954] S.C. R. 892, 895, 896.
1422 Singh vs Atma Ram (1).
While dealing with the question as to whether the requirements as to attestation were of a technical or of an unsubstantial character, Bose J. observed that " when the law enjoins the obser vance of a particular formality, it cannot be disregarded and the substance of the thing must be there ".
We must, therefore, hold that the High Court was right in coming to the conclusion that the nomination paper of Jai Bhagawan had been validly rejected by the returning officer.
Mr. Doabia, however, contends that the view taken by the High Court is purely technical and does not take into account the substance of the matter.
This approach, it is said, is inconsistent with the decision of this Court in Pratap Singh vs Shri Krishna Gupta (1).
It is true that in this case Bose J. has disapproved of the tendency of the courts towards technicalities and has observed that " it is the substance that counts and must take precedence over mere form ".
But in order to appreciate the scope and effect of these observations, it would be necessary to bear in mind the relevant facts and the nature of the point raised before the court for decision in this case.
The question raised was whether the failure of the candidate to mention his occupation as required by r. 9(1)(i) rendered his nomination paper invalid and it was answered by the court in the negative.
The question arose under the provisions of the C. P. and Berar Municipalities Act 11 of 1922.
It is significant that the decision of this Court rested principally on the provisions of section 23 of the said Act according to which " Anything done or any proceedings taken under this Act shall not be questioned on account of any. . defect or irregularity in affecting the merits of the case ".
It was held by this Court that reading r. 9(1) (iii) (c) which directed the supervising officer to examine nomination papers, in the light of section 23, the court had to see whether the omission to set out a candidate 's occupation can be said to affect the merits of the case and on that point there was no doubt that the said failure could not possibly affect the merits of the case.
The High Court had, however, taken a (1) ; , 488.
(2) A.I.R. 1956 S.C. 140,141.
1423 contrary view and it was in reversing this view that Bose J. disapproved the purely technical approach adopted by the High Court.
Where, however, the statute requires specific facts to be proved in a specific way and it also provides for the consequence of non P compliance with the said requirement it would be difficult to resist the application of the penalty clause on the ground that such an application is based on a technical approach.
Indeed it was precisely this approach which was adopted by this Court in the case of Rattan Anmol Singh vs Atma Ram (1).
Mr. Doabia has also relied upon a decision of the Andhra High Court in Mohan Reddy vs Neelagiri Muralidhar Rao (2) in support of his argument that the failure to produce the prescribed copy cannot justify the rejection of the nomination paper.
In our opinion this decision does not assist Mr. Doabia 's contention.
In this case it was urged before the High Court that the document produced by the party was riot a certified copy as required by section 33 (5) of the Act.
This argument was based on the assumption that the certified copy mentioned in section 33(5) of the Act must satisfy the test prescribed by section 76 of the Indian Evidence Act.
The High Court rejected this argument for two reasons.
It held that the certified copy mentioned ins.
33(5) need not necessarily satisfy the test prescribed by section 76 of the Indian Evidence Act.
Alternatively it held, on a consideration of the relevant statutory provisions, that the document in question was in fact and in law a certified copy under section 76 of the Indian Evidence Act.
These points do not arise for our decision in the present appeal.
Mr. Doabia, however, relies on certain observations made in the judgment of the nigh Court and it may be conceded that these observations seem to suggest that according to the High Court the provisions of sections 33(5) and 36(7) do not preclude proof by other means of the fact that the name of the candidate is on the relevant electoral roll.
These observations are clearly obiter.
Even so we (1) ; , 483.
(2) A.I.R. 1958 Andhra Pradesh 485.
181 1424 would like to add that they do not correctly represent the effect of the relevant provisions of the Act.
The result is the appeal is allowed, the order passed by the High Court is set aside and the election petition filed by respondent 1 is dismissed with costs throughout.
Appeal allowed.
| IN-Abs | The first respondent filed an election petition against the 1404 appellant on the grounds: (i) that he committed the corrupt practice specified in section 123(7) Of the Representation of the People Act, 195I inasmuch as he had obtained the assistance of one P, a member of the armed forces, who had acted as his polling agent and (ii) that the nomination of one J had been improperly rejected by returning officer.
The election tribunal held that the corrupt practice was not proved but that the nomination of J had been improperly rejected and consequently it declared the election of the appellant to be void.
On appeal the High Court held that the nomination of J was not improperly rejected but that the corrupt practice alleged was established and dismissed the appeal.
The High Court found that P had signed the form a pointing him as the appellant 's polling agent and had presented it before the presiding officer, that P was seen at the polling booth and that the scribe who wrote this form had also written the form by which the appellant had appointed another polling agent.
From these circumstances the High Court drew the inference that the appellant had appointed P as his polling agent and had in fact signed the form in token of such appointment.
With respect to the rejection of the nomination of J the High Court held that J was a voter in a different constituency and that he had failed to produce a copy of the electoral roll when he presented the nomination paper, nor was it produced at the time of the scrutiny or within the time given by the returning officer and that consequently the nomination was properly rejected.
Held, that to establish that the appellant was guilty of the corrupt practice charged it was not sufficient to show that P had acted as his polling agent but it must also be proved that the appellant had appointed P as his polling agent.
This fact the first respondent had failed to prove by any legal evidence.
The facts and circumstances found by the High Court did not inevitably lead to the conclusion that the appellant had signed the form and hence such an inference could not be drawn.
Held, further, that the nomination of J was not improperly rejected.
Where a candidate is an elector of a different constituency he has to prove that fact in the manner prescribed by section 33(5) by the production of a copy of the electoral roll of that constituency or of the relevant part thereof or of a certified copy of the relevant entries thereof.
In the present case there was failure on the part of J to comply with section 33(5) and his nomination was properly rejected under section 36(2)(b).
The failure to comply with section 33(5) is not a defect of an unsubstantial character so as to attract the application Of section 36(4).
When the statute requires specific facts to be proved in a specific way and it also provides for the consequences of non compliance with the said requirement the application of the penalty clause cannot be resisted on the ground that such application is based on a technical approach.
jagan Nath vs jaswant Singh; , ; Rattan 1405 Anmol Singh vs Atma Ram, ; and Pratap Singh vs Shri Krishna Gupta, A.I.R. 1956 S.C. 140, referred to.
Mohan Reddy vs Neelagiri Muralidhar Rao, A.I.R. 1958 A.P. 485, not approved.
|
No. 268 of 1989 etc.
(Under Article 32 of the Constitution of India).
K. Parasaran, Attorney General, R.K. Garg, Ms. Indira Jaising, L.N. Sinha, Dr. V. Gauri Shankar, Vepa P. Sarathi, Shanti Bhushan, Rakesh Luthra, C.L. Sahu, Indeevar Goodwill, N.S. Malik, N.S. Pundir, R.C, Kaushik, D.K. Garg, Rajeev Dhawan, Miss Kamini 620 Jaiswal, Anip Sachthey, R.C. Pathak, H.D. Pathak, Harish Uppal, S.K. Gambhir, Gopal Subramanium, D.S. Shastri, Arun Sharma, Miss A. Subhashini, C.V.S. Rao, Satish K. Agnihotri, Ashok Kumar Singh, R.K. Jain, Kailash Vasdev and Prashant Bhushan for the appearing parties.
The Judgments of the Court were delivered by SABYASACHI MUKHARJI, CJ. 1.
Is the (hereinafter referred to as 'the Act ') is constitutionally valid? That is the question.
The Act was passed as a sequel to a grim tragedy.
On the night of 2nd December, 1984 occurred the most tragic industrial disaster in recorded human history in the city of Bhopal in the State of Madhya Pradesh in India.
On that night there was massive escape of lethal gas from the MIC storage tank at Bhopal Plant of the Union Carbide (I) Ltd. (hereinafter referred to as 'UCIL ') resulting in large scale death and untold disaster.
A chemical plant owned and oper ated by UCIL was situated in the northern sector of the city of Bhopal.
There were numerous hutments adjacent to it on its southern side, which were occupied by impoverished squatters.
UCIL manufactured the pesticides, Sevin and Tamik, at the Bhopal plant, at the request of, it is stated by Judge John F. Keenan of the United States District Court in his judgment, and indubitably with the approval of the Govt.
of India.
UCIL was incorporated in 1984 under the appropriate Indian law: 50.99% of its shareholdings were owned by the Union Carbide Corporation (UCC), a New York Corporation, L.I.C. and the Unit Trust of India own 22% of the shares of U.C.I.L., a subsidiary of U.C.C. 3.
Methyl Isocyanate (MIC), a highly toxic gas, is an ingredient in the production of both Sevin and Temik.
On the night of the tragedy MIC leaked from the plant in substan tial quantities.
the exact reasons for and circumstances of such leakage have not yet been ascertained or clearly estab lished.
The results of the disaster were horrendous.
Though no one is yet certain as to how many actually died as the immediate and direct result of the leakage, estimates at tribute it to about 3,000.
Some suffered injuries the ef fects of which are described as Carcinogenic and ontogenic by Ms. Indira Jaisingh, learned counsel; some suffered injuries serious and permanent and some mild and temporary.
Livestock was killed, damaged and infected.
Businesses were interrupted.
Environment was polluted and the ecology af fected, flora and fauna disturbed.
621 4.
On 7th December, 1984, Chairman of UCC Mr. Warren Anderson came to Bhopal and was arrested.
He was later released on bail.
Between December 1984 and January 1985 suits were filed by several American lawyers in the courts in America on behalf of several victims.
It has been stated that within a week after the disaster, many American law yers, described by some as 'ambulance chasers ', whose fees were stated to be based on a percentage of the contingency of obtaining damages or not, flew over to Bhopal and ob tained Powers of Attorney to bring actions against UCC and UCIL.
Some suits were also filed before the District Court of Bhopal by individual claimants against UCC (the American Company) and the UCIL.
On or about 6th February, 1985, all the suits in various U.S. Distt.
Courts were consolidated by the Judicial Panel on Multi District Litigation and assigned to U.S. Distt.
Court, Southern Distt.
of New York.
Judge Keenan was at all material times the Presiding Judge there.
On 29th March, 1985, the Act in question was passed.
The Act was passed to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with speedily, effectively and equitably.
On 8th April, 1985 by virtue of the Act the Union of India filed a complaint before the U.S. Distt.
Court, Southern Distt.
of New York.
On 16th April, 1985 at the first pre trial conference in the consolidated action transferred and assigned to the U.S. Distt.
Court, Southern Distt.
, New York, Judge Keenan gave the following directions: (i) that a three member Executive Committee be formed to frame and develop issues in the case and prepare expeditiously for trial or settle ment negotiations.
The Committee was to com prise of one lawyer selected by the firm retained by the Union of India and two other lawyers chosen by lawyers retained by the individual plaintiffs.
(ii) that as a matter of fundamental human decency, temporary relief was necessary for the victims and should be furnished in a systematic and coordinated fashion without unnecessary delay regardless of the posture of the litigation then pending.
On 24th September, 1985 in exercise of powers con ferred by section 9 of the Act, the Govt.
of India framed the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme, 1985 (hereinafter called the Scheme).
622 8.
On 12th May, 1986 an order was passed by Judge Keenan allowing the application of UCC on forum non convenience as indicated hereinafter.
On 21st May, 1986 there was a motion for fairness hearing on behalf of the private plaintiffs.
On 26th June, 1986 individual plaintiffs filed appeal before the US Court of Appeal for the second circuit challenging the order of Judge Keenan.
By an order dated 28th May, 1986 Judge Keenan declined the motion for a fairness hearing.
The request for fairness hearing was rejected at the instance of Union of India in view of the meagerness of the amount of proposed settlement.
On 10th July, 1986 UCC filed an appeal before the US Court of Appeal for the Second Circuit.
It challenged Union of India being entitled to American mode of discovery, but did not challenge the other two conditions imposed by Judge Keenan, it is stated.
On 28th July, 1986 the Union of India filed cross appeal before the US Court of Appeal praying that none of the conditions imposed by Judge Keenan should be disturbed.
In this connection it would be pertinent to set out the conditions incorporated in the order of Judge Keenan, dated 12th May, 1986 whereby he had dismissed the case before him on the ground of forum non convenience, as mentioned before.
The conditions were fol lowing: 1.
That UCC shall consent to the jurisdiction of the courts of India and shall continue to waive defenses based on the statute of limita tion, 2.
That UCC shall agree to satisfy any judg ment rendered by an Indian court against it and if applicable, upheld on appeal, provided the judgment and affirmance "comport with minimal requirements of due process"; and 3.
That UCC shah be subject to discovery under the Federal Rules of Civil Procedure of the US after appropriate demand by the plaintiffs.
On 5th September, 1986 the Union of India filed a suit for damages in the Distt.
Court of Bhopal, being regu lar suit No. H 13/86.
It is this suit, inter alia, and the orders passed therein which were settled by the orders of this Court dated 14th & 15th February, 1989, which will be referred to later.
On 17th November, 1986 upon the applica tion of the Union of India, the Distt.
Court, Bhopal, grant ed a temporary injunction restraining the UCC from selling assets, paying dividends or buying back debts.
On 27th November, 1986 the UCC gave an undertaking to preserve and maintain unencumbered assets to the extent of 3 billion US dollars.
623 10.
On 30th November, 1986 the Distt.
Court, Bhopal lifted the injunction against the Carbide selling assets on the strength of the written undertaking by UCC to maintain unencumbered assets of 3 billion US dollars.
On 16th Decem ber, 1986 UCC filed a written statement contending that they were not liable on the ground that they had nothing to do with the Indian Company; and that they were a different legal entity; and that they never exercised any control and that they were not liable in the suit.
Thereafter, on 14th January, 1987 the Court of Appeal for the Second Circuit affirmed the decision of Judge Keenan but deleted the condi tion regarding the discovery under the American procedure granted in favour of the Union of India.
It also suo motu set aside the condition that on the judgment of the Indian court complying with due process and the decree issued should be satisfied by UCC.
1t ruled that such a condition cannot be imposed as the situation was covered by the provi sions of the Recognition of Foreign Country Money Judgments Act.
On 2nd April, 1987, the court made a written propos al to all parties for considering reconciliatory interim relief to the gas victims.
In September, 1987, UCC and the Govt.
of India sought time from the Court of Distt.
Judge, Bhopal, to explore avenues for settlement.
It has been asserted by the learned Attorney General that the possibili ty of settlement was there long before the full and final settlement was effected.
He sought to draw our attention to the assertion that the persons concerned were aware that efforts were being made from time to time for settlement.
However, in November '87 both the Indian Govt.
and the Union Carbide announced that settlement talks had failed and Judge Deo extended the time.
The Distt.
Judge of Bhopal on 17th December, 1987 ordered interim relief amounting to Rs.350 crores.
Being aggrieved thereby the UCC filed a Civil Revision which was registered as Civil Revision Petition No. 26/88 and the same was heard.
On or about 4th February, 1988, the Chief Judi cial Magistrate of Bhopal ordered notice for warrant on Union Carbide, Hong Kong for the criminal case filed by CBI against Union Carbide.
The charge sheet there was under sections 304, 324, 326, 429 of the Indian Penal Code read with section 35 IPC and the charge was against S/Shri Warren Anderson, Keshub Mahindra.
Vijay Gokhale, J. Mukund, Dr. R.B. Roy Chowdhay.
S.P. Chowdhary, K.V. Shetty, S.1.
Qureshi and Union Carbide of U.S.A., Union Carbide of Hong Kong and Union Carbide having Calcutta address.
It charged the Union Carbide by saying that MIC gas was stored and it was further stated that MIC had to be stored and handled 624 in stainless steel which was not done.
The charge sheet, inter alia, stated that a Scientific Team headed by Dr. Varadarajan had concluded that the factors which had led to the toxic gas leakage causing its heavy toll existed in the unique properties of very high reactivity, volatility and inhalation toxicity of MIC.
It was further stated in the charge sheet that the needless storage of large quantities of the material in very large size containers for inordi nately long periods as well as insufficient caution in design, in choice of materials of construction and in provi sion of measuring and alarm instruments, together with the inadequate controls on systems of storage and on quality of stored materials as well as lack of necessary facilities for quick effective disposal of material exhibiting instability, led to the accident.
It also charged that MIC was stored in a negligent manner and the local administration was not informed, inter alia, of the dangerous effect of the expo sure of MIC or the gases produced by its reaction and the medical steps to be taken immediately.
It was further stated that apart from the design defects the UCC did not take any adequate remedial action to prevent back flow of solution from VGS into RVVH and PVH lines.
There were various other acts of criminal negligence alleged.
The High Court passed an order staying the operation of the order dated 17.12.87 directing the defendant applicant to deposit Rs.3,500 mil lions within two months from the date of the said order.
On 4th April, 1988 the judgment and order were passed by the High Court modifying the order of the Distt.
Judge, and granting interim relief of Rs.250 crores.
The High Court held that under the substantive law of torts, the Court has jurisdiction to grant interim relief under Section 9 of the CPC.
On 30th June, 1988 Judge Deo passed an order restrain ing the Union Carbide from settling with any individual gas leak plaintiffs.
On 6th September, 1988 special leave was granted by this Court in the petition filed by UCC against the grant of interim relief and Union of India was also granted special leave in the petition challenging the reduc tion of quantum of compensation from Rs.350 crores to Rs.250 crores.
Thereafter, these matters were heard in November December '88 by the bench presided over by the learned Chief Justice Of India and hearing, continued also in January Feb ruary '89 and ultimately on 14 15th February, 1989 the order culminating in the settlement was passed.
In judging the constitutional validity of the Act, the subsequent events, namely, how the Act has worked itself out, have to be looked into.
It is, therefore, necessary to refer to the two orders of this Court.
The proof of the cake is in its eating, it is said, and it is perhaps not possible to ignore the terms of the settlement reached on 14th and 625 15th February, 1989 in considering the effect of the lan guage used in the Act.
Is that valid ' or proper or has the Act been worked in any improper way? These questions do arise.
On 14th February, 1989 an order was passed in C.A. Nos.
3187 88/88 with S.L.P. (C) No. 13080/88.
The parties thereto were UCC and the Union of India as well as Jana Swasthya Kendra, Bhopal, Zehraeli Gas Kand Sangharsh Morcha, Bhopal.
That order recited that having considered all the facts and the circumstances of the case placed before the Court, the material relating to the proceedings in the Courts in the United States of America, the offers and counter offers made between the parties at different stages during the various proceedings, as well as the complex issues of law and fact raised and the submissions made thereon, and in particular the enormity of human suffering occasioned by the Bhopal Gas disaster and the pressing urgency to provide immediate and substantial relief to victims of the disaster, the 'Court found that the case was preeminently fit for an overall settlement between the parties covering all litigations, claims, rights and liabil ities relating to and arising out of the disaster and it was found just, equitable and reasonable to pass, inter alia, the following orders: .lm "(1) The Union Carbide Corporation shall pay a sum of U.S. Dollars 470 million (Four hundred and seventy millions) to the Union of India in full settlement of all claims, fights and liabilities related to and arising out of Bhopal Gas disaster.
(2) The aforesaid sum shall be paid by the Union Carbide Corporation to the Union of India on or before 31st March, 1989.
(3) To enable the effectuation of the settlement, all civil proceedings related to and arising out of the Bhopal Gas disaster shall hereby stand transferred to this Court and shall stand concluded in terms of the settlement, and all criminal proceedings related to and arising out of the disaster shall stand quashed wherever these may be pending 15.
A written memorandum was filed thereafter and the Court on 15th February, 1989 passed an order after giving due consideration thereto.
The terms of settlement were as follows: 626 "1.
The parties acknowledge that the order dated February 14, 1989 disposes of in its entirety all proceedings in Suit No. 1113 of 1986.
This settlement shall finally dispose of all past, present and future claims, causes of action and civil and criminal proceedings (of any nature whatsoever wherever pending) by all Indian citizens and all public and private entities with respect to all past, present or future deaths, personal injuries, health effects, compensation, losses, damages and civil and criminal complaints of any nature whatsoever against UCC, Union Carbide India Limited, Union Carbide Eastern, and all of their subsidiaries and affiliates as well as each of their present and former directors, officers, employees, agents, representatives, attorneys, advocates and solicitors arising out of, relating to or connected with the Bhopal gas leak disaster, including past, present and future claims, causes of action and proceedings against each other.
All such claims and causes of action whether within or outside India of Indian citizens, public or private entities are hereby extinguished, including without limitation each of the claims filed or to be filed under the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme 1985, and all such civil proceedings in India are hereby transferred to this Court and are dismissed without preju dice, and all such criminal proceedings in cluding contempt proceedings stand quashed and accused deemed to be acquitted.
Upon full payment in accordance with the Court 's directions the undertaking given by UCC pursuant to the order dated November 30, 1986 in the District Court, Bhopal stands discharged, and all orders passed in Suit No. 1113 of 1986 and or in any Revision therefrom, also stand discharged.
It appears from the statement of objects & reasons of the Act that the Parliament recognized that the gas leak disaster involving the release, on 2nd and 3rd December, 1984 of highly noxious and abnormally dangerous gas from a plant of UCIL, a subsidiary of UCC, was of an unprecedented nature, which resulted in loss of life and damage to proper ty on an extensive scale, as mentioned before.
It was stated that the victims who had managed to survive were still suffering from the adverse effects and the further complica tions which might arise in their cases, of course, could not be fully visualised.
It was asserted by 627 Ms. Indira Jaising that in case of some of the victims the injuries were carcinogenic and ontogenic and these might lead to further genetic complications and damages.
The Central Govt.
and the Govt.
of Madhya Pradesh and various agencies had to incur expenditure on a large scale for containing the disaster and mitigating or otherwise coping with the effects thereto.
Accordingly, the Bhopal Gas Leak Disaster (Processing of Claims) Ordinance, 1985 was promul gated, which provided for the appointment of a Commissioner for the welfare of the victims of the disaster and for the formulation of the Scheme to provide for various matters necessary for processing of the claims and for the utilisa tion by way of disbursal or otherwise of amounts received in satisfaction of the claims.
Thereafter, the Act was passed which received the assent of the President on 29th March, 1985.
Section 2(b) of the Act defines 'claim '.
It says that "claims" means (i) a claim, arising out of, or connected with, the disaster, for compensation or damages for any loss of life or personal injury which has been, or is likely to be suffered; (ii) a claim, arising out of, or connected with, the disaster, for any damage to property which has been, or is likely to be, sustained; (iii) a claim for expenses incurred or required to be incurred for containing the disaster or mitigating or otherwise coping with the effects of the disaster; (iv) any other claim (including any claim by way of loss of business or employment) arising out of, or connected with, the disas ter.
A "claimant" is defined as a person entitled to make a claim.
It has been provided in the Explanation to Section 2 that for the purpose of clauses (b) and (c), where the death of a person has taken place as a result of the disaster, the claim for compensation or damages for the death of such person shall be for the benefit of the spouse, children (including a child in the womb) and other heirs of the deceased and they shall be deemed to be the claimants in respect thereof.
Section 3 is headed "Power of Central Govt.
to represent claimants".
It provides as follows: "3(1) Subject to the other provisions of this Act, the Central Government shall, and shall have the exclusive right to, represent, and act in place of (whether within or outside India) every person who has made, or is enti tled to make, a claim for all purposes con nected with such claim in the same manner and to the same effect as such persons.
(2) In particular and without prejudice to the generality of 628 the provisions of sub section (1), the pur poses referred to therein include (a) Institution of any suit or other proceed ing in or before any court or other authority (whether within or outside India) or withdraw al of any such suit or other proceeding, and (b) entering into a compromise.
(3) The provisions of sub section (1) shall apply also in relation to claims in respect of which suits or other proceedings have been instituted in or before any court or other authority (whether within or outside India) before the commencement of this Act: Provided that in the case of any such suit or other proceeding with respect to any claim pending immediately before the commencement of this Act in or before any court or other authority outside India, the Central Govt.
shall represent, and act in place of, or along with, such claimant, if such court or other authority so permits.
Section 4 of the Act is headed as "Claimant 's right to be represented by a legal practitioner".
It provides as follows: "Notwithstanding anything contained in section 3, in representing, and acting in place of, any person in relation to any claim, the Central Government shall have due regard to any matters which such person may require to be urged with respect to his claim and shall, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
Section 5 deals with the powers of the Central Govt.
and enjoins that for the purpose of discharging its func tions under this Act, the Central Govt.
shall have the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908.
Section 6 provides for the ap pointment of a Commissioner and other officers and employ ees.
Section 7 deals with powers to delegate.
Section 8 deals with limitation, while section 9 deals with the power to frame Scheme.
The Central Govt. was enjoined to frame a scheme which was to take into account, inter alia, the processing of the claims for securing their enforcement, creation of a fund for meeting expenses in connection 629 with the administration of the Scheme and of the provisions of this Act and the amounts which the Central Govt.
might, after due appropriation made by the Parliament by law in that behalf, credit to the fund referred to in clauses above and any other amounts which might be credited to such fund.
Such Scheme was enjoined, as soon as after it had been framed, to be laid before each House of Parliament.
Section 10 deals with removal of doubts.
Section 11 deals with the overriding effect and provides that the provisions of the Act and of any Scheme framed thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than the Act or any instrument having effect by virtue of any enactment other than the Act.
A Scheme has been framed and was published on 24th September, 1985.
Clause 3 of the said Scheme provides that the Deputy Commissioners appointed under Section 6 of the Act shall be the authorities for registration of Claims (including the receipt, scrutiny and proper categorisation of such claims under paragraph 5 of the Scheme) arising within the areas of their respective jurisdiction and they shall be assisted by such other officers as may be appointed by the Central Govt.
under Section 6 of the Act for scrutiny and verification of the claims and other related matters.
The Scheme also provides for the manner of filing claims.
It enjoins that the Dy.
Commissioner shall provide the required forms for filing the applications.
It also provides for categorisation and registration of claims.
Sub clause (2) of Clause 5 enjoins that the claims received for registration shall be placed under different heads.
Sub clause (3) of clause 5 enjoins that on the consideration of claims made under paragraph 4 of the Scheme, if the Dy.
Commissioner is of the opinion that the claims fall in any category different from the category mentioned by the claimant, he may decide the appropriate category after giving an opportunity to the claimant to be heard and also after taking into consideration any facts made available to him in this behalf.
Sub clause (6) of Clause 5 enjoins that if the claimant is not satisfied with the order of the Dy.
Commissioner, he may prefer an appeal against such order to the Commissioner, who shall decide the same.
Clause 9 of the Scheme provides for processing of Claims Account Fund, which the Central Govt.
may, after due appropriation made by Parliament, credit to the said Fund.
It provides that there shall also be a Claims and Relief Fund, which will include the amounts 630 received in satisfaction of the claims and any other amounts made available to the Commissioner as donation or for relief purposes.
Subclause (3) of clause 10 provides that the amount in the said Fund shall be applied by the Commissioner for, disbursal of amounts in settlement of claims, or as relief, or apportionment of part of the Fund for disbursal of amounts in settlement of claims arising in future or for disbursal of amounts to the Govt.
of Madhya Pradesh for the social and economic rehabilitation of the persons affected by the Bhopal gas leak disaster.
Clause 11 of the Scheme deals with the disbursal, apportionment of certain amounts, and sub clause (2) thereof enjoins that the Central Govt. may determine the total amount of compensation to be apportioned for each category of claims and the quantum of compensation payable, in gener al, in relation to each type of injury or loss.
Sub clause (5) thereto provides that in case of a dispute as to disbur sal of the amounts received in satisfaction of claims, an appeal shall lie against the order of the Dy.
Commissioner to the Additional Commissioner, who may decide the matter and make such disbursal as he may, for reasons to be record ed in writing, think fit.
The other clauses are not relevant for our present purposes.
Counsel for different parties in all these matters have canvassed their submissions before us for the gas victims.
Mr. R.K. Garg, Ms. Indira Jaising, and Mr. Kailash Vasudev have made various submissions challenging the valid ity of the Act on various grounds.
They all have submitted that the Act should be read in the way they suggested and as a whole.
Mr. Shanti Bhushan, appearing for interveners on behalf of Bhopal Gas Peedit Mahila Udyog Sangathan and following him Mr. Prashant Bhushan have urged that the Act should be read in the manner canvassed by them and if the same is not so read then the same would be violative of the fundamental rights of the victims, and as such unconstitu tional.
The learned Attorney General assisted by Mr. Gopal Subramanium has on the other hand urged that the Act is valid and constitutional and that the settlement arrived at on 14th/15th February is proper and valid.
In order to appreciate the background Ms. Indira Jaising placed before us the proceedings of the Lok Sabha wherein Mr. Veerendra Patil, the Hon 'ble Minister, stated on March 27, 1985 that the tragedy that had occurred in Bhopal on 2nd and 3rd December, 1984 was unique and unprecedented in character and magnitude not only for our country but for the entire world.
It was stated that one of 631 the options available was to settle the case in Indian courts.
The second one was to file the cases in American courts.
Mr. Patil reiterated that the Govt.
wanted to pro ceed against the parent company and also to appoint a Com mission of Inquiry.
Mr. Garg in support of the proposition that the Act was unconstitutional, submitted that the Act must be exam ined on the touchstone of the fundamental rights on the basis of the test laid down by this court in state of Madras vs V.G, Row, ; , There at page 607 of the report this Court has reiterated that in considering the reasona bleness of the law imposing restrictions on the fundamental rights, both the substantive and the procedural aspects of the impugned restrictive law should be examined from the point of view of reasonableness.
And the test of reasonable ness, wherever prescribed, should be applied to each indi vidual Statute impugned, and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases.
The nature of the right alleged to have been infringed, the underlying purpose of the restrictions im posed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict.
(The emphasis supplied).
Chief Justice Patanjali Sastri reiterated that in evaluating such elusive factors and forming their own conception of what is reasona ble, in the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision would play an important role.
Hence, whether by sections, 3, 4 & 11 the rights of the victims and the citizens to fight for their own causes and to assert their own grievances have been taken away validly and properly, must be judged in the light of the prevailing conditions at the time, the nature of the right of the citizen, the purpose of the restrictions on their rights to sue for enforcement in the courts of law or for punishment for offences against his person or property, the urgency and extent of the evils sought to be remedied by the Act, and the proportion of the impairment of the rights of the citizen with reference to the intended remedy pre scribed.
According to Mr. Garg, the present position called for a comprehensive appreciation of the national and inter national background in which precious rights to life and liberty were enshrined as fundamental rights and remedy for them was also guaranteed under Article 32 of the Constitu tion.
He sought to urge that multinational corporations have assumed powers or potencies to override the political and economic independence of the sovereign nations which have 632 been used to take away in the last four decades, much wealth out of the Third World.
Now these are plundered much more than what was done to the erstwhile colonies by imperialist nations in the last three centuries of foreign rule.
The role of courts in cases of conflict between rights of citi zens and the vast economic powers claimed by multinational corporations to deny moral and legal liabilities for their corporate criminal activities should not be lost sight of.
He, in this background, urged that these considerations assume immense importance to shape human fights jurispru dence under the Constitution, and for the Third World to regulate and control the power and economic interests of multinational corporations and the power of exploitation and domination by developed nations without submitting to due observance of the laws of the developing countries.
It therefore appears that the production of, or carrying on trade in dangerous chemicals by multinational industries on the soil of Third World countries call for strictest en forcement of constitutional guarantees for enjoying human fights in free India, urged Mr. Garg.
In this connection, our attention was drawn to the Charter of Universal Declara tion of Human Rights.
Article 1 of the Universal Declaration of Human Rights, 1948 reiterates that all human beings are born free and equal in dignity and rights.
Article 3 states that everyone has right to life, liberty and security of person.
Article 6 of the Declaration states that everyone has the right to recognition everywhere as a person before the law.
Article 7 states that all are equal before the law and are entitled without any discrimination to equal protec tion of the law.
All are entitled to equal protection against any discrimination in violation of the Declaration of Human Rights and against any incitement to such discrimi nation.
Article 8 states that everyone has the right to an effective remedy by competent National Tribunal for acts violating fundamental rights guaranteed to him by the Con stitution or by the law.
It is, therefore, necessary to bear in mind that Indian citizens have a fight to live which cannot be taken away by the Union of India or the Govt.
of a State, except by a procedure which is just, fair and reason able.
The right to life includes the fight to protection of limb against mutilation and physical injuries, and does not mean merely the fight to breathe but also includes the fight to livelihood.
It was urged that this right is available in all its dimension till the last breath against all injuries to head, heart and mind or the lungs affecting the citizen or his next generation or of genetic disorders.
The enforce ment of the right to life or limb calls for adequate and appropriate reliefs enforceable in courts of law and of equity with sufficient power to offer adequate deterrence in all cases of corporate criminal liability under strict liability, absolute liability, punitive liability and crimi nal prosecution and 633 punishment to the delinquents.
The damages awarded in civil jurisdiction must be commensurate to meet well defined demands of evolved human rights jurisprudence in modern world.
It was, therefore, submitted that punishment in criminal jurisdiction for serious offences is independent of the claims enforced in civil jurisdiction and no immunity against it can be granted as part of settlement in any civil suit.
If any Act authorises or permits doing of the same, the same will be unwarranted by law and as such bad.
The Constitution of India does not permit the same.
Our attention was drawn to Article 21 of the Consti tution and the principles of international law.
Right to equality is guaranteed to every person under article 14 in all matters like the laws of procedure for enforcement of any legal or constitutional right in every jurisdiction, sub stantive law defining the rights expressly or by necessary implications, denial of any of these rights to any class of citizens in either field must have nexus with constitution ally permissible object and can never be arbitrary.
Arbi trariness is, therefore, anti thetical to the right of equality.
In this connection, reliance was placed on the observations of this Court in E.P. Royappa vs State of Tamil Nadu & Anr., ; and Maneka Gandhi vs Union of India, [1978] 2 SCR 621 where it was held that the view that Articles 19 & 21 constitute watertight compartments has been rightly overruled.
Articles dealing with different fundamen tal rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at any point of time.
They. are all parts of an integrated scheme in the Constitution and must be preserved and cannot be destroyed arbitrarily.
Reliance was placed on the observations in R.D. Shetty vs The I.A.A. of India & Ors., ; Hence, the rights of the citizens to fight for remedies and enforce their rights flowing from the breach of obligation in respect of crime cannot be obliterated.
The Act and Sections 3, 4 & 11 of the Act in so far as these purport to do so and have so operated, are violative of Articles 14, 19(1)(g) and 21 of the Constitu tion.
The procedure envisaged by the said Sections deprives the just and legitimate rights of the victims to assert and obtain their just dues.
The rights cannot be so destroyed.
It was contended that under the law the victims had right to ventilate their rights.
It was further contended that Union of India was a joint tort feasor along with UCC and UCIL.
It had negligent ly permitted the establishment of such a factory without proper safeguards exposing the victims and citizens to great danger.
Such a person or authority 634 cannot be entrusted to represent the victims by denying the victims their rights to plead their own cases.
It was sub mitted that the object of the Act was to fully protect people against the disaster of highly obnoxious gas and disaster of unprecedented nature.
Such an object cannot be achieved without enforcement of the criminal liability by criminal prosecution.
Entering into settlement without reference to the victims was, therefore, bad and unconstitu tional, it was urged.
If an Act, it was submitted, permits such a settlement or deprivation of the rights of the vic tims, then the same is bad.
Before we deal with the various other contentions raised in this case, it is necessary to deal with the appli cation for intervention and submission made on behalf of the Coal India in Writ Petition No. 268/89 wherein Mr. L.N. Sinha in his written submission had urged for the intervener that Article 21 of the Constitution neither confers nor creates nor determines the dimensions nor the permissible limits of restrictions which appropriate legislation might impose on the right to life or liberty.
He submitted that provisions for procedure are relevant in judicial or quasi judicial proceedings for enforcement of rights or obliga tions.
With regard to alteration of rights, procedure is governed by the Constitution directly.
He sought to inter vene on behalf of Coal India and wanted these submissions to be taken into consideration.
However, when this contention was sought to be urged before this Court on 25th April, 1989, after hearing all the parties, it appeared that there was no dispute between the parties in the instant writ petitions between the victims and the Government of India that the rights claimed in these cases are referrable to Article 21 of the Constitution.
Therefore, no dispute really arises with regard to the contention of Coal India and we need not consider the submissions urged by Shri Sinha on behalf of the intervener in this case.
It has been so re corded.
By the order dated 3rd March, 1989, Writ Petitions Nos. 268/89 and 164/86 have been directed to be disposed of by this Bench. ' We have heard these two writ petitions along with the other writ petitions and other matters as indicated hereinbefore.
The contentions are common.
These writ peti tions question the validity of the Act and the settlement entered into pursuant to the Act.
Writ Petition No. 164/86 is by one Shri Rakesh Shrouti who is an Indian citizen and claims to be a practising advocate having his residence at Bhopal.
He says that he and his family members were at Bhopal on 2nd/3rd December, 1984 and suffered immensely as a result of the gas leak.
He challenges the validity of the Act on various grounds.
He contends that the Union of India should not have the exclusive right to represent the 635 victims in suits against the Union Carbide and thereby deprive the victims of their right to sue and deny access to justice.
He further challenges the right of the Union of India to represent the victims against Union Carbide because of conflict of interests.
The conduct of the Union of India was also deprecated and it was further stated that such conduct did not inspire confidence.
In the premises, the said petitioner sought a declaration under Article 32 of the Constitution that the Act is void, inoperative and unen forceable as violative of Articles 14, 19 & 21 of the Con stitution Similarly, the second writ petition, namely, writ petition No. 268/89 which is filed by Sh.
Charan Lal Sahu, who is also a practising Advocate on behalf of the victims and claims to have suffered damages as a result of the gas leak.
challenges the Act.
He further challenges the settle ment entered into under the Act.
He says that the said settlement was violative of principles of natural justice and the fundamental right of the said petitioner and other victims.
It is his case that in so far as the Act permits such a course to be adopted, such a course was not permissi ble under the Constitution.
He further asserts that the Union of India was negligent and a joint tort feasor.
In the premises, according to him, the Act is bad, the settlement is bad and these should be set aside.
In order to determine the question whether the Act in question is constitutionally valid or not in the light of Articles 14, 19(l)(g) and 21 of the Constitution, it is necessary to find out what does the Act actually mean and provide for.
The Act in question, as the Preamble to the Act states, was passed in order to confer powers on the Central Government to secure that the claims arising out of, or connected with, the Bhopal gas leak disaster are dealt with speedily, effectively, equitably and to the best advantage of the claimants and for matters incidental thereto.
There fore, securing the claims arising out of or connected with the Bhopal gas leak disaster is the object and purpose of the Act.
We have noticed the proceedings of the Lok Sabha in connection with the enactment of the Act.
Our attention was also drawn by the learned Attorney General to the proceed ings of the Rajya Sabha wherein the Hon 'ble Minister, Shri Virendra Patil explained that the bill enabled the Govern ment to assume exclusive right to represent and act, whether within or outside India in place of every person who had made or was entitled to make claim in relation to the disas ter and to institute any suit or other proceedings or enter into any compromise as mentioned in the Act.
The whole object of the Bill was to make procedural changes to the existing Indian law which would enable the Central Govern ment to take up the responsibility of fighting litigation on behalf of these victims.
The first point was that it 636 sought to create a locus standi in the Central Government to file suits on behalf of the victims.
The object of the Statute.
it was highlighted, was that because of the dimen sion of the tragedy covering thousands of people, large number of whom being poor, would not be able to go to the courts, it was necessary to create the locus standi in the Central Government to start the litigation for payment of compensation in the courts on their behalf.
The second aspect of the Bill was that by creating this locus standi in the Central Government, the Central Government became compe tent to institute judicial proceedings for payment of com pensation on behalf of the victims.
The next aspect of the Bill was to make a distinction between those on whose behalf suits had already been filed and those on whose behalf proceedings had not yet then been instituted.
One of the Members emphasised that under Article 21 of the Constitu tion, the personal liberty of every citizen was guaranteed and it has been widely interpreted as to what was the mean ing of the expression 'personal liberty '.
It was cmphasised that one could not take away the right of a person, the liberty of a person, to institute proceedings for his own benefit and for his protection.
It is from this point of view that it was necessary, the member debated, to preserve the right of a claimant to have his own lawyers to represent him along with the Central Government in the proceedings under Section 4 of the Act, this made the Bill constitution ally valid.
Before we deal with the question of constitutionali ty, it has to be emphasised that the Act in question deals with the Bhopal gas leak disaster and it deals with the claims meaning thereby claims arising out of or connected with the disaster for compensation of damages for loss of life or any personal injury which has been or is likely to be caused and also claims arising out of or connected with the disaster for any damages to property or claims for expenses incurred or required to be incurred for containing the disaster or making or otherwise coping with the impact of the disaster and other incidental claims.
The Act in question does not purport to deal with the criminal liabili ty, if any, of the parties or persons concerned nor it deals with any of the consequences flowing from those.
This posi tion is clear from the provisions and the Preamble to the Act.
Learned Attorney General also says that the Act does not cover criminal liability.
The power that has been given to the Central Government is to represent the 'claims ', meaning thereby the monetary claims.
The monetary claims, as was argued on behalf of the victims, are damages flowing from the gas disaster.
Such damages, Mr. Garg and Ms. Jais ing submitted, are based on strict liability, absolute liability and punitive liability.
The Act does not, either expressly or impliedly, deal with the extent of the damages or 637 liability.
Neither section 3 nor any other section deals with any consequences of criminal liability.
The expression "the Central Government shall, and shall have the exclusive right to, represent, and act in place of (whether within or outside India) every person who has made, or is entitled to make, a claim for all purposes connected with such claim in the same manner and to the same effect as such person", read as it is, means that Central Government is substituted and vested with the exclusive right to act in place of the victims, i.e., eliminating the victims, their heirs and their legal representatives, in respect of all such claims arising out of or connected with the Bhopal gas leak disas ter.
The right, therefore, embraces right to institute proceedings within or outside India along with right to institute any suit or other proceedings or to enter into compromise.
Sub section 1 of section 3 of the Act, there fore, substitutes the Central Government in place of the victims.
The victims, or their heirs and legal representa tives, get their rights substituted in the Central Govern ment along with the concomitant right to institute such proceedings, withdraw such proceedings or suit and also to enter into compromise.
The victims or the heirs or the legal representatives of the victims, are substituted and their rights are vested in the Central Government.
This happens by operation of section 3 which is the legislation in question.
Sub section (3) of section 3 makes it clear that the provi sions of sub section (1) of section 3 shall also apply in relation to claims in respect of which suits or other pro ceedings have been instituted in or before any court or other authority (whether within or outside India) before the commencement of this Act, but makes a distinction in the case of any such suit or other proceeding with respect to any claim pending immediately before the commencement of this Act in or before any court or other authority outside India, and provides that the Central Government shall repre sent, and act in place of, or along with, such claimant, if such court or other authority so permits.
Therefore, in cases where such suits or proceedings have been instituted before the commencement of the Act in any court or before any authority outside India, the section by its own force will not come into force in substituting the Central Govern ment in place of the victims or the heirs or their legal representatives, but the Central Government has been given the right to act in place of, or along with, such claimant, provided such court or other authority so permits.
It is to have adherence and conformity with the procedure of the countries or places outside India, where suits or proceed ings are to be instituted or have been instituted.
There fore, the Central Government is authorised to act along with the claimants in respect of proceedings instituted outside India subject to the orders of such courts or the authori ties.
Is such a right valid and proper? 638 35.
There is the concept known both in this country and abroad, called "parens patriae.
Dr. D.K. Mukherjea in his "Hindu Law of Religious and Charitable Trusts", Tagore Law Lectures, Fifth Edition, at page 404, referring to the concept of parens patriae, has noted that in English Law, the Crown as parens patriae is the constitutional protector of all property subject to charitable trusts, such trusts being essentially matters of public concern.
Thus the posi tion is that according to Indian concept parens patriae doctrine recognized King as the protector of all citizens and as parent.
In Budhakaran Chankhani vs Thakur Prasad Shah, AIR 1942 Cal.
311 the position was explained by the Calcutta High Court at page 3 18 of the report.
The same position was reiterated by the said Court in Banku Behary Mondal vs Banku Behary Hazra & Anr., AIR 1943 Cal.
203 at page 205 of the report.
The position was further elaborated and explained by the Madras High Court in Medai Dalavoi T. Kumaraswami Mudaliar vs Medai Dalavoi Rajammal, AIR 1957 Mad.
563 at page 567 of the report.
This Court also recog nized the concept of parens patriae relying on the observa tions of Dr. Mukherjea aforesaid in Ram Saroop vs S.P. Sahi, [1959] 2 Supp.
SCR 583, at pages 598 and 599.
In the "Words and Phrases" Permanent edition, Vol.
35 at p. 99, it is stated that parens patriae is the inherent power and author ity of a Legislature to provide protection to the person and property of persons non suijuris, such as minor, insane, and incompetent persons, but the words "parens patriae" meaning thereby 'the father of the country ', were applied originally to the King and are used to designate the State referring to its sovereign power of guardianship over persons under disability, (Emphasis supplied).
Parens patriae jurisdic tion, it has been explained, is the right of the sovereign and imposes a duty on sovereign, in public interest, to protect persons under disability who have no rightful pro tector.
The connotation of the term "parens patriae" differs from country to country, for instance, in England it is the King, in America it is the people, etc.
The Government is within its duty to protect and to control persons under disability.
Conceptually, the parens patriae theory is the obligation of the State to protect and take into custody the rights and the privileges of its citizens for discharging its obligations.
Our Constitution makes it imperative for the State to secure to all its citizens the rights guaran teed by the Constitution and where the citizens are not in a position to assert and secure their rights, the State must come into picture and protect and fight for the rights of the citizens.
The Preamble to the Constitution, read with the Directive Principles, Articles 38, 39 and 39A enjoins the State to take up these responsibilities.
It is the protective measure to which the social welfare state is committed.
It is necessary for the State to ensure the funda 639 mental rights in conjunction with the Directive Princi ples of State Policy to effectively discharge its obliga tion and for this purpose, if necessary, to deprive some rights and privileges of the individual victims or their heirs to protect their rights better and secure these further.
Reference may be made to Alfred L. Snapp & Son, Inc. vs Puerto Rico, ; , , 1028.
Ct, 3260 in this connection.
There it was held by the Supreme Court of the United States of America that Commonwealth of Puerto have standing to sue as parens patriae to enjoin apple growers ' discrimination against Puerto Rico migrant farm workers.
This case illustrates in some aspect the scope of 'parens patriae '.
The Commonwealth of Puerto Rico sued in the United States District Court for the Western District of Virginia, as parens patriae for Puerto Rican migrant farm workers, and against Virginia apple growers, to enjoin discrimination against Puerto Ricans in favour of Jamaican workers in violation of the Wagner Peyser Act, and the Immigration and Nationality Act.
The District Court dis missed the action on the ground that the Commonwealth lacked standing to sue, but the Court of Appeal for the Fourth Circuit reversed it.
On certiorari, the United States Supreme Court affirmed.
In the opinion by White, J. joined by Burger, Chief Justice and Brennan, Marshall, Blackman, Rennquist, Stevens, and O 'Connor, JJ., it was held that Puerto Rico had a claim to represent its quasi sovereign interests in federal court at least which was as strong as that of any State, and that it had parens patriae standing to sue to secure its residents from the harmful effects of discrimination and to obtain full and equal participation in the federal employment service scheme established pursu ant to the Wagner Peyser Act and the Immigration and Nation ality Act of 1952.
Justice White referred to the meaning of the expression "parens patriae".
According to Black 's Law Dictionary, 5th Edition 1979, page 1003, it means literally 'parent of the country ' and refers traditionally to the role of the State as a sovereign and guardian of persons under legal disability.
Justice White at page 1003 of the report emphasised that the parens patriae action had its roots in the common law concept of the "royal prerogative".
The royal prerogative included the right or responsibility to take care of persons who were legally unable, on account of mental incapacity, whether it proceeds from nonage, idiocy, or lunacy to take proper care of themselves and their property.
This prerogative of parens patriae is inherent in the supreme power of every state, whether that power is lodged in a royal person or m the legislature and is a most beneficent function.
After discussing several cases Justice White observed at page 1007 of the report that in order to maintain an action, in parens patriae, the state must artic ulate an interest apart from the interests of 640 particular parties, i.e. the State must be more than a nominal party.
The State must express a quasi sovereign interest.
Again an instructive insight can be obtained from the observations of Justice Holmes of the American Supreme Court in the case of Georgia vs Tennessee Copper Co., ; , , , which was a case involving air pollution in Georgia caused by the discharge of noxious gases from the defendant 's plant in Tennessee.
Justice Holmes at page 1044 of the report described the State 's interest as follows: "This is a suit by a State for an injury to it in its capacity of quasi sovereign.
In that capacity the State has an interest independent of and behind the titles of its citizens, in all the earth and air within its domain.
It has the last word as to whether its mountains shall be stripped of their forests and its inhabitants shall breathe pure air.
It might have to pay individuals before it could utter that word, but with it remains the final power . . .
When the States by their union made the forcible abatement of outside nuisances impossible to each, they did not thereby agree to submit to whatever might be done.
They did not renounce the possibility of making reasonable demands on the ground of their still remaining quasi sovereign inter ests" 36.
Therefore, conceptually and from the jurisprudential point of view, especially in the background of the Preamble to the Constitution of India and the mandate of the Direc tive Principles, it was possible to authorise the Central Government to take over the claims of the victims to tight against the multinational Corporation in respect of the claims.
Because of the situation the victims were under disability in pursuing their claims in the circumstances of the situation fully and properly.
On its plain terms the State has taken over the exclusive right to represent and act in place of every person who has made or is entitled to make a claim for all purposes connected with such claim in the same manner and to the same effect as such person.
Whether such provision is valid or not in the background of the requirement of the Constitution and the Code of Civil Procedure, is another debate.
But there is no prohibition or inhibition, in our opinion, conceptually or jurisprudential ly for Indian State taking over the claims of the victims or for the State acting for the victims as the Act has sought to provide.
The actual meaning of what the Act has provided and the validity thereof, however, will have to be examined in the light of the specific submissions advanced in this case.
641 37.
Ms. Indira Jaising as mentioned hereinbefore on behalf of some other victims drew out attention to the background of the passing of the Act in question.
She drew our attention to the fact that the Act was to meet a specif ic situation that had arisen after the tragic disaster and the advent of American lawyers seeking to represent the victims in American courts.
The Government 's view, according to her, as was manifest from the Statement of Objects and Reasons, debates of the Parliament, etc.
was that the inter ests of the victims would be best served if the Central Government was given the right to represent the victims in the courts of United States as they would otherwise be exploited by 'ambulance chasers ' working on contingency fees.
The Government also proceeded initially on the hypoth esis that US was the most convenient forum in which to sue UCC.
The Government however feared that it might not have locus standi to represent the victims in the courts of the United States of America unless a law was passed to enable it to sue on behalf of the victims.
The dominant object of the Act, therefore, according to her, was to give to the Government of India locus Standi to sue on behalf of the victims in foreign jurisdiction, a standing which it other wise would not have had.
According to her, the Act was never intended to give exclusive rights to the Central Government to sue on behalf of the victims in India or abroad.
She drew our attention to the parliamentary debates as mentioned hereinbefore.
She drew our attention to the expression 'parens patriae ' as appearing in the Words and Phrases, Volume 31 p. 99.
She contends that the Act was passed to provide locus standi only to represent in America.
She drew our attention to the "American Constitutional Law by Lau rence B. Trioe, 1978 Edition at paragraph 3.24, where it was stated that in its capacity as proprietor, a state may satisfy the requirement of injury to its own interests by an assertion of harm to the state as such.
It was further stated by the learned author there that the State may sue under the federal anti trust laws to redress wrongs suffered by it as the owner of a railroad and as the owner and opera tor of various public institutions.
It was emphasised that in its quasi sovereign capacity, the state has an interest, independent of and behind the titles of its citizens, in all the earth and air within its domain.
It was sought to be suggested that in the instant Act no such right was either asserted or mentioned.
The State also in its quasi sovereign capacity is entitled to bring suit against a private indi vidual to enjoin a corporation not to discharge noxious gases from its out of state plant into the suing state 's territory.
Finally, it was emphasised that as 'parens patr iae ' on behalf of the citizens, where a state 's capacity as parens patriae is not negated by the federal structure, the protection of the general health, comfort, and welfare of the state 's inhabitants has been held to give the state itself a sufficient 642 interest.
Ms. Jaising sought to contend that to the extent that the Act was not confined to empowering the Government to sue on behalf of those who were not sui generis but extended also to representing those who are, this exercise of the power cannot be referrable to the doctrine of 'parens patriae '.
To the extent, it is not confined in enabling the Government to represent its citizens in foreign jurisdiction but empowered it to sue in local courts to the exclusion of the victims it cannot be said to be in exercise of doctrine of 'parens patriae ', according to her.
We are unable to agree.
As we have indicated before conceptually and juris prudentially there is no warrant in the background of the present Act, in the light of circumstances of the Act in question to confine the concept into such narrow field.
The concept can be varied to enable the Government to represent the victims effectively in domestic forum if.the situation so warrants.
We also do not find any reason to confine the 'parens patriae ' doctrine to only quasisovereign right of the State independent of and behind the title of the citi zens, as we shall indicate later.
It was further contended that deprivation of the rights of the victims and denial of the rights of the vic tims or the fights of the heirs of the victims to access to justice was unwarranted and unconstitutional.
She submitted that it has been asserted by the Government that the Act was passed pursuant to Entry 13 of the List I of the Seventh Schedule to the Constitution.
It was therefore submitted that to the extent it was a law relating to civil procedure, it sets up a different procedure for the Bhopal gas victims and denies to them equality before law, violating Article 14 of the Constitution.
Even assuming that due to the magnitude of the disaster, the number of claimants and their disabili ty they constituted a separate class and that it was permis sible to enact a special legislation setting up a special procedure for them, the reasonableness of the procedure has still to be tested.
Its reasonableness, according to her, will have to be judged on the touchstone of the existing Civil Procedure Code of 1908 and when so tested, it is found wanting in several respects.
It was also contended by the Government that it was a legislation relating to "actionable wrongs" under Entry 8 of the Concurrent List of the Seventh Schedule.
But so read, she said, it could only deal with the procedural aspects and not the substantive aspect of "ac tionable wrongs".
If it does, then the reasonableness of a law must be judged with reference to the existing substan tive law of actionable wrongs and so judged it is in viola tion of many constitutional rights as it takes away from the victims the right to sue for actionable wrongs according to counsel for the victims.
According to her, it fails to take into account the law of strict liability for ultra 643 hazardous activity as clarified by this Court in M.C. Meh ta 's, case (supra).
She further submitted that it is a bad Act as it fails to provide for the right to punitive damages and destruction of environment.
It was contended on behalf of the Central Government that the Act was passed to give effect to the Directive Principle as enshrined under Article 39 A of the Constitu tion of India.
It was, on the other side, submitted that it is not permissible for the State to grant legal aid on pain of destroying rights that inhere in citizens or on pain of demanding that the citizens surrender their rights to the State.
The Act in fact demands a surrender of rights of the citizens to the State.
On the interpretation of the Act, Ms. Indira Jaising submitted that sections 3 and 4 as noted above, give exclusive power to the Government to represent the victims and there is deprivation of the victims ' right to sue for the wrongs done to them which is uncanalised and unguided and the expression "due regard" in section 4 of the Act does not imply consent and as such violative of the rights of the victims.
The right to be associated with the conduct of the suit is hedged in with so many conditions that it is illusory.
According to her, a combined reading of sections 3 and 4 of the act lead to the conclusion that the victims are displaced by the Central Government which has constituted itself as the "surrogate" of the claimants, that they have no control over the proceedings, that they have no right to decide whether or not to compromise and if so on what terms and they have no right to be heard by the court before any such compromise is effected.
Therefore, section 3 read with section 4, according to her, hands over to the Government all effective rights of the victims to sue and is a naked usurption of power.
It was submitted that in any event on a plain reading of the Act, section 3 read with section 4 did not grant the Government immunity from being sued as a joint tort feasor.
It was further urged that section 9 makes the Gov ernment the total arbitor in the matter of the registration, processing and recording of claims.
Reference was made to section 9(2)(a), (b) and (c) and disbursal of claims under sections 9(2)(f) and 10.
It was urged that the Deputy Com missioner and Commissioner appointed under the Act and the Scheme are subordinates and agents of the Central Govern ment.
They replace impartial and independent civil court by officers and subordinates of the Central Government.
Clause 11 of the Scheme makes the Central Government, according to counsel, judge in its own cause inasmuch as the Central Government could be and was in fact a joint tort feasor.
It was submitted that sections 5 to 9 of the Act read with the Scheme do not set up a machinery which is 644 constitutionally valid.
The Act, it was urged, deprives the victims of their rights out of all proportion to the object sought to be achieved, namely, to sue in foreign jurisdic tion or to represent those incapable of representing them selves.
The said object could be achieved, according to counsel, by limiting the right to sue in foreign jurisdic tion alone and in any event representing only those victims incapable of representing themselves.
The victims who wish to sue for and on their own behalf must have power to sue, all proper and necessary parties including Government of India, Government of Madhya Pradesh, UCIL and Shri Arjun Singh to vindicate their right to life and liberty and their rights cannot and should not be curtailed, it was submitted.
Hence, the Act goes well beyond its objects and imposes excessive restriction amounting to destruction of the rights of the victims, according to.
counsel.
In deciding whether any rights are affected, it is not the object of the Act that is relevant but its direct and inevitable effect on the rights of the victims that is material.
Hence no matter how laudable the object of the Act is alleged to be by the Government of India, namely, that it is an Act to give effect to Directive Principles enshrined in Article 39 A of the Constitution, the direct and inevitable effect of sec tion 3 according to counsel for the victims is to deprive the victims of the right to sue for and on their own behalf through counsel of their choice and instead empower the Central Government to sue for them.
The Act is, it was contended, unconstitutional because it deprives the victims of their right to life and personal liberty guaranteed by Article 21.
The right to life and liberty includes the right to sue for violations of the right, it was urged.
The right to life guaranteed by Article 21 must be interpreted to mean all that makes life livable, life in all its fullness.
According to counsel, it includes the right to livelihood.
Reference was made to the decision of Olga Tellis vs B.M.C., [1985] Supp.
2 SCR 51 at p. 78 83.
This right, it was contended, is inseparable from the reme dy.
It was urged that personal liberty includes a wide range of freedoms to decide how to order one 's affairs.
Reference was made to Maneka Gandhi vs Union of India, (supra), The right to life and liberty also includes the right to healthy environment free from hazardous pollutants.
The right to life and liberty, it was submitted, is inseparable from the remedy to judicial vindication of the violation of that right the right of access to justice must be deemed to be part of that right.
Therefore, the importance is given to the right to file a suit for an actionable wrong.
See Ganga Bai vs Vijay Kumar, ; at 886.
According to counsel appearing for the victims, the Act read strictly infringes the right to life and personal liberty because the right to sue by the affected person 645 for damages flowing from infringement of their rights is taken away.
Thus, it was submitted that not just some inci dents of the right to life, but the right itself in all its fullness is taken away.
Such depravation, according to counsel, of the right is not in accordance with procedure established by law inasmuch as the law which takes away the right, i.e., impugned Act is neither substantively nor procedurally just, fair or reasonable.
A law which divests the victims of the right to sue to vindicate for life and personal liberty and vests the said right in the Central Government is not just, fair or reasonable.
The victims are sui generis and able to decide for themselves how to vindi cate their claims in accordance with law.
There is, there fore, no reason shown to exist for divesting them of that right and vesting that on the Central Government.
All the counsel for the victims have emphasised that vesting of the right in Central Government is bad and unrea sonable because there is conflict of interests between the Central Government and the victims.
It was emphasised that the conflict of interest has already prejudiced the victims in the conduct of the case inasmuch as a compromise unac ceptable to the victims has been entered into in accordance with the order of this Court of 14th/15th February, 1989 without heating the victims.
This conflict of interest will continue, it was emphasised, to adversely affect the victims inasmuch as section 9 of the Act read with clauses 5, 10 and 11 of the Scheme empower the Central Government to process claims, determine the category into which these fall, deter mine the basis on which damages will be payable to each category and determine the amount of compensation payable to each claimant.
Learned counsel urged that the right to a just, fair and reasonable procedure was itself a guaranteed fundamental right under Article 14 of the Constitution.
This included right to natural justice.
Reference was made to Olga Tellis 'section case (supra) and S.L. Kapoor vs Jagmohan, ; at 753, 766.
The right to natural justice is included in Article 14 Tulsi Ram vs Union of India, [1985] Supp.
2 SCR 131.
Reference was also made to Maneka Gandhi 's, case (supra).
It was contended by counsel that the right to natural justice is the right to be heard by Court at the pre decisional stage, i.e., before any compromise is effected and accepted.
Reference was made to the decision of this Court in Swadeshi Cotton vs Union of India, ; It was submitted that natural justice is a highly effective tool devised by the Courts to ensure that a statu tory authority arrives at a just decision.
It is calculated to act as a healthy check on the abuse of power.
Natural justice is not dispensable nor is it an empty formality.
Denial of that right can and has led to the miscar 646 riage of justice in this case.
According to counsel, if the victims had been given an opportunity to be heard, they would, inter alia, have pointed out that the amount agreed to be paid by UCC was hopelessly inadequate and that UCC, its officer and agents ought not to be absolved of criminal liability, that the Central Government itself was liable to have been sued as a joint tort feasor and, according to counsel, had agreed to submit to a decree if found liable under the order dated 31st December, 1985, that suits had been filed against the State of Madhya Pradesh, Shri Arjun Singh and UCIL which said suits cannot be deemed to have been settled by the compromise/order of 14th/15th February, 1989.
It was also pointed out that Union of India was under a duty to sue UCIL, which it had failed and neglected to do.
It was submitted that to the extent that the statute does not provide for a pre decisional hearing on the fairness of the proposed settlement or compromise by Court, it is void as offending natural justice hence violative of Articles 14 and 21 of the Constitution.
Alternatively, it was contended by the counsel that since the statute neither expressly nor by necessary implication bars the right to be heard by Court before any compromise is effected such a right to a pre decisional hearing by Court must be read into section 3(2)(b) of the Act.
Admittedly, it does not expressly ex clude the right to a hearing by Court prior to any settle ment being entered into.
Far from excluding such a right by necessary implication, having regard to the nature of the rights affected, i.e., the right to life and personal liber ty, such a right to hearing must be read into the Act in order to ensure that justice is done to the victims, accord ing to all the counsel.
The Act sets up a procedure differ ent from the ordinary procedure established by law, namely, Civil Procedure Code.
But it was submitted that the Act should be harmoniously read with the provisions of Civil Procedure Code and if it is not so read, then the Act in question would be unreasonable and unfair.
In this connec tion, reliance was placed on the provisions of Order I, Rule 4, Order 23, Rule 1 proviso, Order 23, Rule 3 9 and Order 32, Rule 7 of CPC and it was submitted that these are not inconsistent with the Act.
On the contrary these are neces sary and complementary, intended to ensure that there is no miscarriage of justice.
Hence these must be held to apply to the facts and circumstances of the case and the impugned Act must be read along with these provisions.
Assuming that the said provisions do not directly apply then, provisions analogous to the said provisions must be read with section 3(2)(b) to make the Act reasonable, it was submitted.
It was urged that if these are not so read then the absence of such provisions would vest arbitrary and unguided powers in the Central Government making section 3(2)(b) unconstitutional.
The said provisions are intended to ensure the machinery of 647 accountability to the victims and to provide to them, an opportunity to be heard by court before any compromise is arrived at.
In this connection, reference was made to Rule 23(3) of the Federal Rules of Civil Procedure in America which provides for a hearing to the victims before a compro mise is effected.
The victims as plaintiffs in an Indian court cannot be subjected to a procedure which is less fair than that provided by a US forum initially chosen by the Government of India, it was urged.
Counsel submitted that Section 6 of the Act is unreasonable because it replaces an independent and impar tial Civil Court of competent jurisdiction by an Officer known as the Commissioner to be appointed by the Central Government.
No qualification, according to counsel, had been prescribed for the appointment of a Commissioner and clause 5 of the Scheme framed under the Act vests in the Commis sioner the judicial function of deciding appeals against the order of the Deputy Commissioner registering or refusing to register a claim.
It was further submitted that clause 11(2) of the Scheme is unreasonable because it replaces an inde pendent and impartial civil court of competent jurisdiction with the Central Government, which is a joint tort feasor for the purpose of determining the total amount of compensa tion to be apportioned for each category of claims and the quantum of compensation payable for each type of injury or loss.
It was submitted that the said function is a judicial function and if there is any conflict of interest between the victims and Central Government, vesting such a power in the Central Government amounts to making it a judge in its own cause.
It was urged that having regard to the fact that amount received in satisfaction of the claims is ostensibly pre determined, namely, 470 million dollars unless the order of 14th/15th February is set aside which ought to be done, according to counsel, the Central Government would have a vested interest in ensuring that the amount of damages to be disbursed does not exceed the said amount.
Even otherwise, according to counsel, the Government of India has been sued as a joint tort feasor, and as they would have a vested interest in depressing the quantum of damages, payable to the victims.
This would, according to counsel, result in a deliberate under estimation of the extent of injuries and compensation payable.
Clause 11(4) of the Scheme, according to counsel, is unreasonable inasmuch as it does not take into account the claims of the victims to punitive and exemplary damages and damages for loss and destruction of environment.
Counsel submitted that in any event the expression "claims" in section 2(b) cannot be interpreted to mean 648 claims against the Central Government, the State of Madhya Pradesh, UCIL, which was not sued in suit No. 1113/86 and Shri Arjun Singh, all of whom have been sued as joint tort feasors in relation to the liability arising out of the disaster.
Counsel submitted that if section 3 is to be held to be intra vires, the word "exclusive" should be severed from section 3 and on the other hand, if section 3 is held ultra vires, then victims who have already filed suits or those who had lodged claims should be entitled to continue their own suits as well as Suit No. 1113/86 as plaintiffs with leave under Order 1 Rule 8.
Counsel submitted that interim relief as decided by this Court can be paid to the victims even otherwise also, according to counsel, under clause 10(2)(b) of the Scheme.
Counsel submitted that the balance of $ 470 million after deducting interim relief as determined by this Court should be attached.
In any event, it was submitted that, it be declared that the word "claim" in section 2 does not include claims against Central Govt.
or State of Madhya Pradesh or UCIL.
Hence, it was urged that the rights of the victims to sue the Government of India, the State of Madhya Pradesh or UCIL would remain unaffected by the Act or by the compromise effected under the Act.
Machinery to decide suit expeditiously has to be devised, it was submitted.
Other suits filed against UCC, UCIL, State of Madhya Pradesh and Arjun Singh should to be transferred to the Supreme Court for trial and disposal, according to counsel.
It was submit ted that the Court should fix the basis of damages payable to different categories, namely, death and disablement mentioned under clause 5(2) of the scheme.
Counsel submitted that this Court should set up a procedure which would ensure that an impartial judge assisted by medical experts and assessors would adjudicate the basis on which an individual claimant would fall into a particular category.
It was also urged that this Court should quantify the amount of compen sation payable to each category of claimant in clause 5(2) of the Scheme.
This decision cannot, it was submitted, be left to the Central Government as is purported to be done by clause 11(2) of the Scheme.
This Court must set up, it was urged, a trust with independent trustees to administer the trust and trustees to be accountable to this Court.
An independent census should be carried out of number of claimants, nature and extent of injury caused to them, the category into which they fall.
Apportionment of amounts should be set aside or invested for future claimants, that is the category in clause 5(2)(a) of the Scheme, which is, according to counsel, of utmost impor tance 649 since the injuries are said to be.
carcinogenic and ontogen ic and wide affecting persons yet unborn.
Shri Garg, further and on behalf of some of the victims counsel, urged before us that deprivation of the rights of the victims and vesting of those fights in the State is violative of the rights of the victims and cannot.
be justified or warranted by the Constitution.
Neither section 3 nor section 4 of the Act gives any right to the victims; on the other hand, it is a complete denial of access to justice for the victims, according to him.
This, according to counsel, is arbitrary.
He also submitted that section 4 of the Act, as it stands, gives no right to the victims and as such even assuming that in order to fight for the rights of the victims, it was necessary to substitute the victims even then in so far as the victims have been denied the right of say, in the conduct of the proceedings, this is disproportionate to the benefit conferred upon the victims.
Denial of rights to the victims is so great and deprivation of the right to natural justice and access to justice is so tremendous that judged by the well settled principles by which yardsticks provisions like these should be judged in the constitutional framework of this country, the Act is violative of the fundamental rights of the vic tims.
It was further submitted by him that all the rights of the victims by the process of this Act, the right of the victims to enforce full liability against the multinationals as well as against the Indian Companies, absolute liability and criminal liability have all been curtailed.
All the counsel submitted that in any event, the criminal liability cannot be subject matter of this Act.
Therefore, the Government was not entitled to agree to any settlement on the ground that criminal prosecution would be withdrawn and this being a part of the consideration or inducement for settling the civil liability, he submitted that the settlement arrived at on the 14th/l5th February, 1989 as recorded in the order of this Court is wholly unwar ranted, unconstitutional and illegal.
Mr. Garg additionally further urged that by the procedure of the Act, each individual claim had to be first determined and the Government could only take over the aggregate of all individual claims and that could only be done by aggregating the individual claims of the victims.
That was not done, according to him.
Read in that fashion, according to Shri Garg, the conduct of the Government in implementing the Act is wholly improper and unwarranted.
It was submitted by him that the enforcement of the fight of the victims 650 without a just, fair and reasonable procedure which is vitally necessary for representing the citizens or victims was bad.
It was further urged by him that the Bhopal gas victims have been singled out for hostile discrimination resulting in total denial of all procedures of approach to competent courts and tribunals.
It was submitted that the Central Government was incompetent to represent the victims in the litigations or for enforcement of the claims.
It was then submitted by him that the claims of the victims must be enforced fully against the Union Carbide Corporation carry ing on commercial activities for profit resulting in unprec edented gas leak disaster responsible for a large number of deaths and severe injuries to others.
It was submitted that the liability of each party responsible, including the Government of India, which is a joint tort feasor along with the Union Carbide, has to be ascertained in appropriate proceedings.
It was submitted on behalf of the victims that Union of India owned 22% of the shares in Union Carbide and therefore, it was incompetent to represent the victims.
There was conflict of interest between the Union of India and the Union Carbide and so Central Government was incompe tent.
It is submitted that pecuniary interest howsoever small disqualifies a person to be a judge in his own cause.
The settlement accepted by the Union of India, according to various counsel is vitiated by the pecuniary bias as holders of its shares to the extent of 22%.
It was submitted that the pleadings in the court of the United States and in the Bhopal court considered in the context of the settlement order of this Court accepted by the Union of India establish that the victims ' individuality were sacrificed wontedly and callously and, therefore, there was violation, according to some of the victims, both in the Act and in its implementation of Articles 14, 19(l)(g) and 21 of the Constitution.
The principles of the decision of this Court in M.C. Mehta & Anr.
vs Union of India, ; must be so interpreted that complete justice is done and it in no way excludes the grant of punitive damages for wrongs justifying deterrents to ensure the safety of citizens in free India.
No multinational corporation, according to Shri Garg, can claim the privilege of the protection of Indian law to earn profits without meeting fully the demands of civil and criminal justice administered in India with this Court functioning as the custodian.
Shri Garg urged that the liability for damages, in India and the Third World Coun tries, of the multinational companies cannot be less but must be more because the persons affected are often without remedy for 651 reasons of inadequate facilities for protection of health or property.
Therefore, the damages sustainable by Indian victims against the multinationals dealing with dangerous gases without proper security and other measures are far greater than damages suffered by the citizens of other advanced and developed countries.
It is, therefore, neces sary to ensure by damages and deterrent remedies that these multinationals are not tempted to shift dangerous manufac turing operations intended to advance their strategic objec tives of profit and war to the Third World Countries with little respect for the right to life and dignity of the people of sovereign third world countries.
The strictest enforcement of punitive liability also serves the interest of the American people.
The Act, therefore, according to Shri Garg is clearly unconstitutional and therefore, void.
It was urged that the settlement is without juris diction.
This Court was incompetent to grant immunity against criminal liabilities in the manner it has purported to do by its order dated 14th/l5th February, 1989, it was strenuously suggested by counsel.
It was further submitted that to hold the Act to be valid, the victims must be heard before the settlement and the Act can only be valid if it is so interpreted.
This is necessary further, according to Shri Garg, to lay down the scope of heating.
Shri Garg also drew our attention to the scheme of disbursement of relief to the victims.
He submitted that the scheme of disbursement is unreasonable and discriminatory because there is no proce dure which is just, fair and reasonable in accordance with the provisions of Civil Procedure Code.
He further submitted that the Act does not lay down any guidelines for the con duct of the Union of India in advancing the claims of the victims.
There were no essential legislative guidelines for determining the rights of the victims, the conduct of the proceedings on behalf of the victims and for the relief claimed.
Denial of access to justice to the victims through an impartial judiciary is so great a denial that it can only be consistent with the situation which calls for such a drastic provision.
The present circumstances were not such.
He drew our attention to the decision of this Court in Basheshar vs Income Tax Commissioner, ; ; in Re Special Courts Bill, ; A.R. Antulay vs R.S. Nayak & Anr., ; ; Ram Krishna Dalmia vs Ten dulkar, ; Ambika Prasad Mishra etc.
vs State of U.P. & Ors. etc., and Bodhan Chowdhary vs State of Bihar, ; Shri Garg further submitted that Article 21 must be read with Article 51 of the Constitution and other directive principles.
He drew our attention to Lakshmi Kant Pandey vs Union of India, ; ; M/s Mackinnon Machkenzie & Co. Ltd. vs Audrey D 'Costa 652 and Anr., [1987] 2 SCC 469; Sheela Barse vs Secretary, Children Aid Society & Ors.
, ; Shri Garg submitted that in india, the national dimensions of human rights and the international dimensions are both congruent and their enforcement is guaranteed under Articles 32 and 226 to the extent these are enforceable against the State, these are also enforceable against transnational corpora tions inducted by the State on conditions of due observance of the Constitution and all laws of the land.
Shri Garg submitted that in the background of an unprecedented disas ter resulting in extensive damage to life and property and the destruction of the environment affecting large number of people and for the full protection of the interest of the victims and for complete satisfaction of all claims for compensation, the Act was passed empowering the Government of India to take necessary steps for processing of the claims and for utilisation of disbursal of the amount re ceived in satisfaction of the claims.
The Central Government was given the exclusive right to represent the victims and to act in place of, in United States or in india, every citizen entitled to make a claim.
Shri Garg urged that on a proper reading of section 3(1) of the Act read with section 4 exclusion of all victims for all purpose is incomplete and the Act is bad.
He submitted that the decree for adjudica tion of the Court must ascertain the magnitude of the dam ages and should be able to grant reliefs required by law under heads of strict liability, absolute liability and punitive liability.
Shri Garg submitted that it is necessary to consider that the Union of India is liable for the torts.
In several decisions to which Shri Garg grew our attention, it has been clarified that Government is not liable only if the tortious act complained has been committed by its servants in exer cise of its sovereign powers bY which it is meant powers that can be lawfully exercised under sovereign rights only vide Nandram Heeralal vs Union of India & Anr., AIR 1978 M.P. 209 at p. 212.
There is a real and marked distinction between the sovereign functions of the government and those which are non sovereign and some of the functions that fall in the latter category are those connected with trade, commerce, business and industrial undertakings.
Sovereign functions are such acts which are of such a nature as cannot be performed by a private individual or association unless powers are delegated by sovereign authority of state.
According to Shri Garg, the Union and the State Governments under the Constitution and as per laws of the Factories, Environment Control, etc. are bound to exercise control on the factories in public interest and public purpose.
These functions are not sovereign func 653 tions, according to Shri Garg, and the Government in this case was guilty of negligence.
In support of this, Shri Garg submitted that the offence of negligence on the part of the Govt.
would be evident from the fact that (a) the Government allowed the Union Carbide factory to be installed in the heart of the city; (b) the Government allowed habitation in the front of the factory knowing that the most dangerous and lethal gases were being used in the manufacturing processes; (c) the gas leakage from this factory was a common affair and it was agitated continuously by the people journalists and it was agitated in the Vidhan Sabha right from 1980 to 1984.
These features firmly proved, according to Shri Garg, the grossest negligence of the governments.
Shri Garg submitted that the gas victims had legal and moral right to sue the governments and so it had full right to im plead all the necessary and proper parties like Union Carbide, UCIL, and also the then Chief Minister Shri Arjun Singh of the State.
He drew our attention to Order 2, rule 3, of the Civil Procedure Code.
In suits on joint torts, according to Shri Garg, each of the joint tort feasors is responsible for the injury sustained for the common acts and they can all be sued together.
Shri Garg 's main criticism has been that the most crucial question of corporate responsibility of the people 's right to life and their right to guard it as enshrined in Article 21 of the Constitution were sought to be gagged by the Act.
Shri Garg tried to submit that this was an enabling Act only but not an Act which deprived the victims of their right to sue.
He submitted that in this Act, there is denial of natural justice both in the institution under section 3 and in the conduct of the suit under section 4.
It must be seen that justice is done to all (R. Viswanathan vs Rukh ul Mulk Syed Abdul Wajid, ; It was urged that it was necessary to give a reasona ble notice to the parties.
He referred to M. Narayanan Nambiar vs State of Kerala, [1963] Supp.
2 SCR 724.
Shri Shanti Bhushan appearing for Bhopal Gas Peedit Mahila Udyog Sangathan submitted that if the Act is to be upheld, it has to be read down and construed in the manner urged by him.
It was submitted that when the Bhopal Gas disaster took place, which was the worst industrial disaster in the world which resulted in the deaths 654 of several thousands of people and caused serious injuries to lakhs others, there arose a right to the victims to get not merely damages under the law of the torts but also arose clearly, by virtue of right to life guaranteed as fundamen tal right by Article 21 of the Constitution a right to get full protection of life and limb.
This fundamental right also, according to Shri Shanti Bhushan, embodied within itself a right to have the claim adjudicated by the estab lished courts of law.
It is well settled that right of access to courts in respect of violation of their fundamen tal rights itself is a fundamental right which cannot be denied to the people.
Shri Shanti Bhushan submitted that there may be some justification for the Act being passed.
He said that the claim against the Union Carbide are covered by the Act.
The claims of the victims against the Central Government or any other party who is also liable under tort to the victims is not covered by the Act.
The second point that Shri Shanti Bhushan made was that the Act so far as it empowered the Central Government to represent and act in place of the victims is in respect of the civil liability arising out of disaster and not in respect of any right in respect of criminal liability.
The Central Govt., according to Shri Shanti Bhushan, cannot have any right or authority in relation to any offences which arose out of the disaster and which resulted in criminal liability.
It was submitted that there cannot be any settlement or compromise in rela tion to non compoundable criminal cases and in respect of compoundable criminal cases the legal right to compound these could only be possessed by the victims alone and the Central Government could not compound those offences on their behalf.
It was submitted by Shri Shanti Bhushan that even this Court has no jurisdiction whatsoever to transfer any criminal proceedings to itself either under any provi sion of the Constitution or under any provision of the Criminal Procedure Code or under any other provision of law and, therefore, if the settlement in question was to be treated not as a compromise but as an order of the Court, it would be without jurisdiction and liable to be declared so on the principles laid down, according to Shri Bhushan, by this Court in Antulay 's case (supra).
Shri Shanti Bhushan submitted that even if under the Act, the Central Government is considered to be able to represent the victims and to pursue the litigation on their behalf and even to enter into compromise on their behalf, it would be a gross violation of the constitutional rights of the victims to enter into a settlement with the Union Carbide without giving the victims opportunities to express their views about the fairness or adequacy of the settlement before any court could permit such a settlement to be made.
Mr. Shanti Bhushan submitted that the suit which may be 655 brought by the Central Government against Union Carbide under section 3 of the Act would be a suit of the kind contemplated by the Explanation to Order 23, rule 3 of the Code of Civil Procedure since the victims are not parties and yet the decree obtained in the suit would bind them.
It was, therefore, urged by Shri Shanti Bhushan that the provi sions of Section 3(1) of the Act merely empowers the Central Government to enter into a compromise but did not lay down the procedure which was to be followed for entering into any compromise.
Therefore, there is nothing which is inconsist ent with the provisions of Order 23 Rule 3 B of the CPC to which the provisions Section 11 of the Act be applied.
If, however, by any stretch of argument the provisions of the Act could be construed so as to override the provisions of Order 23 Rule 3 B CPC, it was urged, the same would render the provisions of the Act violative of the victims ' funda mental rights and the actions would be rendered unconstitu tional.
If it empowered the Central Government to compromise the victims ' rights, without even having to apply the prin ciples of natural justice, then it would be unconstitutional and as such bad.
Mr. Shanti Bhushan, Ms. Jaising and Mr. Garg submitted that these procedures must be construed in accordance with the provisions contained in Order 23 Rule 3 B CPC and an opportunity must be given to those whose claims are being compromised to show to the court that the compromise is not fair and should not accordingly be permit ted by the court.
Such a hearing in terms, according to counsel, of Order 23 Rule 3 B CPC has to be before the compromise is entered into.
It was then submitted that section 3 of the Act only empowers the Central Government to represent and act in place of the victims and to institute suits on behalf of the victims or even to enter into compro mise on behalf of the victims.
The Act does not create new causes of action create special courts.
The jurisdiction of the civil court to entertain suit would still arise out of section 9 of the CPC and the substantive cause of action and the nature of the reliefs available would also continue to remain unchanged.
The only difference produced by the provisions of the Act would be that instead of the suit being filed by the victims themselves the suit would be filed by the Central Government on their behalf.
Shri Shanti Bhushan then argued that the cause of action of each victim is separate and entitled him to bring a suit for separate amount according to the damages suffered by him.
He submitted that even where the Central Government was empowered to file suits on behalf of all the victims it could only ask for a decree of the same kind as could have been asked for by the victims themselves, namely, a 656 decree awarding various specified amounts to different victims whose names had to be disclosed.
According to Shri Shanti Bhushan, even if all the details were not available at the time when the suit was filed, the details of the victims ' damages had to be procured and specified in the plaint before a proper decree could be passed in the suit.
even if the subject matter of the suit had to be compromised between the Central Government and the Union Carbide the compromise had to indicate as to what amount would be pay able to each victim, in addition to the total amount which was payable by Union Carbide, submitted Shri Shanti Bhushan.
It was submitted that there was nothing in the Act which permitted the Central Government to enter into any general compromise with Union Carbide providing for the lumpsum amount without disclosure as to how much amount is payable to each victim.
If the Act in question had not been enacted, the victims would have been entitled to not only sue Union Carbide themselves but also to enter into any compromise or settlement of their claims with the Union Carbide immediate ly.
The provisions of the Act, according to Mr. Shanti Bhushan, deprive the victims of their legal right and such deprivation of their rights and creation of a corresponding right in the Central Government can be treated as reasonable only if the deprivation of their rights imposed a corre sponding liability on the Central Government to continue to pay such interim relief to the victims as they might be entitled to till the time that the Central Government is able to obtain the whole amount of compensation from the Union Carbide.
He submitted that the deprivation of the right of the victims to sue for their claims and denial of access to justice and to assert their claims and the substi tution of the Central Government to carry on the litigation for or on their behalf can only be justified, if and only if the Central Government is enjoined to provide for such interim relief or continue to provide in the words of Judge Keenan, as a matter of fundamental human decency, such interim relief, necessary to enable the victims to fight the battle.
Counsel submitted that the Act must be so read.
Shri Shanti Bhushan urged that if the Act is construed in such a manner that it did not create such an obligation on the Central Government, the Act cannot be upheld as a reasonable provision when it deprived the victims of their normal legal rights of immediately obtaining compensation from Union Carbide.
He referred to section 10(b) of the Act and clause 10 and 11(1) of the Scheme to show that the legislative policy underlying the Bhopal Act clearly contemplated pay ment of interim relief to the victims from time to time till such time as the Central Government was able to recover from Union Carbide 657 full amount of compensation from which the interim reliefs paid by the Central Government were to be deducted from the amount payable to them by way of final disbursal of the amounts recovered.
The settlement is bad, according to Shri Shanti Bhushan if part of the bargain was giving up of the criminal liability against UCIL and UCC.
Shri Shanti Bhushan submit ted that this Court should not hesitate to declare that the settlement is bad because the fight will go on and the victims should be provided reliefs and interim compensation by the Central Government to be reimbursed ultimately from the amount to be realised by the Central Government.
This obligation was over and above the liability of the Central Government as a joint tort feasor, according to Shri Shanti Bhushan.
Shri Kailash Vasdev, appearing for the petitioners in Writ Petition No. 155 1/86 submitted that the Act dis placed the claimants in the matter of their right to seek redressal and remedies of the actual injury and harm caused individually to the claimants.
The Act in question by re placing the Central Government in place of the victims.
by conferment of exclusive right to sue in place of victims, according to him, contravened the procedure established by law.
The right to sue for the wrong done to an individual was exclusive to the individual.
It was submitted that under the civil law of the country, individuals have rights to enforce their claims and any deprivation would place them into a different category from the other litigants.
The right to enter into compromise, it was further submitted, without consultation of the victims, if that is the con struction of section 3 read with section 4 of the Act, then it is violative of procedure established by law.
The proce dure substituted, if that be the construction of the Act, would be in violation of the principles of natural justice and as such bad.
It was submitted that the concept of 'parens patriae ' would not be applicable in these cases.
It was submitted that traditionally, sovereigns can sue under the doctrine of 'parens patriae ' only for violations of their "quasi sovereign" interests.
Such interests do not include the claims of individual citizens.
It was submitted that the Act in question is different from the concept of parens patriae because there was no special need to be satisfied and a class action, according to Shri Vasdev, would have served the same purpose as a suit brought under the statute and ought to have been preferred because it safeguarded claimants ' right to procedural due process.
In addition, a suit brought under the statute would threaten the victims ' substantive due process rights.
It was further submitted that in order to sustain an action, it was neces sary for the Government of India to have standing 658 62.
Counsel submitted that 'parens patriae ' has received no judicial recognition in this country as a basis for recovery of money damages for injuries suffered by individu als.
He may be right to that extent but the doctrine of parens patriae has been used in India in varying contexts and contingencies.
We are of the opinion that the Act in question was passed in recognition of the right of the sovereign to act as parens patriae as contended by the learned Attorney General.
The Government of India in order to effectively safeguard the rights of the victims in the matter of the conduct of the case was entitled to act as parens patriae, which position was reinforced by the statutory provisions, namely, the Act.
We have noted the several decisions re ferred to hereinbefore, namely, Bhudhkaran Chankhani vs Thakur Prasad Shad, (supra); Banku Behary Mondal vs Banku Behari Hazra, (supra); Medai Dalavoi T. Kumaraswami Mudaliar vs Medai Dalavai Rajammal, (supra) and to the decision of this Court in Mahant Ram Saroop Dasji vs S.P. Sahi, (supra) and the decision of the American Supreme Court in Alfred Schnapp vs Puerto Rico, (supra).
It has to be borne in mind that conceptually and jurisprudentially, the doctrine of parens patriae is not limited to representation of some of the victims outside the territories of the country.
It is true that the doctrine has been so utilised in America so far.
In our opinion, learned Attorney General was right in contending that where citizens of a country are victims of a tragedy because of the negligence of any multinational, a peculiar situation arises which calls for suitable effective machinery to articulate and effectuate the grievances and demands of the victims, for which the conventional adversary system would be totally inadequate.
The State in discharge of its sovereign obligation must come forward.
The Indian state because of its constitutional commitment is obliged to take upon itself the claims of the victims and to protect them in their hour of need.
Learned Attorney General was also right in submitting that the decisions of the Calcutta, Madras and U.S. Supreme Court clearly indicate that parens patriae doctrine can be invoked by sovereign state within India, even if it be contended that it has not so far been invoked inside India in respect of claims for damages of victims suffered at the hands of the multinational.
In our opinion, conceptually and jurisprudentially, there is no bar on the State to assume responsibilities analogous to parens patriae to discharge the State 's obligations under the Constitution.
What the Central Government has done in the instant case seems to us to be an expression of its sover eign power.
This power is plenary and inherent in every sovereign state to do all things which promote the health, peace, 659 morals, education and good order of the people and tend to increase the wealth and prosperity of the state.
Sovereignty is difficult to define.
See in this connection, Weaver on Constitional Law, p. 490.
By the nature of things, the state sovereignty in these matters cannot be limited.
It has to be adjusted to the conditions touching the common welfare when covered by legislative enactments.
This power is to the public what the law of necessity is to the individual.
It is comprehended in the maxim salus populi suprema lex regard for public welfare is the highest law.
It is not a rule, it is an evolution.
This power has always been as broad as public welfare and as strong as the arm of the state, this can only be measured by the legislative will of the people, subject to the fundamental rights and constitutional limita tions.
This is an emanation of sovereignty subject to as aforesaid.
Indeed, it is the obligation of the State to assume such responsibility and protect its citizens.
It has to be borne in mind, as was stressed by the learned Attorney General, that conferment of power and the manner of its exercise are two different matters.
It was submitted that the power to conduct the suit and to compromise, if neces sary, was vested in the Central Government for the purpose of the Act.
The power to compromise and to conduct the proceedings are not uncanalised or arbitrary.
These were clearly exercisable only in the ultimate interests of the victims.
The possibility of abuse of a statute does not impart to it any element of invalidity.
In this connection, the observations of Viscount Simonds in Belfast Corporation vs O.D. Commission, at 520 21 are relevant where it was emphasised that validity of a measure is not be determined by its application to particular cases.
This Court in Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825 emphasised that the consti tutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed.
It has to be borne in mind that if upon so judged it passes the test of reasona bleness, then the possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid.
See in this connection also the observations in P.J. Irani vs State of Madras, ; at 178 to 181 and D.K. Trivedi vs State of Gujarat, [1986] Supp.
SCC 20 at 60 61 64.
Sections 3 and 4 of the Act should be read together as contended by the learned Attorney General, along with other provisions of the Act and in particular sections 9 and 11 of the Act.
These should be appreciated in the context of the object sought to be achieved by the Act as indicated in the Statement of Objects and Reasons and the Preamble to the Act.
The Act was so designed that the victims of the 660 disaster are fully protected and the claims of compensation or damages for loss of life or personal injuries or in ' respect of other matters arising out of or connected with the disaster are processed speedily, effectively, equitably and to the best advantage of the claimants.
Section 3 of the Act is subject to other provisions of the Act which includes sections 4 and 11.
Section 4 of the Act opens with non obstante clause, vis a vis, section 3 and therefore, over rides section 3.
Learned Attorney General submitted that the right of the Central Government under section 3 of the Act was to represent the victims exclusively and act in the place of the victims.
The Central Government, it was urged, in other words, is substituted in the place of 'the victims and is the dominus litis.
Learned Attorney General submitted that the dominus litis carries with it the right to conduct the suit in the best manner as it deems fit, including, the right to withdraw and right to enter into compromise.
The right to withdraw and the right to compromise conferred by section 3(2) of the Act cannot be exercised to defeat the rights of the victims.
As to how the rights should be exer cised is guided by the objects and the reasons contained in the Preamble, namely, to speedily and effectively process the claims of the victims and to protect their claims.
The Act was passed replacing the Ordinance at a time when many private plaintiffs had instituted complaints/suits in the American Courts.
In such a situation, the Government of India acting in place of the victims necessarily should have right under the statute to act in all situations including the position of withdrawing the suit or to enter into com promise.
Learned Attorney General submitted that if the UCC were to agree to pay a lump sum amount which would be just, fair and equitable, but insists on a condition that the proceedings should be completely withdrawn, then necessarily there should be power under the Act to so withdraw.
Accord ing to him, therefore, the Act engrafted a provision empow ring the Government to compromise.
The provisions under section 3(2)(b) of the Act to enter into compromise was consistent with the powers of dominus litis.
In this connec tion, our attention was drawn to the definition of 'Dominus Litis ' in Black 's Law Dictionary, Fifth Edition, P. 437, which states as follows: " 'Dominus litis '.
The master of the suit; i.e. the person who was really and directly inter ested in the suit as a party, as distinguished from his attorney or advocate.
But the term is also applied to one who, though not originally a party, has made himself such, by interven tion or otherwise, and has assumed entire control and responsibility for one side and is treated by the Court as liable for costs.
Vir ginia Electric & Power Co, vs Bowers, ISI Va., 542, ,263".
661 65.
Learned Attorney General sought to contend that the victims had not been excluded entirely either in the conduct of proceedings or in entering into compromise, and he re ferred to the proceedings in detail emphasising the partici pation of some of the victims at some stage.
He drew our attention to the fact that the victims had filed separate consolidated complaints in addition to the complaint filed by the Government of India.
Judge Keenan of the Distt.
Court of America had passed orders permitting the victims to be represented not only 'by the private Attorneys but also by the Govt.
of India.
Hence, it was submitted that it could not be contended that the victims had been excluded.
Learned Attorney General further contended that pursuant to the orders passed by Judge Keenan imposing certain conditions against the Union Carbide and allowing the motion for forum non convenience of the UCC that the suit came back to India and was instituted before the Distt.
Court of Bhopal.
In those circumstances, it was urged by the learned Attorney General that the private plaintiffs who went to America and who were represented by the contingency lawyers fully knew that they could also have joined in the said suit as they were before the American Court along with the Govt.
of India.
It was contended that in the proceedings at any point of time or stage including when the compromise was entered into, these private plaintiffs could have participated in the court proceedings and could have made their representa tion, if they so desired.
Even in the Indian suits, these private parties have been permitted to continue as parties represented by separate counsel even though the Act empowers the Union to be the sole plaintiff.
Learned Attorney General submitted that Section 4 of the Act clearly enabled the victims to exercise their right of participation in the proceedings.
The Central Govt. was enjoined to have due regard to any matter which such person might require to be urged.
Indeed, the learned Attorney General urged very strenuously that in the instant case, Zehreeli Gas Kand Sangharsh Morcha and Jana Swasthya Kendra (Bhopal) had filed before the Distt.
Judge, Bhopal, an application under Order I Rule 8 read with Order I Rule 10 and Section 15 1 of the CPC for their intervention on behalf of the victims.
They had participated in the hearing before the learned Distt.
Judge, who referred to their intervention in the order.
It was further emphasised that when the UCC went up in revision to the High Court of Madhya Pradesh at Jabalpur against the interim compensation ordered to be paid by the Distt.
Court, the intervener through its Advocate, Mr. Vibhuti Jha had participated in the proceedings.
The aforesaid Association had also intervened in the civil appeals preferred pursuant to the special leave granted by this Court to the Union of India and Union Carbide against the judgment of the 662 High Court for interim compensation.
In those circumstances, it was submitted that there did not exist any other gas victim intervening in the proceedings, claiming participa tion under Section 4.
Hence, the right to compromise provid ed for by the Act, could not be held to be violative of the principles of natural justice.
According to the learned Attorney General, this Court first proposed the order to counsel in court and after they agreed thereto, dictated the order on 14th February, 1989.
On 15th February, 1989 after the Memorandum of Settlement was filed pursuant to the orders of the court, further orders were passed.
The said Association, namely, Zehreeli Gas Kand Sangharsh Morcha was present, according to the records, in the Court on both the dates and did not apparently object to the compromise.
Mr. Charanlal Sahu, one of the petitioners in the writ petition, had watched the proceedings and after the Court had passed the order on 15th February, 1989 mentioned that he had filed a suit for Rs. 100 crores.
Learned Attorney General submit ted that Mr. Sahu neither protested against the settlement nor did he make any prayer to be heard.
Shri Charan Lal Sahu, in the petition of opposition in one of these matters have prayed that a sum of Rs. 100 million should be paid over to him for himself as well as on behalf of those vic tims whom he claimed to represent.
In the aforesaid back ground on the construction of the Section, it was urged by the learned Attorney General that Section 3 of the Act cannot be held to be unconstitutional.
The same provided a just, fair and reasonable procedure and enabled the victims to participate in the proceedings at all stages those who were capable and willing to do so.
Our attention was drawn to the fact that Section 11 of the Act provides that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other enactment other than the Act.
It was, therefore, urged that the provisions of the Civil Procedure Code stood overridden in respect of the areas covered by the Act, namely, (a) representation, (b) powers of representation; and (c) com promise.
According to the learned Attorney General, the Act did not violate the principles of natural justice.
The provisions of the CPC could not be read into the Act for Section 11 of the Act provides that the application of the provision of the Civil Procedure Code in so far as those were inconsistent with the Act should be construed as over ridden in respect of areas covered by it.
Furthermore, inasmuch as Section 4 had given a qualified right of partic ipation to the victims, there cannot be any question of violation of the principles of natural justice.
The scope of the application of the principles of natural justice cannot be judged by any strait jacket formula.
According to him, the 663 extension of the principles of natural justice beyond what is provided by the Act in Sections 3 & 4, was unwarranted and would deprive the provisions of the Statute of their efficacy in relation to the achievement of 'speedy relief ', which is the object intended to be achieved.
He emphasised that the process of notice, consultation and exchange of information, informed decision making process, the modali ties of assessing a consensus of opinion would involve such time that the Govt. would be totally unable to act in the matter efficiently, effectively and purposefully on behalf of the victims for realisation of the just dues of the victims.
He further urged that the Civil Procedure Code before its amendment in 1976 did not have the provisions of Order l Rules 8(4), (5) & (6) and Explanations etc.
nor Order XXIII Rules 3A and 3B.
Before the amendment the High Court had taken a view against the requirement of hearing the parties represented in the suit under Order 1, Rule 8 before it before settling or disposing of the suit.
Our attention was drawn to the decision of the Calcutta High Court in Chintaharan Ghose & Ors.
vs Gujaraddi Sheik & Ors., AIR 1951 Cal.
456 at 457 459, wherein it was held by the learned Single Judge that the plaintiff in a representative suit had right to compromise subject to the conditions that the suit was properly filed in terms of the provisions of that Rule and the settlement was agreed bona fide.
Learned Attorney General in that context contended that when the suit was validly instituted, the plaintiff had a right to compromise the suit and there need not be any provision for notice to the parties represented before entering into any compromise.
Reliance was placed on the decision of the Allahabad High Court in Ram Sarup vs Nanak Ram, AIR 1952 Allahabad 275, where it was held that a compromise entered into in a suit filed under Order 1 Rule 8 of the CPC was binding on all persons as the plaintiffs who had instituted the suit in representative capacity had the authority to compromise.
He further submitted that most, if not all, of the victims had given their powers of attorney which were duly filed in favour of the Union of India.
These powers or attorney have neither been impeached nor revoked or with drawn.
By virtue of the powers of attorney the Union of India, it was stated, had the authority to file the suits and to compromise the interests of the victims if so re quired.
The Act in question itself contemplates settlement as we have noted, and a settlement would need a common spokesman.
It was submitted that the Govt.
of India as the statutory representative discharged its duty and is in a centralised position of assessing the merits and demerits of any proposed course of action.
So far as the act of compro mise, abridging or curtailing the ambit of the 664 rights of the victims, it was submitted that in respect of liabilities of UCC & UCIL, be it corporate, criminal or tortious, it was open to an individual to take a decision of enforcing the liability to its logical extent or stopping short of it and acceding to a compromise.
Just as an indi vidual can make an election in the matter of adjudication of liability so can a statutory representative make an elec tion.
Therefore, it is wholly wrong to contend, it was urged, that Section 3(ii)(b) is inconsistent with individu al 's right of election and at the same time it provides the centralised decision making processes to effectively adjudge and secure the common good.
It was only a central agency like the Govt.
of India, who could have a perspective of the totality of the claims and a vision of the problems of individual plaintiffs in enforcing these, it was urged.
It was emphasised that it has to be borne in mind that a com promise is a legal act.
In the present case, it is a part of the conduct of the suit.
It is, therefore, imperative that the choice of compromise is made carefully, cautiously and with a measure of discretion, it was submitted.
But if any claimant wished to be associated with the conduct of the suit, he would necessarily have been afforded an opportunity for that purpose, according to the learned Attorney General.
In this connection, reference was made to Section 4 of the Act.
On the other hand, an individual who did not partici pate in the conduct of the suit and who is unaware of the various intricacies of the case, could hardly be expected to meaningfully partake in the legal act of settlement either in conducting the proceedings or entering into compromise, it was urged.
In those circumstances, the learned Attorney General submitted that the orders of 14 15th February, 1989 and the Memorandum of Settlement were justified both under the Act and the Constitution.
According to him, the terms of Settlement might be envisaged as pursuant to Section 3(ii)(b) of the Act, which was filed according to him pursu ant to judical direction.
He sought more than once to empha sise, that the order was passed by the highest Court of the land in exercise of extraordinary jurisdiction vested in it under the Constitution.
Our attention was drawn to several decisions for the power of this Court under Articles 136 and 142 of the Con stitution.
Looked closely at the provisions of the Act, it was contended that taking into consideration all the factors, namely, possibilities of champerty, exploita tion, unconscionable agreements and the need to represent the dead and the disabled, the course of events would reveal a methodical and systematic protection and vindication of rights to the largest possible extent.
It was observed that the rights are indispensably valuable possessions, but the rights is something which a 665 man can stand on, something which must be demanded or in sisted upon without embarrassment or shame.
When rights are curtailed, permissibility of such a measure can be examined only upon the strength, urgency and the preeminence of rights and the largest good of the largest number sought to b,e served by curtailment.
Under the circumstances which were faced by the victims of Bhopal gas tragedy, the justi fying basis, according to the learned Attorney General, or ground of human rights is that every person morally ought to have something to which he or she is entitled.
It was empha sised that the Statute aimed at it.
The Act provides for assumption of rights to sue with the aim of securing speedy, effective and equitable results to the best advantage of the claimants.
The Act and the scheme, according to the learned Attorney General, sought to translate that profession into a system of faith and possible association when in doubt.
Unless such a profession is shown to be unconscionable under the circumstances or strikes judicial conscience as a sub version of the objects of the Act, a declaredly fair, just and equitable exercise of a valid power would not be open to challenge.
He disputed the submission that the right to represent victims postulated as contended mainly by the counsel on behalf of the petitioners, a pre determination of each individual claim as a sine qua non for proceeding with the action.
Such a construction would deplete the case of its vigour, urgency and sense of purpose, he urged.
In this case, with the first of the cases having been filed in U.S. Federal Court on December 7, 1984 a settlement would have been reached for a much smaller sum to the detriment of the victims.
Learned Attorney General emphasised that this background has to be kept in mind while adjudging the valid ity of the Act and the appropriateness of the conduct of the suit in the settlement entered into.
He submitted that it has to be borne in mind that if the contentions of the petitioners are entertained, the rights theoretically might be upheld but the ends of justice would stand sacrificed.
It is in those circumstances that it was emphasised that the claimant is an individual and is the best person to speak about his injury.
The knowledge in relation to his injury is relevant for the purpose of com pensation, whose distribution and disbursement is the sec ondary stage.
It is fallacious to suggest that the plaint was not based upon necessary data.
He insisted that the figures mentioned in the plaint although tentative were not mentioned without examination or analysis.
It was further submitted by the learned Attorney General 666 that while the Govt.
of India had proceeded against the UCC, it had to represent the victims as a class and it was not possible to define each individual 's right after careful scrutiny, nor was it necessary or possible to do so in a mass disaster case.
The settlement was a substitute for adjudication since it involved a process of reparation and relief.
The relief and reparation cannot be said to be irrelevant for the purpose of the Act.
It was stated that the alleged liability of the Govt.
of India or any claim asserted against the alleged joint tort feasor should not be allowed to be a constraint on the Govt.
of India to protect the interests of its own citizens.
Any counter claim by UCC or any claim by a citizen against the Govt.
cannot vitiate the action of the State in the collective interest of the victims, who are the citizens.
Learned Attorney General submitted that any industrial activity, normally, has to be licensed.
The mere regulation of any activity does not carry with it legally a presumption of liability for injury caused by the activity in the event of a mishap occurring in the course of such an activity.
In any event, the learned Attor ney General submitted the Govt.
of India enjoys sovereign immunity in accordance with settled law.
If this were not the case, the Sovereign will have to abandon all regulatory functions including the licensing of drivers of automobiles.
Hence, we have to examine the question whether even on the assumption that there was negligence on the part of the Govt.
of India in permitting/licensing of the industry set up by the Union Carbide in Bhopal or permitting the factory to grow up, such permission or conduct of the Union of India was responsible for the damage which has been suffered as a result of Bhopal gas leakage.
It is further to be examined whether such conduct was in discharge of the sovereign functions of the Govt., and as such damages, if any, result ing therefrom are liable to be proceeded against the Govt.
as a joint tort feasor or not.
In those circumstances, it was further asserted on behalf of the Union of India that though calculation of damages in a precise manner is a logical consequence of a suit in progress it cannot be said to be a condition precedent for the purpose of settling the matter.
Learned Attorney General urged that the accountabil ity to the victims should be through the court.
He urged that the allegation that a large number of victims did not give consent to the settlement entered into, is really of no relevance in the matter of a compromise in a mass tort action.
It was highlighted that it is possible that those who do not need urgent relief or are uninformed of the issues in the case, may choose to deny consent and may place the flow of relief in jeopardy.
Thus, consent based upon individual subjective opinion can never be correlated to the proposal of an overall settlement in an urgent matter.
Learned Attorney General urged further that if indeed con sent were to be insisted upon as a mandatory 667 requirement of a Statute, it would not necessarily lead to an accurate reflection of the victims ' opinion as opinions may be diverse.
No individual would be in a position to relate himself to a lump sum figure and would not be able to define his expectations on a global criteria.
In such cir cumstances the value of consent is very much diminished.
It was urged that if at all consent was to be insisted it should not be an expression of the mind without supporting information and response.
To make consent meaningful it is necessary that it must be assertion of a fight to be exer cised in a meaningful manner based on information and com prehension of collective welfare and individual good.
In a matter of such dimensions the insistence upon consent will lead to a process of enquiry which might make effective consideration of any proposal impossible.
For the purpose of affording consent, it would also be necessary that each individual not only assesses the damages to himself objec tively and places his opinion in the realm of fair expecta tion, but would also have to do so in respect of others.
The learned Attorney General advanced various reasons why it is difficult now or impossible to have the concurrence of all.
In answer to the criticism by the petitioners, it was explained on behalf of the Union of India that UCIL was not impleaded as a party in the suit because it would have militated against the plea of multinational enterprise liability and the entire theory of the case in the plaint.
It was highlighted that the power to represent under the Act was exclusive, the power to compromise for the Govt.
of India is without reference to the victims, yet it is a power guided by the sole object of the welfare of the victims.
The presence and ultimately the careful imprimatur of the judi cial process is the best safeguard to the victims.
Learned Attorney General insisted that hearing the parties after the settlement would also not serve any purpose.
He urged that it can never be ascertained with certainty whether the victims or groups have authorised what was being allegedly spoken on their behalf; and that the victims would be unable to judge a proposal of this nature.
A method of consensus need not be evolved like in America where every settlement made by contingency fee lawyers who are anxious to obtain their share automatically become adversaries of the victims and the court should therefore be satisfied.
Here the Court arrived at the figure and directed the parties to file a settlement on the basis of its order of February 14, 1985 and the interveners were heard, it was urged.
It was also urged that notice to the victims individually would have been a difficult exercise and analysis of their response time consuming.
668 72.
The learned Attorney General urged that neither the Central Govt.
nor the State Govt.
of Madhya Pradesh is liable for the claim of the victims.
He asserted that, on the facts of the present case, there is and can be no li ability on their part as joint tort feasors.
For the welfare of the community several socio economic activities will have to be permitted by the Govt.
Many of these activities may have to be regulated by licensing provisions contained in Statutes made either by Parliament or by State Legislatures.
Any injury caused to a person, to his life or liberty in the conduct of a licensed authority so as to make the said licensing authority or the Govt.
liable to damages would not be in conformity with jurisprudential principle.
If in such circumstances it was urged on behalf of the Govt.
, the public exchequer is made liable, it will cause great public injury and may result in drainage of the treasury.
It would terrorise the welfare state from acting for development of the people, and will affect the sovereign governmental activities which are beneficial to the community not being adequately licensed and would thereby lead to public injury.
In any event, it was urged on behalf of the Govt., that such licensing authorities even assuming without admitting could be held to be liable as joint tort feasors, it could be so held only on adequate allegations of negligence with full particulars and details of the alleged act or omission of the licensing authority alleged and its direct nexus to the injury caused to the victims.
It had to be proved by cogent and adequate evidence.
On some conjecture or surmise without any foundation on facts, Govt 's right to represent the victims cannot be challenged.
It was asserted that even if the Govt.
is considered to be liable as a joint tort feasor, it will be entitled to claim sovereign immunity on the law as it now stands.
Reference was made to the decision of this Court in Kasturilal Kalia Ram Jain vs The State of U.P., ; where the conduct of some police officers in seizing gold in exercise of their statutory powers was held to be in discharge of the sovereign functions of the State and such activities enjoyed sovereign immunities.
The liability of the Govt.
of India under the Constitution has to be referred to Article 300, which takes us to Sections 15 & 18 of the Indian Independence Act, 1947, and Section 176(1) of the Govt.
of India Act, 1935.
Reference was also made to the observations of this Court in The State of Rajasthan vs Mst.
Vidhyawati, & Anr., [1962] 2 Supp.
SCR 989.
We have noted the shareholding of UCC.
The circum stances that financial institutions held shares in the UCIL would not disqualify 669 the Govt.
of India from acting as patens patriae and in discharging of its statutory duties under the Act.
The suit was filed only against the UCC and not against UCIL.
On the basis of the claim made by the Govt.
of India, UCIL was not a necessary party.
It was suing only the multinational based on several legal grounds of liability of the UCC, inter alia.
on the basis of enterprise liability.
If the Govt.
of India had instituted a suit against UCIL to a certain extent it would have weakened its case against UCC in view of the judgment of this Court in M.C. Mehta 's case (supra).
Accord ing to learned Attorney General, the Union of India in the present case was not proceeding on the basis of lesser liability of UCC predicated in Mehta 's case but on a differ ent jurisprudential principle to make UCC strictly and absolutely liable for the entire damages.
The learned Attorney General submitted that even assuming for the purpose of argument without conceding that any objection can be raised for the Govt.
of India repre senting the victims, to the present situation the doctrine of necessity applied.
The UCC had to be sued before the American courts.
The tragedy was treated as a national calamity, and the Govt.
of India had the right, and indeed the duty, to take care of its citizens, in the exercise of its parens patriae jurisdiction or on principle analogous thereto.
After having statutorily armed itself in recogni tion of such parens patraie right or on principles analogous thereto, it went to the American courts.
No other person was properly designed for representing the victims as a foreign court had to recognise a right of representation.
The Govt.
of India was permitted to represent the victims before the American courts.
Private plaintiffs were also represented by their attorneys.
A Committee of three attorneys was formed before the case proceeded before Judge Keenan.
It was high lighted that the order of Judge Keenan permitted the Govt.
of India to represent the victims.
If there was any remote conflict of interests between the Union of India and the victims from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice that no man should be Judge in his own case.
Reference may be made to Halsbury 's Laws of England, Vol. 1, 4th Edn., page 89, para 73, where it was pointed that that if all the members of the only tribunal competent to determine a matter are subject to disqualifica tion, they may be authorised and obliged to hear that matter by virtue of the operation of the common law doctrine of necessity.
Reference was also made to De Smith 's Judicial Review of Administrative Action (4th Edn.
pages 276 277.
See also G.A. Flick Natural Justice, [1879] pages 138 141.
Reference was also made to the observations of this Court in J. Mohapatra & Co. 670 & Anr.
vs State of Orissa & Anr.
, ; , where at page 112 of the report, the Court recognised 'the principle of necessity.
It was submitted that these were situations where on the principle of doctrine of necessity a person interested was held not disqualified to adjudicate on his rights.
The present is a case where the Govt.
of India only represented the victims as a party and did not adjudicate between the victims and the UCC.
It is the Court which would adjudicate the rights of the victims.
The representation of the victims by the Govt.
of India cannot be held to be bad, and there is and there was no scope of violation of any principle of natural justice.
We are of the opinion in the facts and the circumstances of the case that this contention urged by Union of India is right.
There was no scope of violation of the principle of natural justice on this score.
It was also urged that the doctrine of de facto representation will also apply to the facts and the circum stances of the present case.
Reliance was placed on the decision of this Court in Gokaraju Rangaraju etc.
vs State of A.P.; , , where it was held that the doc trine of de facto representation envisages that acts per formed within the scope of assumed official authority in the interest of public or third persons and not for one 's own benefit, are generally to be treated as binding as if they were the acts of officers de jure.
This doctrine is rounded on good sense, sound policy and practical expediency.
It is aimed at the prevention of public and private mischief and protection of public and private interest.
It avoides end less confusion and needless chaos.
Reference was made to the observations of this Court in Pushpadevi M. Jatia vs M.L. Wadhawan; , at 389 390 and M/s. Beopar Shayak (P) Ltd. & Ors.
vs Vishwa Nath & Ors., [1987] 3 SCC 693 at 702 & 703.
Apart from the aforesaid doctrine, doctrine of bona fide representation was sought to be resorted to in the circumstances.
In this connection, reference was made to Dharampal Sing, vs Director of Small Industries Services & Ors., AIR 1980 SC 1888; N.K. Mohammad Sulaiman vs N.C. Mohammad Ismail & Ors., ; and Malkarjun Bin Shigramappa Pasara vs Narhari Bin Shivappa & Anr., 27 IA 2 16. 77.
It was further submitted that the initiation of criminal proceedings and then quashing thereof, would not make the Act ultra vires so far as it concerned.
Learned Attorney General submitted that the Act only authorised the Govt.
of India to represent the victims to enforce their claims for damages under the Act.
The Govt.
as such had nothing to do with the quashing of the criminal proceedings and it was not representing the victims in respect of the criminal liability of 671 the UCC or UCIL to the victims.
He further submitted that quashing of criminal proceedings was done by the Court in exercise of plenary powers under Articles 136 and 142 of the Constitution.
In this connection, reference was made to State of U.P. vs Poosu & Anr., ; ; K.M. Nanavati vs The State of Bombay, ; According to the learned Attorney General, there is also power in the Supreme Court to suggest a settlement and give relief as in Ram Gopal vs Smt.
Sarubai & Ors., ; India Mica & Micanite Industries Ltd. vs State of Bihar & Ors., 78.
Learned Attorney General urged that the Supreme Court is empowered to act even outside a Statute and give relief in addition to what is contemplated by the latter in exercise of its plenary power.
This Court acts not only as a Court of Appeal but is also a Court of Equity.
See Roshanlal Kuthiala & Ors.
vs R.B. Mohan Singh Oberoi, 1.
During the course of heating of the petitions, he in formed this Court that the Govt.
of India and the State Govt.
of Madhya Pradesh refuted and denied any liability, partial or total, of any sort in the Bhopal gas Leak disas ter, and this position is supported by the present state of law.
It was, however, submitted that any claim against the Govt.
of India for its alleged tortious liability was out side the purview of the Act and such claims, if any, are not extinguished by reason of the orders dated 14th & 15th February, 1989 of this Court.
Learned Attorney General further stated that the amount of $ 470 million which was secured as a result of the memorandum of settlement and the said orders of this Court would be meant exclusively for the benefit of the victims who have suffered on account of the Bhopal gas leak disas ter.
The Govt.
of India would not seek any reimbursement on account of the expenditure incurred suo motu for relief and rehabilitation of the Bhopal victims nor will the Govt.
or its instrumentality make any claim on its own arising from this disaster.
He further assured this Court that in the event of disbursement of compensation being initiated either under the Act or under the orders of this Court, a notifica tion would be instantaneously issued under Section 5(3) of the Act authorising the Commissioner or any other officers to discharge functions and exercise all or any powers which the Central Govt.
may exercise under Section 5 to enable the victims to place before the Commissioner or the Dy.
Commis sioner any additional evidence that they would like to be considered.
The Constitution Bench of this Court presided over by the learned Chief Justice has pronounced an order on 4th May, 1989 giving 672 reasons for the orders passed on 14th 15th February, 1989.
Inasmuch as good deal of criticism was advanced before this Court during the hearing of the arguments on behalf of the petitioners about the propriety and validity of the settle ment dated 14th 15th February, 1989 even though the same was not directly in issue before us, it is necessary to refer briefly to what the Constitution Bench has stated in the said order dated 4th May, 1989.
After referring to the facts leading to the settlement, the Court has set out the brief reason on the following points: (a) How did the Court arrive at the sum of 470 million US dollars for an overall settlement? (b) Why did the Court consider the sum of 470 millions US dollars as 'just, equitable and reasonable '? (c) Why did the Court not pro nounce on certain important legal questions of far reaching importance said to arise in the appeals as to the principles of liability of monolithic, economically entrenched multina tional companies operating with inherently dangerous technologies in the developing countries of the third world? These questions were said to be of great contemporary rele vance to the democracies of the third world.
This Court recognised that there was another aspect of the review pertaining to the part of the settlement which terminated the criminal proceedings.
The questions raised on the point in the review petitions, the Court was of the view, prima facie merit consideration and therefore, abstained from saying anything which might tend to prejudge this issue one way or the other.
The basic consideration, the Court recorded, moti vating the conclusion of the settlement was the compelling need for urgent relief, and the Court set out the law 's delays duly considering that there was a compelling duty both judicial and humane, to secure immediate relief to the victims.
In doing so, the Court did not enter upon any forbidden ground, the court stated.
The Court noted that indeed efforts had already been made in this direction by Judge Keenan and the learned District Judge of Bhopal.
Even at the opening of the arguments in the appeals, the Court had suggested to learned counsel to reach a just and fair settlement.
And when counsel met for re scheduling of the hearings the suggestion was reiterated.
The Court recorded that the response of learned counsel was positive in at tempting a settlement but they expressed a certain degree of uneasiness and skepticism at the prospects of success in view of their past experience of such negotiations when, as they stated, there had been uninformed and even irresponsi ble criticism of the attempts at settlement.
673 82.
Learned Attorney General had made available to the Court the particulars of offers and counter offers made on previous occasions and the history of settlement.
In those circumstances, the Court examined the prima facie material as the basis of quantification of a sum which, having regard to all the circumstances including the prospect of delays inherent in the judicial process in India and thereafter in the matter of domestication of the decree in the U.S. for the purpose of execution and directed that 470 million US dollars, which upon immediate payment with interest over a reasonable period, pending actual distribution amongst the claimants, would aggregate to nearly 500 million US dollars or its rupee equivalent of approximately Rs.750 crores which the learned Attorney General had suggested, be made the basis of settlement, and both the parties accepted this direction.
The Court reiterated that the settlement proposals were considered on the premise that the Govt.
had the exclu sive statutory authority to represent and act on behalf of the victims and neither counsel had any reservation on this.
The order was also made on the premise that the Act was a valid law.
The Court declared that in the event the Act is declared void in the pending proceedings challenging its validity, the order dated 14th February, 1989 would require to be examined in the light of that decision.
The Court also reiterated that if any material was placed before it from which a reasonable inference was possible that the UCC had, at any time earlier, offered to pay any sum higher than an outright down payment of US 470 million dollars, this Court would straightaway initiate suo motu action requiring the concerned parties to show cause why the order dated 14th February '89 should not be set aside and the parties relegat ed to their original positions.
The Court reiterated that the reasonableness of the sum was based not only on inde pendent quantification but the idea of reasonableness for the present purpose was necessarily a broad and general estimate in the context of a settlement of the dispute and not on the basis of an accurate assessment by adjudication.
The Court stated that the question was, how good or reasona ble it was as a settlement, which would avoid delay, uncer tainties and assure immediate payment.
An estimate in the very nature of things, would not have the accuracy of an adjudication.
The Court recorded the offers, counter offers, reasons and the numbers of the persons treated and the claims already made.
The Court found that from the order of the High Court and the admitted position on the plaintiff 's side, a reasonable prima facie estimate of the number of fatal cases and serious personal injury cases, was possible to be made.
The Court referred to the High Court 's 674 assessment and procedure to examine the task of assessing the quantum of interim compensation.
The Court referred to M. C Mehta 's case reiterated by the High Court, bearing in mind the factors that if the suit proceeded to trial the plaintiff Union of India would obtain judgment in respect of the claims relating to deaths and personal injuries in the following manner: (a) Rs.2 lakhs in each case of death; (b) Rs.2 lakh in each case of total permanent disability; (c) Rs. 1 lakh in each case of permanent partial disablement; and (d) Rs.50,000 in each case of temporary partial disablement.
Half of these amounts were awarded as interim com pensation by the High Court.
The figures adopted by the High Court in regard to the number of fatal cases and cases of serious personal injuries did not appear to have been disputed by anybody before the High Court, this Court observed.
From those figures, it came to the conclusion that the total number of fatal cases was about 3,000 and of grievous and serious personal injuries, as verifiable from the records was 30,000.
This Court also took into consideration that about 8 months after the occurrence a survey had been conducted for the purpose of identification of cases.
These figures indi cated less than 10,000.
In those circumstances, as a rough and ready estimate, this Court took into consideration the prima facie findings of the High Court and estimated the number of fatal cases of 3,000 where compensation could range from Rs. 1 lakh to Rs.3 lakhs.
This would account for Rs.70 crores, nearly 3 times higher than what would have otherwise been awarded in comparable cases in motor vehicles accident claims.
The Court recognised the effect of death and reiter ated that loss of precious human lives is irreparable.
The law can only hope to compensate the estate of a person whose life was lost by the wrongful act of another only in the way the law was equipped to compensate i.e. by monetary compen sation calculated on certain well recognised principles.
"Loss to the estate" which is the entitlement of the estate and the 'loss of dependency ' estimated on the basis of capitalised present value awardable to the heirs and depend ants, this Court considered, were the main components in the computation of compensation in fatal accident actions, but the High Court adopted a higher basis.
The Court also took into account the personal injury cases, and stated that these apportionments were merely broad considerations gener ally guiding the idea of reasonableness of the overall basis of 675 settlement, and reiterated that this exercise was not a pre determination of the quantum of compensation amongst the claimants either individually or catagory wise, and that the determination of the actual quantum of compensation payable to the claimants has to be done by the authorities under the Act.
These were the broad assessments and on that basis the Court made the assessment.
The Court believed that this was a just and reasonable assessment based on the materials available at that time.
So far as the other question, name ly, the vital juristic principles of great contemporary relevance to the Third World generally, and to India in particular, touching problems emerging from the pursuit of such dangerous technologies for economic gains by multi nationals in this case, the Court recognised that these were great problems and reiterated that there was need to evolve a national policy to protect national interests from such ultra hazardous pursuits of economic gain; and that Jurists, technologists and other experts in economics.
environmen tology, futurology, sociology and public health should identify the areas of common concern and help in evolving proper criteria which might receive judicial recognition and legal sanction.
The Court reiterated that some of these problems were referred to in M.C. Mehta 's case (supra).
But in the present case, the compulsions of the need for immedi ate relief to tens of thousands of suffering victims could not wait till these questions vital though these be, were resolved in due course of judicial proceedings; and the tremendous suffering of thousands of persons compelled this Court to move into the direction of immediate relief which, this Court thought, should not be subordinated to the uncer tain promises of the law, and when the assessment of fair ness of the amount was based on certain factors and assump tions not disputed even by the plaintiffs.
Before considering the question of constitutional validity of the Act, in the light of the background of the facts and circumstances of this case and submissions made, it is necessary to refer to the order dated 3rd March, 1989 passed by the Constitution Bench in respect of writ peti tions Nos. 164/86 and 268/89, consisting of 5 learned Judges presided over by the Hon 'ble the Chief Justice of India.
The order stated that these matters would be listed on 8th March, 1989 before a Constitution Bench for decision "on the sole question whether the Bhopal Gas Leak Disaster (Process ing of Claims) Act, 1985 is ultra vires".
This is a judicial order passed by the said Constitution Bench.
This is not an administrative order.
Thus, these matters are before this Court.
The question, therefore, arises; what are these matters? The aforesaid order specifically states that these matters were placed before this Bench on the "sole question" whether the Act is ulta vires.
676 Hence, these matters are not before this Bench for disposal of these writ petitions.
If as a result of the determina tion, one way or the other, it is held, good and bad, and that some relief becomes necessary, the same cannot be given or an order cannot be passed in respect thereof, except declaring the Act or any portion of the Act, valid or in valid constitutionally as the decision might be.
In writ petition No. 268/89 there is consequential prayer to set aside the order dated 14/15th February, 1989.
But since the order dated 3rd March, 1989 above only sug gests that these matters have been placed before this Bench 'on the sole question ' whether the Bhopal Act is ultra vires or not, it is not possible by virtue of that order to go into the question whether the settlement is valid or liable to be set aside as prayed for in the prayers in these appli cations.
The provisions of the Act have been noted and the rival contentions of the parties have been set out before.
It is, however, necessary to reiterate that the Act does not in any way circumscribe the liability of the UCC, UCIL or even the Govt.
of India or Govt.
of Madhya Pradesh if they are jointly or severally liable.
This follows from the construction of the Act, from the language that is apparent.
The context and background do not indicate to the contrary.
Counsel for the victims plead that that is so.
The learned Attorney General accepts that position.
The liability of the Government is, however, disputed.
This Act also does not deal with any question of criminal liability of any of the parties concerned.
On an appropriate reading of the relevant provisions of the Act, it is apparent that the criminal liability arising out of Bhopal gas leak disaster is not the subject matter of this Act and cannot be said to have been in any way affected, abridged or modified by virtue of this Act.
This was the contention of learned counsel on behalf of the victims.
It is also the contention of the learned Attor ney General.
In our opinion, it is the correct analysis and consequence of the relevant provisions of the Act.
Hence, the submissions made on behalf of some of the victims that the Act was bad as it abridged or took away the victims ' right to proceed criminally against the delinquent, be it UCC or UCIL or jointly or severally the Govt.
of India, Govt.
of Madhya Pradesh or Mr. Arjun Singh, the erstwhile Chief Minister of Madhya Pradesh, is on a wrong basis.
There is no curtailment of any right with respect to any criminal liability.
Criminal liability is not the subject matter of the Act.
By the terms of the Act and also on the concessions made by the learned Attorney General, if that be so, then can non prosecution in criminal liability be a consideration or valid consideration for settlement of claims under the Act? 677 This is a question which has been suggested and articulated by learned counsel appearing for the victims.
On the other hand, it has been asserted by the learned Attorney General that that part of the order dated 14/15th February, 1989 dealing with criminal prosecution or the order of this Court was by virtue of the inherent power of this Court under Articles 136 & 142 of the Constitution.
These, the learned Attorney General said, were in the exercise of plenary powers of this Court.
These are not considerations which induced the parties to enter into settlement.
For the pur pose of determination of constitutional validity of the Act, it is however necessary to say that criminal liability of any of the delinquents or of the parties is not the subject matter of this Act and the Act does not deal with either claims or rights arising out of such criminal liabil ity.
This aspect is necessary to be reiterated on the ques tion of validity of the Act.
We have set out the language and the purpose of the Act, and also noted the meaning of the expression 'claim ' and find that the Act was to secure the claims connected with or arising out of the disaster so that these claims might be dealt with speedily, affectively, equitably and to the best advantage of the claimants.
In our opinion, Clause (b) of Section 2 includes all claims of the victims arising out of and connected with the disaster for compensation and damages or loss of life or personal injury or loss to the business and flora and fauna.
What, however, is the extent of liability, is another question.
This Act does not purport to or even to deal with the extent of liability arising out of the said gas leak disaster.
Hence, it would be improper or incorrect to contend as did Ms. Jaising, Mr Garg and other learned counsel appearing for the victims, that the Act circumscribed the liability criminal, punitive or absolute of the parties in respect of the leakage.
The Act provides for a method or procedure for the establishment and enforcement of that liability.
Good deal of argument was advanced before this Court on the question that the settle ment has abridged the liability and this Court has lost the chance of laying down the extent of liability arising out of disaster like the Bhopal Gas Leak disaster.
Submissions were made that we should lay down clearly the extent of liability arising out of these types of disasters and we should fur ther hold that the Act abridged such liability and as such curtailed the rights of the victims and was bad on that score.
As mentioned hereinbefore, this is an argument under a misconception.
The Act does not in any way except to the extent indicated in the relevant provisions of the Act circumscribe or abridge the extent of the rights of the victims so far as the liability of the delinquents are concerned.
Whatever are the rights of the victims and what ever claims arise out of the 678 gas leak disaster for compensation, personal injury, loss of life and property, suffered or likely to be sustained or expenses to be incurred or any other loss are covered by the Act and the Central Govt.
by operation of Section 3 of the Act has been given the exclusive right to represent the victims in their place and stead.
By the Act, the extent of liability is not in any way abridged and, therefore, if in case of any industrial disaster like the Bhopal Gas Leak disaster, there is right in victims to recover damages or compensation on the basis of absolute liability, then the same is not in any manner abridged or curtailed.
Over 120 years ago Rylands vs Fletcher, [1868] Vol.
3 LR E & I Appeal Cases 330 was decided in England.
There A, was the lessee of certain mines.
B, was the owner of a mill standing on land adjoining that under which the mines were worked.
B, desired to construct a reservoir, and employed competent persons, such as engineers and a contractor, to construct it.
A, had worked his mines up to a spot where there were certain old passages of disused mines; these passages were connected with vertical shafts which communi cated with the land above, and which had also been out of use for years, and were apparently filled with marl and the earth of the surrounding land.
No care had been taken by the engineer or the contractor to block up these crafts, and shortly after water had been introduced into the reservoir it broke through some of the shafts, flowed through the old passage and flooded As mine.
It was held by the House of Lords in England that where the owner of land, without wilfulness or negligence, uses his land in the ordinary manner of its use, though mischief should thereby be occa sioned to his neighbour, he will not be liable in damages.
But if he brings upon his land any thing which would not naturally come upon it, and which is in itself dangerous, and may become mischievous if not kept under proper control, though in so doing he may act without personal wilfulness or negligence, he will be liable in ' damages for any mischief thereby occasioned.
In the background of the facts it was held that A was entitled to recover damages from B, in respect of the injury.
The question of liability was high lighted by this Court in M.C. Mehta 's case (supra) where a Constitution Bench of this Court had to deal with the rule of strict liability.
This Court held that the rule in Ry lands vs Fletcher, (supra) laid down a principle that if a person who brings on his land and collects and keep there anything likely to do harm and such thing escapes and does damage to another, he is liable to compensate for the damage caused.
This rule applies only to nonnatural user of the land and does not apply to things naturally on the land or where the escape is due to an act of God and an act of a stranger or the default of the person injured or where the things which escape 679 are present by the consent of the person injured or in certain cases where there is a statutory authority.
There, this Court observed that the rule in Rylands vs Fletcher, (supra) evolved in the 19th century at a time when all the developments of science and technology had not taken place, and the same cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure.
In a modern industrial society with highly de veloped scientific knowledge and technology where hazardous or inherently dangerous industries are necessary to be carried on as part of the developmental process, Courts should not feel inhibited by this rule merely because the new law does not recognise the rule of strict and absolute liability in case of an enterprise engaged in hazardous and dangerous activity.
This Court noted that law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country.
Law cannot afford to remain static.
This Court reiterated there that if it is found necessary to construct a new principle of liability to deal with an unusual situa tion which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concomitant to an industrial economy, the Court should not hesitate to evolve such principle of liability merely because it has not been so done in England.
According to this Court, an enterprise which is engaged in a hazardous or inherently dangerous industry which poses potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non delegable duty to the community to ensure that no harm results to anyone.
The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results to anyone on account of an accident in the operation of such activity resulting, for instance, in escape of toxic gas the enterprise is strictly and absolute ly liable to compensate all those who were affected by the accident as part of the social cost for carrying on such activity, regardless of whether it is carried on carefully or not.
Such liability is not subject to any of the excep tions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher.
If the enterprise is permitted to carry on a hazardous or dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such activity as an appropriate item of its overheads.
The enterprise alone has the resources to discover and guard against haz ards or dangers and 'to provide warning against potential hazards.
680 This Court reiterated that the measure of compensation in these kinds of cases must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect.
The larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise.
The determination of actual damages payable would depend upon various facts and circum stances of the particular case.
It was urged before us that there was an absolute and strict liability for an enterprise which was carrying on dangerous operations with gases in this country.
It was further submitted that there was evidence on record that sufficient care and attention had not been given to safe guard against the dangers of leakage and protection in case of leakage.
Indeed, the criminal prosecution that was launched against the Chairman of Union Carbide Shri Warren Anderson and others, as indicated before, charged them along with the defendants in the suit with delinquency in these matters and criminal negligence in conducting the toxic gas operations in Bhopal.
As in the instant adjudication, this Court is not concerned with the determination of the actual extent of liability, we will proceed on the basis that the law enunciated by this Court in M.C. Mehta 's case (supra) is the decision upon the basis of which damages will be payable to the victims in this case.
But then the practical question arises: what is the extent of actual damages payable, and how would the quantum of damages be computed? Indeed, in this connection, it may be appropriate to refer to the order passed by this Court on 3rd May, 1989 giving reasons why the settlement was arrived at at the figure indicated.
This Court had reiterated that it had proceeded on certain prima facie undisputed figures of death and substantially compen sating personal injury.
This Court has referred to the fact that the High Court had proceeded on the broader principle in M.C. Mehta 's case (supra) and on the basis of the capaci ty of the enterprise because the compensation must have deterrent effect.
On that basis the High Court had proceeded to estimate the damages on the basis of Rs.2 lakhs for each case of death and of total permanent disability, Rs. 1 lakh for each case of partial permanent disability and Rs.50,000 for each case or ' temporary partial disability.
In this connection, the controversy as to what would have been the damages if the action had proceeded, is another matter.
Normally, in measuring civil liability, the law has attached more importance to the principle of compensation than that of punishment.
Penal redress, however, involve both compen sation to the person injured and punish 681 ment as deference.
These problems were highlighted by the House of Lords in England in Rookes vs Barnard, [1964]AC 1129, which indicate the difference between aggravated and exemplary damages.
Salmond on the Law of Torts, 15th Edition at p. 30 emphasises that the function of damages is compen sation rather than punishment, but punishment cannot always be ignored.
There are views which are against exemplary damages on the ground that these infringe in principle the object of law of torts, namely, compensation and not punish ment and these tend to impose something equivalent to fine in criminal law without the safeguards provided by the criminal law.
In Rookes vs Barnard (supra), the House of Lords in England recognised three classes of cases in which the award of exemplary damages was considered to be justi fiable.
Awards must not only, it is said, compensate the parties but also deter the wrong doers and others from similar conduct in future.
The question of awarding exem plary or deterrent damages is said to have often confused civil and criminal functions of law.
Though it is considered by many that it is a legitimate.
encroachment of punishment in the realm of civil liability, as it operates as a re straint on the transgression of law which is for the ulti mate benefit of the society.
Perhaps, in this case, had the action proceeded, one would have realised that the fall out of this gas disaster might have been formulation of a con cept of damages, blending both civil and criminal liabili ties.
There are, however, serious difficulties in evolving such an actual concept of punitive damages in respect of a civil action which can be integrated and enforced by the judicial process.
It would have raised serious problems of pleading, proof and discovery, and interesting and challeng ing as the task might have been, it is still very uncertain how far decision based on such a concept would have been a decision according to 'due process ' of law acceptable by international standards.
There were difficulties in that attempt.
But as the provisions stand these considerations do not make the Act constitutionally invalid.
These are matters on the validity of settlement.
The Act, as such does not abridges or curtail damages or liability whatever that might be.
So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained.
Mr. Garg tried to canvass before us the expanding of horizons of human rights.
He contended that the conduct of the multinational corporations dealing with dangerous gases for the purpose of development specially in the conditions prevailing under the Third world countries requires closer scrutiny and vigilance on the part of emerging nations.
He submitted that unless courts are alert and active 682 in preserving the rights of the individuals and in enforcing criminal and strict liability and in setting up norms com pelling the Govt.
to be more vigilant and enforcing the sovereign will of the people of India to oversee that such criminal activities which endanger even for the sake of developmental work, economy and progress of the country, the health and happiness of the people and damage the future prospects of health, growth and affect and pollute the environment, should be curbed and, according to him, these could only be curbed by insisting through the legal adjudi cation, punitive and deterrent punishment in the form of damages.
He also pleaded that norms should be set up indi cating how these kinds of dangerous operations are to be permitted under conditions of vigilance and survillence.
While we appreciate the force of these arguments, and en dorse his plea that norms and deterrence should be aspired for, it is difficult to correlate that aspect with the present problem in this decision.
We do reiterate, as mentioned in the Universal Declaration of Human Rights that people are born free and the dignity of the persons must be recognised and an effec tive remedy by competent tribunal is one of the surest method of effective remedy.
If, therefore, as a result of this tragedy new consciousness and awareness on the part of the people of this country to be more vigilant about meas ures and the necessity of ensuring more strict vigilance for permitting the operations of such dangerous and poisonous gases dawn, then perhaps the tragic experience of Bhopal would not go in vain.
The main question, however, canvassed by all learned counsel for the victims was that so far as the Act takes away the right of the victims to fight or establish their own rights, it is a denial of access to justice, and it was contended that such denial is so great a deprivation of both human dignity and right to equality that it cannot be justi fied because it would be affecting right to life, which again cannot be deprived without a procedure established by law which is just, fair and reasonable.
On this aspect, Shri Shanti Bhushan tried to urge before us that sections 3 & 4 of the Act.
in so far as these enjoin and empower the Central Govt.
to institute or prose cute proceedings was only an enabling provision for the Central Govt.
and not depriving or disabling provisions for the victim.
Ms. Jaising sought to urge in addition, that in order to make the provisions constitutionally valid, we should eliminate the concept of exclusiveness to the Central Govt.
and give the victims right to sue along with the Central Govt.
We are unable to accept these submissions.
683 97.
In our opinion, Sections 3 & 4 are categorical and clear.
When the expression is explicit, the expression is conclusive, alike in what it says and in what it does not say.
These give to the Central Government an exclusive right to act in place of the persons who are entitled to make claim or have already made claim.
The expression 'exclusive ' is explicit and significant.
The exclusivily cannot be whittled down or watered down as suggested by counsel.
The said expression must be given its full meaning and extent.
This is corroborated by the use of the expression 'claim ' for all purposes.
If such duality of rights are given to the Central Govt.
along with the victims in instituting or proceeding for the realisation or the enforcement of the claims arising out of Bhopal gas leak disaster, then that would be so cumbersome that it would not be speedy, effec tive or equitable and would not be the best or more advanta geous procedure for securing the claims arising out of the leakage.
In that view of the matter and in view of the language used and the purpose intended to be achieved, we are unable to accept this aspect of the arguments advanced on behalf of the victims.
It was then contended that by the procedure envisaged by the Act, the victims have been de prived and denied.their rights and property to fight for compensation.
The victims, it has been asserted, have been denied access to justice.
It is a great deprivation, it was urged.
It was contended that the procedure evolved under the Act for the victims is peculiar and having good deal of disadvantages for the victims.
Such special disadvantageous procedure and treatment is unequal treatment, it was sug gested.
It was, therefore, violative of Article 14 of the Constitution, that is the argument advanced.
The Act does provide a special procedure in respect of the rights of the victims and to that extent the Central Government takes upon itself the rights of the victims.
It is a special Act providing a special procedure for a kind of special class of victims.
In view of the enormity of the disaster the victims of the Bhopal gas leak disaster, as they were placed against the multinational and a big Indian corporation and in view of the presence of foreign contin gency lawyers to whom the victims were exposed, the claim ants and victims can legitimately be described as a class by themselves different and distinct, sufficiently separate and indentifiable to be entitled to special treatment for effec tive, speedy, equitable and best advantageous settlement of their claims.
There indubitably is differentiation.
But this differentiation is based on a principle which has rational nexus with the aim intended to be achieved by this differen tiation.
The disaster being unique in its character and in the recorded history of industrial disasters situated as the victims were against a mighty multinational with 684 the presence of foreign contingency lawyers.
looming on the scene, in our opinion, there were sufficient grounds for such differentiation and different treatment.
In treating the victims of the gas leak disaster differently and provid ing them a procedure, which was just, fair, reasonable and which was not unwarranted or unauthorised by the Constitu tion, Article 14 is not breached.
We are, therefore, unable to accept this criticism of the.
The second aspect canvassed on behalf of the victims is that the procedure envisaged is unreasonable and as such not warranted by the situation and cannot be treated as a procedure which is just, fair and reasonable.
The argument has to be judged by the yardstick, as mentioned hereinbe fore, enunciated by this Court in State of Madras vs V.G. Rao, (supra).
Hence, both the restrictions or limitations on the substantive and procedural rights in the impugned legis lation will have to be judged from the point of view of the particular Statute in question.
No abstract rule or standard of reasonableness can be applied.
That question has to be judged having regard to the nature of the rights alleged to have been infringed in this case, the extent and urgency of the evil sought to be remedied, disproportionate imposition, prevailing conditions at the time, all these facts will have to be taken into consideration.
Having considered the back ground, the plight of the impoverished, the urgency of the victims ' need, the presence of the foreign contingency lawyers, the procedure of settlement in USA in mass action, the strength for the foreign multinationals, the nature of injuries and damages, and the limited but significant right of participation of the victims as contemplated by s.4 of the Act, the Act cannot be condemned as unreasonable.
In this connection, the concept of 'parens patriae ' in jurisprudence may be examined.
It was contended by the learned Attorney General that the State had taken upon itself this onus to effectively come in as parens patriae, we have noted the long line of Indian decisions where, though in different contexts, the concept of State as the parent of people who are not quite able to or competent to fight for their rights or assert their rights, have been utilised.
It was contended that the doctrine of parens patriae cannot be applicable to the victims.
How the concept has been understood in this country as well as in America has been noted.
Legal dictionaries have been referred to as noted before.
It was asserted on behalf of the victims by learned counsel that the concept of 'parens patriae ' can never be invoked for the purpose of suits in domestic juris diction of any country.
This can only be applied in respect of the claims out of the 685 country in foreign jurisdiction.
It was further contended that this concept of 'parens patraie ' can only be applied in case of persons who are under disability and would not be applicable in respect of those who are able to assert their own rights.
It is true that victims or their representatives are sui generis and cannot as such due to age, mental capac ity or other reason not legally incapable for suing or pursuing the remedies for the rights yet they are at a tremendous disadvantage in the broader and comprehensive sense of the term.
These victims cannot be considered to be any match to the multinational companies or the Govt.
with whom in the conditions that the victims or their representa tives were after the disaster physically, mentally, finan cially, economically and also because of the position of litigation would have to contend.
In such a situation of predicament the victims can legitimately be considered to be disabled.
They were in no position by themselves to look after their own interests effectively or purposefully.
In that background, they are people who needed the State 's protection and should come within the umbrella of State 's sovereignty to assert, establish and maintain their rights against the wrong doers in this mass disaster.
In that perspective, it is jurisprudentially possible to apply the principle of parens patriae doctrine to the victims.
But quite apart from that, it has to be borne in mind that in this case the State is acting on the basis of the Statute itself.
For the authority of the Central Govt.
to sue for and on behalf of or instead in place of the victims, no other theory, concept or any jurisprudential principle is required than the Act itself.
The Act empowers and substi tutes the Central Govt.
It displaces the victims by opera tion of Section 3 of the Act and substitutes the Central Govt.
in its place.
The victims have been divested of their rights to sue and such claims and such rights have been vested in the Central Govt.
The victims have been divested because the victims were disabled.
The disablement of the victims vis a vis their adversaries in this matter is a self evident factor.
If that is the position then, in our opinion, even if the strict application of the 'parens patriae ' doctrine is not in order, as a concept it is a guide.
The jurisdiction of the State 's power cannot be circumscribed by the limitations of the traditional concept of parens patriae.
Jurisprudentially, it could be utilised to suit or alter or adapt itself in the changed circum stances.
In the situation in which the victims were, the State had to assume the role of a parent protecting the rights of the victims who must come within the protective umbrella of the State and the common sovereignty of the Indian people.
As we have noted the Act is an exercise of the sovereign power of the State.
It is an appropriate evolution of the expression of sovereignty in the situation that had arisen.
We must recognize and accept it as such.
686 101.
But this right and obligation of the State has another aspect.
Shri Shanti Bhushan has argued and this argument has also been adopted by other learned counsel appearing for the victims that with the assumption by the State of the jurisdiction and power as a parent to fight for the victims in the situation there is an imcumbent obliga tion on the State, in the words of Judge Keenan, 'as a matter of fundamental human decency ' to maintain the victims until the claims are established and realised from the foreign multinationals.
The major inarticulate premise apparent from the Act and the scheme and the spirit of the Act is that so long as the rights of the victims are prose cuted the State must protect and preserve the victims.
Otherwise the object of the Act would be defeated, its purpose frustrated.
Therefore, continuance of the payments of the interim maintenance for the continued sustenance of the victims is an obligation arising out of State 's assump tion of the power and temporary deprivation of the rights of the victims and divestiture of the rights of the victims to fight for their own rights.
This is the only reasonable interpretation which is just, fair and proper.
Indeed, in the language of the Act there is support for this interpre tation.
Section 9 of the Act gives power to the Central Govt.
to frame by notification, a scheme for carrying into effect the purposes of the Act.
Sub section (2) of Section 9 provides for the matters for which the scheme may provide.
Amongst others, clause (d) of Section 9(2) provides for creation of a fund for meeting expenses in connection with the administration of the Scheme and of the provisions of the Act; and clause (e) of Section 9(2) covers the amounts which the Central Govt. "may after due appropriation made by Parliament by law in that behalf, credit to the fund re ferred to in clause (d) and any other amounts which may be credited to such fund".
Clause (f) of Section 9(2) speaks of the utilisation, by way of disbursal (including apportion ment) or otherwise, of any amounts received in satisfaction of the claims.
These provisions are suggestive but not explicit.
Clause (b) of Section 10 which provides that in disbursing under the scheme the amount received by way of compensation or damages in satisfaction of a claim as a result of the adjudication or settlement of the claim by a court or other authority, deduction shall be made from such amount of the sums, if any, paid to the claimant by the Govt.
before the disbursal of such amount.
The Scheme framed is also significant.
Clause 10 of the Scheme provides for the claims and relief funds and includes disbursal of amounts as relief including interim relief to persons af fected by the Bhopal gas leak disaster and Clause 11(1) stipulates that disbursal of any amounts under the scheme shall be made by the Deputy Commissioner to each claimant through credit in a bank or postal saving account, stressing that the legislative policy underlined 687 the Bhopal Act contemplated payment of interim relief till such time as the ' Central Govt.
was able to recover from the Union Carbide full amount of compensation from which the interim reliefs already paid were to be deducted from the amount payable to them for the final disbursal.
The Act should be construed as creating an obligation oh the Central Govt.
to pay interim relief as the Act deprives the victims of normal and immediate right of obtaining compensation from the Union Carbide.
Had the Act not been enacted, the victims could have and perhaps would have been entitled not only to sue the Union Carbide themselves, but also to enter into settlement or compromise of some sort with them.
The provi sions of the Act deprived the victims of that legal right and opportunity, and that deprivation is substantial depri vation because upon immediate relief depends often the survival of these victims.
In that background, it is just and proper that this deprivation is only to be justified if the Act is read with the obligation of granting interim relief or maintenance by the Central Government until the full amount of the dues of the victims is realised from the Union Carbide after adjudication or settlement and then deducting therefrom the interim relief paid to the victims.
As submitted by learned Attorney General, it is true that there is no actual expression used in the Act itself which expressly postulates or indicates such a duty or obligation under the Act.
Such an obligation is, however, inherent and must be the basis of properly construing the spirit of the Act.
In our opinion, this is the true basis and will be in consonance with the spirit of the Act.
It must be, to use the well known phrase 'the major inarticulate premise ' upon which though not expressly stated, the Act proceeds.
It is on this promise or premise that the State would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the victims on their own.
If it is only so read, it can only be held to be constitutionally valid.
It has to be borne in mind that the language of the Act does not militate against this construction but on the contrary, Sections 9, 10 and the scheme of the Act suggest that the Act contains such an obligation.
If it is so read, then only meat can be put into the skeleton of the Act making it meaningful and purposeful.
The Act must, therefore, be so read.
This ap proach to the interpretation of the Act can legitimately be called the 'constructive intuition ' which, in our opinion, is a permissible mode of viewing the Acts of Parliament.
The freedom to search for 'the spirit of the Act ' or the quanti ty of the mischief at which it is aimed (both synonymous for the intention of the parliament) opens up the possibility of liberal interpretation "that delicate and important branch of judicial power, the concession of which is dangerous, the denial ruinous".
Given this freedom it is a rare 688 opportunity though never to be misused and challenge for the Judges to adopt and give meaning to the Act, articulate and inarticulate, and thus translate the intention of the Par liament and fulfil the object of the Act.
After all, the Act was passed to give relief to the victims who, it was thought, were unable to establish their own rights and fight for themselves.
it is common knowledge that the victims were poor and impoverished.
How could they survive the long ordeal of litigation and ultimate execution of the decree or the orders unless provisions be made for their sustenance and maintenance, especially when they have been deprived of the fight to fight for these claims themselves? We, there fore, read the Act accordingly.
It was, then, contended that the Central Govt.
was not competent to represent the victims.
This argument has been canvassed on various grounds.
It has been urged that the Central Govt.
owns 22% share in UCIL and as such there is a conflict of interest between the Central Govt.
and the victims, and on that ground the former is disentitled to represent the latter in their battle against UCC and UCIL.
A large number of authorities on this aspect were cited.
However, it is not necessary in the view we have taken to deal with these because factually the Central Govt.
does not own any share in UCIL.
These are the statutory independent organisations, namely, Unit Trust of India and Life Insur ance Corporation, who own 20 to 22% share in UCIL.
The Govt.
has certain amount of say and control in LIC and UTI.
Hence, it cannot be said, in our opinion, that there is any con flict of interest in the real sense of the matter in respect of the claims of Bhopal gas leak disaster between the Cen tral Govt.
and the victims.
Secondly, in a situation of this nature, the Central Govt.
is the only authority which can pursue and effectively represent the victims.
There is no other organisation or Unit which can effectively represent the victims.
Perhaps, theoretically, it might have been possible to constitute another independent statutory body by the Govt.
under its control and supervision in whom the claim of the victims might have been vested and substituted and that Body could have been entrusted with the task of agitating or establishing the same claims in the same manner as the Central Govt. has done under the Act.
But the fact that that has not been done, in our opinion, does not in any way affect the position.
Apart from that, lastly, in our opinion, this concept that where there is a conflict of interest, the person having the conflict should not be entrusted with the task of this nature, does not apply in the instant situation.
In the instant case, no question of violation of the principle of natural justice arises, and there is no scope for the application of the principle that no man should be a Judge in his own cause.
The Central 689 Govt.
was not judging any claim, but was fighting and ad vancing the claims of the victims.
In those circumstances, it cannot be said that there was any violation of the prin ciples of natural justice and such entrustment to the Cen tral Govt.
of the right to ventilate for the victims was improper or bad.
The adjudication would be done by the courts, and therefore there is no scope of the violation of any principle of natural justice.
Along with this submission, the argument was that the power and the right given to the Central Govt.
to fight for the claims of the victims, is unguided and uncanalised.
This submission cannot be accepted.
Learned Attorney General is right that the power conferred on the Central Govt.
is not uncanalised.
The power is circumscribed by the purpose of the Act.
If there is any improper exercise or transgres sion of the power then the exercise of that power can be called in question and set aside, but the Act cannot be said to be violative of the rights of the victims on that score.
We have noted the relevant authorities on the question that how power should be exercised is different and separate from the question whether the power is valid or not.
The next argument on behalf of the victims was that there was con flict of interest between the victims and the Govt.
viewed from another aspect of the matter.
It has been urged that the Central Govt.
as well as the Govt.
of Madhya Pradesh along with the erstwhile Chief Minister of the State of Madhya Pradesh Shri Arjun Singh were guilty of negligence, malfeasance and non feasance, and as such were liable for damages along with Union Carbide and UCIL.
In other words, it has been said that the Govt.
of India and the Govt.
of Madhya Pradesh along with Mr. Arjun Singh are joint tort feasors and joint wrong doers.
Therefore.
it was urged that there is conflict of interest in respect of the claims arising out of the the gas leak disaster between the Govt.
of India and the victims and in such a conflict, it is improper, rather illegal and unjust to vest in the Govt.
of India the rights and claims of the victims.
As noted before, the Act was passed in a particular background and, in our opinion, if read in that background, only covers claims against Union Carbide or UCIL.
"Bhopal gas leak disaster" or "disaster" has been defined in clause (a) of Section (2) as the occurrence on the 2nd and 3rd days of December, 1984 which involved the release of highly noxious and abnormally dangerous gas from a plant in Bhopal (being a plant of the UCIL, a subsidiary of the UCC of U.S.A.) and which resulted in loss of life and damage to property on an extensive scale.
690 104.
In this context, the Act has to be understood that it is in respect of the person responsible, being the person in charge of the UCIL and the parent company UCC.
This interpretation of the Act is further strengthened by the fact that a "claimant" has been defined in clause (c) of Section 2 as a person who is entitled to make a claim and the expression "person" in Section 2(e) includes the Govt.
Therefore, the Act proceeded on the assumption that the Govt. could be a claimant being a person as such.
Further more, this construction and the perspective of the Act is strengthened if a reference is made to the debate both in the Lok Sabha and Rajya Sabha to which references have been made.
The question whether there is scope for the Union of India being responsible or liable as a joint tort feasor is a difficult and different question.
But even assuming that it was possible that the Central Government might be liable in a case of this nature, the learned Attorney Gener al was right in contending that it was only proper that the Central Government should be able and authorised to repre sent the victims.
In such a situation, there will be no scope of the violation of the principles of natural justice.
The doctrine of necessity would be applicable in a situation of this nature.
The doctrine has been elaborated, in Hals bury 's Laws of England, 4th Edition, p, 89, paragraph 73, where it was reiterated that even if all the members of the Tribunal competent to determine a matter were subject to disqualification, they might be authorised and obliged to hear that matter, by virtue of the operation of the common law doctrine of necessity,, An adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide may in certain circumstances be required to adjudicate if there is no other person who is competent or authorised to be adjudicator or if a quorum cannot be formed without him or if no other competent tribu nal can be constituted.
In the circumstances of the case, as mentioned hereinbefore, the Government of India is only capable to represent the victims as a party.
The adjudica tion, however, of the claims would be done by the Court.
In those circumstances, we are unable to accept the challenge on the ground of the violation of principles of natural justice on this score.
The learned Attorney General, howev er, sought to advance, as we have indicated before, his contention on the ground of de facto validity.
He referred to certain decisions.
We are of the opinion that this prin ciple will not be applicable.
We are also not impressed by the plea of the doctrine of bona fide representation of the interests of victims in all these proceedings.
We are of the opinion that the doctrine of bonafide representation would not be quite relevant and as 691 such the decisions cited by the learned Attorney General need not be considered.
There is, however, one other aspect of the matter which requires consideration.
The victims can be divested of their rights i.e. these can be taken away from them provided those rights of the victims are ensured to be established and agitated by the Central Govt.
following the procedure which would be just, fair and reasonable.
Civil Procedure Code is the guide which guides civil proceedings in this country and in other countries procedure akin to Civil Procedure Code.
Hence, these have been recognised and ac cepted as being in consonance with the fairness of the proceedings and in conformity with the principles of natural justice.
Therefore, the procedure envisaged under the Act has to be judged whether it is so consistent.
The Act, as indicated before.
has provided the procedure under sections 3 and 4.
Section 11 provides that the provisions of the Act and of any Scheme flamed thereunder shall have effect not withstanding anything inconsistent therewith contained in any enactment other than the Act or any instrument having effect by virtue of any enactment other than the Act.
Hence, if anything is inconsistent with the Act for the time being, it will not have force and the Act will override those provisions to the extent it does.
The Act has not specifi cally contemplated any procedure to be followed in the action to be taken pursuant to the powers conferred under section 3 except to the extent indicated in section 4 of the Act.
Section 5, however, authorises the Central Government to have the powers of a civil court for the purpose of discharging the functions pursuant to the authority vested under sections 3 and 4 of the Act.
There is no question of Central Government acting as a court in respect of the claims which it should enforce for or on behalf or instead of the victims of the Bhopal gas leak disaster.
In this connection, it is necessary to note that it was submitted that the Act, so far as it deals with the claims of the victims, should be read in conformity with Civil Procedure Code and/or with the principles of natural justice; and unless the provisions of/the Act are so read it would be violative of Articles 14 and 21 of the Constitution in the sense that there will be deprivation of rights to/fife and liberty without following a procedure which is just, fair and reasonable.
That is the main submission and contention of the different counsel for the victims who have appeared.
The different view points from which this contention has been canvassed have been noted before.
On the other hand, on behalf of the Government, the learned Attorney General has canvassed before us that there were sufficient safeguards consistent with the principles of natural justice within this Act and beyond what has been provided for 692 in a situation for which the Act was enacted, nothing more could be provided and further reading down the provisions of the Act in the manner suggested would defeat the purpose of the Act.
The aforesaid section 3 provides for the substitu tion of the Central Government with the ' right to represent and act in place of (whether within or outside India) every person who has made, or is entitled to make, a claim in respect of the disaster.
The State has taken over the rights and claims of the victims in the exercise of sovereignty in order to discharge the constitutional obligations as the parent and guardian of the victims who in the situation as placed needed the umbrella of protection.
Thus, the State has the power and jurisdiction and for this purpose unless the Act is otherwise unreasonable or violative of the con stitutional provisions, no question of giving a hearing to the parties for taking over these fights by the State arises.
For legislation by the Parliament, no principle of natural justice is attracted provided such legislation is within the competence of the legislature, which indeed the present Act is within the competence of the Parliament.
We are in agreement with the submission of the learned Attorney General that section 3 makes the Central Government the dominus litis and it has the carriage of the proceedings, but that does not solve the problem of by what procedure the proceedings should be carried.
The next aspect is that section 4 of the Act, which, according to the learned Attorney General gives limited rights to the victims in the sense that it obliges the Central Government to have due regard to any matters which such person may require to be urged with respect to his claim and shall, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim".
Therefore, it obliges the Central Government to have 'due regard ' to any matters, and it was urged on behalf of the victims that this should be read in order to make the provisions constitutionally valid as providing that the victims will have a say in the conduct of the proceedings and as such must have an opportunity of knowing what is happening either by instructing or giving Opinions to the Central Government and/or providing for such directions as to settlement and other matters.
In other words, it was contended on behalf of the victims that the victims should be given notice of the proceedings and there by an opportunity, if they so wanted, to advance their view: and that to make the provisions of section 4 meaningful and effective unless notice was given to the victim, disabled as he is, the assumption upon which the Act has been enacted, could not come and make suggestion in the proceedings.
If the victims are not informed and given no opportunity, the purpose of section 4 cannot be attained.
693 108.
On the other hand, the learned Attorney General suggested that section 4 has been complied with, and contended that the victims had notice of the proceedings.
They had knowledge of the suit in America, and of the order passed by Judge Keenan.
The private plaintiffs who had gone to America were represented by foreign contingency lawyers who knew fully well what they were doing and they had also joined the said suit along with the Government of India.
Learned Attor ney General submitted that section 4 of the Act clearly.enabled the victims to exercise their right of participation in the proceedings.
According to him, there was exclusion of vic tims from the process of adjudication but a limited partici pation was provided and beyond that participation no further participation was warranted and no further notice was just fied either by the provisions of the Act as read with the constitutional requirements or under the general principles of natural justice.
He submitted that the principles of natural justice cannot be put into strait jacket and their application would depend upon the particular facts and the circumstances of a situation.
According to the learned Attorney General, in the instant case, the legislature had formulated the area where natural justice could be applied, and upto what area or stage there would be association of the victims with the suit, beyond that no further applica tion of any principle of natural justice was contemplated.
The fact that the provisions of the principles of natural justice have to be complied with, is undisputed.
This is well settled by the various decisions of the Court.
The Indian Constitution mandates that clearly, otherwise the Act and the actions would be violative of Article 14 of the Constitution and would also be destructive of Article 19(1)(g) and negate Article 21 of the Constitution by deny ing a procedure which is just, fair and reasonable.
See in this connection, the observations of this Court in Maneka Gandhi 's case (supra) and Olga Tellis 's case (supra).
Some of these aspects were noticed in the decision of this Court in Swadeshi Cotton Mills vs Union of India (supra).
That was a decision which dealt with the question of taking over of the industries under the Industries (Development and Regula tion) Act, 1951.
The question that arose was whether it was necessary to observe the rules of natural justice before issuing a notification under section 18A(1) of the Act.
It was held by the majority of Judges that in the facts of that case there had been non compliance with the implied require ment of the audi alteram partem rule of natural justice at the pre decisional stage.
The order in that case could be struck down as invalid on that score but the court found that in view of the concession a heating would be afforded to the company, the case was remitted 694 to the Central Government to give a full, fair and effective hearing.
It was held that the phrase 'natural justice ' is not capable of static and precise definition.
It could not be imprisoned in the straight jacket or a cast iron formula.
Rules of natural justice are not embodied rules.
Hence, it was not possible to make an exhaustive catalogue of such rules.
This Court reiterated that audi ateram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
The rules of natural justice can operate only in areas not covered by any law validly made.
The general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not in terms exclude this rule of prior hearing but contemplates a post decisional hearing amounting to a full review of the original order on merits then such a statute would be con strued as excluding the audi alteram partem rule at the pre decisional stage.
If the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected the administrative decision after post decisional hearing was good.
The principles of natural justice have been exam ined by this Court in Union of India & Anr.
vs Tulsi Ram Patel & Ors., (supra).
It was reiterated, that the princi ples of natural justice are not the creation of Article 14 of the Constitution.
article 14 is not the begetter of the principles of natural justice but their constitutional guardian.
The principles of natural justice consist, inter alia, of the requirement that no man should be condemned unheard.
If, however, a legislation or a Statute expressly or by necessary implication excludes the application of any particular principle of natural justice then it requires close Scrutiny of the Court.
It has been canvassed on behalf of the victims that the Code of Civil Procedure is an instant example of what is a just, fair and reasonable procedure, at least the princi ples embodied therein and the Act would be unreasonable if there is exclusion of the victims to vindicate properly their views and rights.
This exclusion may amount to denial of justice.
In any case, it has been suggested and in our opinion, there is good deal of force in this contention, that if a part of the claim, for good reasons or bad, is sought to be compromised or adjusted without at least con sidering the views of the victims that would be unreasonable deprivation of the rights of the victims.
After all, it has to be borne in mind that injustice consists in the sense in the minds of the people affected by any act or inaction a feeling that their grievances.
views or claims have gone 'unheeded or not considered.
Such a 695 feeling is in itself an injustice or a wrong.
The law must,be so construed and implemented that such a feeling does not generate among the people for whose benefit the law is made.
Right to a hearing or representation before enter ing into a compromise seems to be embodied in the due proc ess of law understood in the sense the term has been used in the constitutional jargon of this country though perhaps not originally intended.
In this connection, reference may be made to the decision of this Court in Sangram Singh vs Election Tribunal, Kotah; , The Representation of the People Act, 1951 contains section 90 and the proce dure of Election Tribunals under the Act was governed by the said provision.
Sub section (2) of section 90 provides that "Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the Tribunal, as nearly as may be, in accordance with the proce dure applicable under the Code of Civil Procedure, 1908 to the trial of suits".
Justice Bose speaking for the court said that it is procedure, something designed to facilitate justice and further its ends, and cannot be considered as a penal enactment for punishment or penalties; not a thing designed to trip people up rather then help them.
It was reiterated that our laws of procedure are grounded on the principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their ab sence and that they should not be precluded from participat ing in them.
Of course, there may be exceptions and where they are clearly defined these must be given effect to.
But taking by and large, and subject to that proviso, our laws of procedure should be construed, wherever that is reasona bly possible, in the light of that principle.
At page 9 of the report, Justice Bose observed as under: "But that a law of natural justice exists in the sense that a party must be heard in a Court of laW, or at any rate be afforded an opportunity to appear and defend himself, unless there is express provision to the contrary, is, we think, beyond dispute.
See the observations of the Privy Council in Balakrishna Udayar vs Vasudeva Ayyar, (ILR , 800) and especially in T.M. Barter vs African Products Ltd., (AIR where Lord Buckmaster said "no forms or proce dure should ever be permitted to exclude the presentation of a litigant 's defence".
Also Hari Vishnu 's case which we have just quoted.
In our opinion, Wallace J. was right in Venka tasubbiah vs 696 Lakshminarasimham, (AIR 1925 Mad. 1274) in holding that "One cardinal principle to be observed in trials by a Court obviously is that a party has a right to appear and plead his cause on all occasions when that cause comes on for hearing", and that "It follows that a party should not be deprived of that right and in fact the Court has no option to refuse that right, unless the Code of Civil Procedure deprives him of it".
All civilised countries accept the right to be heard as part of the due process of law where questions affecting their rights, privileges or claims are considered or adjudicated.
In S.L. Kapoor vs Jagmohan & Ors., ; at 765, Chinnappa Reddy, J. speaking for this Court observed that the concept that justice must not only be done but must manifestly be seen to be done, is basic to our system.
It has been reiterated that the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been ob served.
The non observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary and it has been said that it will come from a person who has denied justice that the person who has been denied justice, is not prejudiced.
Principles of natural justice must, therefore, be followed.
That is the normal requirement: 114.
In view of the principles settled by this Court and accepted all over the world, we are of the opinion that in case of this magnitude and nature, when the victims have been given some say by Section 4 of the Act, in order to make that opportunity contemplated by section 4 of the Act, meaningful and effective, it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any conclusion in respect of any settlement.
How that opportunity should be given, would depend upon the particular situation.
Fair procedure should be followed in a representative mass tort action.
There are instances and some of these were also placed before us during the hearing of these matters indi cating how the courts regulate giving of the notice in respect of a mass action where large number of people 's views have to be ascertained.
Such procedure should be evolved by the court when faced with such a situation.
The Act does not expressly exclude the application of the 697 Code of Civil Procedure.
Section 11 of the Act provides the overriding effect indicating that anything inconsistent with the provisions of the Act in other law including the Civil Procedure Code should be ignored and the Act should prevail.
Our attention was drawn to the provisions of Order 1 Rule 8(4) of the Code.
Strictly speaking, Order 1 Rule 8 will not apply to a suit or a proceeding under the Act.
It is not a case of one having common interest with others.
Here the plaintiff, the Central Govt. has replaced and divested the victims.
Learned Attorney General submitted that as the provisions of the Code stood before 1976 Amendment, the High Courts had taken the view that hearing of the parties repre sented in the suit, was not necessary, before compromise.
Further reference was made to proviso to Order XXIII Rule 1.
As in this case there is no question, in our opinion, of abandonment as such of the suit or part of the suit, the provisions of this Rule would also not strictly apply.
However, Order XXIII Rule 3B of the Code is an important and significant pointer and the principles behind the said provision would apply to this case.
The said rule 3B pro vides that no agreement or compromise in a representative suit shall be entered into without the leave of the court expressly recorded in the proceedings; and sub rule (2) of rule 3B enjoins that before granting such leave the court shall give notice in such manner as it may think fit in a representative action.
Representative suit, again, has been defined under Explanation to the said rule vide clause (d) as any other suit in which the decree passed may, by virtue of the provisions of this Code or of any other law for the time being in force, bind any person who is not named as party to the suit.
In this case, indubitably the victims would be bound by the settlement though not named in the suit.
This is a position conceded by all.
If that is so, it would be a representative suit in terms of and for the purpose of Rule 3B of Order XXIII of the Code.
If the prin ciples of this rule are the principles of natural justice then we are of the opinion that the principles behind it would be applicable; and also that section 4 should be so construed in spite of the difficulties of the process of notice and other difficulties of making "informed decision making process cumbersome", as canvassed by the learned Attorney General.
In our opinion, the constitutional requirements, the language of the Section, the purpose of the Act and the principles of natural justice lead us to this interpretation of Section 4 of the Act that in case of a proposed or con templated settlement, notice should be given to the victims who are affected or whose rights are to be affected to ascertain their views.
Section 4 is significant.
It enjoins the Central 698 Govt.
only to have "due regard to any matters which such person may require to be urged".
So, the obligation is on the Central Govt.
in the situation contemplated by Section 4 to have due regard to the views of the victims and that obligation cannot be discharged by the Central Govt.
unless the victims are told that a settlement is proposed, intended or contemplated.
It is not necessary that such views would require consent of all the victims.
The Central Govt.
as the representative of the victims must have the views of the victims and place such views before the court in such manner it considers necessary before a settlement is entered into.
If the victims want to advert to certain aspect of the matter during the proceedings under the Act and settlement indeed is an important stage in the proceedings, opportuni ties must be given to the victims.
Individual notices may not be necessary.
The Court can, and in our opinion, should in such situation formulate modalities of giving notice and public notice can also be given inviting views of the vic tims by the help of mass media.
Our attention was drawn to similar situations in other lands , where in mass disaster actions of the present type or mass calamity actions affecting large number of people, notices have been given in different forms and it may be possible to invite the views of the victims by announcement in the media, Press, Radro, and TV etc.
intimating the victims that a certain settlement is proposed or contemplat ed and inviting views of the victims within a stipulated period.
And having regard to the views, the Central Govt. may proceed with the settlement of the action.
Consent of all is not a pre condition as we read the Act under Section 4.
Hence, the difficulties suggested by the learned Attorney General in having the consent of all and unanimity, do not really arise and should not deter us from construing the section as we have.
The next aspect of the matter is, whether in the aforesaid light Section 4 has been complied with.
The fact that there was no Learned Attorney General, however, sought to canvas the view that the victims had notice and some of them had participat ed in the proceedings.
We are, however, unable to accept the position that the victims had notice of the nature contem plated under the Act upon the underling principle of Order XXIII Rule 3B of the Code.
It is not enough to say that the victims must keep vigil and watch the proceeding.
One as sumption under which the Act is justified is that the vic tims were disabled to defend themselves in an action of this type.
If that is so, then the Court cannot presume that the victims were a lot, capable 699 and informed to be able to have comprehended or contemplated the settlement.
In the aforesaid view of the matter, in our opinion, notice was necessary.
The victims at large did not have the notice.
The question, however, is that the settlement had been arrived at after great deal of efforts to give immedi ate relief to the victims.
We have noticed the order dated 4th May, 1989 passed by this Court indicating the reasons which impelled the Court to pass the orders on 14/15th February, 1989 in terms and manner as it did.
It has been urged before us on behalf of some of the victims that jus tice has not been done to their views and claims in respect of the damages suffered by them.
It appears to us by reading the reasons given by this Court on 4th May, 1989 that jus tice perhaps has been done but the question is, has justice appeared to have been done and more precisely, the question before this Court is: does the Act envisage a procedure or contemplate a procedure which ensures not only that justice is done but justice appears to have been done.
If the proce dure does not ensure that justice appears to have been done, is it valid? Therefore, in our opinion, in the background of this question we must hold that Section 4 means and entails that before entering into any settlement affecting the rights and claims of the victims some kind of notice or information should be given to the victims; we need not now spell out the actual notice and the manner of its giving to be consistent with the mandate and purpose of section 4 of the Act.
This Court in its order dated 4th May, 1989 had stated that in passing orders on 14th/15th February, 1989, this Court was impelled by the necessity of urgent relief to the victims rather than to depend upon the uncertain promise of law.
The Act, as we have construed, requires notice to be given in what form and in what manner, it need not be spelled out, before entering into any settlement of the type with which we are concerned.
It further appears that that type of notice which is required to be given had not been given.
The question, therefore, is what is to be done and what is the consequence? The Act would be bad if it is not construed in the light that notice before any settlement under section 4 of the Act was required to be given.
Then arises the question of consequences of not giving the notice.
In this adjudication, we are not strictly concerned with the validity or otherwise of the settlement, as we have indicat ed hereinbefore.
But constitutional adjudication cannot be divorced from the reality of a situation, or the impact of an adjudication.
Constitutional deductions are never made in the vacuum.
These deal with life 's problems in the reality of a given situation.
And no constitutional adjudication is also possible unless 700 one is aware of the consequences of such an adjudication.
One hesitates in matters of this type where large conse quences follow one way or the other to put as under what others have put together.
It is well to remember, as did Justice Holmes, that time has upset many fighting faiths and one must always wagar one 's salvation upon some prophecy based upon imperfect knowledge.
Our knowledge changes; our perception of truth also changes.
It is true that notice was required to be given and notice has not been given.
The notice which we have contemplated is a notice before the settlement or what is known in legal terminology as 'pre decisional notice '.
But having regard to the urgency of the situation and having regard to the need for the victims for relief and help and having regard to the fact that so much effort has gone in finding a basis for the settlement, we, at one point of time, thought that a post decisional hearing in the facts and circumstances of this case might be consid ered to be sufficient compliance with the requirements of principles of natural justice as embodied under section 4 of the Act.
The reasons that impelled this Court to pass the orders of 14th/15th February, 1989 are significant and compelling.
If notice was given, then what would have happened? It has been suggested on behalf of the victims by counsel that if the victims had been given an opportunity to be heard, then they would have perhaps pointed out, inter alia, that the amount agreed to be paid through the settlement was hope lessly inadequate.
We have noted the evidence available to this Court which this Court has recorded in its order dated 4th May, 1989 to be the basis for the figure at which the settlement was arrived at.
It is further suggested that if an opportunity had been given before the settlement, then the victims would have perhaps again pointed out that crimi nal liability could not be absolved in the manner in which this Court has done on the 14th/l5th February, 1989.
It was then contended that the Central Government was itself sued as a joint tort feasor.
The Central Government would still be liable to be proceeded in respect of any liability to the victims if such a liability is established; that liability is in no way abridged or affected by the Act or the settle ment entered into.
It was submitted on behalf of the victims that if an opportunity had been given, they would have perhaps pointed out that the suit against the Central Gov ernment, Government of Madhya Pradesh and UCIL could not have been settled by the compromise.
It is further suggested that if given an opportunity, it would have been pointed out that the UCIL should have also been sued.
One of the impor tant requirements of justice is that people affected by an action or inaction should have opportunity to have their say.
That opportunity the victims have got when these appli cations were heard and they were heard after utmost publici ty and they would have further 701 opportunity when review application against the settlement would be heard.
On behalf of the victims, it was suggested that the basis of damages in view of the observations made by this Court in M.C. Mehta 's case (supra) against the victims of UCC or UCIL would be much more than normal damages suffered in similar case against any other company or party which is financially not so solvent or capable.
It was urged that it is time in order to make damages deterrent the damages must be computed on the basis of the capacity of a delinquent made liable to pay such damages and on the monitory capacity of the delinquent the quantum of the damages awarded would vary and not on the basis of actual consequences suffered by the victims.
This is an uncertain promise of law.
On the basis of evidence available and on the basis of the princi ples so far established, it is difficult to foresee any reasonable possibility of acceptance of this yardstick.
And even if it is accepted, there are numerous difficulties of getting that view accepted internationally as a just basis in accordance with law.
These, however, are within the realm of possibility.
It was contended further by Shri Garg, Shri Shanti Bhushan and Ms. Jaising that all the further particulars upon which the settlement had been entered into should have been given in the ' notice which was required to be given before a settlement was sanctified or accepted.
We are unable to accept this position.
It is not necessary that all other particulars for the basis of the proposed settlement should be disclosed in a suit of this nature before the final decision.
Whatever data was already there have been disclosed, that, in our opinion, would have been sufficient for the victims to be able to give their views, if they want to.
Disclosure of further particulars are not warranted by the requirement of principles of natural justice.
Indeed, such disclosure in this case before finality might jeopar dise luther action, if any, necessary so consistent with justice of the case.
So on the materials available, the victims would have to express their views.
The victims have not been able to show at all any other point or material which would go to impeach the validity of the settlement.
Therefore, in our opinion, though settlement without notice is not quite proper, on the materials so far available, we are of the opinion that justice has been done to the victims but jus tice has not appeared to have been done.
In view of the magnitude of the misery involved and the problems in this case, we are also of the opinion that the setting aside of the settlement on this ground in view of the facts 702 and the circumstances of this case keeping the settlement in abeyance and giving notice to the victims for a post deci sional hearing would not be in the ultimate interest of justice.
It is true that not giving notice, was not proper because principles of natural justice are fundamental in the constitutional set up of this country.
No man or no man 's right should be affected without an opportunity to ventilate his views.
We are also conscious that justice is a psycho logical yearning, in which men seek acceptance of their view point by having an opportunity of vindication of their view point before the forum or the authority enjoined or obliged to take a decision affecting their right.
Yet, in the par ticular situations, one has to bear in mind how an infrac tion of that should be sought to be removed is accordance with justice.
In the facts and the circumstances of this case where sufficient opportunity is available when review application is heard on notice, as directed by Court, no further opportunity is necessary and it cannot be said that injustice has been done.
"To do a great right" after all, it is permissible sometimes "to do a little wrong".
In the facts and circumstances of the case, this is one of those rare occasions.
Though entering into a settlement without the required notice is wrong, in the facts and the circum stances of this case, therefore, we are of the opinion, to direct that notice should be given now, would not result in dain justice in the situation.
In the premises, no further consequential order is necessary by this Court.
Had it been necessary for this Bench to have passed such a consequential order, we would not have passed any such consequential order in respect of the same.
The sections and the scheme dealing with the deter mination of damages and distribution of the amount have also been assailed as indicated before.
Our attention was drawn to the provisions of the Act dealing with the payment of compensation and the scheme framed therefore.
It was submit ted that section 6 of the Act enjoins appointment by the Central Government of an officer known as the Commissioner for the welfare of the victims.
It was submitted that this does not give sufficient judicial authority to the officer and would be really leaving the adjudication under the scheme by an officer of the executive nature.
Learned Attor ney General has, however, submitted that for disbursement of the compensation contemplated under the Act or under the orders of this Court, a notification would be issued under section 6(3) of the Act authorising the Commissioner or other officers to exercise all or any of the powers which the Central Government may exercise under section 6 to enable the victims to place before the Commissioner or Deputy Commissioner any additional evidence that they would like to adduce.
We direct so, and such appropriate notifica 703 tion be issued.
We further direct that in the scheme of categorisation to be done by the Deputy Commissioner should be appealable to an appropriate judicial authority and the Scheme should be modified accordingly.
We reiterate that the basis of categorisation and the actual categorisation should be justifiable and judicially reviewable the provisions in the Act and the Scheme should be so read.
There were large number of submissions made on behalf of the victims about amending the scheme.
Apart from and to the extent indicated above, in our opinion, it would be unsafe to tinker with the scheme piecemeal.
The scheme is an integrated whole and it would not be proper to amend it piecemeal.
We, however, make it clear that in respect of categorisation and claim, the authorites must act on principles of natural justice and act quasi judicially.
As mentioned hereinbefore, good deal of arguments were advanced before us as to whether the clause in the settlement that criminal proceedings would not be proceeded with and the same will remain quashed is valid or invalid.
We have held that these are not part of the proceedings under the Act.
So the orders on this aspect in the order of 14th/15th February, 1989 are not orders under the Act.
Therefore, on the question of the validity of the Act, this aspect does not arise whether the settlement of criminal proceedings or quashing the criminal proceedings could be a valid consideration for settlement or whether if it was such a consideration or not is a matter which the court reviewing the settlement has to decide.
In the premise, we hold that the Act is constitu tionally valid in the manner we read it.
It proceeds on the hypothesis that until the claims of the victims are realised or obtained.
from the delinquents, namely, UCC and UCIL by settlement or by adjudication and until the proceedings in respect thereof continue the Central Government must pay interim compensation or maintenance for the victims.
In entering upon the settlement in view of section 4 of the Act, regard must be had to the views of the victims and for the purpose of giving regard to these, appropriate notices before arriving at any settlement, was necessary.
In some cases, however, post decisional notice might be sufficient but in the facts and the circumstances of this case, no useful purpose would be served by giving a post decisional hearing having regard to the circumstances mentioned in the order of this Court dated 4th May, 1989 and having regard to the fact that there are no further additional data and facts available with the victims which can be profitably and meaningfully presented to controvert the basis of the set tlement and further having regard to the fact that the victims had their say or on 704 their behalf their views had been agitated in these proceed ings and will have further opportunity in the pending review proceedings.
No further order on this aspect is necessary.
The sections dealing with the payment of compensation and categorisation should be implemented in the manner indicated before.
The Act was conceived on the noble promise of giving relief and succour to the dumb, pale, meek and impoverished victims of a tragic industrial gas leak disas ter, a concomitant evil in this industrial age of technolog ical advancement and development.
The Act had kindled high hopes in the hearts of the.
weak and worn, wary and forlorn.
The Act generated hope of humanity.
The implementation of the Act must be with justice.
Justice perhaps has been done to the victims situated as they were, but it is also true that justice has not appeared to have been done.
That is a great infirmity.
That is due partly to the fact that proce dure was not strictly followed as we have understood it and also partly because of the atmosphere that was created in the country, attempts were made to shake the confidence of the people in the judicial process and also to undermine the credibility of this Court.
This was unfortunate.
This was perhaps due to misinformed public opinion and also due to the fact that victims were not initially taken into confi dence in reaching the settlement.
This is a factor which emphasises the need for adherence to the principles of natural justice.
The credibility of judiciary is as impor tant as the alleviation of the suffering of the victims, great as these were.
We hope these adjudications will re store that credibility.
Principles of natural justice are integrally embedded in our constitutional framework and their pristine glory and primacy cannot and should not be allowed to be submerged by the exigencies of particular situations or cases.
This Court must always assert primacy of adherence to the principles of natural justice in all adjudications.
But at the same time, these must be applied in a particular manner in particular cases having regard to the particular circumstances.
It is, therefore, necessary to reiterate that the promises made to the victims and hopes raised in their hearts and minds can only be redeemed in some measure if attempts are made vigorously to distribute the amount realised to the victims in accordance with the scheme as indicated above.
That would be a redemption to a certain extent.
It will also be necessary to reiterate that attempts should be made to formulate the principles of law guiding the Government and the authorities to permit carry ing on of trade dealing with materials and things which have dengerous consequences within sufficient specific safeguards especially in case of multinational corporations trading in India.
An awareness on these lines has dawned.
Let 705 action follow that awareness.
It is also necessary to reit erate that the law relating to damages and payment of inter im damages or compensation to the victims of this nature should be seriously and scientifically examined by the appropriate agencies.
The Bhopal Gas Leak disaster and its aftermath of that emphasise the need for laying down certain norms and standards the Government to follow before granting permis sions or licences for the running of industries dealing with materials which are of dangerous potentialities.
The Govern ment should, therefore, examine or have the problem examined by an expert committee as to what should be the conditions on which future licences and/or permission for running industries on Indian soil would be granted and for ensuring enforcement of those conditions, sufficient safety measures should be formulated and scheme of enforcement indicated.
The Government should insist as a condition precedent to the grant of such licences or permissions, creation of a fund in anticipation by the industries to be available for payment of damages out of the said found in case of leakages or damages in case of accident or disaster flowing from negli gent working of such industrial operations or failure to ensure measures preventing such occurrence.
The Government should also ensure that the parties must agree to abide to pay such damages out of the said damages by procedure sepa rately evolved for computation and payment of damages with out exposing the victims or sufferers of the negligent act to the long and delayed procedure.
Special procedure must be provided for and the industries must agree as a condition for the grant of licence to abide by such procedure or to abide by statutory arbitration.
The basis for damages in case of leakages and accident should also be statutorily fixed taking into consideration the nature of damages in flicted, the consequences thereof and the ability and capac ity of the parties to pay.
Such should also provide for deterrent or punitive damages, the basis for which should be formulated by a proper expert committee or by the Govern ment.
For this purpose, the Government should have the matter examined by such body as it considers necessary and proper like the Law Commission or other competent bodies.
This is vital for the future.
This case has taken some time.
It was argued exten sively.
We are grateful to counsel who have assisted in all these matters.
We have reflected.
We have taken some time in pronouncing our decision.
We wanted time to lapse so that the heat of the moment may calm down and proper atmosphere restored.
Justice, it has been said, is the constant and perpetual disposition to render every man his due.
But what 706 is a man 's due in a particular situation and in a particular circumstances is a matter for appraisement and adjustment.
It has been said that justice is balancing.
The balances have always been the symbol of even handed justice.
But as said Lord Denning in Jones vs National Coal Board Ltd., ; , at 64 let the advocates one after the other put the weights into the scales the 'nicely calculated less or more ' but the judge at the end decides which way the balance tilts, be it ever so slightly.
This is so in every case and every situation.
The applications are disposed of in the manner and with the direction, we have indicated above.
SINGH, J. 1 have gone through the proposed judgment of my learned brother, Sabyasachi Mukharji, CJI.
I agree with the same but I consider it necessary to express my opinion on certain aspects.
Five years ago between the night of December 2 3, 1984 one of the most tragic industrial disasters in the recorded history of mankind occurred in the city of Bhopal, in the State of Madhya Pradesh, as a result of which several per sons died and thousands were disabled and physically inca pacitated for life.
The ecology in and around Bhopal was adversely affected and air, water and the atmosphere waspol luted, its full extent has yet to be determined.
UnionCar bide India Limited (UCIL) a subsidiary of Union Carbide Corporation (a Transnational Corporation of United States) has been manufacturing pesticides at its plant located in the city of Bhopal.
In the process of manufacture of pesti cide the UCIL had stored stock of Methyl Isocyanate commonly known as MlC a highly toxic gas.
On the night of the trage dy, the MIC leaked from the plant in substantial quantity causing death and misery to the people working in the plant and those residing around it.
The unprecedented catastrophe demonstrated the dangers inherent in the production of haz ardous chemicals even though for the purpose of industrial development.
A number of civil suits for damages against the UCC were filed in the United States of America and also in this Country.
The cases filed in USA were referred back to the Indian courts by Judge Keenan details of which are contained in the judgment of my learned brother Mukharji, CJI.
Since those who suffered in the catastrophe were mostly poor, ignorant, illiterate and ill equipped to pursue their claims for damages either before the courts in USA or in Indian courts, the Parliament enacted the (hereinafter re ferred to as 'the Act ') conferring power on the Union of India to take over the conduct of litigation in this regard in place of the 707 individual claimants.
The facts and circumstances which led to the settlement of the claims before this Court have already been stated in detail in the judgment of Mukharji, CJI, and therefore, I need not refer to those facts and circumstances.
The constitutional validity of the Act has been assailed before us in the present petitions.
If the Act is declared unconstitutional, the settlement which was recorded in this Court, under which the UCC has already deposited a sum of Rs.750 crores for meeting the claims of Bhopal Gas victims, would fall and the amount of money which is already in deposit with the Registry of this Court would not be available for relief to the victims.
Long and de tailed arguments were advanced before us for a number of days and on an anxious consideration and having regard to the legal and constitutional aspects and especially the need for immediate help and relief to the victims of the gas disaster, which is already delayed, we have upheld the constitutional validity of the Act.
Mukharji, CJI has ren dered a detailed and elaborate judgment with which I re spectfully agree.
However, I consider it necessary to say few words with regard to the steps which should be taken by the Executive and the Legislature to prevent such tragedy in future and to avoid the prolonged misery of victims of in industrial disaster.
We are a developing country, our national resources are to be developed in the field of science, technology, indus try and agriculture.
The need for industrial development has led to the establishment of a number of plants and factories by the domestic companies and under industries are engaged in hazardous or inherently dangerous activities which pose potential threat to life, health and safety of persons working in the factory, or residing in the surrounding areas.
Though working of such factories and plants is regu lated by a number of laws of our country, i.e. the Factories Act, Industrial Development and Regulation Act and Workmen 's Compensation Act etc.
there is no special legislation pro viding for compensation and damages to outsiders who may suffer on account of any industrial accident.
As the law stands to day, affected persons have to approach civil courts for obtaining compensation and damages.
In civil courts, the determination of amount of compensation or damages as well as the liability of the enterprise has been bound by the shackles of conservative principles laid down by the House of Lords in Ryland vs Herchief, [1868] LR 3 HL page 330.
The principles laid therein made it difficult to obtain adequate damages from the enterprise and that too only after the negligence of the enterprise was proved.
This continued to be the position of law, till a Constitution Bench of this Court in M.C. Mehta 708 vs Union of India, , commonly known as Sriram Oleum Gas Leak case evolved principles and laid down new norms to deal adequately with the new problems arising in a highly industrialised economy.
This Court made judicial innovation in laying down principles with regard to liabili ty of enterprises carrying hazardous or inherently dangerous activities departing from the rule laid down in Ryland vs Fletcher.
The Court held as under: "We are of the view that an enterprise which is engaged in a hazardous or inherently dan gerous industry which poses a potential threat to the" health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non delegiable duty to the community to ensure that no harm results to any one on account of hazardous or inherently dangerous nature of the activity which it has undertaken.
The enterprise must be held to be under an obliga tion to provide that the hazardous or inher ently dangerous activity in which it is en gaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enter prise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part.
Since the persons harmed on account of the hazardous or inher ently dangerous activity carried on by the enterprise would not be in a position to isolate the process of operation from the hazardous preparation of substance or any other related element that caused the harm the enterprise must be held strictly liable for causing such harm as a part of the social cost of carrying on the hazardous or inherently dangerous activity.
If the enterprise is permitted to carry on an hazardous or inher ently dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activi ty as an appropriate item of its overheads.
Such hazardous or inherently dangerous activi ty for private profit can be tolerated only on condition that the enterprise engaged in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of the carrying on of such hazardous or inherent ly dangerous activity regardless of whether it is carried on carefully or not.
This 709 principle is also sustainable on the ground that the enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards.
We would therefore hold that where an enterprise is engaged in a hazardous or inher ently dangerous activity and harm results to anyone on account of an accident in the opera tion of such hazardous or inherently dangerous activity resulting, for example, in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liabili ty is not subject to any of the exceptions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher.
" The law so laid down made a land mark departure from the conservative principles with regard to the liability of an enterprise carrying on hazardous or inherently dangerous activities.
In the instant cases there is no dispute that UCIL a subsidiary of UCC was carrying on activity of manufacturing pesticide and in that process it had stored MIC a highly toxic and dangerous gas which leaked causing vast damage not only to human life but also to the flora and fauna and ecology in and around Bhopal.
In view of this Court 's deci sion in M.C. Mehta 's case there is no scope for any doubt regarding the liability of the UCC for the damage caused to the human beings and nature in and around Bhopal.
While entering into the settlement the UCC has accepted its li ability and for that reason it has deposited a sum of Rs.750 crores in this Court.
The inadequacy of the amount of com pensation under the settlement was assailed by the counsel for the petitioners but it is not necessary for us to ex press any opinion on that question as review petitions are pending before another Constitution Bench and more so as in the present cases we are concerned only with the constitu tional validity of the Act.
The Bhopal Gas tragedy has raised several important questions regarding the functioning of multi nationals in third world countries.
After the Second world war colonial rule came to end in several parts of the globe, as a number of natives secured independence from foreign rule.
The political domination was over but the newly born nations were beset with various problems on account of lack of finances and development.
A number of multi nationals and transnational corporations offered their services to the under developed and developing countries to provide finances and technical know how by 710 setting up their own industries in those countries on their own terms that brought problems with regard to the control over the functioning of the transnational corporations.
Multi national companies in many cases exploited the under developed nations and in some cases they influenced politi cal and economic policies of host countries which subverted the sovereignty of those countries.
There has been com plaints against the multi nationals for adopting unfair and corrupt means to advance their interests in the host coun tries.
Since this was a worldwide phenomena the United Nations took up the matter for consideration.
The Economic and Social Council of the United Nations established a Commission on Transnational Corporations to conduct research on various political, economic and social aspects relating to transnational corporations.
On a careful and detailed study the Commission submitted its Report in 1985 for evolv ing a Code of Conduct for Transnational Corporations.
The Code was adopted in 1986 to which large number of countries of the world are signatories.
Although it has not been fully finalised as yet, the Code presents a comprehensive instru ment formulating the principles of Code of Conduct for transnational corporations carrying on their enterprises in under developed and developing countries.
The Code contains provisions regarding ownership and control designed to strike balance between the competing interests of the Trans national Corporation and the host countries.
It extensively deals with the political, economic, financial, social and legal questions.
The Code provides for disclosure of infor mation to the host countries and it also provides guidelines for nationalisation and compensation, obligations to inter national law and jurisdiction of courts.
The Code lays down provisions for settlement of disputes between the host States and an affiliate of a Transnational Corporation.
It suggests that such disputes should be submitted to the national courts or authorities of host countries unless amicably settled between the parties.
It provides for the choice of law and means for dispute settlement arising out of contracts.
The Code has also laid down guidelines for the determination of settlement of disputes arising out of accident and disaster and also for liability of Transnation al Corporations and the jurisdiction of the courts.
The Code is binding on the countries which formally accept it.
It was stated before us that India has accepted the Code.
If that be so, it is necessary that the Government should take effective measures to translate the provisions of the Code into specific actions and policies backed by appropriate legislation and enforcing machinery to prevent any accident or disaster and to secure the welfare of the victims of any industrial disaster.
In the context of our national dimensions of human rights, right 711 to life, liberty, pollution free air and water is guaranteed by the Constitution under Articles 21, 48A and 5l(g), it is the duty of the State to take effective steps to protect the guaranteed constitutional rights.
These rights must be integrated and illumined by the evolving international dimensions and standards, having regard to our sovereignty, as highlighted by Clauses 9 and 13 of U.N. Code of conduct on Transnational Corporations.
The evolving standards of international obligations need to be respected, maintaining dignity and sovereignty of our people, the State must take effective steps to safeguard the constitutional rights of citizens by enacting laws.
The laws so made may provide for conditions for granting licence to Transnational Corpora tions, prescribing norms and standards for running indus tries on Indian soil ensuring the constitutional rights of our people relating to life, liberty, as well as safety to environment and ecology to enable the people to lead a healthy and clean life.
A Transnational Corporation should be made liable and subservient to laws of our country and the liability should not be restricted to affiliate company only but the parent corporation should also be made liable for any damage caused to the human being or ecology.
The law must require transnational corporations to agree to pay such damages as may be determined.
by the statutory agencies and forum constituted under it without exposing the victims to long drawn litigation.
Under the existing civil law damages are determined by the Civil Courts, after a long drawn litigation, which destroys the very purpose of awarding damages.
In order to meet the situation, to avoid delay and to ensure immediate relief to the victims we would suggest that the law made by the Parliament should provide for constitution of tribunals regulated by special procedure for determining compensation to victims of industrial disaster or accident, appeal against which may lie to this Court on limited ground of questions of law only after depositing the amount determined by the Tribunal.
The law should also provide for interim relief to victims during the pendency of proceedings.
These steps would minimise the misery and agony of victims of hazardous enterprises.
There is yet another aspect which needs consideration by the Government and the Parliament.
Industrial development in our country and the hazards involved therein, pose a mandatory need to constitute a statutory "Industrial Disas ter Fund", contributions to which may be made by, the Gov ernment, the industries whether they are transnational corporations or domestic undertakings public or private.
The extent of contribution may be worked out having regard to the extent of hazardous nature of the enterprise and other allied matters.
The Fund should be permanent in nature, so that money is 712 readily available for providing immediate effective relief to the victims.
This may avoid delay, as has happened in the instant case in providing effective relief to the victims.
The Government and the Parliament should therefore take immediate steps for enacting laws, having regard to these suggestions, consistent with the international norms and guidelines as contained in the United Nations Code of Con duct on Transnational Corporations.
With these observations, I agree with the order proposed by my learned brother, Sabyasachi Mukharji, CJI.
RANGANATHAN, J. Five years ago, this country was shaken to its core by a national catastrophe, second in magnitude and disastrous effects only to the havoc wrought by the atomic explosions in Hiroshima and Nagasaki.
Multitudes of illiterate and poverty stricken people in and around Bhopal suffered damage to life and limb due to the escape of poi sonous Methyl Isocyanate (MIC) gas from one of the storage tanks at the factory of the Union Carbide (India) Limited (UCIL) in Bhopal, a wholly owned subsidiary of the multina tional giant, the Union Carbide Corporation (UCC).
A number of civil suits claiming damages from the UCC were filed in the United States of America and similar litigation also followed in Indian courts.
Fearing the possibilities of the exploitation of the situation by vested interests, the Government of India enacted, the ( 'the ') to regulate the course of such litigation.
Briefly speaking, it empowered the Union of India to take over the conduct of all litiga tion in this regard and conduct it in place of, or in asso ciation with, the individual claimants.
It also enabled the Union to enter into a compromise with the UCC and UCIL and arrive at a settlement.
The writ petitions before us have been filed challenging the constitutional validity of this statute on the ground that the divestiture of the claimants ' individual rights to legal remedy against the multinational for the consequences of carrying on dangerous and hazardous activities on our soil violates the fundamental rights guaranteed under article 14, 19 and 21 of the Constitution.
In consequence of certain proceedings before Judge Keenan of the U.S. District Courts, the venue of the litiga tion shifted to India.
In the principal suit filed in India by the Union (Civil Suit No. 1113/86) orders were passed by the trial court in Bhopal directing the UCC to deposit Rs.370 crores (reduced to Rs.250 crores by the Madhya Pra desh High Court) as interim payment to the gas victims pending disposal of the suit.
There were appeals to this Court in which the 713 UCC contested the Court 's jurisdiction to pass an order for an interim payment in a suit for money, while the Union pleaded that a much higher interim payment should have been granted.
When the matter was being argued in this Court, a settlement was arrived at between the Union and the UCC under which a sum of Rs.750 crores has been received by the Union in full settlement of all the claims of all victims of the gas leak against the UCC.
The Union also agreed to withdraw certain prosecutions that had been initiated against the officials of the UCC and UCIL in this connec tion.
This settlement received the imprimatur of this Court in its orders dated 14th & 15th February, 1989.
It is unfortunate that, though the writ petitions before us were pending in this Court at that time, neither their contents nor the need for considering first the issue of the validity of the before thinking of a settlement in pursuance of its provisions seem to have been effectively brought to the notice of the Bench which put an end to all the litigation on this topic in terms of the settlement.
The settlement thus stood approved while the issue of validity of the under which it was effected stood undecided.
When this was brought to the notice of the above Bench, it di rected these writ petitions to be listed before a different Bench 'to avoid any possible feeling that the same Bench may be coloured in its views on the issue by reason of the approval it had given to the fait accompli viz. the settle ment.
That is now these matters came before us.
The petitioners, claiming to represent a section of the victims are, firstly, against any settlement at all being arrived at with the UCC.
According to them, it is more important to ensure by penal action that multinational corporations do not play with the lives of people in de veloping and under developed countries than to be satisfied with mere compensation for injury and that the criminal prosecutions initiated in this case should have been pur sued.
Secondly, they are of the view that the amount for which the claims have been settled is a pittance, far below the amount of damages they would have been entitled to, on the principles of strict, absolute and punitive liability enunciated by this Court in Mehta 's case [1987] 1 S.C.R. 819.
Thirdly, their grievance is that no publicity at all was given, before this court passed its order, to enable individual claimants or groups of them to put forward their suggestions or objections to the settlement proposed.
Their interests were sealed, they say, without complying with elementary principles of natural justice.
They contend that the provisions of an which has made such a settlement possible cannot be constitutionally valid.
714 The arguments before us ranged over a very wide ground, covered several issues and extended to several days.
This Bench has been placed in somewhat of a predicament as it has to pronounce on the validity of the provisions of the in the context of an implementation of its provisions in a particular manner and, though we cannot (and do not) express any views regarding the merits of the settlement, we are asked to consider whether such settlement can be consistent with a correct and proper interpretation of the tested on the touchstone of the fundamental rights guaranteed under the Constitution.
Mukharji, C.J., has outlined the issues, dealt elaborately with the contentions urged, and given expression to his conclusions in a learned, elaborate and detailed judgment which we have had the advantage of perus ing in draft.
Our learned brother K.N. Singh, J., has also highlighted certain aspects in his separate judgment.
We are, in large measure, in agreement with them, but should like to say a few words on some of the issues in this case, particularly those in regard to which our approach has been somewhat different: 1.
The issue regarding the validity of the turns principally on the construction of sections 3 and 4 of the .
We are inclined to hold that the fact that a settlement has been effected, or the circumstances in which or the amount for which the claims of the victims have been set tled, do not have a bearing on this question of interpreta tion and have to be left out of account altogether except as providing a contextual background in which the question arises.
Turning therefore to the statute and its implica tions, the position is this.
Every person who suffered as a consequence of the gas leak had a right to claim compensa tion from the persons who, according to him, were liable in law for the injury caused to him and also a fight to insti tute a suit or proceeding before any court or authority with a view to enforce his right to claim damages.
In the normal course of events, such a claimant who institute a suit or proceeding would have been at complete liberty to withdraw the said suit or proceeding or enter into any compromise he may choose in that regard.
Section 3 undoubtedly takes away this fight of the claimant altogether: (a) except to the limited extent specified in the proviso to section 3(3) and (b) subject to the provisions of section 4, for this section clearly states that it is the Central Government and the Central Government alone which has the right to represent and act in place of the claimants, whether within or outside India, for all purposes in 715 connection with the enforcement of his claims.
We may first consider how far the main provision in section 3 (leaving out of account the proviso as well as section 4) is compatible with the Constitution The first question that arises is whether the legisla ture is justified in depriving the claimants of the right and privilege of enforcing their claims and prosecuting them in such manner as they deem fit and in compulsorily inter posing or substituting the Government in their place.
We think that, to this question, there can be only one answer.
As pointed out by our learned brother, the situation was such that the victims of the tragedy needed to be protected against themselves as their adversery was a mighty multi national corporation and proceedings to a considerable extent had been initiated in a foreign country, where the conduct of the cases was entrusted to foreign lawyers under a system of litigation which is unfamiliar to us here.
In the stark reality of the situation, it cannot even be plau sibly contended that the large number of victims of the gas leak disaster should have been left to fend for itself and merely provided with some legal aid of one type or another.
It is necessary to remember that, having regard to the identity of the principal ground of claim of all the vic tims, even if a single victim was not diligent in conducting his suit or entered into a compromise or submitted to a decree judging the issues purely from his individual point of view, such a decision or decree could adversely affect the interests of the innumerable other victims as well.
In fact, it appears that a settlement between one set of claim ants and the adversary corporation was almost imminent and would perhaps have been through out for the timely interven tion of the Government of India.
The battle for the enforce ment of one 's rights was bound to be not only prolonged but also very arduous and expensive and the decision of the legislature that the fight against the adversary should be consolidated and its conduct handed over to the Government of India it may perhaps have been better if it had been handed over to an autonomous body independent of the Govern ment but, as pointed out by our learned brother, the course adopted was also not objectionable was perhaps the only decision that could have been taken in the circumstances.
This is indeed a unique situation in which the victims, in order to realise to the best advantage their rights against UCC, had to be helped out by transposing that right to be enforced by the Government.
We did not indeed understand any learned counsel before us to say that the legislature erred in entrusting the Government of India 716 with the responsibility of fighting for the victims.
The only grievance is that in the process their right to take legal proceedings should not have been completely taken away and that they should also have had the liberty of partici pating in the proceedings right through.
In fact, though the contemplates the Central Government to completely act in place of the victims, the Government of India has not in fact displaced them altogether.
In all the proceedings pending in this country, as well as those before Judge Keenan, the Government of India has conducted the proceed ings but the other victims or such of them as chose to associate themselves in these proceedings by becoming par ties were not shut out from taking part in the proceedings.
In fact, as the learned Attorney General pointed out, one of the groups of litigants did give great assistance to the trial judge at Bhopal.
But even if the provisions of section 3 had been scrupulously observed and the names of all parties, other than the Central Government, had been got deleted from the array of parties in the suits and proceedings pending in this country, we do not think that the result would have been fatal to the interests of the litigants.
On the con trary, it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising their rights against the Union Carbide Corpora tion.
Such representation can well be justified by resort to a principle analogous to, if not precisely the same as that of, "parens patriae".
A victim of the tragedy is compelled to part with a valuable right of his in order that it might be more efficiently and satisfactory 'exploited for his benefit than he himself is capable of.
It is of course possible that there may be an affluent claimant or lawyer engaged by him, who may be capable of fighting the litiga tion better.
It is possible that the Government of India as a litigant may or may not be able to pursue the litigation with as much determination or capability as such a litigant.
But in a case of the present type one should not be con founded by such a possibility.
There are more indigent litigants than affluent ones.
There are more illiterates than enlightened ones.
There are very few of the claimants, capable of finding the financial wherewithal required for fighting the litigation.
Very few of them are capable of prosecuting such a litigation in this country not to speak of the necessity to run to a foreign country.
The financial position of UCIL was negligible compared to the magnitude of the claim that could arise and, though eventually the battle had to be pitched on our own soil, an initial as well as final recourse to legal proceedings in the United States was very much on the cards, indeed inevitable.
In this situa tion, the legislature was perfectly justified in coming to the aid of the victims with this piece of legislation and in asking the Central Government to shoulder the responsibility by substituting itself in place of the victims 717 for all purposes connected with the claims.
Even if the had provided for a total substitution of the Government of India in place of the victims and had completely precluded them from exercising their rights in any manner, it could perhaps have still been contended that such deprivation was necessary in larger public interest.
But the is not so draconian in its content.
Actual ly, as we have said a little earlier, the grievance of the petitioners is not so much that the Government was entrusted with the functions.
of a dominus litis in this litigation.
Their contention is that the whole object and purpose of the litigation is to promote the interests of the claimants, to enable them to fight the UCC with greater strength and determination, to help them overcome limitations of time, money and legal assistance and to realise the best compensa tion possible consistent not only with the damage suffered by them but also consistent with national honour and pres tige.
It is suggested that the power conferred on the Gov ernment should be construed as one hedged in by this domi nant object.
A divestiture of the claimant 's right in this situation would be reasonable, it is said, only if the claimant 's rights are supplemented by the Government and not supplanted by it.
Assuming the correctness of the argument, the provisions of the proviso to section 3(3) and of section 4 furnish an answer to this contention.
While the provision contained in the main part of section 3 may be sufficient to enable the Government of India to claim to represent the claimants and initiate and conduct suits or proceeding on their behalf, the locus standi of the Government of India in suits filed by other claimants before the commencement of the out side India would naturally depend upon the discretion of the court enquiring into the matter.
That is why the proviso to section 3 makes the right of the Government of India to represent and act in place of the victims in such proceed ings subject to the permission of the court or authority where the proceedings are pending.
It is of course open to such court to permit the Central Government even to displace the claimants if it is satisfied that the authority of the is sufficient to enable it to do so.
In the present case it is common ground that the proceedings before Judge Keenan were being prosecuted by the Central Government along with various individual claimants.
Not only did Judge Keenan permit the association of the Government of India in these proceedings but the Government of India did have a substan tial voice in the course of those proceedings as well.
Again section 4 mandates that, notwithstanding anything 718 contained in section 3, the Central Government, in repre senting and acting in place of any person in relation to any claim, shall have due regard to any matters which such person may require to be urged with respect to his claim.
It also stipulates that if such person so desires, the Central Government shall permit, at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
In other words, though, perhaps, strictly speaking, under section 3 the Central Government can totally exclude the victim himself or his legal practitioner from taking part in the proceedings (except in pending suits outside India), section 4 keeps the substance of the rights of the victims in tact.
It enables, and indeed obliges, the Govern ment to receive assistance from individual claimants to the extent they are able to offer the same.
If any of the vic tims or their legal advisers have any specific aspect which they would like to urge, the Central Government shall take it into account.
Again if any individual claimant at his own expense retains a legal practitioner of his own choice, such legal practitioner will have to be associated with the Government in the conduct of any suit or proceeding relating to his claim.
Sections 3 and 4 thus combine together the interests of the weak, illiterate, helpless and poor victims as well as the interests of those who could have managed for themselves, even without the help of this enactment.
The combination thus envisaged enables the Government to fight the battle with the foreign adversary with the full aid and assistance of such of the victims or their legal advisers as are in a position to offer any such assistance.
Though section 3 denies the claimants the benefit of being eo nominee parties in such suits or proceedings, section 4 preserves to them substantially all that they can achieve by proceeding on their own.
In other words, while seeming to deprive the claimants of their right to take legal action on their own, it has preserved those rights, to be exercised indirectly.
A conjoint reading of sections 3 and 4 would, in our opinion, therefore show that there has been no real total deprivation of the right of the claimants to enforce their claim for damages in appropriate proceedings before any appropriate forum.
There is only a restriction of this right which, in the circumstances, is totally reasonable and justified.
The validity of the is, therefore, not liable to be challenged on this ground.
The next angle from which the validity of the provision is attacked is that the provision enabling the Government to enter into a compromise is bad.
The argument runs thus: The object of the legislation can be furthered only if it per mits the Government to prosecute the litigation more effec tively and not if it enables the Government to 719 withdraw it or enter into a compromise.
According to them, the fails the impecunious victims in this vital aspect.
The authority conferred by the on the Government to enter into a settlement or compromise, it is said, amounts to an absolute negation of the rights of the claimants to compensation and is capable of being so exercised to render such rights totally valueless, as in fact, it is said, has happened.
It appears to us that this contention proceeds on a misapprehension.
It is common knowledge that any authority given to conduct a litigation cannot be effective unless it is accompanied by an authority to withdraw or settle the same if the circumstances call for it.
The vagaries of a litigation of this magnitude and intricacy could not be fully anticipated.
There were possibilities that the litiga tion may have to be fought out to the bitter finish.
There were possibilities that the UCC might be willing to ade quately compensate the victims either on their own ' or at the insistence of the Government concerned.
There was also the possibility, which had already been in evidence before Judge Keenan, that the proceedings might ultimately have to end in a negotiated settlement.
One notices that in most of the mass disaster cases reported, proceedings finally end in a compromise if only to avoid an indefinite prolongation of the agonies caused by such litigation.
The legislation, therefore, cannot be considered to be unreasonable merely because in addition to the right to institute a suit or other proceedings it also empowers the Government to with draw the proceedings or enter into a compromise.
Some misgivings were expressed, in the course of the hearing, of the legislative wisdom (and, hence the validity) of entrusting the carriage of these proceedings and, in particular, the power of settling it out of Court, to the Union of India.
It was contended that the union is itself a joint tort feasor (sued as such by some of the victims) with an interest (adverse to the victims) in keeping down the amount of compensation payable to the minimum so as to reduce its own liability as a joint tort feasor.
It seems to us that this contention in misconceived.
As pointed out by Mukharji, C.J., the Union of India itself is one of the entities affected by the gas leak and has a claim for com pensation from the UCC quite independent of the other vic tims.
From this point of view, it is in the same position as the other victims and, in the litigation with the UCC, it has every interest in securing the maximum amount of compen sation possible for itself and the other victims.
It is, therefore, the best agency in the circumstances that could be looked up to for fighting the UCC on its own as well as on behalf of the victims.
The suggestion that the Union is a joint tort lessor has been 720 stoutly resisted by the learned Attorney General.
But, even assuming that the Union has some liability in the matter, we fail to see how it can derive any benefit or advantage by entering into a low settlement with the UCC.
as is pointed out later in this judgment and by Mukharji, C.J., the and Scheme thereunder have provided for an objective and quasi judicial determination of the amount of damages pay able to the victims of the tragedy.
There is no basis for the fear expressed during the hearing that the officers of the Government may not be objective and may try to cut down the amounts of compensation, so as not to exceed the amount received from the UCC.
It is common ground and, indeed, the learned Attorney General fairly conceded, that the settle ment with the UCC only puts an end to the claims against the UCC and UCIL and does not in any way affect the victims ' rights, if any, to proceed against the Union, the State of Madhya Pradesh or the ministers and officers thereof, if so advised.
If the Union and these officers are joint tort lessors, as alleged, the Union will not stand to gain by allowing the claims against the UCC to be settled for a low figure.
On the contrary it will be interested in settling the claims against the UCC at as high a figure as possible so that its own liability as a joint tort feasor (if made out) can be correspondingly reduced.
We are, therefore, unable to see any vitiating element in the legislation insofar as it has entrusted the responsibility not only of carrying on but also of entering into a settlement, if thought fit.
Nor is there basis for the contention that the enables a settlement to be arrived at without a proper opportunity to the claimants to express their views on any proposals for settlement that may be mooted.
The right of the claimant under section 4 to put forward his suggestions or to be represented by a legal practitioner to put forth his own views in the conduct of the suit or other proceeding certainly extends to everything connected with the suit or other proceeding.
If, in the course of the proceedings there should arise any question of compromise or settlement, it is open to the claimants to oppose the same and to urge the Central Government to have regard to specific aspects m arriving at a settlement.
Equally it is open to any claimant to employ a legal practitioner to ventilate his opinions in regard to such proposals for settlement.
The provisions of the , read by themselves, therefore, guarantee a complete and full protection to the rights of the claimants in every respect.
Save only that they cannot file a suit themselves, their right to acquire redress has not really been abridged by the provisions of the .
Sections 3 and 4 of the properly read, in our opinion, completely vindicate the objects and reasons which compelled Parliament to enact this piece of legislation.
721 Far from abridging the rights of the claimants in any man ner, these provisions are so worded as to enable the Govern ment to prosecute the litigation with the maximum amount of resources, efficiency and competence at its command as well as with all the assistance and help that can be extended to it by such of those litigants and claimants as are capable of playing more than a mere passive rule in the litigations But then, it is contended, the victims have had no opportunity of considering the settlement proposals mooted in this case before they were approved by the Court.
This aspect is dealt with later.
One of the contentions before us was that the UCC and UCIL are accountable to the public for the damages caused by their industrial activities not only on a basis of strict liability but also on the basis that the damages to be awarded against them should include an element of punitive liability and that this has been lost sight of while approv ing of the proposed settlement.
Reference was made in this context to M.C. Mehta 's case (supra).
Whether the settlement should have taken into account this factor is, in the first place, a moot question.
Mukharji, C.J. has pointed out and we are inclined to agree that this is an "uncertain province of the law" and it is premature to say whether this yard stick has been, or will be, accepted in this country, not to speak of its international acceptance which may be necessary should occasion arise for executing a decree based on such a yardstick in another country.
Secondly, whether the settle ment took this into account and, if not, whether it is bad for not having kept this basis in view are questions that touch the merits of the settlement with which we are not concerned.
So we feel we should express no opinion here on this issue.
It is too far fetched, it seems to us, to con tend that the provisions of the permitting the Union of India to enter into a compromise should be struck down as unconstitutional because they have been construed by the Union of India as enabling it to arrive at such a settle ment.
The argument is that the confers a discretionary and enabling power in the Union to arrive at a settlement but lays down no guidelines or indications as to the stage at which, or circumstances in which, a settlement can be reached or the type of settlement that can be arrived at; the power conferred should, therefore, be struck down as unguided, arbitrary and uncanalised.
It is difficult to accept this contention.
The power to conduct a litigation, particularly in a case of this type, must, to be effective, necessarily carry with it a power to settle it at any stage.
It is impossible to provide statutorily any detailed 722 catalogue of the situations that would justify a settlement or the basis or terms on which a settlement can be arrived at.
moreover, cannot be said to have conferred any unguided or arbitrary discretion to the Union in conducting proceedings under the .
Sufficient guidelines emerge from the Statement of Objects and Reasons of the which makes it clear that the aim and purpose of the is to secure speedy and effective redress to the victims of the gas leak and that all steps taken in pursuance of the should be for the implementation of the object.
Whether this object has been achieved by a particular settlement will be a different question but it is altogether impossible to say that the itself is bad for the reason alleged.
We, therefore, think it necessary to clarify, for our part, that we are not called upon to express any view on the observa tions in Mehta 's case and should not be understood as having done so.
Shri Shanti Bhushan, who supported the Union 's stand as to the validity of the , however, made his support conditional on reading into its provisions an obligation on the part of the Union to make interim payments towards their maintenance and other needs consequent on the tragedy, until the suits filed on their behalf ultimately yield tangible results.
That a modern welfare State is under an obligation to give succour and all kinds of assistance to people in distress cannot at all be gainsaid.
In point of fact also, as pointed out by the learned Chief Justice, the provisions of the and scheme thereunder envisage interim payments to the victims; so, there is nothing objectionable in this on this aspect.
However, our learned brother has accept ed the argument addressed by Shri Shanti Bhushan which goes one step further viz. that the would be unconstitutional unless this is read as "a major inarticulate promise" under lying the .
We doubt whether this extension would be justified for the hypothesis underlying the argument is, in the words of Sri Shanti Bhushan, that had the victims been left to fend for themselves, they would have had an "immedi ate and normal right of obtaining compensation from the Union Carbide" and, as the legislation has vested their rights in this regard in the Union, the should be con strued as creating an obligation on the Central Government to provide interim relief.
Though we would emphatically reiterate that grant of interim relief to ameliorate the plight of its subjects in such a situation is a matter of imperative obligation on the part of the State and not merely 'a matter of fundamental human decency ' as Judge Keenan put it, we think that such obligation flows from its character as a welfare State and would exist irrespective of what the statute may or may not provide.
In our view the validity of the does not depend upon its 723 explicitly or implicitly providing for interim payments.
We say this for two reasons.
In the first place, it was, and perhaps still is, a moot question whether a plaintiff suing for damages in tort would be entitled to advance or interim payments in anticipation of a decree.
That was, indeed, the main point on which the interim orders in this case were challenged before this Court and, in the context of the events that took place, remains undecided.
It may be men tioned here that no decided case was brought to our notice in which interim payment was ordered pending disposal of an action in tort in this country.
May be there is a strong case for ordering interim payments in such a case but, in the absence of full and detailed consideration, it cannot be assumed that, left to themselves, the victims would have been entitled to a "normal and immediate" right to such payment.
Secondly, even assuming such right exists, all that can be said is that the State, which put itself in the place of the victims, should have raised in the suit a demand for such interim compensation which it did and that it should distribute among the victims such interim compensation as it may receive from the defendants.
To say that the would be bad if it does not provide for payment of such compensa tion by the Government irrespective of what may happen in the suit is to impose on the State an obligation higher than what flows from its being subrogated to the rights of the victims.
As we agree that the and the scheme thereunder envisage interim relief to the victims, the point is perhaps only academic.
But we felt that we should mention this as we are not in full agreement with Mukharji, C.J., on this aspect on the case.
The next important aspect on which much debate took place before us was regarding the validity of the qua the procedure envisaged by it for a compromise or settle ment.
It was argued that if the suit is considered as a representative suit no compromise or settlement would be possible without notice in some appropriate manner to all the victims of the proposed settlement and an opportunity to them to ventilate their views thereon (vide Order XXIII, r. 3B, C.P.C.).
The argument runs thus: section 4 of the either incorporates the safeguards of these provisions in which event any settlement effected without compliance with the spirit, if not the letter, of these provisions would be ultra vires the .
Or it does not, in which event, the provisions of section 4 would be bad as making possible an arbi trary deprivation of the victims ' rights being inconsistent with, and derogatory of, the basic rules established by the ordinary Law of the land viz. the Code of Civil Procedure.
We are inclined to take the view that it is not possible to bring the suits brought under the within the categories of representative action envisaged in the Code of Civil procedure.
The 724 deals with a class of action which is sui generis and for which a special formula has been found and encapsuled in section 4.
The divests the individual claimants of their right to sue and vests it in the Union.
In relation to suits in India, the Union is the sole plaintiff, none of the others are envisaged as plaintiffs or respondents.
The victims of the tragedy were so numerous that they were never defined at the stage of filing the plaint nor do they need to be de fined at the stage of a settlement.
The litigation is car ried on by the State in its capacity, not exactly the same as but somewhat analogous to that of a "parens patriae".
In the case of a litigation by karta of a Hindu Undivided Family or by a guardian on behalf of a ward, who is non sui juris, for example, the junior members of the family or the wards, are not to be consulted before entering into a set tlement.
In such cases, the Court acts as guardian of such persons to scrutinise the settlement and satisfy itself that it is in the best interest of all concerned.
It is later discovered that there has been any fraud or collusion, it may be open to the junior members of the family or the wards to call the karta or guardian to account but, barring such a contingency, the settlement would be effective and binding.
In the same way, the Union as "parens patriae" would have been at liberty to enter into such settlement as it consid ered best on its own and seek the Court 's approval there fore.
However, realising that the litigation is truly fought on behalf and for the benefit of innumerable, though not fully identified victims the has considered it necessary to assign a definite role to the individual claimants and this is spelt out in section 4.
This section directs: (i) that the union shall have due regard to any matters which such person may require to be urged with respect to his claim; and (ii) that the Union shaH, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
This provision adequately safeguards the interests of indi vidual victims.
It enables each one of them to bring to the notice of the Union any special features or circumstances which he would like to urge in respect of any matter and if any such features are brought to its notice the Union is obliged to take it into account.
Again, the individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the proceed ings.
If the suits in this 725 case had proceeded, in the normal course, either to the stage of a decree or even to one of settlement the claimants could have kept themselves abreast of the developments and the statutory provisions would have been more than adequate to ensure that the points of view of all the victims are presented to the court.
Even a settlement or compromise could not have been arrived at without the court being apprised of the views or any of them who chose to do so.
Advisedly, the statute has provided that though the Union of India will be the dominus litis in the suit, the interests of all the victims and their claims should be safeguarded by giving them a voice in the proceedings to the extent indi cated above.
This provision of the statute is an adaptation of the principle of O.I.r. 8 and of Or.
XXIII r. 3 of the Code of Civil Procedure in its application to the suits governed by it and, though the extent of participation allowed to the victims is somewhat differently enunciated in the legislation, substantially speaking, it does incorporate the principles of natural justice to the extent possible in the circumstances.
The statute cannot, therefore, be fault ed, as has been pointed out earlier also, on the ground that it denies the victims an opportunity to present their views or places them at any disadvantage in the matter of having an effective voice in the matter of settling the suit by way of compromise.
The difficulty in this case has arisen, as we see it, because of a fortuitous circumstance viz. that the talks of compromise were mooted and approved in the course of the hearing of an appeal from an order for interim payments.
Though compromise talks had been in the air right from the beginning of this episode, it is said that there was an element of surprise when they were put forward in Court in February, 1989.
This is not quite correct.
It has been pointed out that even when the issue regarding the interim relief was debated in the courts below, attempts were made to settle the whole litigation.
The claimants were aware of this and they could perhaps should have anticipated that similar attempts would be made in this Court also.
Though certain parties had been associated with the conduct of the proceedings in the trial court and the trial judge did handsomely acknowledge their contribution to the proceed ings they were apparently not alert enough to keep a watch ing brief in the Supreme Court, may be under the impression that the appeal here was concerned only with the quantum of interim relief.
One set of parties was present in the Court but, apart from praying that he should be forthwith paid a share in the amount that would be deposited in Court by the UCC in pursuance of the settlement, no attempt appears to have been made to put forward a contention that the amount of settlement was inade 726 quate or had not taken into account certain relevant consid erations.
The Union also appears to have been acting on the view that it could proceed ahead on its own both in its capacity as "parens patraie" as well as in view of the powers of attorney held by it from a very large number of the victims though the genuineness of this claim is now contested before us.
There was a day 's interval between the enunciation of the terms of the settlement and their approv al by the Court.
Perhaps the Court could have given some more publicity to the proposed settlement in the newspapers, radio and television and also permitted some time to lapse before approving it, if only to see whether there were any other points of view likely to emerge.
Basically speaking, however, the has provided an adequate opportunity to the victims to speak out and if they or the counsel engaged by some of them in the trial court had kept in touch with the proceedings in this court, they could have most certainly made themselves heard.
If a feeling has gained ground that their voice has not been fully heard, the fault was not with the statute but was rather due to the developments leading to the finalisation of the settlement when the appeal against the interim order was being heard in this Court.
One of the points of view on which considerable emphasis was laid in the course of the arguments was that in a case of this type the offending parties should be dealt with strictly under the criminal law of the Land and that the inclusion, as part of the settlement, of a term requiring the withdrawal of the criminal prosecutions launched was totally unwarranted and vitiates the settlement.
It has been pointed out by Mukharji, C.J. , and we agree that the talks only of the civil liability of, and the proceedings against, the UCC or UCIL or others for damages caused by the gas leak.
It has nothing to say about the criminal liability of any of the parties involved.
Clearly, therefore, this part of the settlement comprises a term which is outside the purview of the .
The validity of the cannot, there fore, be impugned on the ground that it permits and should not have permitted the withdrawal of criminal proceedings against the delinquents.
Whether in arriving at the settle ment, this aspect could also have been taken into account and this term included in it, is a question concerning the validity of the settlement.
This is a question outside the terms of reference to us and we, therefore, express no opinion in regard thereto.
A question was mooted before us as to whether the actual settlement if not the statutory provision is liable to be set aside on the grounds that the principles of natu ral justice have been flagrantly 727 violated.
The merits of the settlement as such are not in issue before us and nothing we say can or should fetter the hands of the Bench hearing a review petition which has already been filed, from passing such orders thereon as it considers appropriate.
Our learned brother, however, has, while observing that the question referred to us is limited to the validity of the alone and not the settlement, incidentally discussed this aspect of the case too.
He has pointed out that justice has in fact been done and that all facts and aspects rele vant for a settlement have been considered.
He has pointed out that the grievance of the petitioners that the order of this Court did not give any basis for the settlement has since been sought to be met by the order passed on 4th May, 1989 giving detailed reasons, This shows that the Court had applied its mind fully to the terms of the settlement in the light of the data as well as all the circumstances placed before it and had been satisfied that the settlement pro posed was a fair and reasonable one that could be approved.
In actions of this type, the Court 's approval is the true safety valve to prevent unfair settlements and the fact is that the highest Court of the land has given thought to the matter and seen it fit to place its seal of approval to the settlement.
He has also pointed out that a post decisional hearing in a matter like this will not be of much avail.
He has further pointed out that a review petition has already been filed in the case and is listed for hearing.
The Court has already given an assurance in its order of May 4, 1989, that it will only be too glad to consider any aspects that may have been overlooked in considering the terms of the settlement.
Can it be said, in the circumstances, that there has been a failure of justice which compels us to set aside the settlement as totally violative of fundamental rights? Mukharji, C.J., has pointed out that the answer to this question should be in the negative.
It was urged that there is a feeling that the maxim: "Justice must not only be done but must also appear to be done" has not been fully complied with and that perhaps, if greater publicity had attended the hearing, many other facts and aspects could have been high lighted resulting in a higher settlement or no settlement at all.
That feeling can be fully ventilated and that deficien cy can be adequately repaired, it has been pointed out by Mukharji, C.J., in the hearing on the review petition pend ing before this Court.
Though we are prima facie inclined to agree with him that there are good reasons why the settle ment should not be set aside on the ground that the princi ples of natural justice have been violated, quite apart from the practical complications that may arise as the result of such an order, we would not express any final opinion on the validity of the settlement but would leave it open to be agitated, to the 728 extent permissible in law, in the review petition pending before this Court.
There is one more aspect which we may perhaps usefully refer to in this context.
The scheme of the is that on the one hand the Union of India pursues the litigiation against the UCC and the UCIL; on the other all the victims of the tragedy are expected to file their claims before the prescribed authority and have their claims for compensation determined by such authority.
Certain infirmities were pointed out on behalf of the petitioners in the statutory provisions enacted in this regard.
Our learned brother has dealt with these aspects and given appropriate directions to ensure that the claims will be gone into by a quasi judicial authority (unfettered by executive prescriptions of the amounts of compensation by categorising the nature of in juries) with an appeal to an officer who has judicial quali fications.
In this manner the scheme under the provides for a proper determination of the compensation payable to the various claimants.
Claims have already been filed and these are being scrutinised and processed.
A correct picture as to whether the amount of compensation for which the claims have ben settled is meagre, adequate or excessive will emerge only at that stage when all the claims have been processed and their aggregate is determined.
In these cir cumstances, we feel that no useful purpose will be served by a post decisional hearing on the quantum of compensation to be considered adequate for settlement.
For these reasons, it would seem more correct and proper not to disturb the orders of 14 15 February, 1989 on the ground that the rules of natural justice have not been complied with, particularly in view of the pendency of the review petition.
Before we conclude, we would like to add a few words on the state of the law of torts in this country.
Before we gained independence, on account of our close association with Great Britain, we were governed by the common law principles.
In the field of torts, under the common law of England, no action could be laid by the dependants or heirs of a person whose death was brought about by the tortious act of another on the maxim actio personalis moritur cum persona, although a person injured by a similar act could claim damages for the wrong done to him.
In England this situation was remedied by the passing of the Fatal Accidents Act, 1846, popularly known as Lord Campell 's Act.
Soon thereafter the Indian Legislature enacted the Fatal acci dents Act, 1855.
This Act is fashioned on the lines of the English Act 729 of 1846.
Even though the English Act has undergone a sub stantial change, our law has remained static and seems a trifle archaic.
The magnitude of the gas leak disaster in which hundreds lost their lives and thousands were maimed, not to speak of the damage to livestock, flora and fauna, business and property, is an eye opener.
The nation must learn a lesson from this traumatic experience and evolve safeguards atleast for the future.
We are of the view that the time is ripe to take a fresh look at the outdated cen tury old legislation which is out of tune with modern con cepts.
While it may be a matter for scientists and technicians to find solutions to avoid such large scale disasters, the law must provide an effective and speedy remedy to the victims of such torts.
The Fatal Accidents Act, on account of its limited and restrictive application, is hardly suited to meet such a challenge.
We are, therefore, of the opinion that the old antiquated Act should be drastically amended or fresh legislation should be enacted which should, inter alia, contain appropriate provisions in regard to the fol lowing matters: (i) The payment of a fixed minimum compensa tion on a "no fault liability" basis (as under the Motor Vehicles Act), pending final adjudi cation of the claims by a prescribed forum; (ii) The creation of a special forum with specific power to grant interim relief in appropriate cases; (iii) The evolution of a procedure to be followed by such forum which will be conducive to the expeditious determination of claims and avoid the high degree of formalism that at taches to proceedings in regular courts; and (iv) A provision requiring industries and concerns engaged in hazardous activities to take out compulsory insurance against third party risks.
In addition to what we have said above, we should like to say that the suggestion made by our learned brother, K.N. Singh J., for the creation of an Industrial Disaster Fund (by whatever name called) deserves serious consideration.
We would also endorse his suggestion that the Central Govern ment will be well advised if, in future, it insists on certain safeguards before permitting a transnational company to do business in this country.
The necessity of such safe guards, atleast in the following two directions, is high lighted in the present case: 730 (a) Shri Garg has alleged that the processes in the Bhopal Gas Plant were so much shrouded in secrecy that neither the composition of the deadly gas that escaped nor the proper anti dote therefore were known to anyone in this country with the result that the steps taken to combat its effects were not only delayed but also totally inadequate and ineffective.
It is necessary that this type of situation should be avoided.
The Government should therefore insist, when granting licence to a transnational company to establish its indus try here, on a right to be informed of the nature of the processes involved so as to be able to take prompt action in the event of an accident.
(b) We have seen how the victims in this case have been considerably handicapped on account of the fact that the immediate tort feasor was the subsidiary of a multi national with its Indian assets totally inadequate to satisfy the claims arising out of the disaster.
It is, therefore, necessary to evolve, either by international consensus or by unilateral legislation, steps to overcome these handicaps and to ensure (i) that foreign corporations seeking to establish an industry here, agree to submit to the jurisdiction of the Courts in India in respect of actions for tortious acts in this country; (ii) that the liability of such a corporation is not limited to such of its assets (or the assets of its affiliates) as may be found in this country, but that the victims are able to reach out to the assets of such concerns anywhere in the world; (iii) that any decree obtained in Indian Courts in compliance with due process of law is capable of being executed against the foreign corpora tion, its affiliates and their assets without further procedural hurdles, in those other countries.
Our brother, K.N. Singh, J., has in this context dealt at some length with the United Nations Code of Conduct for multi national Corporations which awaits approval of various countries.
We hope that calamities like the one which this country has suffered will serve as catalysts to expedite the acceptance of an international code on such matters in the near future.
With these observations, we agree with the order pro posed by the learned Chief Justice.
G.N. Petitions dis posed of.
| IN-Abs | Union Carbide (India) Ltd. (UCIL) is a subsidiary of Union Carbide Corporation (UCC), a New York Corporation.
UCIL was incorporated in India in 1954.
50.99% of its share holding was with UCC and 22% of the shares were held by Life Insurance Corporation of India and Unit Trust of India.
UCIL owned a chemical plant in Bhopal for the manufacture of pesticides using Methyl Isocyanate (MIC) a highly toxic gas.
On the night between 2nd and 3rd December, 1984, there was a massive escape of lethal gas from the MIC Storage tank at the Bhopal plant resulting in the tragic death of about 3,000 people.
Thousands of people suffered injuries.
The environment also got polluted, badly affecting the flora and the fauna.
On behalf of the victims, many suits were filed in various District Courts in the United States of America.
All such suits were consolidated by the Judicial Panel on Multi District Litigation and were assigned to the U.S. District Court, Southern District of New York and Judge Keenan was the Presiding Judge throughout.
Later, the legal battle shifted to Indian Courts, as it could not proceed in the U.S. Courts, on the ground of forum non conveniens.
599 Meanwhile, the Bhopal Gas Leak Disaster (Processing of claims) 1985 was passed by the Government of India with a view to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with speedily, effectively and equitably.
Union of India filed a suit for damages in the District Court of Bhopal on 5.9.86.
However, there were negotiations for a settlement; hut ultimately the settlement talks had failed.
On 17.12.1987, the District Judge ordered interim relief of Rs.350 crores.
On appeal, the High Court, on 4.4.88 modified the order of the District Judge and ordered an interim relief of Rs.250 crores.
Aggrieved, the UCC as also the Union of India filed petitions for special leave before this Court.
Leave was granted.
By its orders dated 14.2.89 and 15.2.89, this Court, on the basis of a settlement arrived at between the parties, directed UCC to pay a sum of 470 million U.S. Dollars to the Union of India in full settlement of all claims, rights and liabilities related to and arising out of the Bhopal gas disaster.
The said orders were passed keeping in view the Bhopal Gas Disaster (Processing of claims) Act, 1985.
The present Writ Petitions challenge the constitutional validity of the said Act inter alia on the grounds that the Act is violative of the fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution: that the Act is violative of the Principles of Natural Justice mainly on the ground that Union of India, being a joint tort feasor, in that it has permitted establishment of such factories with out necessary safeguards, has no locus standi to compromise on behalf of the victims; that the victims and their legal heirs were not given the opportunity of being heard, before the Act was passed; that in the guise of giving aid, the State could not destroy the rights inherent in its citizens; nor could it demand the citizens to surrender their rights to the State; that vesting of the rights in Central Govern ment was bad and unreasonable because there was conflict of interest between the Central Government and the victims.
since the Central Government owned 22% share in UCIL, and that would make the Central Government a Judge in its own cause.
Disposing of the Writ Petitions, this Court, 600 HELD: Sabyasachi Mukharji, CJ and K.N. Saikia, J. Per C J: 1.1 The Act is constitutionally valid.
It proceeds on the hypothesis that until the claims of the victims are realised or obtained from the delinquents, namely, UCC and UCIL by settlement or by adjudication and until the proceed ings in respect thereof continue, the Central Government must pay interim compensation or maintenance for the vic tims.
In entering upon the settlement in view of section 4 of the Act, regard must be had to the views of the victims and for the purpose of giving regard to these, appropriate notices before arriving at any settlement, was necessary.
In some cases, however, post decisional notice might be sufficient but in the facts and the circumstances of the present case, no useful purpose would be served by giving a post decision al hearing having regard to the circumstances mentioned in the order of this Court dated 4th May, 1989 and having regard to the fact that there are no further additional data and facts available with the victims which can be profitably and meaningfully presented to controvert the basis of the settlement and further having regard to the fact that the victims had their say, or on their behalf their views had been agitated in these proceedings, and will have further opportunity in the pending review proceedings.
[703E H; 704A] 1.2 Though settlement without notice is not quite prop er, on the materials so far available, it is seen that Justice has been done to the victims but justice has not appeared to have been done.
In view of the magnitude of the misery involved and the problems in this case, the setting aside of the settlement on this ground in view of the facts and the circumstances of this case keeping the settlement in abeyance and giving notice to the victims for a post deci sional hearing would not be in the ultimate interest of justice.
It is true that not giving notice was not proper because principles of natural justice are fundamental in the constitutional set up of this country.
No man or no man 's right should be affected without an opportunity to ventilate his views.
Justice is a psychological yearning, in which men seek acceptance of their view point by having an opportunity of vindication before the forum or the authority enjoined or obliged to take a decision affecting their right.
Yet in the particular situations, one has to bear in mind how an in fraction of that should be sought to be removed in accord ance with justice. "To do a great right" after all.
it is permissible sometimes "to do a little wrong".
In the facts and circumstances of the case, this is one of those rare occasions.
[701G H; 702A C] 2.1 The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed.
It has to be borne in mind that if so 601 judged it passed the test of reasonableness, then the possi bility of the power conferred being improperly used is no ground for pronouncing the law itself invalid.
[659E G] 2.2 Conceptually and from the jurisprudential point of view, especially in the background of the Preamble to the Constitution of India and the mandate of the Directive Principles, it was possible to authorise the Central Govern ment to take over the claims of the Victims to fight against the multinational corporation in respect of the claims.
Because of the situation the victims were under disability in pursuing their claims in the circumstances of the situa tion fully and properly.
But there is no prohibition or inhibition, for Indian State taking over the claims of the victims or for the State acting for the victims as the Act has sought to provide.
[640E H] 2.3 The Act does provide a special procedure in respect of rights of the victims and to that extent the Central Govt.
takes upon itself the rights of the victims.
It is a special Act providing a special procedure for a kind of special class of victims.
In view of the enormity of the disaster the victims of the Bhopal gas leak disaster, as they were placed against the multi national and a big Indian Corporation and in view of the presence of foreign contin gency lawyers to whom the victims were exposed, the claim ants and victims can legitimately be described as a class by themselves different and distinct, sufficiently separate and identifiable to be entitled to special treatment for effec tive, speedy, equitable and best advantageous settlement of their claims.
There indubitably is differentiation.
But this differentiation is based on a principle which has rational nexus with the aim intended to be achieved by this differen tiation.
The disaster being unique in its character and in the recorded history of industrial disaster, situated as the victims were against a mighty multinational with the presence of foreign contingency lawyers looming on the scene, there were sufficient grounds for such differentia tion and different treatment.
In treating the victims of the gas leak disaster differently and providing them a proce dure, which was just, fair, reasonable and which was not unwarranted or unauthorised by the Constitution, Article 14 is not breached.
[683E H; 684A B] Collector of Customs, Madras vs Nathella Sampathu Chet ty; , ; P.J. Irani vs State of Madras, ; D.K. Trivedi vs State of Gujarat, [1986] Suppl.
SCC 20, relied on.
Ballast Corporation vs O.D. Commission, , referred to 602 3.1 The present case is one where the Govt.
of India only represented the victims as a party ' and did not adjudi cate between the victims and the UCC.
It is the court which would adjudicate the rights of the victims.
The representa tion of the victims by the Government of India cannot be held to be bad, and there is and there was no scope of violation of any principle of natural justice.
[670B] 3.2 The connotation of the term "parens patria" differs from country to country, for instance, in England it is the King, in America it is the people, etc.
According to Indian concept parens patria doctrine recognised King as the pro tector of all citizens as parent.
The Government is within its duty to protect and to control persons under disability.
Conceptually, the parens patriae theory is the obligation of the State to protect and take into custody the rights and privileges of its citizens for discharging its obligations.
Our Constitution makes it imperative for the State to secure to all its citizens the rights guaranteed by the Constitu tion and where the citizens are not in a position to assert and secure their rights, the State must come into picture and protect and fight for the right of the citizens.
The Preamble to the Constitution, read with the Directive Prin ciples contained in Articles 38, 39 and 39A enjoins the State to take up these responsibilities.
It is the protec tive measure to which the social welfare state is committed.
It is necessary for the State to ensure the fundamental rights in conjunction with the Directive Principles of State Policy to effectively discharge its obligation and for this purpose, if necessary, to deprive some rights and privileges of the individual victims or their heirs to protect their rights better and secure these further.
[638E H; 639A] 3.3 The UCC had to be sued before the American courts.
The tragedy was treated as a national calamity and the Govt.
of India had the right, and indeed the duty, to take care of its citizens, in the exercise of its parens patriae juris diction or on principles analogous thereto.
After having statutorily armed itself in recognition of such parens patriae right or on principles analogous thereto, it went to the American Courts.
No other person was properly designed for representing the victims, as a foreign court had to recognise a right of representation.
The Govt.
of India was permitted to represent was permitted to represent the vic tims before the American courts.
Private plaintiffs were also represented by their attorneys.
The order of Judge Keenan permitted the Govt.
of India to represent the vic tims.
If there was any remote conflict of interests between the Union of India and the victims from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice that no man should be Judge in his own case.
[669C F] 603 3.4 The Act in question has been passed in recognition of the right of the sovereign to act as parens patriae.
The Government of India in order to effectively safeguard the rights of the victims in the matter of the conduct of the case was entitled to act as parens patriae, which position was reinforced by the statutory provisions, namely the Act.
It has to be borne in mind that conceptually and jurispru dentially, the doctrine of parens patriae is not limited to representation of some of the victims outside the territo ries of the country.
It is true that the doctrine has been so utilised in America so far.
Where citizens of a country are victims of a tragedy because of the negligence of any multinational in peculiar situation arises which calls for suitable effective machinery to articulate and effectuate the grievance and demands of the victims, for which the conventional adversary system would be totally inadequate.
The State in discharge of its sovereign obligation must come forward.
The Indian State because of its constitutional commitment is obliged to take upon itself the claim of the victims and to protect them in their hour of need.
[658B F] 3.5 There is no bar on the State to assume responsibili ties analogous to parens patriae to discharge the State 's obligations under the Constitution.
What the Central Govern ment has done in the instant case seems to be an expression of its sovereign power.
This power is plenary and inherent in every sovereign state to do all things which promote the health, peace, moral, education and good order of the people and tend to increase the wealth and prosperity of the State.
Sovereignty is difficult to define.
By the nature of things, the State Sovereignty in these matters cannot be limited.
It has to be adjusted to the conditions touching the common welfare when covered by legislative enactments.
This power is to the public what the law of necessity is to the indi vidual.
It is comprehended in the maxim salus populi suprema lex regard for public welfare is the highest law.
It is not a rule, it is an evolution.
This power has always been as broad as public welfare and as strong as the arm of the state, this can only be measured by the legislative will of the people, subject to the fundamental rights and constitu tional limitations.
This is an emanation of sovereignty and it is the obligation of the State to assume such responsi bilities and protect its citizens.
[658G H; 659A C] 3.6 In the instant case, the victims cannot be consid ered to be any match to the multinational companies or the Government with whom in the conditions that the victims or their representatives were after the disaster physically, mentally, financially, economically and also because of the position of litigation would have to contend.
In such a situation of 604 predicament the victims can legitimately be considered to be disabled.
They were in no position by themselves to look after their own interest effectively or purposefully.
In that background, they are people who needed the State 's protection and should come within the umbrella of State 's sovereignty to assert, establish and maintain their rights against the wrong doers in this mass disaster.
In that perspective, it is jurisprudentially possible to apply the principle of parens patriae doctrine to the victims.
But quite apart from that, it has to be borne in mind that in this case the State is acting on the basis of the Statute itself.
For the authority of the Central Government to sue for and on behalf of or instead in place of the victims, no other theory, concept, or any jurisprudential principle is required than the Act itself.
The Act empowers and substi tutes the Central Government.
The victims have been divested of their rights to sue and such claims and such rights have been vested in the Central Government.
The victims have been divested because the victims were disabled.
The disablement of the victims vis a vis their adversaries in this matter is a self evident factor.
Even if the strict application of the 'parens patriae ' doctrine is not in order, as a concept it is a guide.
The jurisdiction of the State 's power cannot be circumscribed by the limitations of the traditional concept of parens patriae.
Jurisprudentially it could be utilised to suit or alter or adapt itself to the changed circumstances.
In the situation in which the victims were, the State had to assume the role of a parent protecting the rights of the victims who must come within the protective umbrella of the State and the common sovereignty of the Indian people.
The act is an exercise of the sovereign power of the State.
It is an appropriate evolution of the expression of sovereignty in the situation that had arisen.
It has to be accepted as such.
[685C H] 3.7 The concept of parens patriae can be varied to enable the Government to represent the victims effectively in domestic forum if the situation so warrants.
There is no reason to confine the 'parens patriae ' doctrine to only quasi sovereign right of the State independent of and behind the title of the citizen.
[692B C] 3.8 The power to compromise and to conduct the proceed ings are not uncanalised or arbitrary.
These were clearly exercisable only in the ultimate interests of the victims.
The possibility of abuse of a statute does not impart to it any element of invalidity.
[659C D] E.P. Royappa vs State of Tamil Nadu, ; ; Menaka Gandhi vs Union of India, [1978] 2 SCR 621; R.D. Shetty vs International Airport Authority of India, ; followed.
605 Ram Saroop vs S.P. Sahi, relied on.
Budhkaran Chankhani vs Thakur Prasad Shah, AIR ; Banku Behari Mondal vs Banku Behari Hazra, AIR 1943 Cal 203; Medai Dalavoi T. Kumaraswamy Mudaliar vs Medai Dalavoi Rajammal, AIR 1957 Mad.
563 approved.
State of U.P. vs Poosu, ; K.M. Nanavati vs State of Bombay, ; ; Ram Gopal Sarubai vs Smt.
Sarubhai & Ors., ; India Mica & Mican ite Industries Ltd. vs State of Bihar & Ors. ; Alfred L Snapp & SonInc.
vs Puerto Rico, ; 73, Ed.
2d 995, 102 section ct.
3260; State of Georgia vs Tennessee Copper Co., ; , 27 section et.
618, re ferred to.
B.K. Mukherjea on Hindu Religious and Charitable Trusts, Tagore Law Lectures, 5th Edn.
p. 404; Words & Phrases, permanent Edn.
33 p. 99; Black 's Law Dictionary, 5th Edn. 1979, p. 1003; Weaver 's Constitutional Law, p. 490; American Consti tutional Law by Lawrence H. Tribe 1978 Edn. para 3.24, referred to.
4.1 Section 3 provides for the substitution of the Central Government with the right to represent and act in place of (whether within or outside India) every person who has made or is entitled to make, a claim in respect of the disaster.
The State has taken over the rights and claims of the victims in the exercise of sovereignty in order to discharge the constitutional obligations as the parent and guardian of the victims who in the situation as placed needed the umbrella of protection.
Thus, the State has the power and jurisdiction and for this purpose unless the Act is otherwise unreasonable or violative of the constitutional provisions no question of giving a hearing to the parties for taking over these rights by the State arises.
For legis lation by the Parliament, no principle of natural justice is attracted provided such legislation is within the competence of the legislature.
Indeed the present Act is within the competence of the Parliament.
Section 3 makes the Central Government the dominoes litis and it has the carriage of the proceedings, but that does not solve the problem of by what procedure the proceedings should be carried.
[692A D] 4.2 Section 4 means and entails that before entering into any settlement affecting the rights and claims of the victims some kind of notice or information should be given to the victims.
[699D] 606 4.3 Sections 3 and 4 are categorical and clear.
When the expression is explicit, the expression is conclusive, alike in what it says and in what it does not say.
These give the Central Government an exclusive right to act in place of the persons who are entitled to make claim or have already made claim.
The expression 'exclusive ' is explicit and signifi cant.
The exclusively cannot be wittled down or watered down.
The said expression must be given its full meaning and extent.
This is corroborated by the use of the expression 'claim ' for all purposes.
If such duality of rights are given to.
the Central Government alongwith the victims in instituting or proceeding for the realisation or the en forcement of the claims arising out of Bhopal gas leak disaster, then that would be so cumbersome that it would not be speedy, effective or equitable and would not be the best or more advantageous procedure for securing the claims arising out of the leakage.
[683A C] 4.4 Sections 3 and 4 of the Act should be read together alongwith other provisions of the Act and in particular sections 9 and 11 of the Act.
These should be appreciated in the context of the object sought to be achieved by the Act as indicated in the Statement of objects and Reasons and the Preamble to the act.
The Act was so designed that the vic tims of the disaster are fully protected and the claims of compensation or damages for loss of life or personal in juries or in respect of other matters arising out of or connected with the disaster are processed speedily, effec tively, equitably and to the best advantage of the claim ants.
Section 3 of the Act is subject to other provisions of the Act which includes Sections 4 and 11.
Section 4 of the Act opens with non obstante clause, vis a vis, section 3 and, therefore overrides section 3.
[659G H; 660A B] 4.5 In the instant case, the Government of India is only capable to represent the victims as a party.
The adjudica tion of the claims would be done by the Court.
The doctrine of 'Bona fide Representation ' as also 'defacto validity ' are not applicable to the present case.
[690F] Basheshar vs Income Tax Commissioner, ; ; In re Special Courts Bill, ; A.R. Antulay vs R.S. Nayak & Anr., ; ; Ram Krishna Dalmia vs Ten dulkar, ; Ambika Prasad Mishra vs State of U.P. & Ors.
; ; Bodhan Chowdhary vs State of Bihar; , ; Lakshmi Kant Pandey vs Union of India; , ; M/s Mackinnon Mackenzie & Co. Ltd. vs Audrey D ' Costa and Anr., [1987] 2 SCC 469; Sheela Barse vs Secretary, Children Aid Society & Ors.
, ; ; Gokaraju Rangaraju vs State of A.P., ; ; Pushpadevi M. Jatia vs M.L. Wadhwan. ; ; 607 M/s Beopar Sahayak (P) Ltd. & Ors.
vs Vishwanath & Ors., [1987] 3 SCC 693; Dharampal Singh vs Director of Small Industries Services & Ors., AIR 1980 SC 1888; N.K. Mohammed Sulaiman vs N.C. Mohammed lsmail & Ors.; , ; Malkariun Bin Shidrammappa Pasare vs Narhari Bin Shivappa & Anr., 271 A 216, referred to.
Black 's Law Dictionary 5th Edn.
p. 437, referred to.
The restrictions or limitations on the substantive and procedural rights in the Act will have to be judged from the point of view of the particular Statute in question.
No abstract rule or standard of reasonableness can be applied.
That question has to be judged having regard to the nature of the rights alleged to have been infringed in this case, the extent and urgency of the evil sought to be remedied, disproportionate imposition, prevailing conditions at the time, all these facts will have to be taken into considera tion.
Having considered the background, the plight of the impoverished, the urgency of the victims ' need, the presence of the foreign contingency lawyers, the procedure of settle ment in USA in mass action, the strength of the foreign multinationals, the nature of injuries and damages, and the limited but significant right of participation of the vic tims as contemplated by section 4 of the Act, the Act cannot be condemned as unreasonable.
[684C E] State of Madras vs V.G. Row, ; , referred to.
6.1 In view of the principles settled by this Court and accepted all over the world in a case of this magnitude and nature, when the victims have been given some say by Section 4 of the Act, in order to make that opportunity contemplated by section 4 of the Act, meaningful and effective, it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any conclusion in respect of any settlement.
How that opportuni ty should be given, would depend upon the particular situa tion.
Fair procedure should be followed in a representative mass tort action.
[696E F] 6.2 One assumption under which the Act is justified is that the victims were disabled to defend themselves in an action of this type.
If that is so, then the Court cannot presume that the victims were a lot, capable and informed to be able to have comprehended or contemplated the settlement.
In the aforesaid view of the matter notice was necessary.
The victims at large did not have the notice.
The Central Government as the representative of the victims must have the views of the victims and place such view before the court in such manner it considers neces 608 sary before a settlement is entered into.
If the victims want to advert to certain aspect of the matter during the proceedings under the Act and settlement indeed is an impor tant stage in the proceedings, opportunities must be given to the victims.
Individual notices may not be necessary.
The Court can, and should in such situation formulate modalities of giving notice and public notice can also be given invit ing views of the victims by tile help of mass media.
Howev er, it is not necessary that such views would require the consent of all the victims.
[698B C; 698G H; 699A] 6.3 One of the important requirements of justice is that people affected by an action or inaction should have oppor tunity to have their say.
That opportunity the victims have got when these applications were heard and they were heard after utmost publicity and they would have further opportu nity when review application against the settlement would be heard.
1700G H; 701A] 7.1 The Act does not expressly exclude the application of the Code of Civil Procedure.
Section 11 of the Act pro vides the overriding effect indicating that anything incon sistent with the provisions of the Act or in other laws including the Civil Procedure Code should be ignored and the Act should prevail.
Strictly speaking, Order 1 Rule 8 will not apply to a suit or a proceeding under the Act.
It is not a case of one having common interest with others.
Here the plaintiff, the Central Government has replaced and divested the victims.
1696H; 697A B] 7.2 In the instant case, there is no question of aban donment as such of the suit or part of the suit, the provi sions of order XXIII Rule 1 would also not strictly apply.
However, Order XXIH Rule 3B of the Code is an important and significant pointer and the principles behind the said provision would apply to this case.
The said rule 3B pro vides that no agreement of compromise in a representative suit shall be entered into without the leave of the Court expressly recorded in the proceedings; and sub rule (2) of rule 3B enjoins that before granting such leave the court shall give notice in such manner as it may think fit in a representative action.
Representative suit has been defined under Explanation to the said rule vide clause (d) as any other suit in which the decree passed may, by virtue of the provisions this Code or of any other law for the time being in force, bind any person who is not named as party to the suit.
Indubitably the victims would be bound by the Settle ment though not named in the suit.
11his is a position conceded by all.
If that is so, it would be a representative suit in terms of and for the purpose of Rule 315 of Order XXIII of the Code.
If the principles of this rule are the principles of natural justice then we are of the opinion that 609 the principles behind it would be applicable; and also that section 4 of the Act should be so construed in spite of the difficulties of the process of notice and other difficulties of making "informed decision making process cumbersome".
[697C G] 7.3 In as much as section 4 of the Act had given a qualified right of participation to the victims, there cannot be any question of violation of the principles of natural justice.
The scope of the application of the princi ples of natural justice cannot be judged by any strait jacket formula.
[662G H] R. Viswanathan vs Rukn ul Mulk Syed Abdul Wajid, ; ; M. Narayanan Nambiar vs State of Kerala, [1963] Supp.
(2) 724; Chintaharan Ghose & Ors.
vs Gujaraddi Sheik & Ors., AIR 1951 Cal. 456; Ram 'Sarup vs Nanak Ram, AIR 1952 All.
275; referred to.
The Act has to be understood that it is in respect of the person responsible, being the person in charge of the UCIL and the parent company UCC.
This interpretation of the Act is further strengthened by the fact that a 'claimant" has been defined in clause (c) of Section 2 as a person who is entitled to make a claim and the expression "person" in Section 2(e) includes the Government.
Therefore, the Act proceeded on the assumption that the Government could be a claimant being a person as such.
[690A B] 9.1 The fact that the provisions of the principles of natural justice have to be complied with, is undisputed.
This is well settled by the various decisions of the Court.
The Indian Constitution mandates that clearly, otherwise the Act and the actions would be violative of Article 14 of the Constitution and would also be destructive of Article 19(1)(g) and negate Article 21 of the Constitution by deny ing a procedure which is just, fair and reasonable.
[693D E] 9.2 Rules of natural justice are not embodied rules.
Hence, it was not possible to make an exhaustive catalogue of such rules.
Audi alteram partem is a highly effective rule devised by the Courts to ensure that a statutory au thority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
The rules of natural justice can operate only in areas not covered by any law validly made.
The general principle as distinguished from an absolute rule of uniform application is that where a statute does not in terms exclude the rule of prior hearing but contemplates a post decisional hearing 610 amounting to a full review of the original order on merits then such a statute would be construed as excluding the audi alteram partem rule at the pre decisional stage.
If the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected the administrative decision after post decisional hearing was good.
[694A D] 9.3 In the instant case, no question of violation of the principle of natural justice arises, and there is no scope for the application of the principle that no man should be a Judge in his own cause.
The Central Government was not judging any claim, but was fighting and advancing the claims of the victims.
The adjudication would be done by the courts, and therefore, there is no scope of the violation of any principle of natural justice.
[688G H; 689A B] Menaka Gandhi vs Union of India, [1978] 2 SCR 621; Olga Tellis vs Bombay Municipal Corporation, [1985] Supp. 2 SCR 51; Union of India vs Tulsi Ram Patel, [1985] Supp. 2 SCR 131; Swadeshi Cotton Mills vs Union of India, ; , relied on.
Ganga Bai vs Vijay Kumar, ; ; S.L. Kapoor vs Jagmohan, ; Sangram vs Election Commis sion; , , referred to.
Though not expressly stated, the Act proceeds on 'the major inarticulate premise '.
It is on this promise or premise that the State would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the victims on their own.
If it is only so read, it can only be held to be constitutionally valid.
It has to be borne in mind that the language of the Act does not militate against this construc tion but on the Contrary.
Sections 9, 10 and the scheme of the Act suggest that the Act contains such an obligation.
If it is so read, then only meat can be put into the skeleton of the Act making it meaningful and purposeful.
The Act must, therefore, be so read.
This approach to the interpre tation of the Act can legitimately be called the 'construc tive intuition ' which is a permissible mode of viewing the Acts of Parliament.
The freedom to search for 'the spirit of the Act ' or the quantity of the mischief at which it is aimed (both synonymous for the intention of the parliament) opens up the possibility of liberal interpretation "that delicate and important branch of judicial power, the conces sion of which is dangerous, the denial ruinous".
Given this freedom it is a rare opportunity though never to be misused and challenge for the Judges to adopt and give meaning to 611 the act, articulate and inarticulate and thus translate the intention of the Parliament and fulfil the object of the Act.
After all, the Act was passed to give relief to the victims, who, it was thought, were unable to establish their own rights and fight for themselves.
[687E H; 688A] 11.1 The circumstances that financial institutions held shares in the UCIL would not disqualify the Government of India from acting as parens patriae and in discharging its statutory duties under the Act.
The suit was filed only against the UCC and not against UCIL.
On the basis of the claim made by the Government of India, UCIL was not a neces sary party.
It was suing only the multinational based on several legal grounds of liability of the UCC, inter alia, on the basis of enterprise liability.
If the Government of India had instituted a suit against UCIL to a certain extent it would have weakened its case against UCC in view of the judgment of this Court in M.C. Mehta 's case.
[668H; 669A B] M.C. Mehta vs Union of India, ; , referred to.
11.2 Even if there was any remote conflict of interests between the Union of India and the victims on account of the sharesholding, doctrine of necessity would override the possible violation of the principles of natural justice.
[669F] Kasturilal Ralia Ram Jain vs State of UP, ; ; State of Rajasthan vs Vidyawati, [1962] 2 Supp.
SCR 989; J. Mohapatra & Co. & Anr.
vs State of Orissa & Anr.
, ; , referred to.
Halsbury 's Laws of England, Vol. 1, 4th Edn.
para 73 Smith 's Judicial Review of Administrative Action, 4th Edn.
276 277; Natural Justice by G.A. Flick, [1979] Edn. pp. 138 141, referred to.
The Act does not create new causes of action or create special courts.
The jurisdiction of the civil court to entertain suit would still arise out of section 9 of the CPC and the substantive cause of action and the nature of the reliefs available would also continue to remain un changed.
The only difference produced by the provisions of the Act would be that instead of the suit being filed by the victims themselves the suit would be filed by the Central Government on their behalf.
[655F] 13.
Normally, in measuring civil liability, the law has attached more importance to the principle of compensation than that of punishment.
Penal redress, however, involves both compensation to the 612 person injured and punishment as deterrence.
The Act, as such does not abridge or curtail damage or liability whatev er that might be.
So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained.
[680G H; 681A F] Roshanlal Kuthiala & Ors.
vs R.B. Mohan Singh, Oberoi ; ; Nandram Heeralal vs Union of India & Anr., AIR 1978 M.P. 209; Ryland vs Flatcher, (1868) Vol 3 LR E& I Appeal Cases 330; Rookes vs Barnard, ; , re ferred to.
Salmond 's Law of Torts, 15th Edn.
p. 30, referred to.
The Act in question does not purport to deal with the criminal liability, if any, of the parties or persons concerned nor it deals with any of the consequences flowing from those.
This position is clear from the provisions and the preamble to the Act.
[636F] 15.
The major inarticulate premise apparent from the Act and the scheme and the spirit of the Act is that so long as the rights of the victims are prosecuted the state must protect the victims.
Otherwise the object of the Act would be defeated its purpose frustrated.
Therefore, continuance of the payments of the interim maintenance for the continued sustenance of the victims is an obligation arising out of State 's assumption of the power and temporary deprivation of the rights of the victims and divestiture of the right of the victims to fight for their own rights.
This is the only reasonable interpretation which is just, fair and proper.
[686B C] 16.
The promises made to the victims and hopes raised in their hearts and minds can only be redeemed in some measure if attempts are made vigorously to distribute the amount realised to the victims in accordance with the scheme.
That would be redemption to a certain extent.
The law relating to damages and payment of interim damages or compensation to the victims of this nature should be seriously and scientif ically examined by the appropriate agencies.
[704F H; 705A] 17.
The Bhopal Gas Leak disaster and its aftermath emphasise the need for laying down certain norms and stand ards that the Government may follow before granting permis sion or licences for the running of industries dealing with materials which are of dangerous potentialities.
The Govern ment, should, therefore, examine or have the problem exam ined by an expert committee as to what should be the condi tions on 613 which future licences and/or permission for running indus tries on Indian soil would be granted and for ensuring enforcement of those conditions, sufficient safety measures should be formulated and scheme of enforcement indicated.
The Government should insist as a condition precedent to the grant of such licences or permission, creation of a fund in anticipation by the industries to be available for payment of damages out of the said fund in case of leakages or damages in case of accident or disaster flowing from negli gent working of such industrial operations or failure to ensure measures preventing such occurrence.
The Government should also ensure that the parties must agree to abide to pay such damages out of the said Fund by procedure separate ly evolved for computation and payment of damages without exposing the victims or sufferers of the negligent act to the long and delayed procedure.
Special procedure must be provided for and the industries must agree as a condition for the grant of licence to abide by such procedure or to abide by statutory arbitration.
The basis for damages in case of leakages and accident should also be statutorily fixed taking into consideration the nature of damages in flicted, the consequences thereof and the ability and capac ity of the parties to pay.
Such should also provide for deterrant or punitive damages, the basis for which should be formulated by a proper expert committee or by the Govern ment.
For this purpose, the Government should have the matter examined by such body as it considers necessary and proper like the Law Commission or other competent bodies.
This is vital for the future.
[705B F] 18.
That people are born free, the dignity of the per sons must be recognised, and competent tribunal is one of the surest methods of effective remedy.
If, therefore, as a result of this tragedy new consciousness and awareness on the part of the people of this country to be more vigilant about measures and the necessity of ensuring more strict vigilance for permitting the operations of such dangerous and poisonous gases dawn, then perhaps the tragic experience of Bhopal would not go in vain.
[682D E] Per Singh, J. (concurring): 1.1 In India, the need for industrial development has led to the establishment of a number of plants and factories by the domestic companies and under takings as well as by Transnational Corporations.
Many of these industries are engaged in hazardous or inherently dangerous activities which pose potential threat to life, health and safety of persons working in the factory, or residing in the surround ing areas.
Though working of such factories and plants is regulated by a 614 number of laws of our country, there is no special legisla tion providing for compensation and damages to outsiders who may suffer on account of any industrial accident.
As the law stands today, affected persons have to approach civil courts for obtaining compensation and damages.
In civil courts, the determination of amount of compensation or damages as well the liability of the enterprise has been bound by the shack les of conservative principles.
[707D G] 1.2 The principles laid down in Ryland vs Fletcher made it difficult to obtain adequate damages from the enterprise and that too only after the negligence of enterprise was proved.
[707G H] 1.3 The law laid down in Oleum Gas Leak case made a land mark departure from the conservative principles with regard to the liability of an enterprise carrying on hazard ous or inherently dangerous activities.
[709C] 1.4 In the instant case, there is no scope for any doubt regarding the liability of the UCC for the damage caused to the human beings and nature in and around Bhopal.
[709E] Ryland vs Fletcher, ; ; M.C. Mehta vs Union of India; , , referred to. 2.
In the context of our national dimensions of human rights, right to life, liberty, pollution free air and water is guaranteed by the Constitution under Articles 21, 48A and 51(g), it is the duty of the State to take effective steps to protect the constitutional rights guaranteed.
These rights must be integrated and illumined by evolving interna tional dimensions and standards, having regard to our sover eignty as highlighted by Clauses 9 and 13 of U.N. Code of Conduct on Transnational Corporations.
Such a law may pro vide for conditions for granting licence to Transnational Corporations, prescribing norms and standards for running industries on Indian soil ensuring the above said constitu tional rights of our people.
A Transnational Corporation should be made liable and subservient to laws of our country and the liability should not be restricted to affiliate company only but the parent corporations should also be made liable for any damage caused to the human beings or ecology.
The law must require transnational Corporations to agree to pay such damages as may be determined by the statutory agencies and forum constituted under it without exposing the victims to long drawn litigation.
In order to meet the situation, to avoid delay and to ensure immediate relief to the victims, the law should 615 provide for constitution of tribunals regulated by special procedure for determining compensation to victims of indus trial disaster or accident, appeal against which may lie to this Court on the limited ground of questions of law only after depositing the amount determined by the Tribunal.
The law should also provide for interim relief to victims during the pendency of proceedings.
These steps would minimise the misery and agony of victims of hazardous enterprises.
[710H; 711A F] 3.
Industrial development in our country and the hazards involved therein, pose a mandatory need to constitute a statutory "Industrial Disaster Fund", contributions to which may be made by the Government, the industries whether they are transnational corporations or domestic undertakings, public or private.
The extent of contribution may be worked out having regard to the extent of hazardous nature of the enterprise and other allied matters.
The fund should be permanent in nature.
so that money is readily available for providing immediate effective relief to the victims.
[711 G H; 712A] Ranganathan and Ahmadi, J J Per Ranganathan, J. (Concur ring).
The provisions of the Act, read by themselves, guar antee a complete and full protection to the rights of the claimants in every respect.
Save only that they cannot file a suit themselves, their right to acquire redress has not really been abridged by the provisions of the Act.
Sections 3 and 4 of the Act completely vindicate the objects and reasons which compelled Parliament to enact this piece of legislation.
Far from abridging the rights of the claimants in any manner, these provisions are so worded as to enable the Government to prosecute the litigation with the maximum amount of resources, efficiency and competence at its com mand.
as well as with all the assistance and help that can be extended to it by such of those litigants and claimants as are capable of playing more than a mere passive role in the litigation.
[720G H; 721A B] 2.
Even if the provisions of section 3 had been scrupulously observed and the names of all parties, other than the Cen tral Government, had been got deleted from the array of parties in the suits and proceedings pending in this coun try, the result would not have been fatal to the interests of the litigants.
On the contrary, it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising their rights against the Union Carbide Corporation.
Such representation can well be justified by resort to a principle analogous to, if not precisely the same, as that of, "parens 616 patriae".
A victim of the tragedy is compelled to part with a valuable right of his in order that it might be more efficiently and satisfactorily exploited for his benefit than he himself is capable of.
It is of course possible that there may be an affluent claimant or lawyer engaged by him, who may be capable of fighting the litigation better.
It is possible that the Government of India as a litigant may or may not be able to pursue the litigation with as much deter mination or capability as such a litigant.
But in a case of the present type one should not be confounded by such a possibility.
There are more indigent litigants than affluent ones.
There are more illiterates than enlightened ones.
There are very few of the claimants, capable of finding the financial wherewithal required for fighting the litigation.
Very few of them are capable or prosecuting such a litiga tion in this country not to speak of the necessity to run to a foreign country.
The financial position of UCIL was negli gible compared to the magnitude of the claim that could arise and, though eventually the battle had to be pitched on our own soil, an initial as well as final recourse to legal proceedings in the United States was very much on the cards, indeed inevitable.
In this situation, the legislature was perfectly justified in coming to the aid of the victims with this piece of legislation and in asking the Central Govern ment to shoulder the responsibility by substituting itself in place of the victims for all purposes connected with the claims.
[716C H; 717A] 3.
Section 4 adequately safeguards the interest of individual victims.
It enables each one of them to bring to the notice of the Union any special features or circum stances which he would like to urge in respect of any matter and if any such features are brought to its notice the Union is obliged to take it into account.
The individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the proceedings.
If the suits in this case had proceeded, in the normal course, either to the stage of a decree or even to one of settlement the claimants could have kept themselves abreast of the developments and the statutory provisions would have been more than adequate to ensure that the points of view of all the victims are presented to the court.
Even a settlement or compromise could not have been arrived at without the court being apprised of the views of any of them who chose to do so.
The statute has provided that though the Union of India will be the dominus litis in the suit, the interest of all the victims and their claims should be safeguarded by giving them a voice in the proceedings to the extent indicated above.
This provision of the statute is an adaptation of the principle of Order 1 Rule 8 and of order XXIII Rule 38 of the Code of Civil Procedure in its application to the suits governed by it and, though the extent of participation al lowed to 617 the victims is somewhat differently enunciated in the legis lation, substantially speaking, it does incorporate the principles of natural justice to the extent possible in the circumstances.
The statute cannot, therefore, be faulted on the ground that it denies the victims an opportunity to present their views or places them at any disadvantage in the matter of having an effective voice in settling the suit by way of compromise.
[724G H; 725A D] 4.
Sections 3 and 4 combine together the interest of the weak, illiterate, helpless and poor victims as well as the interest of those who could have managed for themselves, even without the help of this enactment.
The combination thus envisaged enables the Government to fight the battle with the foreign adversary with the full aid and assistance of such of the victims or their legal advisers as are in a position to offer any such assistance.
Though section 3 denies the climants the benefit of being eo nominee parties in such suits or proceedings, section 4 preserves to them substantially all that they can achieve by proceeding on their own.
In other words, while seeming to deprive the claimants of their right to take legal action on their own, it has preserved those rights, to be exercised indirectly.
A conjoint reading of sections 3 and 4 would show that there has been no real total deprivation of the right of the claimants to enforce their claim for damage in appropriate proceedings before any appropriate forum.
There is only a restriction of this right which, in the circumstances, is totally reasonable and justified.
[718D G ] 5.
It is not possible to bring the suits brought under the Act within the categories of representative action envisaged in the Code of Civil Procedure.
The Act deals with a class of action which is sui generis and for which a special formula has been found and encapsuled in section 4.
The Act divests the individual claimants of their right to sue and vests it in the Union.
In relation to the suit in India, the Union is the sole Plaintiff.
none of the others are envisaged as plaintiffs or respondents.
The victims of the tragedy were so numerous that they were never defined at the stage of filing the plaint nor do they need to be defined at the stage of settlement.
The litigation is carried on by the State in its capacity not exactly the same as, but somewhat analogous to that of "parens patriae".
In the case of a litigation by a Karta of a Hindu undivided family or by a guardian on behalf of a ward, who is non sui juris, the junior members of the family or the wards, are not to be consulted before entering into a settlement.
In such cases, court acts as guardian of such persons to scrutinise the settlement and satisfy itself that it is in the best inter est of all concerned.
If it is later discovered that there has been any fraud or collusion, it may be open to the junior members of the 618 family or the wards to call the Karta or guardian to account but, barring such a contingency, the settlement would be effective and binding.
In the same way, the Union as "parens patriae ' would have been at liberty to enter into such settlement as it considered best on its own and seek the Court 's approval therefore.
[723G H; 724A D] 6.
It is common knowledge that any authority given to conduct a litigation cannot be effective unless it is accom panied by an authority to withdraw or settle the same if the circumstances call for it.
The vagaries of a litigation of this magnitude and intricacy could not be fully anticipated.
There were possibilities that the litigation may have to be fought out to the bitter finish.
There were possibilities that the UCC might be willing to adequately compensate the victims either on their own or at the insistence of the Government concerned.
There was also the possibility, which had already been in evidence before Judge Keenan, that the proceedings might ultimately have to end in negotiated settlement.
In most of the mass disaster cases reported, proceedings finally end in a compromise, if only to avoid an indefinite prolongation of the agonies caused by such liti gation.
The legislation, therefore, cannot be considered to be unreasonable merely because in addition to the right to institute a suit or other proceedings it also empowers the Government to withdraw the proceedings or enter into a compromise.
[719B E] M.C. Mehta vs Union of India, ; , referred to.
The Act has provided an adequate opportunity to the victims to speak out and if they or the counsel engaged by some of them in the trial court had kept in touch with the proceedings in this court, they could have most certainly made themselves heard.
If a feeling has gained ground that their voice has not been fully heard, the fault was not with the statute but was rather due to the development leading to the finalisation of the settlement when the appeal against the interim order was being heard in this Court.
[726B D] 8.
In the field of torts, under the common law of Eng land, no action could be laid by the dependants or heirs of a person whose death was brought about by the tortious act of another on the maxim actio personalis maritur cum persona although a person injured by a similar act could claim damages for the wrong done to him.
In England this situation was remedied by the passing of Fatal Accidents Act, 1846, popularly known as Lord Compbell 's Act.
Thereafter the Indian Legislature enacted the .
This Act is fashioned on the 619 lines of the English Act of 1840.
Even though the English Act has undergone a substantial change, our law has remained static and seems a trifle archaic.
The magnitude of the gas leak disaster in which hundreds lost their lives and thou sands were maimed, not to speak of the damage to livestock, flora and fauna, business and property, is an eye opener.
The nation must learn a lesson from this traumatic experi ence and evolve safeguards atleast for the future.
The time is ripe to take a fresh look at the outdated century old legislation which is out of tune with modern concepts.
[728F H; 729A B] 9.
The Central Government will be well advised to insist on certain safeguards before permitting a transnational company to do business in the country.
It is necessary to insist on a right to be informed of the nature of the proc esses involved so as to take prompt action in the event of an accident.
The victims in this case have been considerably handicapped on account of the fact that the immediate tort feasor was the subsidiary of a multi national with its Indian assets totally inadequate to satisfy the claims arising out of the disaster.
It is, therefore, necessary to evolve, either by international consensus or by unilateral legislation, steps to overcome these handicaps and to ensure that foreign corporations seeking to establish an industry here, agree to submit to the jurisdiction of the Courts in India in respect of actions for tortious acts in this coun try; that the liability of such a corporation is not limited to such of its assets (or the assets of its affiliates) as may be found in this country, but that the victims are able to reach out to the assets of such concerns anywhere in the world; and that any decree obtained in Indian Courts in compliance with due process of law is capable of being executed against the foreign corporation, its affiliates and their assets without further procedural hurdles.
in those other countries.
[729G H; 730A E] 10.
It is hoped that calamities like the one which this country has suffered will serve as catalyst to expedite the acceptance of an international code on such matters in the near future.
[730F G]
|
Criminal Appeal No. 221 of 1986 etc.
From the Judgment and Order dated 28.6.1985 of the Bombay High Court in Crl.
Appeal No. 215 of 1982.
S.B. Bhasme, Mrs. H. Wahi, A.S. Bhasme and A.M. Khanwil kar for the Appellants.
V.D. Misra, J. Wad and Mrs. Aruna Matbur for the Re spondents.
The Judgment of.the Court was delivered by AHMADI, J.
This appeal by special leave is brought by the State of Maharashtra against the judgment of acquittal recorded by the Nagpur Bench of the High Court of Bombay (Maharashtra) reversing the conviction of the respondent Chandraprakash Kewalchand Jain, a Sub Inspector of Police, under Section 376, I.P.C. for having committed rape on Shamimbanu, a girl aged about 19 or 20 years on 22nd August, 1981.
The learned Additional Sessions Judge, Nagpur, came to the conclusion that the prosecution had brought home the charge under Section 376, I.P.C. and sentenced the respond ent to suffer rigorous imprisonment for 5 years and to pay a fine of Rs.1,000, in default to suffer rigorous imprisonment for 6 months.
He was, however, acquitted of the charge under Section 342, I.P.C. The respondent challenged his conviction in appeal to the High Court.
The High Court set aside the order of conviction and sentence imposed by the trial court and acquitted the respondent.
The State feeling aggrieved sought special leave to appeal.
On the same being granted this appeal is before us.
Briefly the facts are that the parents of Shamimbanu were residing as tenants in a part of the building belonging to the father of Mohmad Shafi while the remaining portion was occupied by the owner 's family.
PW 1 Mohmad Shafi aged about 25 years fell in love with PW 2 Shamimbanu aged about 19 years.
The prosecution case is that although the parents of both knew about their love affair, for some reason or the other, they were not married.
Both of them left Nagpur and went to Bombay where they contracted a marriage 118 through a Kazi and returned to Nagpur by train on 20th August, 198 1.
They got down at Anjani Railway Station (a suburb of Nagpur) and went to a nearby Gurudeo Lodge and occupied Room No. 204.
That night i.e. on the night of 20th/12st August, 1981, PW 8 Police Sub Inspector Qureishi checked the hotel and learnt that the couple was living in the said room in the assumed names of Mohmad Shabbir and Sultana.
On being questioned PW 1 Mohmad Shafi gave out the true facts and showed the Nikahnama.
exhibit 10.
On being satis fied about the correctness of the version, Police Sub In spector qureishi got their correct names substituted in the register of the Lodge as is evident from the entry exhibit 31, proved by PW 5 Manohar Dhote, the Manager of the Lodge.
Police Sub Inspector Qureishi did not deem it necessary to take any steps against the couple.
On the next night between 21st and 22nd August, 1981 the respondent accused went to the hotel room No. 204 occupied by the couple at the odd time of about 2.30 a.m. and knocked on the door.
He was accompanied by PW 7 Constable Chandrab han.
When Mohmad Shafi opened the door the respondent ques tioned him on seeing Shamimbanu with him.
Mohmad Shafi told him that she was his wife and gave their correct names.
Notwithstanding their replies the respondent insisted that they accompany him to the police station.
PW 5 requested the respondent to sign his visit book since he had inspected a few rooms of his Lodge including Room No. 204 but the re spondent told him that he would do it later.
So saying he left the Lodge with the couple.
On reaching the police station the respondent separated the couple.
He took Shamimbanu to the first floor of the police station while her husband Mohmad Shafi was taken to another room by PW 7.
Shamimbanu alleges that after she was taken to the first floor, the respondent flirted with her, slapped her when she refused to respond to his flirtation and demanded that she spend the night with him.
The respond ent also demanded that she should give her age as 15 years so that Mohmad Shafi could be booked.
On her refusing and protesting against his behaviour he threatened her with dire consequences.
In the other room Mohmad Shafi was subjected to beating by PW 7.
After sometime both the boy and the girl were brought down to the main hall of the police station.
By then it was around 5.00 or 5.30 a.m.
Thereafter he sent Mohmad Shafi with a constable to fetch the girl 's father.
The girl 's parents arrived at the police station shortly.
The respondent asked the girl 's parents if they were prepared to take 119 back the girl who claimed to have married Mohmad Shafi.
The girl 's parents showed annoyance and left the police station refusing to take her with them.
Mohmad Shafi 's parents also adopted the same attitude.
The respondent then recorded an offence under Section 110 read with 117 of the Bombay Police Act against Mohmad Shafi on the allegation that he was found misbehaving on a public street uttering filthy abuses in front of Gujarat Lodge near Gurudeo Lodge.
After putting Mohmad Shaft in the lock up he sent the girl Shamimbanu to Anand Mahal Hotel with PW 7.
Initially PW 4, the Hotel Manager refused to give a room to an unescorted girl but PW 7 told him that he had brought her on the directive of the respondent.
Thereupon PW 4 allotted Room No. 36 to her.
He made an entry in the hotel register to the effect 'Shamimbanu wife of Mohmad Shaft . . as per instructions of Police Sub Inspector Shri Jain . ' vide exhibit 25.
Afterleaving the girl in Room No. 36, PW 7 left the hotel.
It is the prosecution case that after the girl was allotted the room, as per the usual practice, the hotel boy changed the bed sheets, pillow covers and quilt cover.
The rent was charged from the girl.
Having thus separated the couple and finding the girl thoroughly helpless, the respondent visited the girl 's room and knocked on the door.
The unsuspecting Shamimbanu opened the door.
The respondent entered the room and shut the door behind him.
Thereafter he asked the girl to undress but on the girl refusing he forcibly removed her 'kurta ' and threw it away.
He gagged the girl 's mouth and threatened her with dire consequences if she did not submit.
He then threw the girl on the cot, forcibly removed her 'salwar ' and denuded her.
He then had sexual intercourse with her, notwithstand ing her protestations.
After satisfying his lust, the re spondent left threatening that he would bury both of them alive if she complained to anyone.
He told her that he would now arrange to send back her husband.
Not fully satisfied the respondent returned to the hotel room after about half an hour and knocked on the door.
Shamimbanu opened the door thinking that her husband had returned.
When she saw the respondent she tried to shut the door but the respondent forced his way into the room and shut the door from within.
He once again had sexual inter course with her against her will.
He repeated his threat before leaving.
On the other hand Mohmad Shaft was sent to Court on his arrest 120 under Sections 110/117 of the Bombay Police Act.
He was released on bail.
He returned to the police station by about 5.00 p.m. and enquired about the whereabouts of his wife.
PW 7 told him she was in Room No. 36 of Anand Mahal Hotel.
He immediately went to his wife.
On seeing him she was in tears.
She narrated to him what she had gone through at the hands of the respondent.
Enraged Mohmad Shaft went back to the police station and informed PW 14 Inspector Pathak about the commission of assault and rape on his wife by the re spondent.
PW 14 recorded the same in the station diary at 6.35 p.m. and informed his superiors about the same presuma bly because a police officer was involved.
Thereupon Deputy Commissioner of Police Parassis and Assistant Commissioner of Police Gupta arrived at the police station.
The Assistant Commissioner of Police asked Inspector Pathak to accompany Mohmad Shafi and fetch Shamimbanu.
On their return with Shamimbanu Mohmad Shaft was asked to give a written account of the incident which he did.
On the basis thereof an of fence under section 376, I.P.C. was registered and the investigation was entrusted to Inspector Korpe of Crime Branch.
In the course of investigation a spot panchnama of Room No. 36 was drawn up and certain articles such as bed sheet, quilt cover, mattress, etc.
which had semen like stains were attached.
The hotel register containing the relevant entry (exhibit 25) was also seized and statements of witnesses were recorded.
Both the respondent and Shamimbanu were sent for medical examination and their blood samples were taken along with that of Mohmad Shafi to determine their blood groups.
Similarly the garments of the respondent and Shamimbanu were attached and sent for chemical examination along with the articles seized from the hotel room.
On the conclusion of the investigation the respondent was charge sheeted and put up for trial before the Additional Sessions Judge, Nagpur.
The respondent pleaded not guilty to the charge and denied the accusation made against him.
His defence was that he arrested Mohmad Shaft on the charge under Sections 110/117, Bombay Police Act, and took him to Gurudeo Lodge and from there he took him and Shamimbanu to the police station.
Since the parents of both the boy and the girl disowned them he had no alternative but to place Mohmad Shaft in the lock up and allow Shamimbanu to leave the police station as a free citizen since she was not accused of any crime.
It was his say that after Shamimbanu left the police station she went to Anand Mahal Hotel and stayed in Room No. 36 awaiting Mohmad Shafi.
According to him as Mohmad Shaft was annoyed because of his detention in the 121 lock up, he had, with the assistance of Shamimbanu, falsely involved him on the charge of rape.
The trial court found that the respondent had visited Room No. 204 at an odd hour and had taken the couple to the police station where he had misbehaved with the girl.
It also found that he had booked the boy on a false charge and had lodged the girl in Room No. 36 after their parents disowned them.
It lastly held that the evidence of the prosecutrix clearly established that the respondent had raped her twice in that room.
The trial court convicted the respondent under Section 376, I.P.C. The respondent preferred an appeal to the High Court.
A learned Single Judge of the High Court allowed the appeal and acquitted the respondent.
The High Court took the view that the oral information exhibit 50 furnished by Mohmad Shafi to Inspector Pathak at 6.35 p.m. constituted the First Information Report and the subsequent written information exhibit 7 given at 8.30 p.m., was inadmissible in evidence as hit by Section 162 of the Code.
The High Court then took the view that except in the 'rarest of the rare cases ' where the testimony of the prosecutrix is found to be so trustworthy, truthful and reliable that no corroboration is necessary, the Court should ordinarily look for corroboration.
Accord ing to it as exhibit 50 did not unfold two successive acts of rape, this was not a case where it would be safe to base a conviction on the sole testimony of the prosecutrix, more so because both the girl and the boy had reason to entertain a grudge against the respondent who had booked the latter.
Lastly the High Court pointed out that the version of the prosecutrix is full of contradictions and is not corroborat ed by medical evidence, in that, the medical evidence re garding the examination of the prosecutrix is negative and does not show marks of violence.
These contradictions and inconsistencies have been dealt with in paragraphs 24 to 31 of the judgment.
The High Court also noticed certain infirm ities in the evidence of PW 1 Mohmad Shafi in paragraphs 32 to 34 of its judgment.
The High Court, therefore, concluded that the prosecution had miserably failed to prove the guilt of the accused and accordingly acquitted him.
It is against this order of the High Court that the State has preferred this appeal by special leave.
The learned counsel for the appellant State submitted that the entire approach of the High Court in the matter of appreciation of evidence of the prosecution witnesses, particularly PW 2, betrays total ignorance of the psychology of an Indian woman belonging to the 122 traditional orthodox society.
He submitted that the prosecu tix of this case came from an orthodox muslim family, was semi literate having studied upto the VII Standard and whose parents considered it a shame to take her back to their fold because she had eloped and married a boy of her own choice.
He submitted that the statement of law in the High Court judgment that implicit reliance cannot be placed on a prose cutrix except in the rarest of rare cases runs counter to the law laid down by this Court in Bharwada Bhoginbhai Hirjibhai vs State of Gujarat, ; He also submitted that the evidence of the prosecutrix has been rejected on unsustainable grounds which do not touch the substratum of the prosecution case and which can be at tributed to nervousness and passage of time.
According to him this approach of the High Court has resulted in gross miscarriage of justice which this Court must correct in exercise of its jurisdiction under Article 136 of the Con stitution.
The learned counsel for the respondent, however, supported the High Court judgment.
It is necessary at tile outset to state what the ap proach of the Court should be while evaluating the prosecu tion evidence, particularly the evidence of the prosecutrix, in sex offences.
Is it essential that the evidence of the prosecutrix should be corroborated in material particulars before the Court basis a conviction on her testimony? Does the rule of prudence demand that in all cases save the rarest of rare the Court should look for corroboration before acting on the evidence of the prosecutrix? Let us see if the Evidence Act provides the clue.
Under the said stat ute 'Evidence ' means and includes all statements which the Court permits or requires to be made before it by witnesses, in relation to the matters of fact under inquiry.
Under Section 59 all facts, except the contents of documents, may be proved by oral evidence.
Section 118 then tells us who may give oral evidence.
According to that section all per sons are competent to testify unless the Court considers that they are prevented from understanding the questions put to them, or from giving rational answers to those questions, by tender years, extreme old age, disease, whether of body or mind, or any other cause of the same kind.
Even in the case of an accomplice Section 133 provides that he shall be a competent witness against an accused person; and a convic tion is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice.
However, illus tration (b) to Section.
114, which lays down a rule of practice, says that the Court 'may ' presume that an accom plice is unworthy of credit, unless he is corroborated in material particulars.
Thus under Section 133, which lays down a rule of law, an accomplice is a competent witness and a conviction based solely on his uncorroborated evidence 123 is not illegal although in view of Section 114, illustration (b), courts do not as a matter of practice do so and look for corroboration in material particulars.
This is the conjoint effect of Sections 133 and 114, illustration (b).
A prosecutrix of a sex offence cannot be put on par with an accomplice.
She is in fact a victim of the crime.
The Evidence Act nowhere says that her evidence cannot be ac cepted unless it is corroborated in material particulars.
She is undoubtedly a competent witness under Section 118 and her evidence must receive the same weight as is attached to an injured in cases of physical violence.
The same degree of care and caution must attach in the evaluation of her evi dence as in the case of an injured complainant or witness and no more.
What is necessary is that the Court must be alive to and conscious of the fact that it is dealing with the evidence of a person who is interested in the outcome of the charge levelled by her.
If the Court keeps this in mind and feels satisfied that it can act on the evidence of the prosecutrix, there is no rule of law or practice incorporat ed in the Evidence Act similar to illustration (b) to Sec tion 114 which requires it to look for corroboration.
If for some reason the Court is hesitant to place implicit reliance on the testimony of the prosecutrix it may look for evidence which may lend assurance to her testimony short of corrobo ration required in the case of an accomplice.
The nature of evidence required to lend assurance to the testimony of the prosecutrix must necessarily depend on the facts and circum stances of each case.
But if a prosecutrix is an adult and of full understanding the Court is entitled to base a con viction on her evidence unless the same is shown to be infirm and not trustworthy.
If the totality of the circum stances appearing on the record of the case disclose that the prosecutrix does not have a strong motive to falsely involve the person charged, the Court should ordinarily have no hesitation in accepting her evidence.
We have, therefore, no doubt in our minds that ordinarily the evidence of a prosecutrix who does not lack understanding must be accept ed.
The degree of proof required must not be higher than is expected of an injured witness.
For the above reasons we think that exception has rightly been taken to the approach of the High Court as is reflected in the following passage: "It is only in the rarest of rare cases if the Court finds that the testimony of the prosecutrix is so trustworthy, truthful and reliable that other corroboration may not be necessary.
" 124 With respect, the law is not correctly stated.
If we may say so, it is just the reverse.
Ordinarily the evidence of a prosecutrix must carry the same weight as is attached to an injured person who is a victim of violence, unless there are special circumstances which call for greater caution, in which case it would be safe to act on her testimony if there is independent evidence lending assurance to her accusation.
We think it proper, having regard to the increase in the number of sex violation cases in the recent past, particu larly cases of molestation and rape in custody, to remove the notion, if it persists, that the testimony of a woman who is a victim of sexual violence must ordinarily be cor roborated in material particulars except in the rarest of rare cases.
To insist on corroboration except in the rarest of rare cases is to equate a woman who is a victim of the lust of another with an accomplice to a crime and thereby insult womanhood.
It would be adding insult to injury to tell a woman that her story of woe will not be believed unless it is corroborated in material particulars as in the case of an accomplice to a crime.
Ours is a conservative society where it concerns sexual behaviour.
Ours is not a permissive society as in some of the Western and European countries.
Our standard of decency and morality in public life is not the same as in those countries.
It is, however, unfortunate that respect for womanhood in our country is on the decline and cases of molestation and rape are steadily growing.
An Indian woman is now required to suffer indigni ties in different forms, from lewd remarks to eve teasing, from molestation to rape.
Decency and morality in public life can be promoted and protected only if we deal strictly with those who violate the societal norms.
The standard of proof to be expected by the Court in such cases must take into account the fact that such crimes are generally commit ted on the sly and very rarely direct evidence of a person other than the prosecutrix is available.
Courts must also realise that ordinarily a woman, more so a young girl, will not stake her reputation by levelling a false charge con cerning her chastity.
But when such a crime is committed by a person in au thority, e.g. a police officer, should the Court 's approach be the same as in any other case involving a private citi zen? By our criminal laws wide powers are conferred on police officers investigating cognizable offences.
The infrastructure of our criminal investigation system recog nises and indeed protects the right of a woman to decent and dignified treatment at the hands of the investigating agen cy.
This is evident from the proviso to sub section (2) of Section 47 of the Code which obliges the police officer desiring to effect entry to give an opportunity to the 125 woman in occupation to withdraw from the building.
So also subsection (2) of Section 53 requires that whenever a female accused is to be medically examined such examination must be under the supervision of a female medical practitioner.
The proviso to Section 160 stipulates that whenever the presence of a woman is required as a witness the investigating offi cer will record her statement at her own residence.
These are just a few provisions which reflect the concern of the legislature to prevent harassment and exploitation of women and preserve their dignity.
Notwithstanding this concern, if a police officer misuses his authority and power while dealing with a young helpless girl aged about 19 or 20 years, her conduct and behaviour must be judged in the backdrop of the situation in which she was placed.
The purpose and setting, the person and his position, the misuse or abuse of Office and the despair of the victim which led to her surrender are all relevant factors which must be present in the mind of the Court while evaluating the con duct evidence of the prosecutrix.
A person in authority, such as a police officer, carries with him the awe of office which is bound to condition the behaviour of his victim.
The Court must not be oblivious of the emotional turmoil and the psychological injury that a prosecutrix suffers on being molested or raped.
She suffers a tremendous sense of shame and the fear of being shunned by society and her near rela tives, including her husband.
Instead of treating her with compassion and understanding as one who is an injured victim of a crime, she is, more often than not, treated as a sinner and shunned.
It must, therefore, be realised that a woman who is subjected to sex violence would always be slow and hesitant about disclosing her plight.
The Court must, there fore, evaluate her evidence in the above background.
It is time to recall the observations of this Court made not so far back in Bharwada Bhognibhai Hirjibhai, (supra): "In the Indian setting, refusal to act on the testimony of a victim of sexual assaults in the absence of corroboration as a rule, is adding insult to injury.
Why should the evidence of the girl or the woman who complains of rape or sexual molestation be viewed with the aid of spectacles fitted with lenses tinged with doubt, disbelief or suspicion? To do so is to justify the charge of male chauvinism in a male domi nated society.
We must analyse the argument in support of the need for corroboration and subject it to relentless and remoreseless cross examination.
And we must do so with a logical, and not an opinionated, eye in the light of 126 probabilities with our feet firmly planted on the soil of India and with our eyes focussed on the Indian horizon.
We must not be swept off the feet by the approach made in the Western World which has its own social milieu, is own social mores, its own permissive values, and its own code of life.
Corroboration may be considered essential to establish a sexual offence in the backdrop of the social ecology of the Western World.
It is wholly unnecessary to import the said concept on a turn key basis and to transplate it on the Indian soil regardless of the altogether different atmos phere, attitudes, mores, responses of the Indian Society, and its profile.
The identities of the two worlds are dif ferent.
The solution of problems cannot therefore be identi cal.
" Proceeding further this Court said: "Without the fear of making too wide a statement, or of overstating the case, it can be said that rarely will a girl or a woman in India make false allegations of sexual assault . .
The statement is generally true in the context of the urban as also rural society.
It is also by and large true in the context of the sophisticated, not so sophisticated, and unsophisticated society.
Only very rarely can one conceivably come across an exception or two and that too possibly from amongst the urban elites.
Because: (1) A girl or a woman in the tradition bound non permissive Socie ty of India would be extremely reluctant even to admit that any incident which is likely to reflect on her chastity had ever occurred.
(2) She would be conscious of the danger of being ostracised by the Society or being looked down by the Society including by her own family members, relatives, friends and neighbours.
(3) She would have to brave the whole world.
(4) She would face the risk of losing the love and respect of her own husband and near relatives, and of her matrimonial home and happiness being shattered.
(5) If she is unmarried, she would apprehend that it would be difficult to secure an alliance with a suitable match from a respectable of an acceptable family.
(6) It would almost inevitably and almost invariably result in mental torture and suffering to herself.
(7) The fear of being taunted by others will always haunt her.
(8) She would feel extremely embrassed in relating the incident to others being over powered by a feeling of shame on account of the upbringing 127 in a tradition bound society where by and large sex is taboo.
(9) The natural inclination would be to avoid giving publicity to the incident lest the family name and family honour is brought into controversy.
(10) The parents of an unmarried girl as also the husband and members of the hus band 's family of a married woman would also more often than not, want to avoid publicity on account of the fear of social stigma on the family name and family honour.
(11) The fear of the victim herself being considered to be promiscu ous or in some way responsible for the incident regardless of her innocence.
(12) The reluctance to face interrogation by the investigating agency, to face the court, to face the cross examination by Counsel for the culprit, and the risk of being disbelieved, acts as a deterrent.
" We are in complete agreement with these observations.
We now proceed to examine if the High Court was justi fied in upturning the order of conviction passed by the Trial Court.
The High Court refused to confirm the convic tion of the respondent as it found the evidence of the prosecutrix full of contradictions and not consistent with medical evidence as well as the findings recorded by the Chemical Analyst.
We may first indicate the contradictions which prompted the High Court to look for corroboration.
They are: (i) the version that the respondent had misbehaved with her in the police station and had molested her could not be believed because she did not complain about the same to the other police officers who were present in the police station main hall on the ground floor or to her relatives who were called to the police station; (ii) the conduct of the respondent in calling her par ents and in giving them an opportunity to take her with them does not smack of an evil mind; (iii) the evidence of the prosecutrix that the respondent was instrumental in lodging her in Anand Mahal Hotel room is not supported by any evidence; (iv) the conduct of the prosecutrix in not informing and seeking assistance from the hotel management after the first incident and even after the second incident of rape in the hotel 128 room is unnatural and surprising; (v) the find of semen stains on the 'salwar ' and 'kurta ' of the prosecutrix runs counter to her evidence that on both the occasions she was completely denuded before she was ravished; (vi) the absence of marks of physical violence also runs counter to her version that when she tried to raise an alarm she was slapped by the respondent; (vii) the evidence of PW 3 Dr. Vijaya and the medical report exhibit 17 do not lend corroboration to the evidence of the prosecutrix that the respondent had sexual intercourse with her notwithstanding the resistence offered by her; (viii) the report of the Assistant Chemical Analyst exhibit 71 shows that neither semen nor spermatozoa were detected from the vaginal smear and slides that were forwarded for analysis; and (ix) the evidence of PW 12 Dr. More and his report exhibit 41 shows that no physical injuries were found on the person of the respondent to indicate that he had forcible sexual intercourse shortly before his examination.
Before we proceed to deal with these discrepancies we think it is necessary to clear the ground on the question whether the prosecutrix had a sufficiently strong motive to falsely involve the respondent and that too a police offi cer.
It is possible that she may have felt annoyed at being dragged out of the hotel room at dead of night after they had satisfied Police Sub Inspector Qureishi that they were legally wedded only a few hours back.
PW 1 may also have felt offended at being wrongly hooked under Sections 110/117, Bombay Police Act.
The question is whether on account of this annoyance both PW 1 Mohmad Shaft and PW 2 Shamimbanu would be prepared to stake the reputation of the latter? As pointed out earlier ordinarily an Indian woman would be most reluctant to level false accusation of rape involving her own reputation unless she has a very strong bias or reason to do so.
In the present case although the couple had reason to be annoyed with the conduct of the respondent, the reason was not strong enough for Mohmad Shafi to involve his wife and soil her reputation nor for Shamimbanu to do so.
An Indian woman attaches maximum impor 129 tance to her chastity and would not easily be a party to any move which would jeopardise her reputation and lower her in the esteem of others.
There are, therefore, no such strong circumstances which would make the court view her evidence with suspicion.
The next question is whether the High Court was justi fied in refusing to place reliance on her evidence in view of the discrepancies and inconsistencies indicated above.
It is not in dispute that the respondent had taken both PW 1 and PW 2 to the police station at dead of night.
At the police station both of them were separated.
She was all alone with the respondent till about 5.00 a.m.
This was her first encounter with the police.
She must have been nervous and considerably shaken.
She must have felt helpless as she was all alone.
She must be terribly worried not only about her own fate but also that of her husband.
It is during the time she was alone with the respondent that the latter is alleged to have misbehaved with her.
How could she complain to the other police officers in the police station about the behaviour of their colleague unless she be sure of their response? Having seen the behaviour of one of them, how could she place confidence in others belonging to the same clan? She may rather prefer to ignore such behaviour than speak of it to unknown persons.
Ordinarily an Indian woman is ashamed to speak about such violations of her person, more so to total strangers about whose response she is not sure.
There was no point in speaking to her parents who had disowned her.
She, however, claims to have informed her husband about the same on his return.
The omission on the part of her husband to make a mention about the same cannot discredit her.
Even if we assume that she omitted to mention it, the said omission cannot weaken her evidence as obvious ly she would attach more importance to what happened there after in the hotel room.
The respondent 's behaviour in the police station had paled into insignificance in view of his subsequent misdeeds.
No wonder she would attach greater importance to the subsequent events rather than dwell on advances made earlier.
We, therefore, cannot agree with the High Court 's observation that "the prosecutrix is not only prone to make improvements and exaggerations, but is also a liar disclosing a new story altogether to serve her inter est".
This is a harsh comment which, we think, is totally unwarranted.
The High Court has argued that the conduct of the respondent in sending for her parents and in permitting her to go with them shows that the respondent 's intentions were not evil.
In the first place it must be mentioned that the suggestion to call the parents came from PW 1. 130 Secondly the evil thought may have taken concrete shape after the parents refused to take her with them.
It was then that the respondents realised the helplessness of the girl and chalked out a plan to satisfy his lust.
As a part of that design he falsely booked Mohmad Shaft and made arrange ments to lodge the girl in a hotel of his choice.
The evi dence of PW 4 Suresh Trivedi read with the entry in the hotel register and the contradiction brought on record from his police statement leave no room for doubt that the girl was lodged in his hotel at the instance of the respondent.
PW 6 and PW 7 have also resiled from their earlier versions to help the respondent.
But notwithstanding their denial we see no reason to disbelieve Shamimbanu on the point of PW 7 having lodged her in Room No. 36 of Anand Mahal Hotel as the same is corroborated not only by the remark in the entry Exh. 25 of the hotel register but also by the fact that it was PW 7 who informed Mohmad Shaft that she was in Room No. 36.
We are, therefore, of the view that her evidence in this behalf is supported by not only oral but also documentary evidence.
How then could she seek help or assistance from the hotel staff which was under the thumb of the respondent? The hotel was situate within the jurisdiction of the re spondent 's police station.
It was at the behest of the respondent that she was kept in that room.
She must have realised the futility of complaining to them.
Failure to complain to the hotel staff in the above circumstances cannot be described as unnatural conduct.
It is true that the prosecutrix had deposed that on both the occasions she was completely denuded before the respond ent raped her.
On the first occasion he had removed her 'kurta ' before she was laid on the cot.
Her 'salwar ' was removed while she was lying on the cot.
Therefore, the 'salwar ' may be lying on the cot itself when the act was committed.
It is, therefore, not at all surprising to find semen stains on the 'salwar '.
She was wearing the same clothes when she was ravished the second time.
On the second occasion he first threw her on the cot and then undressed her.
Therefore, both the 'kurta ' and the 'salwar ' may be lying on the cot at the time of sexual intercourse.
Besides she had worn the same clothes without washing herself imme diately after the act on each occasion.
It is, therefore, quite possible that her clothes were stained with semen.
It must also be remembered that this is not a case where the prosecuting agency can be charged of having concocted evi dence since the respondent is a member of their own force.
If at all the investigating agency would try to help the respondent.
There is, therefore, nothing surprising that both these garments bore semen stains.
Besides, there was no time or occasion to manipulate semen stains on her clothes and that too of the respondent 's 131 group.
Her clothes were sent along with the other articles attached from Room No. 36 for chemical analysis under the requisition exhibit 67.
The report of the Assistant Chemical Analyser, exhibit 69 shows that her clothes were stained with human blood and semen.
The semen found on one of her gar ments and on the bed sheet attached from the room was of group A which is the group of the respondent, vide exhibit 70.
Of course the other articles, viz., the mattress and the underwear of the respondent bore no stains.
On the contrary the find of semen tends corroboration, if corroboration is at all needed to the version of the prosecutrix.
The possi bility of the semen stains being of Mohmad Shaft is ruled out as his group was found to be 'B ' and not 'A '.
In the circumstances the absence of semen or spermatozoa in the vaginal smear and slides, vide report exhibit 71, cannot cast doubts on the creditworthiness of the prosecutrix.
The evidence of PW 3 Dr. Vijaya Lele shows that she had taken the vaginal smear and the slides on 23rd August, 1981 at about 1.30 p.m. i.e., almost after 24 hours.
The witness says that spermatozoa can be found if the woman is examined within 12 hours after intercourse, thereafter they may be found between 48 and 72 hours but in dead form.
Shamimbanu may have washed herself by then.
Therefore absence of sper matozoa cannot discredit her evidence.
The absence of marks of physical violence on the prose cutrix is not surprising.
According to her the respondent had slapped her and threatened her with dire consequences when she tried to resist him on both occasions.
Since she was examined almost 24 hours after the event it would be too much to expect slap marks on her person.
It is, however, true that according to PW 12 Dr. More there were no marks of injury on the body of the respondent when he was examined on the 22nd itself at about 8.45 p.m.
While it is true that the version of the prosecutrix is that she had tried to resist him, it must be realised that the respondent being a strong man was able to overpower her and take her by force.
Be sides, he was a man in authority in police uniform.
The prosecutrix was alone and helpless.
In the circumstances as pointed out earlier the resistance would be considerably dampened.
But the evidence of PW 12 Dr. More who examined the respondent on the 22nd at 8.45 p.m. reveals that he had noticed (i) absence of smegma around the glans penis and (ii) the frenum tortuous and edematous.
indicative of the respondent having had sexual intercourse within the preced ing 24 hours.
However, absence of marks of violence and absence of matting of pubic hair led the witness to state that no definite opinion could be given whether or not the respondent had sexual intercourse in the last 24 hours.
In cross examination an attempt was 132 made to show that smegma may be absent in a man with clean habits; that the frenum may be edematous if there is fric tion with rough cloth and tortuousness of the frenum could be due to anything that causes swelling of the skin.
The witness, however, said that he had not seen marks of itching thereby negativing the suggestion.
Be that as it may, the evidence of this witness does show that there was evidence suggesting the possibility of the respondent having had sexual intercourse within the preceding 24 hours although the witness could not hazard a definite opinion.
Therefore, the non committal opinion of this witness cannot be said to run counter to the evidence of the prosecutrix.
It may be that the evidence as to resistence may have been overstated, a tendency which is generally noticed in such cases arising out a fear of being misunderstood by the society.
That is not to say that she was in any way a consenting party.
She was the victim of brute force and the lust of the respond ent.
PW 1 Mohmad Shafi 's evidence is also brushed aside on account of so called contradictions set out in paragraphs 32 to 34 of the High Court Judgment.
The first reason is the non disclosure of details in the first oral statement which was reduced to writing at exhibit 50.
That was skeleton informa tion.
That is why the need to record a detailed version exhibit 7 was felt.
Therefore, merely because the details are not set out in exhibit 50 it cannot be said that the prosecutrix had not narrated the details.
We have treated exhibit 50 as FIR for deciding this case.
The previous involvement of PW 1 in a couple of cases is not at all relevant because the decision of the case mainly rests on his wife 's evidence.
But even exhibit 50 shows that his wife had told him that the respondent had raped her.
We, therefore, do not see how the evidence of PW 1 can be said to be unacceptable.
The fact that the respondent had gone to Gurudeo Lodge at an odd hour and had taken the prosecutrix and her husband to the police station at dead of night is not disputed.
The fact that the respondent refused to sign the police visit book of the Lodge, though requested by the Manager PW 5 Manohar Dhote, on the pretext that he was in a hurry and would sign it later, which he never did, speaks for itself.
Then the respondent booked Md. Shafi under a false charge and put him behind the bars thereby isolating the prosecu trix.
We say that the charge was false not merely because it is so found on evidence but also because of the report exhibit 46 dated 21st September, 1981 seeking withdrawal of prosecu tion for want of material to sustain the charge.
Having successfully isolated the prosecutrix he sent her to Anand Mahal Hotel with PW 7 who lodged her in Room No. 36.
The respondent, 133 therefore, had planned the whole thing to satisfy his lust.
The subsequent attempt on the part of the respondent to commit suicide on being prosecuted as evidenced by the FIR exhibit 56 betrays a guilty conscience.
We are, therefore, of the opinion that if the prosecution evidence is appreciated in the correct perspective, which we are afraid the High Court failed to do, there can be no hesitation in concluding that the prosecution has succeeded in proving the respond ent 's guilt.
Unfortunately the High Court stigmatised the prosecutrix on a thoroughly erroneous appreciation of her evidence hereby adding to her woes.
If the two views were reasonably possible we would have refrained from interfering with the High Court 's order of acquittal.
In our opinion the trial court had adopted a correct approach and had properly evaluated the evidence and the High Court was not justified in interfering with the trial court 's order of conviction.
On the question of sentence we can only say that when a person in uniform commits such a serious crime of rape on a young girl in her late teens, there is no room for sympathy or pity.
The punishment must in such cases be exemplary.
We, therefore, do not think we would be justified in reducing the sentence awarded by the trial court which is not harsh.
In the result we allow this appeal, set aside the order of the High Court acquitting the respondent and restore the order of conviction and sentence passed on the respondent by the trial court.
The respondent will surrender forthwith and serve out his sentences in accordance with law.
His bail bond will thereupon stand cancelled.
Criminal Appeal No. 220 of 1986.
In view of the order passed in the State 's appeal, we need not pass separate orders in this appeal.
The appeal will, therefore, stand disposed of in view of the order passed in the above appeal.
R.N.J. Appeal al lowed.
| IN-Abs | The respondent, a Sub Inspector of police, was convicted under section 376 of I.P.C. for having committed rape on a young newly married girl of 19 or 20 years of age, by the Additional Sessions Judge, Nagpur.
The respondent challenged his conviction in appeal to the High Court.
The High Court set aside the order of conviction and sentence imposed by the trial court and acquitted him.
The State feeling ag grieved came up in appeal by special leave.
While allowing the appeal setting aside the order of the High Court and restoring that of the Trial Court, the Court, HELD: A prosecutrix of a sex offence cannot be put on par with an accomplice.
She is in fact a victim of the crime.
The Evidence Act nowhere says that her evidence cannot be accepted unless it is corroborated in material particulars.
She is undoubtedly a competent witness under section 118 and her evidence must receive the same weight as is attached to an injured in cases of physical violence.
The same degree of care and caution must attache in the evalua tion of her evidence as in the case of any injured complain ant or witness and no more.
[123B C] What is more necessary is that the Court must be alive to and conscious of the fact that it is dealing with the evidence of a person who is interested in the outcome of charge levelled by her.
Having regard to the increase in the number of sex violation cases in the recent past, particu larly cases of molestation and rape in custody, it is proper to remove the notion, if it persists, that the testimony of a woman who is a 116 victim of sexual violence must ordinarily be corroborated in material particulars except in the rarest of rare cases.
[123C D; 124B C] Ours is a conservative society where it concerns sexual behaviour.
Ours is not a permissive society as in some of the Western and European countries.
Our standard of decency and morality in public life is not the same as in those countries.
It is, however, unfortunate that respect for womanhood in our country is on the decline and cases of molestation and rape are steadily growing.
An Indian Woman is now required to suffer indignities in different forms, from lewd remark to eve teasing, from molestation to rape.
Decency and morality in public life can be promoted and protected only if we deal strictly with those who violate the social norms.
The standard of proof to be expected by the Court in such cases must take into account the tact that such crimes are generally committed on the sly and very rarely direct evidence of a person other than the prosecu trix is available.
[124D F] Courts must also realise that ordinarily a woman, more so a young girl, will not stake her reputation by leveling a false charge concerning her chastity.
By our criminal laws vide powers are conferred on police officers investigating cognizable offences.
The infrastructure of our criminal 'investigation system recognises and indeed protects the right of a woman to decent and dignified treatment at the hands of the investigating agency.
[124F H] The purpose and setting, the person and his position, the misuse or abuse of office and the despair of the victim which led to her surrender are all relevant factors which must be present in the mind of the Court while evaluating the conduct evidence of the prosecutrix.
A person in author ity, such as a police officer carries with him the awe of office which is bound to condition the behaviour of his victim [125C D] The Court must not be oblivious of the emotional turmoil and the psychological injury that a prosecutrix suffers on being molested or raped.
She suffers a tremendous sense of shame and the fear of being shunned by society and her near relatives including her husband.
Instead of treating her with compassion and understanding as one who is an injured victim of a crime, she is, more often than not, treated as a sinner and shunned.
It must, therefore be realised that a woman who is subjected to sex violence would always be slow and hesitant about disclosing her plight.
The Court must, therefore, evaluate her evidence in the above background.
117 Bharwada Bhognibhai Hirjibhai vs State of Gujarat, ; upon.
|
ivil Appeal No. 1057 of 1987.
From the Order dated 29.12.1986 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED/SB/ 7 A No. 186/82 BI in Order No. 826/86 BI.
D.N. Mehta, R.C. Misra and Dr. Meera Agarwal for the Appellants.
V.C. Mahajan and R.P. Srivastava for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
Item 26AA(iv) of the Central Excise Tariff reads as follows: "Pipes and tubes (including blanks therefore) all sorts, whether rolled, forged, spun, cast, drawn, annealed, welded or extruded" 62 The appellants are engaged in the manufacture of pipe fittings such as elbows, bends and reducers.
They purchase steel pipes on payment of excise duty prom indigenous pro ducers from the open market and they also get steel tubes by way of import.
The appellants cut the pipes and tubes into different sizes, give them shape and turn them into pipe fittings in their factories by heating in a furnace (at a temperature between 66 degrees C and 900 degrees C) hammer ing and pressing.
The short question in this appeal is whether the pipe fittings so produced by the petitioners also fall under Item 26AA(iv) or whether they should be classified under tariff item 68 which is the residuary entry.
The case of the appellants is that the products manufac tured by them are also nothing but pipes and tubes and that they are being virtually asked to pay duty twice over on the same product.
According to them the processes undertaken by them do not amount to manufacture and no new product has come into existence as a result of the processes employed in their factories.
They say that the pipes and tubes retain their material and original character and use and they can also be had only from dealers dealing in pipes and tubes.
This claim of the appellants has not been accepted by the Central Customs Excise and Gold Appellate Tribunal and hence the present appeal under section 35L(b) of the .
The question before us is whether the Department is right in claiming that the items in question are dutiable under tariff entry No. 68 This, as mentioned already, is the residuary entry and only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry.
In other words, unless the department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item.
We do not think this has been done.
Looking at Tariff item 26AA(iv), it encompasses all sorts of pipes and tubes.
It is also clear that it is of no conse quence whether the pipes and tubes are manufactured by rolling, forging, spinning, casting, drawing, annealing, welding or extruding.
It is true that initially pipes and tubes may be obtained from sheets, billets or bars by var ious processes, but the process of manufacture of pipes and tubes does not end there.
In order to achieve fully the purpose for which the pipes and tubes are manufactured, it is necessary to manufacture smaller pieces of pipes and tubes and also to manufacture them in such a shape that they may be able to conduct liquids and gases, passing them through and across angles, turnings, 63 corners and curves or regulating their flow in the manner required.
Smaller pieces of pipes and tubes differently shaped are manufactured for this purpose.
They are merely intended as accessories or supplements to the larger pipes and tubes.
They are pipes and tubes made out of pipes and tubes.
There is no change in their basic physical properties and there is no change in their end use.
There is no reason why these smaller articles cannot also be described as pipes and tubes.
But, it is said, they are known in the market different ly as pipe fittings, a totally different commercial commodi ty.
The expression "pipe fittings" merely denotes that it is a pipe or tube of a particular length, size or shape.
"Pipe fittings" do not cease to be pipes and tubes; they are only a species thereof.
This aspect of the matter can be illus trated by the decision of this Court in Indian Aluminium Cables Ltd. vs Union of India and others, [1985] 3 S.C.C. 284.
In that case the question was whether "Properzi Rods" manufactured and cleared by the assessee fell within Entry 27(a)(ii) of the First Schedule to the , I of 1944.
That entry read as follows: Aluminium (a) wire bars, wire rods and castings, not otherwise speci fied.
It was contended, on behalf of the appellant, inter alia, that, commercially, Properzi Rods are not known as wire rods in the trade and that a person wanting to purchase Properzi Rods asks specifically for Properzi Rods and not for wire rods.
Reliance was also placed on the view taken by this Court that words and expressions describing an article in a tariff schedule should be construed in the sense in which they are understood in the trade by the dealer and the consumer.
The Court held that Properzi Rods were only a species of wire rods.
It pointed out: "To sum up the true position, the process of manufacture of a product and the end use to which it is put, cannot neces sarily be determinative of the classification of that product under a fiscal schedule like the Central Excise Tariff.
What is more important is whether the broad descrip tion of the article fits in with the expression used in the Tariff.
The aluminium wire rods, whether obtained by the extrusion process, the conventional process or by Properzi process,, are still aluminium wire rods.
The process of 64 manufacture is bound to undergo transformation with the advancement in science and technology.
The name of the end product may, by reason of new technological processes, change but, the basic nature and quality of the article may still answer the same description.
On the basis of the material before us, it is not possible to record a positive finding that Properzi Rods and wire rods are treated as distinct items in commercial parlance.
Properzi Rod is a wire rod subjected to the Properzi process and is used for transmission of high voltage electric current.
" The position is somewhat similar in the present case.
As explained above, the goods described in the tariff, namely, pipes and tubes are designed to meet various types of re quirements.
Normally pipes and tubes are produced as long and straight pieces.
But by themselves they cannot fulfil all the needs or the end use for which they are intended.
To get the maximum use out of the pipes and tubes, it is neces sary not only to produce long and straight pipes and tubes but also to turn out pipes and tubes of smaller dimensions and of different shapes and curves such as bends, elbows, 'T ' pieces, 'Y ' pieces, plugs, caps, flanges, joints, un ions, collars and so on.
This is done by a process of forg ing, welding, hammering and so on applied to the longer tubes but basically the items remain the same and the use also remains the same.
The tariff entry calls for no dis tinction between pipes and tubes manufactured out of sheets, rods, bars, plates or billets and those turned out from larger pipes and tubes.
In these circumstances it is diffi cult to say that pipe fittings, though they may have a distinctive name or badge of identification in the market, are not pipes and tubes.
It is true that all pipes and tubes cannot be described as pipe fittings.
But it would not be correct to say that pipe fittings are not pipes and tubes.
They are only a species of pipes and tubes.
The use of the words "all sorts" and the reference to the various processes by which the excisable item could be manufactured set out in the tariff entry are comprehensive enough to sweep within their fold the goods presently under consideration.
A certain amount of reliance has been placed on entries in the Harmonised Code as well as in the Customs Cooperative Council Nomenclature (CCCN).
We do not think that these entries and specifications are very helpful.
The CCCN con tains a number of entries in Section XV, namely, heading Nos.
73.17 to 73.20.
While heading Nos.
73.17 to 73.19 talk of pipes, tubes and conduits, heading No. 73.20 speaks of "tube and pipe fittings (for example, joints, elbows, unions 65 and flanges) of iron and steel".
Section XVI also deals with some types of pipes and tubes.
The position is similar under the Harmonised Code.
In Section XV, there is an equally meticulous sub division.
Heading Nos.
73.02 to 06 deal with various types of pipes and tubes.
Then comes heading No.73.07 which specifically talks of "tube or pipe fittings (for example, couplings, elbows, sleeves) of iron and steel (including stainless steel)" and proceeds to set out various subdivisions of these items one of which is (7307.23 & 7307.93) "butt welding fittings" which is the item of manu facture in the present case.
It is true that "tubes and pipes" and "pipe fittings" fall under different subitems under the above Codes where the two expressions are used in contrast and the sub classification is more detailed.
That dichotomy cannot be imported into the present context where there is only one comprehensive and generic entry.
We can not, therefore, derive any assistance from those entries.
For the above reasons we are of the opinion that the view taken by the Tribunal is not correct and that the assessee 's contention that the goods in question fall under item 26AA(iv) should be accepted.
We, therefore, set aside the order of the Tribunal and direct the modification of the assessments accordingly.
In the circumstances, however, we make no order as to costs.
P.S.S. Appeal allowed.
| IN-Abs | Steel pipes and tubes (including blanks therefore) all sorts, whether rolled, forged, spun, cast, drawn, annealed, welded or extruded were dutiable under Item 26AA(iv) of the First Schedule to the .
The Department, however, sought to classify 'pipe fittings ' such as elbows, bends and reducers, manufactured by the appellants, from out of the steel pipes purchased from the open market on payment of excise duty, under Item 68 which was a residuary entry, on the ground that they were known in the market differently as pipe fittings, a totally different commercial commodity.
The appellants ' claim that the process undertaken by them did not amount to manufacture as the products turned out were nothing but pipes and tubes, and that they were being virtually asked to pay duty twice over on the same product, was rejected by the Appellate Tribunal.
Allowing the appeal under section 35L(B) of the Act, the Court, HELD: 1.
Unless the Department could establish that the goods in question could by no conceivable process of reason ing be brought under any of the tariff items, resort could not be had to the residuary item.
This has not been done in the instant case.
[62F] 2.1 The use of the words 'all sorts of ' and the refer ence to the various processes by which the excisable items could be manufactured set out in Entry 26AA(iv) are compre hensive enough to encompass all sorts of pipes and tubes.
[64F] 2.2 The expression "pipe fittings" merely denotes that it is a pipe or tube of a particular length, size or shape.
Pipe fittings do not cease to be pipes and tubes; they are only a species thereof.
In order to achieve 61 fully the purpose for which the pipes and tubes are manufac tured, it is necessary to manufacture smaller pieces of pipes and tubes and also to manufacture them in such a shape that they may be able to conduct liquids and gases, passing them through and across angles, turnings, corners and curves or regulating their flow in the manner required.
This is done by a process of forging, welding, hammering and so on applied to the longer tubes.
There is no change in their basic physical properties and there is no change in their end use.
They are merely intended as accessories or supple ments to the larger pipes and tubes.
It could not, there fore, be said that pipe fittings, though they may have a distinctive name or badge of identification in the market, were not pipes and tubes.
[63B C, 62G 63A, 64E] Indian Aluminium Cables Ltd. vs Union of India & Ors., ; , referred to.
No doubt "tubes and pipes" and "pipe fittings" fall under different sub items under the Harmonised Code as well as under the Customs Cooperative Council Nomenclature where two expressions are used in contrast and the sub classifica tion is more detailed.
That dichotomy could not be imported into the instant case where there was only one comprehensive and generic entry.
[65B C]
|
vil Appeal Nos.
80405 of 1975.
From the Judgment and Order dated 28.12.1973 of the Andhra Pradesh High Court in S.T.A. Nos. 1 and 3 of 1971.
P.R. Seetharaman and T.V.S.N. Chari for the Appellant.
M.C. Bhandare, A.V.V. Nair for the Respondent.
Under the provisions of the said Act, on 7 9 1949 the Gosha hospital at Vizianagaram which was till then manned by the hereditary landlord and zamindar of the impartible Estate of Vizianagaram (hereinafter referred to as the Estate) was handed over to the State.
The late Maharani Appalakondayamba otherwise popularly known as "Rani of Rewa" had executed a Will on 14 12 1911 creating a permanent endowment of a sum of Rs.1,00,000 for the maintenance of the said hospital.
This amount was kept in deposit with the Estate.
Since the Government had taken over the hospital by its Application No. TOP 123/58 to the Estates Abolition Tribunal and Distt.
Judge, Vishakhapatnam, the Government claimed the recovery of the said amount with interest at the rate of 6% per annum and also claimed a priority over the other creditors.
The Tribunal by its Order dated 15 12 62 allowed the claim for the amount, but rejected the claim for priority.
The Tribunal also directed the payment of Rs.36,695 to the Government out of the total amount of compensation which was then 137 deposited with it.
The Government filed an appeal against the said Order being STA No. 1/64 in the High Court, but the same was dismissed.
It appears that subsequently, another sum of compensation being Rs.11,78,581.09 was deposited, and hence the Government filed another application, viz. TOP 5/69 for payment of the balance of Rs.63,305 with interest thereon at the rate of 6% per annum from 1 7 49 till the date of payment.
In this application, the appellant did not dispute the Government 's claim for Rs.63,305 but contended that no interest on the sum of Rupees one lakh or on any part thereof was payable since according to him the Tribunal had rejected the claim for interest by its earlier Order of 15 12 62 in TOP 123/58.
The Tribunal accepted the appel lant 's contention and held that the claim for interest was rejected earlier and disallowed the same.
Against the said Order, the Government preferred an appeal to the High Court being STA 1/71. 3.
The late Rani of Rewa by her same Will had also deposited another sum of Rupees one lakh with the Estate with the direction that the interest thereon should be utilised in feeding Telugu Brahmin students studying ad vanced Sanskrit Literature and Shastras at Banaras.
The said fund will hereinafter be referred to as the Banaras Chari ties Fund.
It appears that sufficient number of Telugu Brahmin students were not available and hence the Executor of the Will had applied for utilisation of the said amount for the Gosha hospital, and in that application, the High Court had directed that out of the accumulated surplus interest of Rs.47,897 in the said Banaras Charities Fund, a sum of Rs.30,000 be capitalised and deposited with the Estate and the interest thereon at the rate of 3% per annum be utilised to meet the recurring annual expenditure of the Gosha hospital.
After the abolition of the Estate, the Government filed before the Tribunal a claim application being TOP No. 124/58 for recovery of the said sum of Rs.30,000 with interest at the rate of 6% per annum.
The Government also claimed priority over the other creditors for the said amount as well.
The Tribunal by its same order of 15 12 62 allowed the Government 's claim for the amount, but rejected the claim for priority.
The Tribunal also directed that a sum of Rs.11,008.50 be paid to the Govern ment from out of the amount of compensation which was then deposited.
Against the said order, the Government preferred an appeal to the High Court being STA No. 2/64 which was dismissed.
On the subsequent deposit of further compensa tion, the Government preferred another application being TOP 6/69, for the balance of Rs.18,991.50 and for interest thereon at the rate of 6% per annum from 1 7 49 till the date of payment.
The appellant did not dispute the 138 claim for the payment of the balance amount of Rs.10,991.50, but resisted the claim for interest, firstly on the ground that there was no provision for payment of interest in the Act and secondly on the ground which was urged in the other appeal, viz. that in TOP 124/58 it was rejected by the Tribunal earlier.
The Tribunal accepted the appellant 's contention and disallowed the claim for interest.
Against the said order, the Government preferred an appeal to the High Court being STA No. 3/71.
Thus before the High Court the only question in both the appeals was whether the Tribunal by its earlier order of 15 12 62 in TOP 123 and 124/58 had allowed or rejected the claim for interest? The High Court by its common order dated 28 12 73 held that the Tribunal by its earlier order of 15 12 62 had not only allowed the claim for the principal endowed amounts of Rupees one lakh and Rs.30,000 respective ly, but also interest thereon, and directed the payment of interest thereon from 1 7 49 as claimed.
It is this order which is challenged by the appellant by these two separate appeals.
Civil Appeal No. 804 is against the order of the High Court in STA No. 1/71 arising out of TOP 5/69 (corresponding to earlier TOP 123/58) and Civil Appeal No. 805 is against the order in STA No. 3/71 arising out of TOP 6/69 (corre sponding to earlier TOP 124/58).
Mr. Bhandare, learned counsel appearing for the appellant in both the appeals contended firstly, that the Tribunal while disposing of TOPs Nos. 123 and 124 of 1958 should be deemed to have rejected the claim for interest because in the operative part of the order, the Tribunal did not state that it was granting interest, but only mentioned that it was granting the amounts which were claimed in the applications.
The expression 'amount ' claimed in the appli cation should be construed to mean the principal amount only and not interest.
He also tried to derive support to this submission from the fact that while directing the payment of specific amounts, the Tribunal had considered only the principal amounts in both cases as is evident from the orders of the Tribunal in that behalf.
Hence he submitted that the issue with regard to the interest was barred by resjudicata and the interest could not have been claimed by the Government in its subsequent applications.
His second contention was that assuming without admitting that there was a direction given by the Tribunal to pay the interest, such direction was without jurisdiction because there was no provision in the Act for payment of interest.
Thirdly, he submitted that in any case it would be inequitable to ask the Estate to pay interest 139 when the compensation which was paid to the Estate did not bear any interest.
Fourthly, he contended that in any event, the appellant personally cannot be held liable to pay the interest since the endowed amounts were always a part of the Estate which was abolished, and the compensation which was paid and later on distributed among the sharers of the Estate, covered the said endowed amounts.
The interest, according to him, therefore, has to come out of the shares of all the sharers and the appellant alone cannot be direct ed to pay the same.
Fifthly, his contention was that assum ing without admitting that the appellant as an executor had retained the said amounts and applied them to purposes other than the objects of the endowment, he cannot be penalised for the same under the Act by making him pay the interest on them.
At the most he may be liable for misfeasance as a trustee under the appropriate law.
Lastly, he submitted that in any case since other sharers are not made parties to the present proceedings, no direction can be given in the present proceedings for payment of interest which has to come out of the compensation received by all the sharers.
As regards the first contention, namely, that the Tribunal had not directed the payment of interest in TOPs 123 and 124/58, it may be pointed out that in the applica tions made by the State Government to the Tribunal for the recovery of the two endowed amounts, the Government had in clear terms claimed that they were entitled to the said sums with interest @ 6% per annum from 1 7 49 till the date of payment, and that the Government was entitled to this amount after the compensation was deposited.
The Government had also made a further claim that it was entitled to the pay ment of the said amount in priority over the claims of all other persons.
Pursuant to these averments, the Tribunal had framed Issue No. 2 in TOP 123/58 and Issue No. 3 in TOP 124/58 in identical terms as follows: "Whether the Government is entitled to claim the said amount with interest from the date of abolition . . ?" While recording its findings in both the TOPs, the Tribunal had in paragraph 21 state as follows: "Under these circumstances, I hold under point 3 that the Government is entitled to get payment of the amounts claimed in TOPs Nos. 123 24/58.
" The Tribunal further reiterated the said finding in para graph 29 as follows: 140 "It is not in dispute that the amount of these two lakhs of rupees continued to be with the Samsthanam and the Samstha nam was paying interest on those amounts for the purposes of the endowments . .
From that time onwards all along these two amounts have been treated as debts payable by the Samsthanam.
The amounts claimed under TOP Nos . . 123 24/58 relate to this amount of Rupees two lakhs and interest accrued thereon.
Under these circumstances I hold that the amounts claimed under the said petitions are debts payable from and out of the assets of the Impartible Estate.
" Again later in the same paragraph, it is stated as follows: "Under these circumstances I hold under point 15 that the amounts claimed in TOP Nos . . . . 123 24/ 58 . . . . are debts to be paid from and out the assets of the Impartible Estate of Vizianagaram and therefore they are debts which come under the category of debts contemplated under Section 45(3) of the Abolition Act and those debts are liable to be paid from out of the com pensation amount before any division of it can be made between the sharers and maintenance holders.
" In paragraph 32 the Tribunal has observed as follows: "From the above discussion it is clear that out of the amount of Rs.3,63,007 in dispute concerned in the first instance the State Government is entitled to payment of the amount due to it under TOP No. 122/58 and out of the balance remaining the amounts payable under TOP Nos. 123 24/58 . . should be paid.
" It is, therefore, more than clear that the Tribunal had by its order in question given a finding that the Government was entitled to the entire amount claimed by it, namely, the principal endowed amount and also interest claimed thereon.
The contention that because the Tribunal had not reiterated the word 'interest ' in the next sentence of its direction and had only mentioned "the amount" payable under the TOPs and, therefore, it should be held that the Tribunal had rejected the claim for interest is too facile to be accepted.
For the same.
reason, we are also not impres 141 sed by the argument that since the Tribunal had while di recting the payment of specific amounts had only referred to a part of the principal amounts it should be held that the Tribunal had rejected the claim for interest.
Under the scheme of the Act itself, the Tribunal was required to apportion the amounts according to the priorities depending upon the amount of compensation deposited at the time of the giving of the direction in question.
It was, therefore, only to be expected that the Tribunal would first give directions with regard to the payment of the principal amounts and defer the payment of interest to a future date.
That is exactly what the Tribunal had done in the present case and, hence, in the second set of applications made by the Govern ment, the Government had not only claimed the balance of the principal amounts but also interest on the entire of the said amounts from 1 7 49.
The High Court was, therefore, right in holding that the Tribunal by its order of 15 12 62 had allowed the claim for interest.
In the circumstances, the issue with regard to the claim for interest in the subsequent applications, namely, applications TOPs 5/69 and 6/69 was not barred by resjudicata, as contended by Shri Bhandare.
The second contention that the Tribunal could not have directed the payment of interest because there was no jurisdiction to do so is also misconceived, for the simple reason that in the Will in question, both the said amounts were deposited by the testator with the Estate, and the beneficiaries of the endowment, namely, Gosha hospital and the Banaras Charities Fund were to be financed from the interest accruing on the said two amounts respectively.
It was not in dispute that these two amounts were lying depos ited with the Estate and the Estate was paying interest @ 6% per annum on the amount of Rupees one lakh which was meant for Gosha hospital and @ 5% per annum on the amount meant for the Banaras Charities Fund.
Hence, all that the Tribunal had done was to direct the Estate to pay the amounts in question to the Government together with interest at the admitted rate, which interest was in any case payable to wards the endowment objects.
Under the Act the Tribunal had, among other things, to determine the liability of the Es tate.
The endowment amounts together with the interest admittedly accruing thereon together formed the total li ability of the Estate.
The interest, further was a recurring one and the objects of the endowment were to be financed from out of the said interest.
When, therefore, the Tribunal directed the payment of interest together with the principal amount it did nothing more than direct the Estate to honour its liability.
As regards the third contention that it was inequitable for 142 SUPREME COURT REPORTS [1990] 1 S.C.R. the Tribunal to ask the Estate to pay the interest since the compensation paid to the Estate did not bear any interest, we are afraid that the submission is beside the point.
In the first instance, under the scheme of the Act the amount of compensation was to be paid in stages as and when the compensation was deposited.
Secondly, whether the Estate was paid or not paid the interest on compensation due to it, has nothing to do with the Estate 's liability towards the endow ments.
The interest directed to be paid by the Tribunal was not interest over and above the endowed amounts.
It is the principal amount together with the interest accruing thereon which constituted the total endowed amounts at the time of the abolition of the Estates.
The next three contentions can be dealt with togeth er.
There is no doubt that the amounts were deposited with the Estate, and it was the Estate which was paying interest to the beneficiary or beneficiaries under the endowments.
Hence, as observed by the Tribunal, in the first instance, the endowment amounts together with the interest accruing thereon had to be set apart, from out of the compensation payable to the Estate, and it is the balance which had to be distributed among the sharers or the creditors of the shar ers as the case may be.
As we read the Tribunal 's order of 15 12 62 as well as the impugned order of the High Court, we see no direction to the appellant to pay the said amount personally, as indeed on such direction could have been given, since the facts show, that both the amounts were lying with the Estate and not with the appellant in his individual capacity.
What is recorded in the Tribunal 's order is that it is the Estate holder who had not made over the two amounts to the Government on the date of its taking over.
Hence, the direction of the High Court to pay the said amount will have to be read as a direction to the appellant to do so in his capacity as the Estate holder and not in his individual capacity.
If the final amounts are already dis tributed among all the sharers and/or the creditors, the Government has to look for the amount of interest to all the sharers and/or their creditors including of course the appellant.
All the sharers will be liable to contribute towards the payment of the amount of interest in proportion to their share in the compensation.
That is how the impugned order of the High Court and the earlier order of 15 12 62 passed by the Tribunal will have to be read and construed.
In the circumstances, it matters not whether all the sharers were parties to the proceedings.
The proceedings were essen tially against the Estate, and the present appellant in his capacity as an Estate holder represented the Estate and all the sharers.
The order passed in the proceedings is, there fore, binding on all the sharers in the Estate notwithstand ing the fact that all the sharers 143 were not parties to the proceedings.
We, therefore, find no substance in the contention that the present proceedings were bad in law because all the sharers were not made par ties to the same.
In the result, both the appeals fail.
In the circum stances, however, there will be no order as to costs.
G.N. Appeals dis missed.
| IN-Abs | Under the provisions of the Andhra Pradesh (Andhra Area) Estates (Abolitian and Conversion into Ryotwari) Act, 1948, (the Act), the Government took over a hospital which was run by a Zamindar of an impartible estate.
After the take over, the Government made applications before the Estate Abolition Tribunal claiming recovery of certain amounts which were endowed to the hospital by the erstwhile ruler, from out of the compensation paid on the abolition of the estate.
Claims for interest and priority over other creditors were also made.
In the first of such applications, the Tribunal allowed the amount claimed without specific reference to interest but rejected the claim for priority.
In the subsequent proceedings, the Tribunal rejected the claim for interest as also priority and held that in the earlier proceeding also, it has disallowed the claim for interest.
Aggrieved against the Tribunal 's orders, Government preferred appeals before the High Court.
The High Court took the view that while allowing the claim the Tribunal had not only allowed the claim for principal but also interest thereon, and ordered payment of interest as claimed.
These appeals are against the High Court 's orders and the appellant contended that there was no provision in the Act for payment of interest; that the expression 'amount ' claimed before the Tribunal should be construed to mean the principal amount only; that the subsequent claims for inter est were barred by resjudicata; that it would be 135 inequitable to claim interest on the amounts endowed since no interest was paid on compensation; that while the compen sation was shared by others also, the appellant cannot be singled out to pay the interest.
Dismissing the appeals, this Court, HELD: 1.1 The High Court was right in holding that the Tribunal by its order of 15.12.02 had allowed the claim for interest.
Under the scheme of the Act itself, the Tribunal was required to apportion the amounts according to the priorities depending upon the amount of compensation depos ited at the time of giving of the direction in question.
It was, therefore, only to be expected that the Tribunal would first give directions with regard to the payment of princi pal amounts and defer the payment of interest to a future date.
That is exactly what the Tribunal had done in the present case and, hence, in the second set of applications made by the Government, the Government had not only claimed the balance of the principal amounts but also interest thereon.
Thus, the issue with regard to the claim for inter est in the subsequent applications was not barred by resju dicata.
[141B C, D].
1.2 All that the Tribunal had done was to direct the Estate to pay the amounts in question to the Government together with interest at the admitted rate, which interest was in any case payable towards the endowment objects.
Under the Act, the Tribunal had, among other things, to determine the liability of the Estate.
The endowment amounts together with the interest admittedly accruing thereon formed the total liability of the Estate.
The interest, further was a recurring one and the objects of the endowment were to be financed from out of the said interest.
When the Tribunal directed the payment of interest together with the principal amount, it did nothing more than direct the Estate to honour its liability.
[141F G] 2.
Whether or not interest was paid on compensation due to the Estate, it has nothing to do with the Estate 's li ability towards the endowments.
The interest directed to be paid by the Tribunal was not interest over and above the endowed amounts.
It is the principal amount together with the interest accruing thereon which constituted the total endowed amounts at the time of abolition of the Estates, [142A B] 3.
The direction of the High Court to pay the said amount will have to be read as a direction to the appellant to do so in his capacity as the Estate holder and not in his individual capacity.
If the final amounts 136 are already distributed among all the sharers and/or the creditors, the Government has to look for the amount of interest to all the sharers and/or their creditors including of course the appellant.
All the sharers will be liable to contribute towards the payment of the amount of interest in proportion to their share in the compensation.
That is how the order of the High Court and the earlier order passed by the Tribunal will have to be read and construed.
[142E H; 143A]
|
ivil Appeal No. 1043 of 1990.
From the Judgment and Order dated 10.8.1989 of the Bombay High Court in C.R.A. NO.
521 of 1985.
V.A. Bobde, S.D. Mudaliar.
Mrs. Ranjana Bobde and C.K. Ratnaparkhi for the Appellants.
V.P. Salve, and Ms. Bina Gupta for the Respondent.
The Judgment of the Court was delivered by VERMA, J.
Special Leave granted.
The short question involved is the maintainability of the suit which gives rise to this appeal.
The appellants contend mat the Suit is not maintainable even on the plaint averments.
The Trial Court held the suit to be maintainable and the High Court has dismissed the appellants ' revision affirming that view.
Hence this appeal by special leave.
The appellants are the legal representatives of Motilal who purchased the disputed property, namely, 'Goyal Talkies ' at Kamptee in the year 1946.
The said Motilal entered into a partnership on 31.12.1953 with respondent Ratanlal repre senting the joint family firm "M,s.
Ratanlal Damdoolal and Bros." for the purpose of running the cinema business in 'Goyal Talkies '.
Some disputes having arisen between the parties, the said Motilal together with his wife and chil dren filed Civil Suit No. 19A of 1955 on 4.8.1955 in the Court of Civil Judge, Class I, Nagput, against respondent Ratanlal as defendant No. 1, the firm "M/s. Damdoolal and Bros." as defendant No. 2 and one Puranmal as defendant No. 3.
The suit was for the dissolution of partnership, rendi tion of accounts and ancillary reliefs.
On discovery of the misdescription of defendant No. 2 firm, an application was made by the plaintiff for correction of that misdescription.
The misdescription being obvious, the Trial Court allowed the plaintiff 's application on 19.8.1955 permitting defend ant No. 2 firm to be correctly described as "M/s. Ratanlal Damdoolal and Bros." instead of "M/s. Damdoolal and Bros." It appears that the correction even though permitted was 175 not actually incorporated in the plaint.
However, the par ties were not misled in any manner by the misdescription of defendant No. 2 made initially in the plaint which is evi dent from the fact that defendant No. I Ratanlal who filed the separate written statement in the suit on behalf of defendant No. 2 also correctly described defendant No. 2 as "Ratanlal Damdoolal and Bros." This suit was compromised between the parties and a compromise petition dated February 20, 1956 signed by the plaintiff, Motilal, Ratanlal for himself as defendant No. 1 and also on behalf of defendant No. 2 firm, and the counsel for defendant Nos. 1 and 2 was filed in the Trial Court.
This compromise was recorded by the Court on 5.3.1956 after the statements of defendant No.1 Ratanlal and the counsel for defendant No. 2 firm were recorded accepting the compromise.
One of the agreed terms was that defendant No. 3 Puranmal should be discharged from the suit apparently because he had no interest in the suit.
According to the terms of the compromise, plaintiff was to pay to defendant Nos. 1 and 2 a sum of Rs.15,700 in full satisfaction of their claim subject to final accounting, which included the sum of Rs.2,600 paid to Puranmal by defendant Nos. 1 and 2.
It was also agreed that on payment of this amount by the plaintiff to defendant Nos. 1 and 2 within the specified period, the partnership would be deemed to be dissolved and that defendant Nos. 1 and 2 gave up all their rights including the interest acquired by them from defendant No. 3, Puranmal under the sale deed executed in their favour.
It was agreed that the plaintiff would be entitled to possession of the talkies immediately on payment of the amount due to defendant Nos. 1 and 2.
The Receiver Shri K.S. Mishra Advocate, was required to act in terms of the compromise between the parties which required confirma tion of accounts from the accountbooks of the partnership and thereafter distribution of the surplus between the plaintiff and defendant Nos. 1 and 2.
The plaintiff paid this sum of Rs.15,700 on 5.3.1956 well within the specified period; the receiver rendered accounts on 19.3.1956 and an application for correction was made on 3.4.1956.
It may be mentioned that full compliance having been made by the plaintiff on 5.3.
1956, the receiver gave possession of the Talkies to the plaintiff on 5.3.
1956 according to the compromise since the Only thing remaining to be done thereafter was to refund to the plaintiff the amount of Rs.5,470 paid in excess by plaintiff to defendant Nos. 1 and 2.
Accordingly, on 16.11.1959 the Court passed the final decree in the suit stating that the partnership stood dissolved with effect from 27.4.1959 and the defendant Nos. 1 and 2 were directed to refund to the plaintiff the amount of Rs.5,470 which was the excess amount paid by the plaintiff to them.
176 Notwithstanding the above facts, defendant Nos. 1 and 2 filed an appeal against the final decree dated 16.11.1959 in the Court of the Extra Assistant Judge, Nagpur which was C.A. No. 413 of 1962 decided on 27.12.
Thereafter, a second appeal No. 293 of 1963 was also filed by these de fendants in the High Court which too was dismissed on 2.12.1972.
The final decree dated 16.11.1959 based on the compromise which was fully satisfied become final inasmuch as the defendants did not challenge the same by a further appeal to this Court.
Thereafter, Civil Suit No. 1699 of 1980 in the Court of Civil Judge, Senior Division, Nagpur, was filed by respond ent Ratanlal against the petitioners who are the legal representatives of the aforesaid Motilal assailing the above consent decree after taking the entire benefit thereunder.
The reliefs claimed in this suit are for a declaration that the aforesaid final decree dated 16.11.
1959 passed on the basis of the order dated 5.3.1956 in Civil Suit No. 19A of 1955 by the Civil Judge, Senior Division, Nagpur, is a nullity; that the partnership under the partnership deed dated 31.12.1953 between the said Ratanlal and Motilal continues to subsist; that Ratanlal is entitled to posses sion of the said Goyal Talkies; and the other ancillary reliefs.
This suit was contested by the petitioners, inter alia on the ground that it was barred by res judicata by the earlier adjudication between the parties and also that it was not maintainable.
It would suffice to say that as a result of the High Court 's direction, the Trial Court framed preliminary issue regarding maintainability of the suit and by its order dated 15.4.1985, it held the suit to be main tainable.
On behalf of the petitioners the suit was claimed to be barred also by virtue of Rule 3A of Order 23, C.P.C. The Trial Court rejected these contentions and held the suit to be maintainable.
The petitioners then preferred a Civil Revision in the High Court which has been dismissed by the Order dated 10.8.1989.
Hence this appeal by special leave.
The contention of Shri V.A. Bobde, learned counsel for the appellant is that the suit is barred by virtue of Rule 3A of Order 23, C.P.C. and even otherwise the plaint aver ments do not disclose any cause of action in order to raise a triable issue.
He also contended that even if Rule 3A inserted in Order 23, C.P.C. by the C.P.C. Amendment Act, 1976 with effect from 1.2.1977 does not apply to the present suit challenging the decree passed prior to the amendment, this suit is barred also in accordance with the unamended provision existing earlier.
In reply, Shri V.P. Salve, learned counsel for the respondent contended that Rule 3A of Order 23, C.P.C. has no application since the decree as sailed in the suit is of a date much prior to insertion of 177 Rule 3A by amendment with effect from 1.2.
He also contended that the question of examining the frame of the suit to determine its maintainability on any other ground does not arise since the petitioners case was based on the bar under Order 23, Rule 3A, C.P.C., which too was an objec tion raised after the filing of the written statement in which the plea of res judicata had been taken.
However, in all fairness Shri Salve made no attempt to contend that the suit as framed raises any triable issue on the basis of the only grounds on which the decree dated 16.11.1959 is alleged to be a nullity.
He urged only two additional grounds, not pleaded in the existing plaint, which were raised unsuccess fully on behalf of the present respondent in the First Appeal and the Second Appeal against the compromise decree to contend that the suit is triable.
He also urged that no specific objection for rejection of the plaint under Order 7 Rule 11 C.P.C. was taken earlier and, therefore, the matter be remanded for a fresh consideration on this basis.
To avoid protracting this litigation any longer, we gave opportunity to learned counsel for the respondent to prepare the case on this point.
Shri Salve then filed an application for amendment of the plaint on the next day in any attempt to plead the additional grounds on which alone he claimed the suit to be triable.
We may first dispose of the application for amendment to the plaint filed by Shri Salve on January 12, 1990 during the course of hearing of the appeal.
We do not find any ground to allow this application which apart from being highly belated, is clearly an after thought for the obvious purpose of averting the inevitable consequence of rejection of the plaint on the ground that it does not disclose any cause of action or raise any triable issue.
Moreover, the proposed amendments in the plaint, as summarised by Shri Salve, are to raise two grounds which are concluded by the earlier adjudication ending with dismissal of Ratanlal 's Second Appeal against the impugned decree.
The first is the consequence of rejection of the plaint under Order 7, Rule 11, C.P.C. in the earlier suit on 26.3.1959 and its revival on payment of court fee by plaintiff, Motilal, in terms of that order itself.
It is sufficient to mention that the High Court 's order dismissing the Second Appeal arising out of that decree considers and rejects this argument and that order has become final between the parties since it was not challenged thereafter.
The second point relates to delivery of possession of the Talkies on 5.3.1956 to plaintiff, Motilal, which is alleged to have been made under a wrong procedure.
The facts narrated above clearly indicate that delivery of possession by the 178 Receiver, Shri K.S. Mishra, Advocate, to plaintiff, Motilal, was in pursuance of the Court 's order dated 5.3.1956 after plaintiff Motilal had already deposited the sum of Rs.15,700 which was really in excess of the amount required to be paid by the plaintiff, Motilal, to.
defendant Nos. 1 and 2 re sulting in subsequent refund of Rs.5,470 to plaintiff and the express compromise between parties which was accepted by Ratanlal in his statement recorded by court on 22.2.
This contention also was rejected in the earlier adjudica tion ending with the High Court 's dismissal of the Second Appeal which has become final.
Moreover, this appeal is not against that decision of the High Court.
There is no ground to allow the belated attempt to amend the plaint for taking these grounds.
The application for amendment is, therefore, rejected.
We do not consider it necessary to decide the applica bility of Rule 3A of Order 23, C.P.C. to the present suit since the matter can be disposed of even otherwise.
The plaint averments specify the grounds on which the decree dated 16.11.
1959 is alleged to be nullity.
The question is: whether any of these grounds raises a triable issue in the suit or in other words does the plaint disclose any cause of action? The specific case of the respondent as clearly mentioned in Para 3 of the impunged order dated 10.8.
1989 of the High Court is as under: "The plaintiff has never claimed that some fraud, coercion or misrepresentation is played.
On the other hand, he says that due to the lapses while deciding the matter, decree passed by the Court below has become a nullity.
It is, therefore, clear that the respondent/plaintiff does not challenge validity of the decree dated 16.11.1959 on the ground of fraud, coercion or misrepresentation but merely on the basis of lapses in deciding the earlier suit which have been specifically mentioned in para 6 of the plaint.
It is, therefore, only on these limited grounds that the question of maintainability of the present suit has to be decided.
We shall, therefore, now refer to the grounds mentioned in para 6 of the plaint which alone are relied on to dis close a cause of action for the suit.
The first ground of nullity averred in para 6 of the plaint is that the decree was passed against a non existent person "M/s.
Damdoolal and Bros." It is not the respondent 's case that "M/s. Dam doolal and Bros." is a legal entity distinct from "M/s. Ratanla Damdoolal and Bros." so that the decree was against another person As earlier stated, in the written statement filed by respondent Ratan 179 lal, the description of defendant No. 2 was correctly given by respondent Ratanlal himself as "M/s. Ratanlal Damdoolal and Bros." and not "M/s. Damdoolal and Bros." Moreover, an order dated 19.8.
1955 was made by the trial court permit ting the correction to be made even though it was not duly incorporated in the plaint thereafter.
It is significant that the first appeal and the second appeal filed against the compromise decree made by the respondent in which the firm as one of the appellants was correctly described as "M/s. Ratanlal Damdoolal and Bros." and not "M/s. Damdoolal and Bros".
The decree was, therefore, against "M/s. RatanIal Damdoolal and Bros." and this is how it was admittedly understood throughout by the respondent himself who repre sented the firm at every stage of the earlier suit till the final decision by the High Court, describing the firm cor rectly as "M/s. Ratanlal Damdoolal and Bros." Obviously this ground is non existent.
The next ground of nullity pleaded is that the decree does not direct discharge of defendant No. 3, Puranmal.
Admittedly, no relief was claimed or granted against defend ant No. 3, Puranmal who was treated by all to be only a formal party.
This ground also is, therefore, non existent.
The next ground is that there is no consideration for aban donment of the interest of Puranmal which renders the corre sponding term void.
Admittedly, the terms of compromise show payment of Rs.2,600 to Puranmal and execution of a sale deed by Puranmal in favour of defendant Nos. 1 and 2 who alone thereafter remained the interested parties.
This is how Shri Salve, learned counsel for the respondent summarised the entire grounds of nullity pleaded in the plaint.
On the admitted facts appearing from the record itself, learned counsel for the respondent, was unable to show that all or any of these averments in the plaint disclose a cause of action giving rise to a triable issue.
In fact, Shri Salve was unable to dispute the inevitable consequence that the plaint was liable to be rejected under Order 7 Rule 11, C.P.C. on these averments.
All that Shri Salve contended was that the Court did not in fact reject the plaint under Order 7 Rule 11, C.P.C. and summons having been issued, the trial must proceed.
In our opinion, it makes no difference that the Trial Court failed to perform its duty and proceeded to issue summons without carefully reading the plaint and the High Court also overlooked this fatal defect.
Since the plaint suffers from this fatal defect, the mere issuance of summons by the Trial Court does not require that the trial should proceed even when no triable issue is shown to arise.
Permitting the continuance of such a suit is tantamount to licensing frivolous and vexatious litigation.
This cannot be done.
180 It being beyond dispute that the plaint averments do no disclose a cause of action, the plaint is liable to be rejected under Order 7 Rule 11, C.P.C. without going into the applicability of Order 23 Rule 3A, C.P.C. to the present suit.
Having reached this conclusion, it is unnecessary to adopt the technical course of directing the Trial Court to make the consequential order of rejecting the plaint and, instead, we adopt the practical course of making that order in this proceeding itself to avoid any needless delay in conclusion of this futile litigation.
Consequently, the appeal is allowed.
The impugned orders of the Trial Court and the High Court holding the suit to be maintainable are set aside and the plaint is rejected under Order 7 Rule 11, C.P.C. The respondent shall pay the appel lants ' costs throughout.
R.S.S. Appeal allowed.
| IN-Abs | One Motilal who owned Goyal Talkies entered into a partnership with respondent Ratanlal representing the joint family firm of M/s. Ratanlal Damdoolal and Bros., for the purpose of running the cinema business.
Later, the said Motilal together with his wife and children filed a civil suit for dissolution of partnership, rendition of accounts, etc., against respondent Ratanlal, as defendant No. 1, the firm "M/s Damdoolal and Bros." as defendant No. 2, and one Puranmal as defendant No. 3.
Motilal subsequently filed an application for correction of the description of defendant No. 2 firm, which was allowed.
The suit was compromised.
According to one of the terms of the compromise, plaintiff was to pay to defendant Nos.1 and 2 a sum of Rs.15,700 in full satisfaction of their claim, subject to final accounting.
The plaintiff paid this sum within the specified period and thereupon the receiver gave possession.
Subsequently, the Court passed a final decree dated 16.11.1959 stating that the partnership stood dissolved, and directing defendant Nos. 1 and 2 to refund to the plaintiff the amount of Rs.5,470 which was the excess amount paid by the plaintiff to them.
Defendant Nos. 1 and 2 filed an appeal against the final decree which was dis missed, and their second appeal in the High Court was also dismissed on 2.12.1972.
Thereafter, Civil Suit No. 1699 of 1980 was filed by Ratanlal, respondent herein, against the appellants, who are the legal representatives of Motilal, assailing the consent decree after taking the entire benefit thereunder.
The reliefs claimed were for a declaration that the final decree dated 16.11.1959 was a nullity, and for possession of Goyal Talkies, etc.
The appellants resisted the suit inter alia on the ground that it was barred by res judicata, and further that the suit was also barred by virtue of Rule 3A Order 23, C.P.C. The Trial Court framed a 173 preliminary issue regarding maintainability and held the suit to be maintainable.
The High Court dismissed the civil revision against that order.
Before this Court it was contended on behalf of the appellant that the suit was barred by virtue of Rule 3A of Order 23 and even otherwise tile plaint averments did not disclose any cause of action in order to raise a triable issue.
In reply, it was contended that Rule 3A of Order C.P.C., had no application since the decree assailed in the suit was a date much prior to insertion of Rule 3A by amend ment with effect from 1.2.1977; and that the question of examining the frame of the suit to determine its maintain ability on any other ground did not arise since the appel lant 's case was based on the bar under Order 23, Rule 3A, and no specific objection for rejection of the plaint under order 7 Rule 1 t C.P.C., was taken earlier.
During the course of hearing of the appeal, the respond ent filed an application for amendment of the plaint.
Allowing the appeal, this Court, HELD: (1) On the admitted facts appearing from the record itself, counsel for the respondent was unable to show that all or any of the averments in the plaint disclose a cause of action giving rise to a triable issue.
[179F] Since the plaint suffers from this fatal defect, the mere issuance of summons by the Trial Court does not require that the trial should proceed even when no triable issue is shown to arise.
Permitting the continuance of such a suit is tantamount to licensing frivolous and vexatious litigation.
This can not be done.
[179G H] (3) It being beyond dispute that the plaint averments do not disclose a cause of action, the plaint is liable to be rejected under Order 7 Rule i 1, C.P.C. without going into the applicability of Order 23 Rule 3A, C.P.C. to the present suit.
[180A] There is no ground to allow the application for amend ment of the plaint which apart from being highly belated, is clearly an afterthought fur the obvious purpose of averting the inevitable consequence of rejection of the plaint on the ground that it does not disclose any cause of action or raise any triable issue.
Moreover, the proposed amendments in the plaint are to raise two grounds which are concluded 174 by the earlier adjudication ending with dismissal of Ratan lal 's Second Appeal against the impugned decree.
[177E F]
|
ivil Appeal No. 480 of 1986.
From the Judgment and Order dated 10.7.85 of the Madhya Pradesh High Court in Misc.
Petition No. 1235 of 1984.
D.N. Mukherjee and Ran jan Mukherjee for the Appellant.
S.S. Khanduja, Yashpal Dingra and Baldev Kishan for the Respondents.
The Judgment of the Court w. as delivered by 146 K. JAGANNATHA SHETTY, J.
This appeal by leave from a judgment of the M.P. High Court concerns the scope of Sec tion 415 of the M.P. Municipal Corporation Act, 1956 ( 'the Act ' for short).
The circumstances can be shortly stated.
Within the Jabalpur Municipal Corporation limits, there is a 'Mandi ' established under the M.P. Krishi Upaj Mandi Adhiniyam, 1973 ( 'Adhiniyam ') covering an area of 55 acres.
It is enclosed by high boundary wall and is under the con trol and jurisdiction of the Krishi Upaj Mandi Samithi or otherwise called the Market Committee.
Under Section 7 of the Adhiniyam, the market Committee is a body corporate with power to provide facilities for regulation of buying and selling of agricultural produce and establishment of proper administration of the market.
Section 7(3) of the Adhiniyam provides that notwithstanding anything contained in any enactment for the time being in force, every market commit tee shall for all purposes, be deemed to be a 'local author ity '.
Inside the Mandi, the market committee appears to have constructed office buildings, shop complexes, godowns, market yards, shades and other buildings.
The Jabalpur Municipal Corporation assessed property tax in respect of the buildings within the Mandi area and also demanded safai tax, water tax, electricity charges, development charges for the years 1980 81 to 198384.
The market committee has re fused to pay the same and claimed that the corporation has no jurisdiction to levy and collect such taxes or charges.
The Corporation did not agree with that claim and initiated proceedings to recover the dues.
Challenging the action taken, the Market Committee moved the High Court under Article 226 of the Constitution for quashing the recovery proceedings.
The High Court following an earlier decision arising under Section 334 of the M.P. Municipalities Act, 1961, allowed the petition and quashed recovery proceedings.
The High Court also directed the Corporation to take steps in accordance with Section 4 15 of the Act for resolving the dispute with the market committee.
The order of the High Court reads as follows: "Section 415 of the M.P. Municipal Corporation Act, 1956 provides for adjudication of disputes between the Corpora tion and local authorities by the State Government on a reference made to it for this purpose.
The corresponding provision in the M.P. Municipalities Act, 1961 is Section 334.
In a similar situation, where recovery proceedings had been commenced against a Krishi Upaj Mandi Samiti, like 147 the petitioner, by the Municipal Council, Gadarwara, a Division Bench in Misc.
Petition No. 994 of 1981 (Jawahar Krishi Upaj Mandi Samiti, Gadarwara and another) decided on 5.6.1983 quashed the recovery preceedings and directed the Municipal Council to take steps under section 334 of the M.P. Municipalities Act, 1961 for adjudication of the dis pute between itself and the Krishi Upaj Mandi Samiti.
Since section 415 of the M.P. Municipal Corporation Act, 1956 is in pari materia with section 334 of the M.P. Municipalities Act, 1961 that decision has to be followed.
Consequently, this petition is allowed.
The pending recovery proceedings against the petitioner are quashed and the respondent Municipal Corporation, Jabalpur is directed to take steps in accordance with section 4 15 of the M.P. Municipal Corporation Act, 1956 for resolving its dispute with the petitioner.
The parties shall bear their own costs.
" In this appeal, the Municipal Corporation, Jabalpur has challenged the validity of the above order.
Before us, the core of the argument of learned counsel for the appellant is that the Market Committee is not a local authority either under the Municipal Corporation Act, or under the M.P. General Clauses Act, 1957.
It has been declared to be a local authority only for purposes of the Adhiniyam and that declaration could not be relevant for the purpose of Section 415 of the Act.
The Market Committee unless it falls within the definition of 'local authority ' under the M.P. General Clauses Act, 1957, the dispute under Section 415 of the Act could not be referred to the Govern ment.
Counsel also referred to us the various provisions of the Act which confer power on the Corporation to levy and collect taxes and charges.
Indisputably, the respondent is not a local authority as defined under M.P. General Clauses Act, 1957.
Section 2(20) of the said Act defines 'local authority ' to mean "a munici pal corporation, municipality, local board, Janapad Sabha, village panchayat, or other authority legally entitled to, or entrusted by the Government with the control of manage ment of a municipal or local fund.
" Counsel for the respond ent however, strongly relied upon Section 7(3) of the Adhi niyam which provides that the Market Committee shall be deemed to be a local 148 authority notwithstanding anything contained in any other enactment.
It seems to us that it is not necessary to express any opinion on this controversy and even if we assume in favour of the respondent that it is a local authority without deciding, the recovery proceedings could not have been quashed by the High Court.
And the Corporation could not have been directed to refer the dispute to the Government under Section 415 of the Act.
Section 4 15 of the Act reads: "Disputes between Corporation and local authorities: If any dispute arises between the Corporation and any local authority as regards anything done or to be done under this Act, it shall be referred to the Government for decision and such decision may include an order as to costs of any en quiry ordered by the Government, and shall be final.
Provided that it shall be competent to the Corpora tion and the local authority to agree in writing that any such dispute shall, instead of being referred to the Govern ment for decision, be referred to the decision of an arbi trator or arbitrators appointed under the , or to a civil court under Section 20 of the Code of Civil Procedure, 1908.
" The Section is clear and provides that the disputes arising between the Corporation and local authority as regards anything done or to be done under the Act, shall be referred to the Government for decision.
It shall be compe tent also to the Corporation and local authority to agree in writing that any such dispute shall, instead of being re ferred to the Government be referred to the decision of an arbitrator under the or to a civil court under Section 20 of the Code of Civil Procedure.
The assess ment of tax or demand of any fees by the Corporation under the provisions of the Act could fall within the term "any thing done or intended to be done under the Act" as provided under Section 415.
Even refusal of the Corporation to con sider the objections against assessment and recovery of tax or fees could also be considered as "anything done or in tended to be done under the Act".
The question however, is whether it would be obligatory for the Corporation in the event of the local authority refusing to pay taxes or fees to approach the Government or refer the dispute 149 to the Government for decision? The answer to the question should be in the negative.
Section 4 15 does not provide that the Corporation has to move the Government when the local authority has refused to pay the tax or fees levied and demanded.
There are also no rules framed by the Govern ment regulating the exercise of power under the Section and at any rate our attention has been drawn to no statutory rules framed under the section.
The High Court however, has followed its earlier deci sion arising under Section 334 of the Municipalities Act.
There the dispute arose between the Gadarwara Municipal Council and Mandi Samiti Gadarwara as to the authority of the former to collect takes and charges from the latter.
The Mandi Samithi was an authority constituted like the present Market Committee under Section 7 of the Adhiniyam and func tioning within the Municipal limits.
It challenged the recovery proceedings initiated by the Municipal Council and moved the High Court for appropriate relief under Article 226 of the Constitution.
The High Court quashed the recovery proceedings and directed the Municipal Council to approach the Government under Section 334 of the Municipalities Act to resolve the dispute.
This decision, we think, overlooks the plain terms of Section 334 and even otherwise it is not relevant for operation of Section 415 of the Act.
Section 334 of the M.P. Municipality Act, 1961 reads: "Dispute between Council and other local body: (1) In the event of any dispute arising between a Council and any other local authority established under any State Act on a matter in which they are jointly interested, such dispute shall be referred to the State Government, whose decision shall be final.
" Under this Section the State Government has framed rules called "Madhya Pradesh Municipalities (Regulation of Rela tions between Councils and other local Authorities) Rules, 197 1".
Rules 2 and 3 are in these terms: "Rule 2.
Whenever a Council and any other authority are jointly interested in any matter, such matter shall be settled amicably between them and where they do not come to a mutual agreement, the matter shall be referred to the Collector.
150 Rule 3.
The Collector shall then arrange a joint meeting of the Council and Local Authority and manage to bring about an amicable settlement.
" The rules thus provide that the dispute in which the Council and local authority are jointly interested in any matter, but not possible to settle the dispute mutually, the matter shall be referred to the Collector.
The Collector shall try to bring about an amicable settlement by arranging a joint meeting of both the authorities.
Rules 4 and 5 are also relevant in this context and may be read: "Rule 4.
If the talk for amicable settlement fails, the Collector shah persuade the Council and the local authority to agree in writing to refer the matter to an arbitrator or arbitrators appointed under the and if they agree, the matter shall be referred to such arbitrator or arbitrators, as the case may be.
Rule 5.
When the Council and local authority do not agree to refer the matter to arbitration the Collector shall refer the matter to the State Government with his comments on it and the decision of the State Government shall be final.
" Under Rule 5, it would be for the Collector to refer the matter to the Government with his comments, and not for the Municipal Council to approach the Government.
By comparing the provisions of Section 415 of the Act with Section 334 of Municipalities Act, it will be seen that the structure of the former is different from the latter.
Section 4 15 speaks of dispute between the Corporation and local authority as regards anything done or to be done under the Act.
And such a dispute shall be referred to the Govern ment for decision.
Section 334 refers to a dispute on a matter in which the Municipal Council and local authority are jointly interested and it states that such dispute shall be referred to the State Government for decision.
Section 334 does not refer to the dispute as regards "anything done or to be done under the Act.
" Section 415 does not speak of any dispute in which the Corporation and the local authority are jointly interested.
Secondly, there are no rules framed for operation of Section 415 of the Act.
In view of these differences the view taken by the High Court.
That the Corporation must take steps to resolve the dispute cannot be justified.
It has apparently no support 151 either from the terms of Section 4 15 or from any rules framed for the purpose.
In the result, we allow the appeal and reverse the judgment of the High Court.
In the circumstances of the case, there will be no order as to costs.
T.N.A. Appeal allowed.
| IN-Abs | The appellant Corporation assessed property tax in respect of buildings belonging to the respondent Market Committee, which refused to pay the same.
Proceedings were commenced for recovery of the dues.
The respondent moved the High Court under Article 226 of the Constitution for quash ing the recovery proceedings.
The High Court following its earlier decision arising under Section 334 of the M.P. Municipalities Act, 1961 allowed the petition, quashed the recovery proceedings and directed the Corporation to refer the dispute to the Govern ment under Section 415 of the M.P. Municipal Corporation Act, 1956.
Aggrieved by the aforesaid decision, the Corporation, appealed to this court.
Allowing the appeal, this Court, HELD: 1.
The assessment of tax or demand of any fees by the Corporation under the provisions of the M.P. Municipal Corporation Act, 1956 could fail within the term "anything done or intended to be done under the Act" as provided under Section 415 of the Act.
Even 145 refusal of the Corporation to consider the objections against assessment and recovery of tax or fees could also be considered as "anything done or intended to be done under the Act".
But section 415 does not provide that the Corpora tion has to move the Government when the local authority has refused to pay the tax or fees levied and demanded.
[148GH; 149A] 2.
The structure of section 415 of the M.P. Municipal Corporation Act, 1956 is different from section 334 of the M.P. MuniCipalities Act; 1961.
Section 415 speaks of dispute between the Corporation and local authority as regards anything done or to be done under the Act.
And such a dis pute shall be referred to the Government for decision.
Section 334 refers to a dispute on a matter in which the Municipal Council and local authority are jointly interested and it states that such dispute shall be referred to the State Government for decision.
Section 334 does not refer to the dispute as regards "anything done or to be done under the Act.
" Section 415 does not speak of any dispute in which the Corporation and the local authority are jointly inter ested.
There are no rules framed for operation of section 415 while under section 334 the State Government has framed Rules.
In view of these differences the view taken by the High Court that the Corporation must take steps to resolve the dispute cannot be justified.
It has apparently no sup port either from the terms of section 415, or from any rules framed for the purpose.
Therefore, the recovery proceedings should not have been quashed by the High Court.
And the Corporation should not have been directed to refer the dispute to the Government under section 415 of the M.P. Municipal Corporation Act, 1956.
[150F H; 151A] Jawahar Krishi Upaj Mandhi Samiti Gadarwara & Anr.
vs Municipal Committee Gadarwara & Anr.
Petition No. 994 of 1981 decided by the M.P. High Court on 5.5.1983, distin guished.
|
ivil Appeal No. 3154 of 1982.
From the Judgment and Order dated 28.9.1981 of the Allahabad High Court in S.A. No. 1874 of 1970.
Satish Chandra, S.N. Singh, T.N. Singh, H.L. Srivastava and Sudama Ojha for the Appellants.
U.R. Lalit and R.D. Upadhyaya for the Respondents.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
This appeal is directed against the judgment dated 28 9 1981 of the High Court of Allahabad in Second Appeal No. 1874 of 1970.
167 The plaintiff respondent filed the suit alleging inter alia that before enforcement of the U.P. Zamindari Abolition and Land Reforms Act, 1950, hereinafter referred to as "Zamindari Abolition Act", defendants Nos. 3 to 25 were the tenants in chief of the plots in suit and his father Munni Lal was their sub tenant; that Munni Lal died in 1951 leav ing behind four sons including the plaintiff respondent; that remaining three brothers of the plaintiff had separated and consequently the plaintiff became sole tenant; that Munni Lal was recorded occupant in Khasra 1356 Fasli and in cultivatory possession in Khasra 1359 Fasli and consequen tially he acquired adhivasi rights and then sirdari rights, the rights of defendants 3 to 25 extinguished under section 240 A of the Zamindari Abolition Act; that in 1968, however, defendants Nos. 1 and 2 obtained fictitious sale deed from defendants Nos. 3 to 25 in respect of the plots in suit.
They had started interfering with the plaintiff 's possession and, hence, the plaintiff respondent filed the suit for permanent injunction.
Defendants Nos. 1 to 3, 5 to 7, 13 and 14 contested the suit.
They denied the plaintiff 's claim and disputed that the plaintiff 's father, Munni Lal, was the sub tenant or that he acquired adhivasi rights or sirdari rights.
It was further pleaded that the plaintiff or his father was never in possession of the plots in suit.
The suit for permanent injunction was dismissed.
Against the judgment of the trial court, the plaintiff respondent preferred Appeal No. 321 of 1969 which was dis missed by the first appellate court.
The Second Appeal No. 1874 of 1970, filed before the High Court of Allahabad against the judgment of the first appellate court, was allowed on 28 9 1981.
The respondent based his title on three grounds, namely, (i) that his father Munni Lal was recorded occupant in Khasra 1356 Fasli (be ginning from 1.7.1948 and ending with 30.6.1949) and became adhivas under section 20(b)(i) of the Zamindari Abolition Act; (2) that his father Munni Lal was in cultivatory possession of the disputed land it Khasra 1359 Fasli (beginning from 1.7.1951 and ending with 30.6.1952 and consequently he became adhivasi under section 3 of the U.P. Land Reforms (Supplementary) Act, (U.P. Act No. 31 of 1952);and (3) that his father Munni Lal was sub tenant over the disputed land and, there fore, he became an adhivasi and consequently the sirdar under the provisions of the zamindari Abolition Act.
The trial court and the first appellate court recorded finding of 168 facts to the effect that the plaintiff 's father Munni Lal was not in cultivatory possession of 1359 Fasli and there fore he could not get adhivasi right under section 3 of the U.P. Land Reforms (Supplementary) Act, 1952.
Both the courts further observed that the plaintiff 's father was not a recorded occupant within the meaning of section 20(b)(i) of the Zamindari Abolition Act, as the entry of his name in column 6 of the Khasra 1356 Fasli was suspicious, not being supported by Khatauni entry.
It was further held that as his father died in 1951 before the date of vesting i.e. 1.7.1952 (when the zamindari was abolished in U.P. under the provi sions of Zamindari Abolition Act), the plaintiff is not entitled to the benefit of becoming adhivasi under section 20(b)(i) of the Zamindari Abolition Act.
The trial court and the first appellate court also found that no contract or sub tenancy between Munni Lal and the proforma defendants was proved.
The High Court held the view that the approach made by the courts below was wrong.
The question that arose for decision in the suit was whether the appellant 's father was a sub tenant? The learned Single Judge noticed that if Munni Lal was a sub tenant, his heir being the adhivasi and the appellant must, therefore, suc ceed.
The evidence relating to the sub tenancy and conse quent possession was therefore, considered in detail and the learned Judge concluded that Munni Lal was in cultivatory possession of the land in 1356 Fasli as a sub tenant.
His rights as sub tenant devolved on the appellant who continued in possession as such and became adhivasi and rights of defendants 3 to 14 were extinguished under the Zamindari Abolition Act and defendants could not interfere with appel lants possession.
In this view the appellant was granted a decree reversing the decision of the lower courts.
The main contention advanced on behalf of the appellants before us is that the decision having been rendered by the trial court and the first appellate court on the basis of the finding of fact regarding the right claimed and the possession alleged, in the absence of any substantial ques tion of law, there was no jurisdiction of the High Court under section 100 C.P.C. to disturb the finding of a concur rent nature and upset the decision.
The High Court, while exercising its power under section 100 C.P.C., has no juris diction to interfere with the finding of fact recorded by the first appellate court.
Reliance was placed on V. Rarna chandra Ayyar & Anr.
vs Ramalingam Chettiar & Anr., AIR 1963 SC 302.
Section 100(1)(c) refers to a substantial error or defect in the procedure.
The error or defect in the proce dure to which the clause refers is not an error or defect in the appreciation of 169 evidence adduced by the parties on the merits.
Even if the appreciation of evidence made is patently erroneous and the finding of fact recorded in consequence is grossly errone ous, that cannot be said to introduce a substantial error or defect in the procedure.
If in dealing with a question of fact the lower appellate court has placed the onus on wrong party and its finding of fact is the result substantially of this wrong approach that may be regarded as a defect in procedure.
When the first appellate court discarded the evidence as inadmissible and the High Court is satisfied that the evidence was admissible that may introduce an error or defect in procedure.
So also in a case where the court below ignored the weight of evidence and allowed the judg ment to be influenced by inconsequential matters, the High Court would be justified in reappreciating the evidence and coming to its own independent decision as held in Madan Lal vs Gopi, ; The substantial issue in the present suit was whether the respondent was in possession of the disputed land.
The respondent claimed possession under his father as sub tenant and thereafter as sirdar.
In support of his claim respondent relied on the entries in the revenue records and the re ceipts for payment of rent.
The effect of these documents had been wholly ignored by the lower courts on the assump tion that these were fabricated.
The U.P. Zamindari Aboli tion Act came into force on July 1, 1952.
Section 20(b)(i) of the Act provided that every person, recorded as occupant of a land in the Khasra or Khatauni of 1356 Fasli prepared under sections 28 and 33 of the U.P. Land Revenue Act 190 1, be called the adhivasi of the land.
This Court in Amba Prasad vs Abdul Noor Khan & Ors., ; examined the scheme of the section and held that the title to posses sion as adhivasi depends on the entry in the Khasra of 1356 Fasli.
The section eliminates enquiries into possession in accepting the record in the Khasra.
The Court observed at page 808: "The word 'occupant ' is not defined in the Act.
Since khasra records possession and enjoyment the word 'occupant ' must mean a person holding the land in possession or actual enjoyment.
The khasra, however, ma mention the proprietor, the tenant, the sub tenant and other person in actual pos session, as the case may be.
by occupant is meant the person in actual possession it clear that between a proprietor and a tenant the tenant and between a tenant and the sub tenant the latter and 170 between him and a person recorded in the remarks column as "Dawedar qabiz" the dawedar qabiz are the occupants. ' ' In Nath Singh & Ors.
vs The Board of Revenue & Ors., ; in answering the contention that the cor rectness of the entry in the record of Khasra of 1356 Fasli could be gone into and where the respondents are recorded only as sub tenant and not as occupant, they could not get the benefit of section 20(b)(i) of the Act, this Court held as under: "The record of rights for the year 1356F. had not been corrected afterwards.
We have to go by the entry in the record of rights and no enquiry need be made as to when the respondents became sub tenants after the decision in favour of the landlord, Ram Dhani Singh.
The last decision of this Court also shows that as between the tenant and the sub tenant the entry in the record of rights in favour of the sub tenant makes him the occupant entitled to the adhivasi rights under section 20 of the Act.
" In this case the Khasra entry for 1356 Fasli Ex 4 showed that the respondent 's father Munni Lal was sub tenant.
As rightly stated by the High Court, it is not for the plain tiff to prove that this entry is correct.
It was for the defendants to show that the entry had been introduced sur reptitiously out of ill will or hostility.
In the absence of such proof, the genuineness has to be presumed and the entry accepted as evidence of the sub tenancy in favour of the respondent 's father.
The Khasra entry of 1371 Fasli and 1372 show the respondent 's name as person in possession.
It is clear indication that possession of the subtenant continued with the respondent.
The rent receipts of the year 1929 and subsequent years are not required to be proved by the re spondent as pointed out by the learned Judge.
These furnish evidence of possession as sub tenant.
We agree that the lower appellate court was not justified in ignoring these documents.
The High Court was, therefore, well within its powers in appreciating the evidence and arriving at its own conclusion.
The contention that the second appeal abated on account of non filing of substitution application after the death of defendants Nos. 6, 10 and 11 had been reiterated before us.
These defendants were only proforma parties and the High Court was right in holding hat appeal did not abate.
We may refer to The State of Punjab vs 171 Nathu Ram; , where it is held "that ordinari ly the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appel lants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the Court.
" The Civil Court had jurisdiction to try the suit for injunction when the question of title arose only incidentally.
The objection to jurisdiction of the Civil Court to try the suit on the ground that revenue court had exclusive jurisdiction is not sustainable the suit being one for permanent injunction and the question of title arises only incidentally.
We find no merit in the appeal which is accordingly dismissed.
No order as to costs.
G.N. Appeal dis missed.
| IN-Abs | The plaintiff respondent claimed that before the U.P. Zamindari Abolition and Land Reforms Act, 1950 came into force, his father was a sub tenant under defendants 3 to 25 and after his father 's death, the other 3 sons separated from the plaintiff and consequently he has become the sole tenant.
According to him, his father was recorded occupant of Khasra 1356 Fasli (1.7.1948 to 30.6.1949) and was in cultivatory possession in Khasra 1359 Fasli (1.7.1951 to 30.6.1952) as a result of which he had acquired adhivasi rights and sirdari rights, and the rights of defendants 3 to 25 extinguished under section 240 A of the said Act.
He alleged that in 1968, defendants I and 2 obtained fictitious sale deed from defendants Nos. 3 to 25 in respect of the said land and started interfering with his possession.
He, therefore, filed a suit for permanent injunction.
The suit was contested by some of the defendants who pleaded that neither the plaintiff nor his father was in possession of the said land at any point of time and there was no question of sub tenancy or acquiring of adhivasi/sirdari rights.
The trial court dismissed the suit.
The appeal preferred by the plaintiff respondent was dismissed by the first appellant court.
The trial court as also the first appellate court held that the respondent was not entitled to become an adhivasi under section 20(b)(i) of the Act since his father died in 1951 before the date of vesting i.e. 1.7.1952.
Both the courts also held that his father was not in cultivatory possession of Khasra 1359 Fasli and, therefore, he could not get adhivasi rights under section 3 of the U.P. Land Reforms (Supple 165 mentary) Act, 1952.
It was also held that there was no contract or sub tenancy in the name of his father.
The plaintiff respondent preferred an appeal before the High Court which allowed the appeal and granted a decree reversing the decision of the courts below.
Aggrieved, the appellants have flied the present appeal contending inter alia that since there were concurrent findings of facts by the trial court and the first appellate court, and in the absence of any substantial question of law, the High Court had no jurisdiction under section 100 C.P.C. to disturb the concurrent findings of facts.
Dismissing the appeal, this Court, HELD: 1.
Section 100(1)(c) of the Code of Civil Proce dure refers to a substantial error or defect in the proce dure.
The error or defect In the procedure to which the clause refers is not an error or defect in the appreciation of evidence adduced by the parties on the merits.
Even if the appreciation of evidence made is patently erroneous and the finding of fact recorded inconsequence is grossly erro neous, that cannot be said to introduce a substantial error or defect in the procedure.
If in dealing with a question of fact the lower appellate court has placed the onus on wrong party and its finding of fact is the result substantially of this wrong approach that may be regarded as a defect in procedure.
When the first appellate court discarded the evidence as inadmissible and the High Court is satisfied that the evidence was admissible that may introduce an error or defect in procedure.
So also in a case where the court below ignored the weight of evidence and allowed the judg ment to be influenced by inconsequent matters, the High Court would be justified in reappreciating the evidence and coming to its own independent decision.
[168H; 169A C] Madan Lal vs Gopi, ; relied on.
V. Ramachandra Ayyar & Anr.
vs Ramalingam Chettiar & Anr., AIR 1963 SC 302 referred to.
Section 20(b)(1) of the Act eliminates enquiries into possession in accepting the record in the Khasra.
In the instant case the Khasra entry for 1356 Fasli showed that the appellant 's father was the subtenant.
It is not for the appellant to prove that this entry Is incorrect.
It was for the defendants to show that the entry had been introduced 166 surreptitiously out of ill will of hostility.
In the absence of such proof, the genuineness has to be presumed and the entry accepted as evidence of the sub tenancy in favour of the appellant 's father.
The Khasra entry of 1371 Fasli and 1372 show the appellant 's name as person in possession.
It is clear indication that possession of the sub tenant con tinued with the appellant.
The rent receipts of the year 1929 and subsequent years are not required to be proved by the appellant as pointed out by the learned Judge.
These furnish evidence of possession as sub tenant.
The lower appellate court was not justified in ignoring these docu ments.
The High Court was, therefore, well within its power in appreciating the evidence and arriving at its own conclu sion.
[170B, E G] Amba Prasad vs Abdul Noor Khan & Ors., ; and Nath Singh & Ors.
vs The Board of Revenue & Ors., ; relied on.
Though the revenue courts had exclusive jurisdiction, the civil court had jurisdiction to try the suit for injunc tion when the question of title arose only incidentally.
[171B] 4.
The High Court was right in holding that the appeal did not abate on account of non filing of substitution application after the death of certain defendants.
[170H] The State of Punjab vs Nathu Ram, ; relied on.
|
ition (Criminal) No 359 of 1989.
(Under Article 32 of the Constitution of India).
Dr. Shankar Ghosh, Ashok Ganguli, Md. Nizamuddin and Ms. Mridula Ray, for the Petitioner.
V.C. Mahajan, A. Subba Rao and P. Parmeshwaran for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
Mr. Kubic Dariusz, a Polish national, holding a Polish passport arriving Calcutta by air from Singapore via Bangkok was arrested on 29.4.1989 under sec tion 104 of the Customs Act, by the officers of the Customs Department attached to Calcutta Airport, on the ground that he was carrying in his possession foreign gold weighing about 70 tolas.
On 30.4.1989, he was produced before the Chief Judicial Magistrate, Barasat who remanded him to jail custody till 15th May, 1989.
He was interrogated by Intelli gence officer when he made, corrected and signed his state ments in English.
His application for bail was rejected by the Chief Judicial Magistrate.
While still in custody, he was served with the impugned detention order dated 16.5.1989 passed under section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, herein after referred to as 'the COFEPOSA Act along with the grounds of detention.
On 24.5.
1989 he was granted bail by the Calcutta High Court but the same could not be availed of because of the detention order which is now being challenged in this petition.
102 The detention order was passed with a view to preventing the detenu from smuggling goods; and it stated that the detaining authority, namely, the Additional Secretary to the Government of India in the department of Revenue, Ministry of Finance, was satisfied that the detenu was likely to smuggle goods into and through Calcutta Airport which was an area highly vulnerable to smuggling as defined in Explana tion 1 to section 9(1) of the COFEPOSA Act.
In the grounds of detention it was stated, inter alia, that arriving at Calcutta by Thai Airways the detenu opted for the green Channel meant for the passengers not having any dutiable and/or prohibited goods for customs clearance and proceeded towards the exit gate; that he declared that he did not have any gold with him, but on search 7 gold bars weighing 70 tolas valued approximately at Rs.2,71,728 deftly concealed between the inner soles of the left and right sports shoes in specially made cavities were recovered; that in his voluntary statement before the customs officer he admitted the recovery; that he had been able to learn English as he was with some English people during the period of 2nd Ke dardham Expedition or Kedarnath Dham Expedition in the year 1987 and he was also learning English when he was in France in the year 1985; that scrutiny of his passport revealed that he visited Delhi on 6.2.1989 & 21.2.
1989, Trichi on 22.4.1989 and Calcutta on 29.4.1989; that he admitted to have been in India in 1986, 1987 & 1988; and that on chemi cal tests the sample was found to be containing 99.9% of gold.
Shankar Ghosh, the learned counsel for the petitioner assails the detention order primarily on two grounds, name ly, that the detenu knew only the Polish language and did not know English wherefore he was unable to read and be informed of the grounds of detention given in English and he was not given the grounds of detention in a language under stood by him so as to enable him to defend himself; and that the representation submitted by him was not considered, acted upon or replied to at all by the detaining authority wherefore the detention order was liable to be quashed as violative of Article 22(5) of the Constitution of India.
Mr. V.C. Mahajan, the learned counsel for the respond ents emphatically refutes the first ground submitting that the detenu was conversant with the English language as would appear from the answers to the questions put to him in course of interrogation by the Intelligence authorities and this was clearly stated in the grounds of detention, and consequently, there arose no question of his being furnished with the grounds of detention in Polish and not in English 103 language.
Refuting the second submission Mr. Mahajan submits that the so called representation dated 13.6.1989 addressed to the Chairman, Central Advisory Board, COFEPOSA through the Superintendent, Central Jail, Dum Dum, Calcutta was duly sent to and received by the Chairman and the detenu appeared before the Advisory Board which, after hearing the detenu, found sufficient cause for his detention and there was, therefore, no question of the representation being separate ly dealt with by the Central Government.
Besides, Mr. Maha jan submits, had the detaining authority accepted the state ment that the detenu did not know English, they would have been in a trap.
Counsel would also submit that the so called representation dated 13.6.1989 was not a representation to the appropriate Government against the detention and could not be treated as such.
Taking up the first submission, we find that Article 22(5) of the C of India provides that when any person is detained inpursuance of an order made under any law provid ing for preventive detention, the authority making the order shall, as soon as may be, I communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order.
It is settled law that the communication of the grounds which is required by the earlier part of the clause is for the purpose of enabling the detenu to make a representation, the right to which is guaranteed by the latter part of the clause.
A communication in this context, must, therefore, mean imparting to the detenu sufficient and effective knowledge of the facts and circumstances on which the order of detention is passed, that is, of the prejudi cial acts which the authorities attribute to him.
Such a communication would be there when it is made in a language understood by the detenu, as was held in Harikisan vs The State of Maharashtra, ; In Razia Umar Bakshi vs Union of India, , Fazal Ali, J. held that the service of the grounds of detention on the detenu was a very precious constitutional right and where the grounds were couched in a language which was not known to the detenu, unless the contents of the grounds were fully explained and translated to the detenu, it would tantamount to not serving the grounds of detention to the detenu and would thus vitiate the detention ex facie.
In Nainmal Partap Mal Shah vs Union of India, the detenu stated that he did not know the English language and, therefore, could not under stand the grounds of detention, nor he was given a copy of the grounds duly translated in 104 vernacular language.
In the counter affidavit the detaining authority suggested that as the detenu had signed a number of documents in English, it must be presumed that he was fully conversant with English.
Rejecting the contention it was held by this Court that merely because he may have signed some documents, it could not be presumed, in absence of cogent material, that he had working knowledge of English and under those circumstances there had been clear violation of the constitutional provisions of Article 22(5) so as to vitiate the order of detention.
Thus what was considered necessary was a working knowledge of English or full expla nation or translation.
In Surjeet Singh vs Union of India, ; , the petitioner, being served the detention order and the grounds in English, contended that English was not a language which he under stood and that this factor rendered it necessary for the grounds of detention to be served on him in Hindi which was his mother tongue and that the same having not been done, there was in law no communication of such grounds to him; and it was held that under those facts and circumstances it had not been shown that the petitioner had the opportunity which the law contemplated in his favour of making an effec tive representation against his detention, which was, there fore, illegal and liable to be set aside.
Where it is stated that the detaining authority ex plained the grounds of detention to the detenu, Court in sists on adequate proof in the absence of any translation being furnished.
Thus in Lallubhai Jogibhai Patel vs Union of India & Ors., ; , the detenu did not know English but the grounds of detention were drawn up in Eng lish and the detaining authority in affidavit stated that the Police Inspector while serving the grounds of detention fully explained the grounds in Gujarati to the detenu.
Admittedly, no translation of the grounds of detention into Gujarati was given to the detenu.
It was held that there was no sufficient compliance with the mandate of Article 22(5) of the Constitution which required that the grounds of detention must be communicated to the detenu.
"Communicate" is a strong word.
It requires that sufficient knowledge of the basic facts constituting the grounds should be imparted effectively and fully to the detenu in writing in a language which he understands, so as to enable him to make a purpose ful and effective representation.
If the grounds are only verbally explained to the detenu and nothing in writing is left with him in a language which he understands, then that purpose is not served, and the constitutional mandate in Article 22(5) is infringed.
This follows from the decisions in Harikisan vs State of Maharashtra, (supra) and Hadibandhu Das vs District Magistrate, [1969] 1 SCR ; 105 Mr. Ghosh relies on the decision in Ibrahim Ahmad Batti vs State of Gujarat, ; , wherein the detenu under the COFEPOSA Act was a Pakistani national to whom the detention order and the grounds of detention were served in English and he contended that as he did not know English and the grounds of detention and the document relied on were not furnished in Urdu within the statutory period the detention was bad.
Urdu translation of all the documents and state ments referred to in the grounds for reaching the subjective satisfaction had not been supplied to the detenu in time and translations of quite a few of such documents and statements had not been supplied at all.
The petitioner 's mother tongue seemed to be Urdu and a little knowledge of English figured.
It was evident that the petitioner knew English figures, understood English words written in capital letters and was also conversant with talking in Hindi and Gujarati and therefore it was argued for the detaining authority that the non supply of Urdu translation of the documents could not be said to have caused prejudice to the petitioner in the matter of making representation against his detention.
This Court held that the Explanation was hardly satisfactory and could not condone the non supply of Urdu translation of those documents.
In that case with the assistance of counsel of either side the Court had gone through many of those documents and statements and for the Court it was not possi ble to say that most of them were statements of accused containing figures in English with English words written in capital letters.
A large number of documents were in Hindi and Gujarati and were material documents which had obviously influenced the mind of the detaining authority in arriving at the subjective satisfaction and those were all in a script or language not understood by the detenu and, there fore, it was held that the non supply of Urdu translation of those documents had clearly prejudiced the petitioner 's right against his detention and hence the safeguards con tained in Article 22(5) was clearly violated.
In the instant case the basis of the statement that the detenu did not know English is his representation dated 13.6.1989, that is, nearly one month after his detention.
An English rendering of the representation is found at page 75 of the Writ Petition which is attested to have fully corre sponded to its original in Polish language.
It is signed by the detenu and is addressed to the Chairman, Central Adviso ry Board (COFEPOSA), High Court of Delhi, through the Super intendent, Central Jail, Dum Dum, Calcutta.
It reads: "Ref: Govt.
of India, Finance Department and Revenue Department Order No. F No. 673/322/89 CUS VIII dated 16.05.
1989 106 SUPREME COURT REPORTS [1990] 1 S.C.R. Sub: Representation against my detention under COFEPOSA Respected Chairman, 1.
I am a Polish national.
I do not know any other language except Polish language.
I cannot speak, write and read English language and do not know small English letters.
I know how to write my name in Block letters.
I have received all the documents concerning the above mentioned case in English language and for the fact that I do not know that language the documents were so complicated for me to understand.
In view of the above facts, I kindly request your goodself to provide me with the order of detention together with the grounds of detention in my language (Polish lan guage) so that I can effectively present my defence.
" While it is the settled law that the detention order, the grounds of detention and the documents referred to and relied on are to be communicated to the detenu in a language understood by him so that he could make effective represen tation against his detention, the question arises as to whether the courts have necessarily to accept what is stated by the detenu or it is permissible for the Court to consider the facts and circumstances of the case so as to have a reasonable view as to the detenu 's knowledge of the language in which the grounds of detention were served, particularly in a case where the detenu is a foreign national.
If the detenu 's statement is to be accepted as correct under all circumstances it would be incumbent on the part of the detaining authority in each such case to furnish the grounds of detention in the mother tongue of the detenu which may involve some delay or difficulty under peculiar circum stances of a case.
On the other hand if it is permissible to ascertain whether the statement of the detenu in this regard was correct or not it would involve a subjective determina tion.
It would, of course, always be safer course in such cases to furnish translations in the detenu 's own language.
We are of the view 107 that it would be open for the Court to consider the facts and the circumstances of a case to reasonably ascertain whether the detenu is reigning ignorance of the language or he has such working knowledge as to understand the grounds of detention and the contents of the documents furnished.
In the instant case we find that when the detention order and the grounds of detention were served the detenu received them and acknowledged the receipt thereof, as it appears from the records, putting his signature in English.
He did not complain that the grounds of detention were not understood by him.
On the other hand in the very grounds of detention it was stated that in course of interrogation he answered the questions in English including the questions as to how he happened to learn English.
The gist of his answers in this regard was also given in the grounds of detention.
We have perused the statements and find that those contained number of informations peculiar to the detenu himself which could not have been communicated by him to the interrogators unless he knew the English language.
We also find that in several places he corrected the statements putting appropri ate English words and signing the corrections.
While the detention order was passed on 16 5 1989 his representation was admittedly dated only 13 6 1989.
In the meantime bail petitions were moved on his behalf before the Chief Judicial Magistrate and the High Court.
There is nothing to show that he did not give instructions to his counsel.
After all, the detenu is not required to write an essay or pass any lan guage test.
A working knowledge of English enabling him to understand the grounds would be enough for making a representation.
He could very well send his representation in the language known by him.
In Parkash Chandra Mehta vs Commissioner and Secretary, Government of Kerala & Ors., ; , Venilal D. Mehta, his daughter Miss Pragna Mehta and son Bharat Mehta were detained under the COFEPOSA Act by an order dated 19th June, 1984 and the detention order was challenged in this Court under Article 32 of the Constitution of India.
They were alleged to have been in possession of 60 gold biscuits of foreign origin.
After their arrest the father and his daughter were taken to the Central Excise and Customs De partment, Cochin where statements on their behalf were written in English by the daughter.
The father Venilal D. Mehta put his signature in English as Balvant Shah but the daughter told the officers concerned that the correct name of her father was Venilal Mehta.
In the writ petition it was the case of the father that he could not understand, read, speak or write English but could only sign his name in English.
He was served 108 with the grounds of detention in English language on 20th June, 1984.
A Hindi translation of the grounds of detention was served on 30th June, 1984.
On 27th May, 1984 the father made a representation in Gujarati to the detaining authority praying that he was unable to read and write either in English or Hindi or 'Malayalam and the grounds of detention may be given to him duly translated in Gujarati.
In Court it was contended that the order and grounds should have been communicated to the detenu in the language or languages they understood and Venilal Mehta understood nothing except Gujarati.
He did not understand English or Hindi or Malaya lam.
The Hindi translation was admittedly furnished beyond a period of 5 days and no exceptional circumstances were stated to exist.
Following Harikisan vs State of Maharashtra (supra) and considering the definite case of Venilal Mehta, this Court observed that the facts revealed that the detenu Venilal Mehta was constantly in the company of his daughter as well as son and both of them knew English very well.
The father signed a document in Gujarati which was written in English and which was his mercy petition in which he com pletely accepted the guilt of the involvement in smuggling.
That document contained a statement "I myself am surprised to understand what prompted me to involve in such activity as dealing in Imported Gold.
" On those facts and circum stances this Court observed: "There is no rule of law that common sense should be put in cold storage while considering Constitutional provisions safeguards against misuse of powers by authorities though these Constitutional provisions should be strictly con strued.
Bearing in mind this salutary principle and having regard to the conduct of the detenu Venilal Mehta especially in the mercy petition and other communications, the version of the detenu Venilal in feigning lack of any knowledge of English must be judged in the proper perspective.
He was, however, in any event given by 30th June, 1984 the Hindi translation of the grounds of which he claimed ignorance.
The gist of the annexures which were given in Malayalam language had been stated in the grounds.
That he does not know anything except Gujarati is merely the ipse dixit of Venilal Mehta and is not the last word and the Court is not denuded of its powers to examine the truth.
He goes to the extent that he signed the mercy petition not knowing the contents, not understanding the same merely because his wife sent it though he was sixty years old and he was in business and he was writing at a 109 time when he was under arrest, his room had been searched, gold biscuits had been recovered from him.
Court is not the place where one can sell all tales.
The detaining authority came to the conclusion that he knew both Hindi and English.
It had been stated so in the affidavit filed on behalf of the respondent.
We are of the opinion that the detenu Veni lal Mehta was merely reigning ignorance of English." After referring to the decisions in Hadibandhu Das vs District Magistrate, Cuttack & Anr. (supra), Nainmal Partap Mal Shah vs Union of India & Ors.
(supra), and Ibrahim vs State of Gujarat & Ors.
(supra) this Court in Prakash Chan dra Mehta (supra) rejected the contention that the grounds of detention were not communicated to Venilal Mehta in a language understood by him.
Considering the facts and circumstances of the instant case and in view of the fact that no objection regarding non communication of the grounds in a language understood by the detenu was made within the statutory period for furnish ing the grounds and the fact that the representation was beyond the statutory period, almost a month after the grounds were served, along with the detenu 's statements as to how he learnt English, we have no hesitation in holding that the detenu understood the English language, had working knowledge of it and was reigning ignorance of it, and there was no violation of Article 22(5) of the Constitution on the ground of non communication of the grounds of detention in a language understood by him.
The first submission of the detenu has, therefore, to be rejected.
Coming to the second submission, in the representation dated 13.6.
1989 the detenu clearly requested that he be provided with the order of detention together with the grounds of detention in his language (Polish language) so that he could effectively present his defence.
He called it a "representation" against his detention under COFEPOSA Act.
Admittedly, this representation was not disposed of by the appropriate Government and, indeed, has not been disposed of or acted upon till today.
Mr. Mahajan submits that it having been addressed to the Chairman, Central Advisory Board it need not have been dealt with by the Central Government and it could not be regarded as representation at all and the Government smarted out of the trap by not admitting that the detenu did not know English.
We are not inclined to accept this submission.
Admittedly the representation was sent through the Superintendent, Central Jail, Dum Dum, 110 Calcutta.
There was no scope to hold that what has been stated to be 'representation ' was not representation at all inasmuch as it only requested for translated copies of the grounds of detention and the annexed documents in Polish language.
Supply of translated copies would have surely not affected the detention order ipso facto.
In Smt.
Shalini Soni vs Union of India, ; 1981(1) SCR 962, it has been held that under Article 22(5) no proforma for representation has been prescribed and a request for release of the detenu, therefore, has to be deemed a representation; so also a request to supply copies of documents etc.
Oppor tunity to make a representation comprehends a request for supply of translated copies.
Therefore, the detenu 's 'repre sentation ' asking for copies of documents must be held to have amounted to a representation and it was mandatory on the part of the appropriate Government to consider and act upon it at the earliest opportunity and failure to do so would be fatal to the detention order.
There has been a catena of decisions of this Court that the representation of the detenu must be considered by the appropriate Government and Article 22(5) does not say which is the authority to whom representation shall be made or which authority shall consider it.
But it is indisputable that the representation may be made by the detenu to the appropriate Government and it is the appropriate Government that has to consider the representation as was reiterated in John Martin vs State of West Bengal, ; (3) SCR 211.
It is settled law that delay in disposing the represen tation when inordinate and unexplained the detention would be bad and the detenu must be ordered to be released forth with.
Chandroo Kundan vs Union of India, AIR 1980 SC 1123; Pabitra N. Rana vs Union of India, ; , Saleh Mohammed vs Union of India, ; Kamla Kanyalal Khusahalani vs State of Maharashtra, ; are some of the decisions settling this proposition of law.
In Rattan Singh vs State of Punjab & Ors., ; , it was held that section 11(1) of the COFEPOSA Act confers upon the Central Government the power of revocation of an order of detention made by the State Government or its officer.
That power, in order to be real and effective, must imply the right in a detenu to make a representation to the Central Government against the order of detention.
The failure of the Jail Superintendent to either forward the representation to the Government concerned or to have for warded the same to the State Government with a request for their onward transmission to the Central Government in that case was held to have 111 deprived the detenu of his valuable right to have his deten tion revoked by the Government.
The continued detention of the detenu was.
therefore, held illegal and the detenu was set free.
In the instant case though the representation was addressed to the Chairman, Central Advisory Board the same was forwarded by the Jail authorities and it must be taken to have been a representation to the appropriate Government which was to consider it before placing it before the Advi sory Board and the same having not been done Article 22(5) has to be held to have, been violated.
In Kirit Kumar Chaman Lal Kundaliya vs Union of India & Ors., [1981] 2 SCC 426, a case under the COFEPOSA Act, where the order of detention was made by the Home Minister and the representation made by the detenu had been rejected not by the Home Minister but by the Secretary, this Court held that the representation had been rejected by an authority which had no jurisdiction at all to consider or pass any order on the representation of the detenu and that, therefore, ren dered a continued detention of the petitioner void, follow ing Santosh Anand 's case , where it was held that the representation was not rejected by the detaining authority and as such the constitutional safeguards under Article 22(5) could not be said to have been strictly ob served or complied with.
In B. Sundar Rao & Ors.
vs State of Orissa, , where the detention was under the Orissa Preventive Detention Act, 1970 and sections 7 & 11 thereof conferred the right on the detenu to make represen tation and have it considered by appropriate authority it was held that such consideration was independent of any action of Advisory Board as there was necessity of Govern ment to form opinion and judgment before sending the case to the Advisory Board.
In Vimalchand Jawantraj Jain vs Shri Pradhan & Ors.
, ; , it was held by this Court that under Article 22(5) independent of the reference to the Advisory Board, the detaining authority must consider the representa tion at the earliest and come to its own conclusion before confirming the detention order and consideration and rejec tion of the representation subsequent to report of the Advisory Board would not cure the defect.
It was clearly held that it is no answer for the detaining authority to say that the representation of the detenu was sent by it to the Advisory Board and the Advisory Board had considered the representation and then made a report in favour of deten tion.
Even if the Advisory Board had made a report upholding the detention the appropriate Government is not bound by such opinion and it may still, on considering the represen tation of the 112 detenu and keeping in view all the facts and circumstances relating to the case, come to its own decision whether to confirm the order of detention or to release the detenu; as in that case there was nothing to show that the Government considered the representation before making the order con firming the detention.
The Constitutional obligation under Article 22(5) was not complied with.
In the instant case there was no consideration before and even after the Adviso ry Board considered the case of the detenu.
It can not therefore, be said that the representation was disposed of in accordance with law.
Mr. Ghosh faintly submits on merits of the case that a single instance of possessing 70 tolas of gold in gold bars was not enough to genuinely satisfy the detaining authori ties to resort to preventive detention of the petitioner who is a Polish national and not resident in India.
It is true that the detention order was passed with a view to prevent ing the detenu from repeating smuggling activities.
That the detenu in the particular act indulged in smuggling could not of course be denied.
It is stated in the counter that the detention of persons under the COFEPOSA Act serves two purposes: (1) to prevent the person concerned from engaging himself in an activity prejudicial to the conservation of foreign exchange and also preventing him from smuggling activities and thereby to render him immobile by the detain ing authority so that during that period the society is protected from such prejudicial activities on the part of the detenu; and (2) to break the links between the persons so engaged and the source of such activity and from his associates engaged in that activity or to break the continu ity of such prejudicial activities so that it would become difficult, if not impossible, for him to resume the activi ties.
There is undoubtedly scope for interpreting that the above two purposes envisage continuous residence of the person engaged in smuggling and as such may be more readily applicable to a resident of the country.
But such habitual smuggling activity may not have similarly been envisaged in respect of a foreign national who is not a resident of this country.
The customs Act itself makes appropriate provisions for adjudication, confiscation and punishment for smuggling and prevents possible repetition or recurrence.
Preventive detention of a foreign national who is not resident of the country involves an element of international law and human fights and the appropriate authorities ought not to be seen to have been oblivious of its international obligations in this regard.
The universal declaration of human fights include the fight to life, liberty and security of person, freedom from arbitrary arrest and detention; the right 113 to fair trial by an independent and impartial tribunal; and the right to presume to be an innocent man until proved guilty.
When an act of preventive detention involves a foreign national, though from the national point of view the municipal law alone counts in its application and interpre tation, it is generally a recognised principle in national legal system that in the event of doubt the national rule is to be interpretted in accordance with the State 's interna tional obligations as was pointed out by Krishna Iyer, J. in Jolly George Verghese vs The Bank of Cochin, ; There is need for harmonisation whenever possible bearing in mind the spirit of the Covenants.
In this context it may not be out of place to bear in mind that the funda mental rights guaranteed under our Constitution are in conforming line with those in the Declaration & The Covenant on Civil and Political Rights and the Covenant, Economic, Social and Cultural Rights to which India has become a party by ratifying them.
Crimen Trahit personam.
The crime carries the person.
The commission of a crime gives the court of the place where it is committed jurisdiction over the person of the offender.
Legal relations associated with the effecting of legal aid on criminal matters is governed in the interna tional field either by the norms of multilateral interna tional conventions relating to control of crime of an inter national character or by special treaties concerning legal cooperation.
Smuggling may not be regarded as such a crime.
The system of extradition of criminals represents an act of legal assistance by one State (the requestee) to another State (the requestor) with the aim of carrying out a crimi nal prosecution, finding and arresting a suspected criminal in order to bring him to court or for executing the sen tence.
In concluding such convention the States base them selves on principles of humanitarianism in their efforts to contribute to the more effective achievement of the objec tives of the correction and re education of violators of the law.
Where such conventions exist, the citizens of a State who were convicted to deprivation of freedom in another signatory State are in accordance with mutual agreement of States, transferred to the country of which they are citizens to serve their sentences.
The transfer of the convicted person may take place only after the verdict has entered into legal force and may be carried out on the initiative of either of the interested States.
The punish ment decided upon with regard to a convicted person is served on the basis of the verdict of the State in which he was convicted.
On the strength of that verdict the competent court of the State of which the person is a citizen adopts a decision concerning its implementation and determines, in accordance with the law of its own State, the same period of deprivation of freedom as was assigned under the verdict.
While such ameliorative practices may be available in case of a foreign 114 national being criminally prosecuted, tried and punished, no such proceedings are perhaps possible when he is preventive ly detained.
A preventive detention as was held in Rex vs Holiday, 1917 AC 268 "is not punitive but precautionary measure.
" The object is not to punish a man for having done something but to intercept him before he does it and to prevent him from doing it.
No offence is proved, nor any charge is formulated; and the justification of such deten tion is suspicion or reasonable probability and there is no criminal conviction which can only be warranted by legal evidence.
In this sense it is an anticipatory action.
Pre ventive justice requires an action to be taken to prevent apprehended objectionable activities.
In case of punitive detention the person concerned is detained by way of punish ment after being found guilty of wrong doing where he has the fullest opportunity to defend himself, while preventive detention is not by way of punishment at all, but it is intended to prevent a person from indulging in any conduct injurious to the society.
There may, therefore, be cases where while a citizen and resident of the country deserves preventive detention apart from criminal prosecution, in case of a foreign national not resident of the country he may not be justifiably subjected to preventive detention in the event of which no international legal assistance is possible unlike is case of criminal prosecution and punish ment.
Considering the facts and circumstances of the instant case, however, we find sufficient evidence of the detenu having visited this country though on earlier occasions he was not found to have been carrying on such smuggling activ ities.
However, in view of our decision in the earlier submissions we do not express any opinion on this submis sion.
In the result we find force in the second submission and hold that continued detention of the detenu has been ren dered illegal by nonconsideration of his representation by the appropriate Government according to law resulting in violation of Article 22(5) of the Constitution; and he is to be set at liberty forthwith in this case.
R.N.J. Petition allowed.
| IN-Abs | Mr. Kubic Dariusz a Polish national was arrested on 29.4.89 by the Customs Department on the ground that he was in possession of foreign gold weighing about 70 tolas.
On 30.4.89 he was produced before the Chief Judicial Magistrate who remanded him to jail custody till 15th May 89.
His bail application was rejected by the Chief Judicial Magistrate.
While still in custody he was served with the impugned Detention Order dated 16.5.89 under the COFEPOSA Act along with the grounds of detention.
On 24.5.89 he was granted bail by the Calcutta High Court but the same could not be availed of because of the detention order which the peti tioner challenged by preferring the Writ Petition before this Court.
The detention order is assailed on two grounds, namely that the detenu did not know English wherefore he was unable to read and be informed of the grounds of detention to enable him to defend himself and secondly that the represen tation submitted by him through the Superintendent of Jail to Central Advisory Board, COFEPOSA was neither considered nor acted upon or replied to at all by the detaining author ity wherefore the detention order was liable to be quashed as violative of Article 22(5) of the Constitution of India.
On behalf of the respondent it is contended that the detenu was 99 conversant with the English language as would appear from his replies to the questions put to him in the course of interrogation.
Hence there was no question of furnishing the grounds to him in Polish language.
Refuting the second contention it was stated that after hearing the detenu the Advisory Board found sufficient cause for his detention.
It was also urged by the respondent that the so called repre sentation of the detenu dated 13.6.89 was not a representa tion to the appropriate Govt.
against the detention and could not be treated as such.
Allowing the Writ Petition and setting at liberty the detenu, this Court, HELD: Continued detention of the detenu has been ren dered illegal by non consideration of his representation by the appropriate government according to law, resulting in violation of Article 22(5) of the Constitution of India.
[114F] Where the grounds are couched in a language which was not known to the detenu, unless the contents of the grounds were fully explained and translated to the detenu it would tantamount to not serving the grounds of detention and would thus vitiate the detention ex facie.
It is the settled law that the detention order, the grounds of detention and the documents referred to and relied upon are to be communicated to the detenu in a language understood by him so that he can make effective representation against his detention.
To ascertain whether the detenu knew the language in which the grounds were served or was reigning ignorance, it is open to Court to consider the circumstances and facts of the case.
The detenu is not required to write an essay or pass any language test.
A working knowledge of English enabling him to understand the grounds would be enough for making a representation.
He could very well send his representation in the language known by him.
[103G; 106E H; 107A E] No hesitation there is in the instant case in holding that the detenu understood the English Language, had the working knowledge of it and was reigning ignorance of it.
[109E] Though the representation was addressed to the Chairman Central Advisory Board, the same was forwarded by the Jail authorities and it must be taken to have been a representa tion to the appropriate government which was to consider it before placing it before the Advisory Board and the same having been not done, Article 22(5) of the Constitution has to be held to have been violated.
Delay in disposing of 100 the representation when inordinate and unexplained the detention would be rendered bad and the detenu must be ordered to be released forthwith.
[111A B; 110E] Preventive detention of a foreign national who is not resident of the country involved an element of international law and human rights and the appropriate authorities ought not to be seen to have been oblivious of the international obligation in this regard.
The universal declaration of human rights include the right to life, liberty and security of person, freedom from arbitrary arrest and detention; the right to fair trial by an independent and impartial tribunal and the right to presume to be innocent until proved guilty.
[112G H; 113A] When an act of preventive detention involves a foreign national, though from the national point of view the munici pal law alone counts in its application and interpretation, it is generally a recognised principle in national legal system that in the event of doubt the national rule is to be interpreted in accordance with the States ' international obligations.
[113A B] The fundamental rights guaranteed under our Constitution are in conforming line with those in the Declaration and the Covenant on Civil and Political Rights and the Covenant, Economic, Social and Cultural Rights to which India has become a party by ratifying them.
Crimen Trahit personam.
The crime carries the person.
Smuggling may not be regarded as such a crime.
[113C D] There may, therefore, be cases where while a citizen and resident of the country deserves preventive detention apart from criminal prosecution, in the case of a foreign national not resident of the country he may not be justifiably sub jected to preventive detention in the event of which no international legal assistance is possible unlike in cases of criminal prosecution and punishment.
[114D E] Harikisan vs The State of Maharashtra, [1962] 2 Suppl.
SCR 918; Razia Umar Bakshi vs Union of India, ; Nainmal Partap Mal Shah vs Union of India, ; Surjeet Singh vs Union of India, ; ; Lallubhai Jogibhai Patel vs Union of India & Ors., ; ; Hadibandhu Das vs District Magistrate, ; ; [brahim Ahmad Batti vs State of Gujarat, ; ; Prakash Chandra Mehta vs Commissioner and Secretary, Government of Kerala & Ors., ; ; Smt.
Shalini Soni vs Union of India, ; ; John Martin vs State of West 101 Bengal; , ; Chandroo Kundan vs Union of India, AIR 1980 SC 1123; Pabitra N. Rana vs Union of India, ; ; Saleh Mohammed vs Union of India, ; Kamla Kanyalal Khushalani vs State of Maharashtra, ; ; Rattan Singh vs State of Punjab & Ors., ; ; Kirit Kumar Chaman Lal Kundaliya vs Union of India & Ors., [1981] 2 SCC 426; Santosh Anand 's case, ; B. Sundar Rao & Ors.
vs State of Orissa, ; Vimalchand Jawantraj Jain vs Shri Pradhan & Ors., ; ; Jolly George Verghese vs The Bank of Cochin, ; and Rex vs Halliday, , referred to.
|
ivil Appeal Nos.
1430 36(NM) of 1987.
From the Judgment and Order dated 23.4.1987 of the Custom Excise and Gold (Control) Appellate Tribunal, South Regional Tri 159 bunal, Madras in Appeal Nos. 174, to 176 and 240 to 243 of 1986 MAS in Order No. 247 of 1987.
Anil B. Divan, H.K. Dutt, section Ramasubramanium, Krishna Srinivasan and Ms. Midula Ray for the Appellant.
A.K. Ganguli, A. Subba Rao and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by KANIA, J.
These appeals arise from a judgment of the Customs, Excise and Gold (Control) Appellate Tribunal (South Regional Bench) at Madras.
The facts necessary for the disposal of these appeals are as follows.
The appellant is a manufacturer of motor vehicle parts falling under Item 34 A of the Central Excise Tariff and components for I.C. Engines falling under Item 68 of the said Tariff.
The period with which we are concerned in these appeals is the period from October 1, 1975 to July 21, 1984.
The marketing pattern of the appellant was that they sold goods in the wholesale to O.E. manufacturers, Transport Undertakings and Government Bodies.
The requirements of the replacement market were met by the appellant by sale in the wholesale to other persons who were designated by the appel lant as distributors/primary wholesale buyers on the basis of agreements with such distributors.
The amendment to section 4 of the (herein after referred to as "the Central Excises.
Act") came into force from October 1, 1975 and, as from that date, the Department took the view that sales by the appellant to its distributors would be considered as sales to related per sons.
The Department, therefore, directed the appellant to file price lists in in the form prescribed for sales to related persons.
The appellant filed the price lists in , and The price lists filed in related to sales to industrial buyers, Government Bodies and so on who were admittedly not related persons regarding the appellant.
These price lists were duly approved '.
It was regarding the price lists filed under that the Assistant Collector on the basis of the aforesaid view directed the appellant to file revised price lists showing a discount of 12 1/2% from the price at which the goods sup plied by the appellant were sold by their distributors to independent buyers.
The appellant complied with this direc tion under protest taking up the contention that the dis tributors were also a class of independent buyers.
This claim was rejected by the Assistant Collector, who took the view that the distributors 160 were related persons and hence the prices charged by these distributors to their purchasers should be taken as the assessable value.
This was contested by the appellant before the Collector (Appeals) who by his order dated July 27, 1984 took the view that the distributors were not related per sons, on the basis of the decision of this Court in the case of Union of India & Ors.
vs Bombay Tyres International Ltd., The appellant applied for a refund on the ground that the excise duty had been collected from the appellant on the footing that the distributors were related persons and that, in view of the finding that the distribu tors were not related persons, the excess amount should be refunded to it.
This contention was rejected by the Assist ant Collector and on the ground that except in respect of sales to wholesale distributors/primary wholesellers and O.E. manufacturers, the excise duty had been paid by the appellant voluntarily.
Against this decision, the appellant preferred an appeal to the Tribunal.
The Tribunal, however, confirmed the view of the Assistant Collector on the ground that the other modes of sale like depot transfers, retail sales, direct dealer sales, sales to transport undertakings and sales to Government bodies like transport undertakings had not figured as issues for determination before the excise authorities and the protest made by the appellant was only in respect of the assessable value regarding the said two categories of sales to wholesale distributors/ primary wholesellers and to O.E. manufacturers.
On the basis of these conclusions, the Tribunal dismissed the appeal of the appellant: The present appeals are directed against this decision of the Tribunal.
It was submitted by Mr. Divan, learned counsel for the appellant, that the decision of the Tribunal was erroneous and liable to be set aside as, for purposes of levy of excise duty on the sales in question only one price can be treated as the normal price and, as the distributors were held not to be related persons, it was the wholesale price at which the goods were sold by the appellant to the dis tributors which must be held to be the normal price.
It was pointed out by him that all the circumstances show that the payment of excise duty was made under protest and that the returns were originally filed only on the basis of the single normal price, namely, the price at which the goods were sold by the appellant to its distributors.
Learned counsel drew our attention to the provisions of section 4 of the Central Excises Act.
The relevant part of section 4 runs as follows: "4.
Valuation of excisable goods for purposes of charging of duty of excise (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference 161 to value, such value shall, subject to the other provisions of this section, be deemed to be "(a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the asses see to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale.
" We are not concerned with the proviso to this section for the purposes of this appeal.
Learned counsel submitted that the language of section 4(1) suggests that there can be only one normal price for sales to independent distributors.
Learned counsel for the appellant also drew our atten tion to the decision of this Court in Indian Oxygen Ltd. vs Collector of Central Excise, It has been observed by this Court in that judgment as follows (para 6 of the said report): "It is necessary to reiterate that value for assessable goods must be determined in term of section 4 of the Act.
The said section 4(1) provides that where the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section be deemed to be the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale.
" It may be noted that in the present case there was no contention that there was any consideration for the sale other than the price.
In India Cements Ltd. vs Collector of Central Excise, ; a Division Bench of this Court has taken the view that no particular form is prescribed for making up of protest.
In that case, the Court took the view that an ordinary reading of the letter sent by the appellant showed that the appellant was not accepting the liability without protest and in view of this, the letter must be held to be in the nature of a protest.
The Division Bench further held that in view of this, the question of limitation does not arise for refund of the duty (para 10 of the said report).
162 It was submitted by learned counsel for the appellant that in the present case the letter of protest sent by the appellant, on a commonsense reading thereof, covered the entire payment of excise duty in those cases where the normal price was fixed on the footing that the distributors of the appellant were related persons and submitted that in view of this no question of limitation would arise in con sidering the application of the appellant for refund.
The learned counsel drew our attention to the decision of the Special Bench of the Tribunal in Collector of Central Ex cise, Madras vs Ashok Leyland Ltd., Madras, [1987] 29 E.L.T. 530 where on similar facts a Special Bench of the Tribunal had taken the view that even removals for captive use and retail sales had to be assessed at the normal price avail able at the time and place of removal from their main deal ers.
The contention of the Department in that case that the removals were not the subject matter of the original adjudi cation by the Assistant Collector and hence the assessments had become final, was rejected.
In our opinion, the submission on behalf of the appel lant is well founded.
In view of the fact that the distribu tors of the appellant were finally held not to be related persons regarding the appellant in cases where excise duty has been levied on the footing that the distributors of the appellant were related persons and hence, the price at which the goods were sold to them could not be regarded as the normal price and the excise duty collected in respect of the difference between the price at which the goods were sold by the appellant to its distributors and the price at which the said goods were sold by the distributors to independent buyers, calculated as aforestated, must be held to be excess levy.
The protests filed by the appellant clearly took up the contention that its distributors could not be regarded as related persons and hence the protests lodged by the appellant must be held to cover all cases where the price at which the appellant sold its goods to its distributors was not regarded as the normal price on the ground that the distributors were related persons.
It was submitted by Mr. Ganguly, learned counsel for the respondent, that the protest made by the appellant must be read as limited to the cases of sales by the appellant to its wholesale distributors/primary wholesellers and to O.E. manufacturers and that the other categories of sales like stock transfers, clearances to retail sellers and other wholesale sales to purchasers other than distributors must be held not to be covered by the protests.
He placed strong reliance on the observation of this Court in Assistant Collector of Central Excise & Ors.
vs Madras Rubber Factory Ltd. & Ors., 163 (S.C.) where it has been held (page 20 of the report) that the different prices can be normal prices for the purposes of the determination of the assessable value of an article.
In that case, however, it must be appreciated that the separate price lists in respect of supplies made to the Government and other departments were filed by the assessee, the Madras Rubber Factory, distinct and different from the price lists in relation to dealers and it was held that since different price lists for different classes of buyers are specifically recognised under proviso (i) of section 4(1) of the Central Excises Act, therefore, merely because the product is sold at a lower price to the Government and its department that does not enable the MRF to contend that the difference in price with reference to an ordinary dealer and the Government is a discount to the Government.
The difference in price is not a discount but constitutes a normal price for the Government as a class of buyers and no deduction on this Head is admissible.
It was, in these facts and circumstances, that the aforesaid conclusion was arrived at and it has no application to the case before us because it has not been shown to us that a distinct or different price list was filed regarding any particular category of buyers in respect of the sales in question.
Mr. Ganguly next drew our attention to Rule 233B of the Central Excises Rules, 1944 which lays down the procedure to be followed when duty is paid under protest.
The provisions of this rule, however, are of no relevance here because it has not been pointed out to us as to how the appellant has failed to observe this rule in any particular regard so that the provisions of clause 8 of the rule can come into effect.
This rule does not prescribe any particular form of protest and hence it is not possible to say on the basis of this rule that the appellant assessee in this case must be deemed to have paid the duty without protest.
In the result, the appeal is allowed.
The order of the Tribunal is set aside and it is held that the assessee is entitled to refund where excise duty has been assessed and collected from the assessee at a higher rate on the footing that the wholesale distributors of the assessee were persons related to it, that is, in respect of the other categories of sales, namely, retail sales, sales to dealers, sales to State Transport Undertakings and export clearances.
Looking, however, to the facts and circumstances of the case, there will be no order as to costs of the appeals.
The orders for costs already made shall, however, stand.
N.V.K. Appeal al lowed.
| IN-Abs | The appellant was a manufacturer of motor vehicle parts failing under Item 34 A, and components for I.C. Engines failing under Item 68, of the Central Excise Tariff.
The marketing pattern of the appellant was that they sold goods in the wholesale to O.E. manufacturers, Transport Undertakings and Government Bodies, and the requirements of the replacement market were met by sale in the wholesale to other persons who were met by sale in the wholesale to other persons who were designated by them as distributors/ primary wholesale buyers on the basis of agreements with such dis tributors.
The Department took the view that sales by the appellant to its distributors would be considered as sales to 'related persons ' on account of the amendment to sec.
4 of the Cen tral Excises and Salt Act, 1944, which came into force from October 1 1975, and directed the filing of revised price lists showing a discount of 12 1/2% from the price at which the goods supplied by the appellant were sold by its dis tributors to independent buyers.
The appellant complied with this direction under protest taking up the contention that the distributors were also a class of independent buyers, which was however rejected by the Assistant Collector.
On appeal the Collector (Appeals) took the view that distributors were not related persons relying on this Court 's decision in Union of India vs Bombay Tyres Interna tional Ltd., [19831 The appellant then claimed refund of the excess amount of excise duty paid.
This was rejected by the Assistant Collector on the ground that except in respect of sales to wholesale distributors/primary wholesellers and O.E. manu facturers, the excise duty had been paid by the appellant voluntarily.
The Customs, Excise and Gold (Control) Appellate Tribu nal dismissed the Appellant 's appeal.
158 In the appeal to this Court it was contended on behalf of the appellant that the language of section 4(1) of the Central Excises Act, indicates that there could be only one normal price for sales to independent distributors, and that as the letter of protest sent by the appellant covered the entire payment of excise duty in those cases where the normal price was fixed on the footing that the distributors of the appellant were related persons, no question of limi tation would arise in considering the application of the appellant for refund.
On behalf of the respondent, it was contended that the protest made by the appellant must be read as limited to the cases of sales by the appellant to the wholesale distribu tors/primary wholesellers and to O.E. manufacturers and that the other categories of sales must be held not to be covered by the protest.
Allowing the appeal, this Court, HELD: (1) In view of the fact that the distributor of the appellant were finally held not to be related persons, the excise duty collected in respect of the difference between the price at which the goods were sold by the appel lant to the distributors and the price to which the said goods were sold by the distributors to independent buyers calculated as aforesaid, must be held to be excess duty.
[162D E] Indian Oxygen Ltd. vs Collector of Central Excise, , Collector of Central Excise, Madras vs Ashok Leyland Ltd., Madras, referred to.
(2) The protests flied by the appellant clearly took up the contention that its distributors could not be regarded as related persons and hence the protests lodged by the appellant must be held to cover all cases where the price at which the appellant sold its goods to its distributors was not regarded as the normal price on the ground that the distributors were related persons.
[162E F] Indian Cements Ltd. vs Collector of Central Excise, ; referred to.
(3) Rule 233B of the Excise Rules does not prescribe any particular form of protest and hence it is not possible to say on the basis of this rule that the appellant assessee in this case must he deemed to have paid the duty without protest.
[ 163E F]
|
ivil Appeal Nos.
992997 of 1990.
From the Judgment and Order dated 30.8.
1988 of the Allahabad High Court in W.P. Nos.
12572 of 1984.
6512/85, 12574/84, 17966/180.
12152,84 and 12159 of 1984.
K.K. Venugopal, S.N. Misra, Rajinder Sachhar, Soli J. Sorabjee, V.M. Tarkunde, S.S. Ray, O.P. Rana, Govind Muk hoti, P.C. Kapur, B.P. Sahu, P.N. Misra, Krishna Pd., B.P. Singh, A.K. Goel.
J.M. Khanna, Ms. Shafali Khanna, section Mar kandeya, Ashok Sharma, G.S. Gift Rao, Mrs. C. Markandeya, W.A. Nomani, G. Seshagiri, S.K. Mehta, Aman Vachher, Atul Nanda, N.D. Tyagi, Raju Ramachandran, D. Pillai, Raja Ram Agarwal, Sanjay Parekh, S.N. Mira and A.K. Goel for the appearing parties.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
We have heard counsel for the par ties at considerable length but piece meal spread over a number of days.
Special Leave granted 205 Five cooperative societies with membership of Government servants mostly of ' the lower strata filed six separate writ petitions before the Allahabad High Court challenging the Notification under section 4(1) and section 17(1) of the Land Acquisition Act (1 of 1894) on several grounds.
The principal contentions before the High Court were two fold: (1) the cooperative societies consisting Of the low paid Government servants having acquired the land for the purpose of providing residential accommodation to their members, the Ghaziabad Development Authority constituted by the State of Uttar Pradesh for the same purpose should not have been permitted to acquire the said land to their prejudice; and (2) there was no justification for depriving the petitioners of their right to representation under section 5A of the Acquisition Act in the facts and circumstances of the case.
The High Court by a common judgment dated 30th August, 1988, dismissed the writ petitions by negativing the several contentions raised on behalf of the petitioners.
It may be pointed out that on behalf of the Neelam Sahakari Awas Samiti Ltd. two writ petitions were filed while each of the other four societies had filed one writ petition.
That is how six Special Leave Petitions were filed before this Court and have now been converted into appeals on grant of leave.
Ghaziabad, within the State of Uttar Pradesh, virtually bordering Delhi is located at a distance of 28 kilometers from the New Delhi Railway Station in the trans Jamuna area.
It has of late become, apart from being a Railway junction,.
an industrial area as also an agglomeration sufficiently developed to call it a township.
A Master Plan has been drawn up for the area and some portions have been developed while the lands of the five cooperative societies have not yet been improved on account of the pendency of this group of cases.
In course of the hearing of these appeals we were satis fied about the genuineness of the grievance advanced on behalf of the members through their respective cooperative societies and took the view that the members of the coopera tive societies should not be denied residential accommoda tion for which they had taken effective steps before the acquisition for the Development authority was notified.
We took into consideration the total number of members as also the number of eligible members; the total area which the members had acquired and entrusted to the cooperative socie ties for construction; the capacity of the members to pay for the construction now charged by the Development authori ty; the need of planned development of the area.
; and all other relevant facts and circumstances placed by all the parties before 206 us and formed the opinion that it would be sufficient to meet the requirement of members of these societies if each one of them was provided with a plot limited to an area of 80 square yards.
Total members entitled to allotment are 1739.
Whether it should be individual plots or double storeyed construction should be permitted was seriously debated before us but we have come to the ultimate conclusion that instead of single storey construction double storey constructions would be convenient and economical.
The interest of the members represented by their respective cooperative societies and the nature of the housing complex contemplated by the Devel opment authority have to be kept in view and the ultimate decision, keeping the interest of both, has to be taken.
Counsel for the Development authority had canvassed before us that instead of confining construction of flats to two storeys, the normal pattern of five or six storeys could be adopted.
High rise construction for the poor section of the society would not be convenient in old age many would have movement problem; many of the necessities for living would be difficult to secure.
We have, therefore, decided that the construction must be confined to two storeys only and the members of their respective societies shall make their own adjustment of the ground floor and 1st floor allotments.
About 20 acres of land would be necessary if the double storey construction with an area of 80 square yards is adopted.
Society wise particulars are provided below: section No. Name of cooperative Total members Area society entitled to in acres allotment 1.
Sarkari Karamchari Evam 230 2.54 Mitregan Sahakari Awas Samiti Ltd. 2.
Kendriya Karamchari Evam 523 5.77 Mitregan Sahakari Awas Samiti Ltd. 3.
Ghaziabad Shiromani 298 3.29 Sahakari Awas Samiti Ltd. 4.
Neelain Sahakari Awas 245 2.70 Samiti Ltd. 207 5.
Asha Pushpa Vihar Sahakari 443 4.87 Awas Samiti Ltd. 1739 19.17 Members entitled 1739 Total area 19.17 acres (rounded to 20 acres) This area of 20 acres is inclusive of land for laying of the roads and other requirements contemplated under the development scheme.
For convenience and adjustment we are of the view that two more acres of land be made available to the five cooperative societies to be shared by amicable adjustment by them.
Thus from the acquisition Notification 22 acres of land shall stand deleted and shall be released in accordance with the extent indicated for each of the five cooperative societies.
The identification of the land to be so released shall be made within four weeks from the date of pronouncement of the order by mutual arrangement.
We direct that when the land shall be so identified, the order of release from acquisition by appropriate description of the land shall be made; sketch maps showing the identified land shall also be signed by parties to avoid future litigation and made over to each of the societies.
We commend that all the five cooperative societies may form themselves into a federation for the purpose of ensur ing appropriate development of the area and sharing either in common or by division the 2.83 acres of extra land which is directed to be released from acquisition.
It has been agreed that development charges for sewer age, electricity, road connections and the like shall be provided by the Development authority @ Rs. 100 per square yards and internal development shall be done by the socie ties themselves.
In raising the construction, the bye laws and regulations of the Development authority shall be strictly followed.
We hope and trust that the Development authority shall extend its cooperation in every manner to the societies to effectuate the directions made by us.
We look forward to the fulfillment of the dreams of each of the members of the society in the matter of having a residential accommodation.
208 As soon as the lands are identified and sketch maps are delivered as directed above the interim orders made by this Court shall stand dissolved.
The appeals are disposed of without any order for costs.
P.S.S. Appeals allowed.
| IN-Abs | The appellant cooperative societies consisting of 1739 low paid Government servants had acquired certain land in Ghaziabad for the purpose of providing residential accommo dation to their members.
Subsequently, the said land was notified for acquisition under sections 4(1) and 7(1) of the Land Acquisition Act for the Ghaziabad Development Authori ty.
Representations made by the appellants under section 5A of the Act were rejected.
In the writ petitions, filed under Article 226 of the Constitution, it was contended for the appellant societies that the Development Authority constituted by the State for the same purpose should not have been permitted to acquire the said land to their prejudice, and that there was no justification for depriving them of their right to represen tation under section 5A of the Act.
The High Court dismissed the writ petitions.
Allowing the appeals by special leave, the Court, HELD: 1.
The members of the appellant societies should not be denied residential accommodation for which they had taken effective steps before the acquisition for the Ghazia bad Development Authority was notified.
[205G] 2.1 Keeping in view the number of eligible members, the total area which they had acquired and entrusted to the societies for construction, the capacity of the members to pay for the construction now charged by the Development Authority, the need for planned development of the area and all other relevant facts, it would be sufficient if each one of them was provided with an area of 80 sq. yards.
[205G H; 206A] 204 2.2 High rise construction for the poor sections of the society would not be convenient.
If the double storey con struction with an area of 80 sq.
yards is adopted about 20 acres of land, inclusive of land for laying of the roads and other requirements contemplated under the development scheme, would be necessary.
For convenience and adjustment two more acres of land shall be made available to the socie ties to be shared by amicable adjustment by them.
Thus, from the acquisition notification 22 acres of land shall stand deleted and shall be released inaccordance with the extent indicated for each of the societies.
The identification of the land to be so released shall be made within four weeks from the date of pronouncement of the order by mutual ar rangements.
The order of release bearing appropriate de scription to follow and sketch maps to be signed by the parties.
[206D; 207C E] 3.
The development charges for sewerage, electricity, road connections and the like shall be provided to the Development Authority at the rate of Rs.100 per sq. yard and internal development shall be done by the societies them selves.
In raising the construction, the bye laws and regu lations of the Development Authority shall be strictly followed, (207G)
|
Appeals Nos. 5 and 6 of 1955.
Appeals from the judgment and decree dated September 15, 1952, of the Madras High Court in Second Appeals Nos.
2256 of 1947and 2545 of 1948, 2 arising.
out of the judgment and decree dated September 19, 1946, of the Court of Subordinate Judge of Kozhikode in Appeal Suit Nos. 336 and 180 of 1946, against the judgment and decree dated October 9, 1945, and June 29, 1946, respectively of the Court of Districts Munsif, Chowghat, in O. section Nos. 131 and 158 of 1945.
B. K. B. Naidu, for the appellants.
V. Karunakara Menon and M. R. Krishna Pillai, for the respondents.
October 1.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J.
The point for determination in these two appeals is whether one Kesavan Kaimal who was one of three executants of a will dated February 10, 1906, became entitled under that will to the properties, which are the subject matter of these appeals.
The will is a short one, and is as follows: " Will executed on 28th Makaram 1081 M. E., corresponding to 10th February, 1906, jointly by Kunhan Kaimal, son of Karayamvattath Katbayakkal Kunhu Kutti Amma, Kesavan Kaimal, son of Theyi Amma and Theyi Amma, daughter of Nani Amma of Etathiruthi amsom and Etamuttan desom in Ponnani Taluk.
We have hereby settled and agreed that all the movable and immovable properties acquired jointly and separately by us till now, and those which we may be so acquiring in future and those which have devolved on us and those which we may yet be obtaining shall be held by us in our possession and under our control and dealt with by us as we please till our death and that subsequent to our death, Kalliani Amma 's children, Kali and Kunhu Kutty, Thona Amma 's children, Parukutty, Kunhunni, Kochu Govindan and Ramar, and the children of the deceased Narayani Amma, namely, Kunhunniri, Kuttiparu and Lakshmikutty and their children and the children who may be born to them as also the children who may be born of them, shall as our heirs and legal representatives, hold the said properties in their 3 possession and enjoy them hereditarily in equal shares amongst themselves.
Except after our death, the aforesaid persons shall not lay claim to any of the properties belonging to us.
It is settled that in the event of our effecting any transfers or alienations of the said properties.
either jointly or severally till our death, the aforesaid ' persons shall have the right and freedom only in respect of the remaining items of properties to the exclusion of those items of properties included in the above transactions.
It is hereby further settled and agreed that subsequent to our death, save our legal representatives aforesaid and such of those as may be born hereafter, no other persons shall have the right to claim to or right of entry upon the entire properties moveable and immoveable found belonging to us.
And we have signed herein in the presence of the undersigned witnesses (signed) Kunhan Kaimal.
( " " ) Kesavan Kaimal.
(" " ) Theyi Amma.
" of the three testators, Theyi Amma died first the exact date of her death does not appear and is not very material and Kunhan Kaimal died thereafter sometime in 1930.
It is the case of Kesavan Kaimal that in the events which had happened, he had become entitled by survivorship to all the properties disposed of by the will, including those of Kunhan Kaimal, and on this footing he conveyed on October 14,1938, seven items of properties, of which three belonged to Kunhan Kaimal, to one Sankarankutti Kaimal and on October 16, 1944, another three items of properties which belonged to Kunhan Kaimal, to Kalyani and Vijayan.
These transfers led to the two litigations; which have culminated in the present appeals.
The legatees under the will dated February 10, 1906, instituted O. section No. 131 of 1945 in the Court of the District Munsif, Chowghat, then in the Province of Madras, for recovery of possession of three items of properties which had belonged to Kunhan Kaimal 4 after redeeming a mortgage for Rs. 100 created over those properties on February 3, 1901.
The plaintiffs claimed that on the death of Kunhan Kaimal in 1930 they had become entitled to those properties as legatees under the will.
Defendants 1 to 3 represented the mortgagees.
Defendant 6 was Kesavan Kaimal, and defendants 4 and 5 were brought on record as persons claiming to be entitled to the suit properties under a deed of transfer by defendant 6, dated October 16, 1944.
Defendants 4 to 6 contested the suit, and pleaded that on a proper construction of the will, the properties of Kunhan Kaimal survived to Kesavan Kaimal on the death of the former in 1930, and that the plaintiffs got no title to them.
This contention was overruled by the District Munsif, and the suit was decreed.
There were two appeals against this decree, A. section No. 179 of 1946 and A. section No. 180 of 1946 in the Court of the Subordinate Judge, Calicut, the former by defendants 4 and 5 and the latter, by defendant 6.
The Subordinate Judge agreed with the construction put on the will by the District Munsif, and dismissed the appeals.
Against that decree, defendant 6 preferred section A. No. 2256 of 1947 in the High Court of Madras.
Basing himself on the deed of transfer dated October 14, 1938, Sankarankutti Kaimal instituted O. section No. 158 of 1945 in the Court of the District Munsif, Chowghat, for recovery of possession of three items of properties, of which one belonged to Kunhan Kaimal absolutely and the other two ' to him and others as co owners.
In the plaint, he alleged that there was an oral lease of the properties to the first defendant and to one Kali Amma, whose legal representatives were defendants 2 and 3, that the defendants were in arrears in the payment of rent, and were disputing his title to the properties, and that he was therefore entitled to eject them.
Defendant 4 is Kesavan Kaimal, the vendor of the plaintiff.
The contesting defendants who were the same as the plaintiffs in O.S. No. 131 of 1945 pleaded that under the will they became entitled to all the properties of Kunhan Faimal, that the oral lease was untrue, and that the 5 suit was barred by limitation.
The District Munsif found all the contentions in favour of defendants 1 to 3 and dismissed the suit.
, Against this decree, there was an appeal, A. section No. 336 of 1946, in the Court of the Subordinate Judge of Ottapalam, and that was dismissed, the Subordinate Judge agreeing with the District Munsif on all the issues.
Against his decree, the plaintiff preferred section A. No. 2545 of 1948 in the High Court of Madras.
Both the second appeals came up for hearing before Raghava Rao J. who held that on its true construction the will operated to vest, in the three testators all the properties covered by it in joint ownership, that, in consequence, on the death successively of Theyi Amma and Kunhan Kaimal, their interest survived to Kesavan Kaimal, and that the transfers made by him on October 14, 1938, and October 16, 1944, were valid.
In the result, both the second appeals were allowed, the suit for redemption, O. section No 131 of 1945, was dismissed, and the suit in ejectment, O. section No. 158 of 1945, was decreed.
Against this judgment, the present appeals have been brought on a certificate granted by this court under article 136.
The sole point for determination in these appeals is whether under the will all the three testators became joint owners of all the properties on which it operated.
After hearing the question fully argued, we have come to the conclusion that that is not the effect of the will, and that the judgment of the High Court contra cannot be supported.
There were three executants of the will.
Each of them possessed properties, which were his or her self acquisitions.
They also owned some properties which they had jointly acquired, but their title to such properties was as tenants in common and not as joint tenants.
Each of them would have been entitled to execute a will of his or her properties, and if that had been done, the legatees named therein would undoubtedly have been entitled to those pro perties.
In the present case, the legatees who were intended to take were the same persons, and it was for that reason that the three testators instead of each executing a separate will jointly executed it.
It ist 6 nevertheless, a will by which each testator bequeathed properties belonging to him or to her, and therefore on the death of each testator, the legatees mentioned in the will would be entitled to the properties of the testator, who dies.
The contention of the respondents which has found favour with the High Court is that the will must be construed as a transfer by the several testators of all their individual properties to themselves jointly as joint tenants.
That would really be a transfer inter Vivos and not a will.
The word "will" is widely known and used, and it has a well understood significance as meaning a disposition which is to take effect on the death of a person.
The executants of the will could not have therefore intended that it should operate inter ViVOs.
Moreover, if the document was intended to take effect as a present disposition, it should have to be stamped under the provisions of the Stamp Act, but the will is an unstamped document.
Coming to the recitals in the will, there are no words by which the executants thereof divest themselves of their individual ownership and vest it in themselves jointly.
It is said that that could be implied from the words " all the movable and immovable properties acquired jointly and separately by us till now, and those which we may be so acquiring in future and those which have devolved on us and those which we may yet be obtaining shall be held by us in our possession and under our control ".
We are unable to read any such implication in those words.
It is difficult to imagine how properties which were to be acquired in future could form the subject matter of a disposition in praesenti.
On the other band, the true purpose of this clause would seem to be to emphasise that the execution of the will does not affect the rights of the testators over their properties, and that is an indication the it is to operate as a will.
The matter appears to us to be concluded beyond all doubt by the terms of clause 3, which provides that the testators could alienate the properties jointly or severally.
If the properties were intended to be impressed with the character of joint property, an alienation by any 7 one of them singly would be incompetent.
In coming to the conclusion to which he did, the learned Judge in the Court below was very largely influenced by the fact that the will dealt with, not only the separate properties of the testators but also of their joint properties, and that there was one disposition as regards all of them.
But this reasoning is based on a misconception of the recitals in the will.
The will does not refer to any joint properties of the testators but to properties jointly acquired by them which is very different.
They would hold these properties as tenants in common, and their share therein would devolve as their separate properties.
It was further argued for the respondents that it could not have been the intention of Theyi Amma, one of the testators, to benefit the legatees under the will in preference to her own son, Kesavan Kaimal, and that, therefore, it must be held that she intended that her son who was the youngest of the testators should take all the properties.
But if Kesavan Kaimal could himself agree to bequeath his properties to those legatees, we see nothing unnatural in his mother also agreeing to bequeath her properties to them they being the heirs of the testators under the Marumakkat tayam Law.
Learned counsel for the respondents sought to rely on the subsequent conduct of the parties as showing that they understood the will as conferring a joint estate on the testators.
It was said that it was in that belief that Kesavan Kaimal was dealing with the properties of the other testators as his own, after their death.
It was also said that the conduct of the other members of the tarwad, including the plaintiffs, showed that they shared that belief.
And this was sought to be made out by reference to the proceedings in E. A. No. 320 of 1938 in section C. No. 480 of 1933.
The facts were that one Kunhunni Kaimal obtained a decree against Kesavan Kaimal in section C. No. 480 of 1933, and in execution of that decree, he brought some of the tarwad properties to sale, purchased them himself and got into possession.
The members of the tarwad then filed an application, E. A. No. 320 of 1938, under 0. 21, r. 100, for redelivery of the 8 properties to them on the ground that the decree and the sale proceedings were not binding on them, and that was dismissed.
In the order dismissing the application, the District Munsif observed that under the will dated February 10, 1906, Kesavan Kaimal had the power to transfer the properties.
This order was relied on in these proceedings as operating as res judicata in favour of the respondents; but that contention was negatived by the Courts below, and has not been repeated before us.
But these proceedings are now sought to be relied on as showing that the members of the tarwad did not dispute the title of Kesavan Kaimal to the properties which were dealt with by the will.
As against this, the appellant referred us to a partition deed dated May 16, 1915, and a mortgage deed dated March 4, 1926, to both of which Kesavan Kaimal was a party, in which be and other members of the family had understood the will in question as meaning that the testators held the properties covered by the will in separate ' and exclusive ownership.
Whatever value one might attach to the above considerations if there was any doubt or uncertainty as to the meaning of the will, when once it is held that the language thereof is clear and unambiguous, evidence of the subsequent conduct of the parties cannot be admitted for the purpose of limiting or controlling its meaning.
In our view, the terms of the will are clear, and the subsequent conduct of the parties sought to be relied on must be disregarded as wholly inadmissible.
We are accordingly of opinion that the will dated February 10, 1906, is what it purports to be a will, and nothing else.
It does not confer any rights inter se on the testators; it only vests the title to the properties disposed of by it in the legatees on the death of the testators.
In this view, the will must be held to be a testamentary disposition by the three testators of their properties operating on the death of each testator on his properties, and is, in effect, three wills combined in one.
A joint will, though unusual, is not unknown to law.
In Halsbury 's Laws of England, Hailsham 's Edition, Vol. 34, p. 17, para.
12, the law is thus stated: 9 " A joint will is a will made by two or more testators contained in a single document, duly executed by each testator, disposing either of their separate properties, or of their joint property.
It is not, however, recognised in English law as a single will.
It operates on the death of each testator as his will disposing of his own separate property, and is in effect two or more wills ".
There is a similar statement of the law in Jarman on Wills, 8th Ed., p. 41.
The following observations of Farewell J. in Duddell in re.
Roundway V. Roundway (1) are apposite: ". in my judgment it is plain on the authorities that there may be a joint will in the sense that if two people make a bargain to make a joint will, effect may be given to that document.
On the death of the first of those two persons the will is admitted to probate as a disposition of the property that be possesses.
On the death of the second person, assuming that no fresh will has been made, the will is admitted to probate as the disposition of the second person 's property. .
It was also argued for the respondents that the will might be construed as a mutual will, but that, in our opinion, is an impossible contention to urge on the recitals of the document.
A will is mutual when two testators confer upon each other reciprocal benefits, as by either of them constituting the other his legatee; that is to say, when the executants fill the roles of both testator and legatee towards each other.
But where the legatees are distinct from the testators, there can be no question of a mutual will.
It cannot be argued that there is, in the present case, a bequest by the testators to themselves.
There is nothing in the will to support such a contention, which would be inconsistent with the position taken by the respon dents that there was a settlement of the properties inter vivos converting separate properties into joint properties.
In this view, on the death of Kunhan Kaimal his properties vested in the legatees under the will dated February 10, 1906, and therefore neither Kesavan Kaimal nor his transferees under the deeds could lay any claim to them.
(1) , 592.
2 10 In the result, the appeals are allowed, the decrees passed by the High Court are set aside, and those of the Courts below are restored, with costs throughout.
Appeals allowed.
| IN-Abs | A will executed jointly :by three persons contained, inter alia, the following recitals: " We have hereby settled and agreed that all the moveable and immoveable properties acquired jointly and separately by us till now, and those which we may be so acquiring in future and those which have devolved on us and those which we may yet be obtaining, shall be held by us in our possession and under our control and dealt with by us as we please till our death.
" There were bequests in favour of certain persons and the will provided that in the event of the executants effecting any transfers or alienations of the said properties, either, jointly or severally till their death, the aforesaid persons shall have the right only in respect of the remaining items of the properties.
Two of the testators having died the third claimed that he had become entitled by surviorship to all the properties disposed of by the document on the footing that it was in effect a transfer of all their individual properties to themselves jointly as joint tenants.
Held, that the document was a testamentary disposition by the three testators of their properties operating on the death of each testator on his properties, and was, in effect three wills combined in one.
The properties were held by the testators at, tenants in common and the legatees mentioned in the will would become entitled to the properties of the testator who dies.
|
ivil Appeal No. 652 of 1982.
From the Judgment and Order dated 22.8.1980 of the Patna High Court in Second Appeal No. 125 of 1977 (R).
Ashok K. Sen and D.P. Mukherjee for the Appellants.
N.H. Hingorani, Ms. Kapila Hingorani and R.P. Wadhwani for the Respondents.
The Judgment of the Court was delivered by THOMMEN, J.
This civil appeal by special leave is brought by the defendants against the judgment of the Patna High Court, Ranchi Bench, in Second Appeal No. 125 of 1977 dismissing in limine their appeal against the judgment of the learned District Judge in Title Appeal No. 2/5 of 1977 whereby the decree for eviction granted by the learned Munsiff in Title Suit No. 3 of 1975 was in part affirmed.
The plaintiffs (respondents) instituted the suit against the defendants (appellants) for eviction under Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 on the ground that the defendants were in arrears of rent for the months of February 1974 and May 1974 to August 1974.
The defendants contested the suit on various grounds.
Their main defence was that they were not in ar rears of rent as alleged by the plaintiffs.
Decreeing the suit, the learned Munsiff found that rent for the months of February 1974 and May 1974 to August 1974 had not been paid by the defendants.
This decree was affirmed by the learned District Judge in part, that is, in respect of the alleged arrears for the months of May 154 and June 1974, and not for any other period.
The finding of the First Appellate Court was affirmed by the High Court by dismissing the defendants ' appeal in limine.
The question which arises for consideration is whether the courts below were justified in coming to the conclusion, which they did, and whether the impugned judgment of the High Court is liable to be interfered with in the present appeal brought by special leave under Article 136 of the Constitution.
Whether or not rent for the two months in question had been duly paid by the defendants is a question of fact, and with a finding of such fact, this Court does not ordinarily interfere in proceedings under Article 136 of the Constitu tion, particularly when all the courts below reached the same conclusion.
But where the finding of fact is based on no evidence or opposed to the totality of evidence and contrary to the rational conclusion to which the state of evidence must reasonably lead, then this Court will in the exercise of its discretion intervene to prevent miscarriage of justice.
The suit was instituted by the widow of Rameswarlal Sultania.
The plaint was verified by Rameswarlal Sultania 's nephew on behalf of the plaintiffs, and he deposed as PW 4.
Neither the first plaintiff, the widow nor the other two plaintiffs, her children testified in support of the plaint allegations.
The nephew, PW 4 frankly admitted in the box that he had no personal knowledge of the facts alleged in the plaint.
He did not know if the defendants were in arrears of rent or whether his aunt, the first plaintiffs or anybody else had demanded rent from the defendants.
None of the witnesses on the side of the plaintiffs had any personal knowledge of the facts alleged by the plaintiffs in regard to the arrears of rent.
PW 4 is, amongst the plaintiff 's witnesses, the only person who speaks to this fact, but admittedly speaks without any claim of personal knowledge.
In the circumstances, there is no reliable oral evidence on the side of the plaintiffs to support the plaint allegation regarding the arrears of rent.
Nor is there any documentary evidence in support of their case.
On the other hand, the defendants categorically stated that they had paid the rent for the two months in question to the first plaintiff.
At that time her husband was alive, but he was in no condition, on account of poor health, to give a receipt for the rents paid.
The defendants, in view of their personal relationship with him, did not insist upon a receipt.
155 DW 8 is one of the defendants.
He categorically stated that for the months of May and June 1974 he paid the rent in June 1974 by handing over the amount to the first plain tiff 's daughter when she went to his shop to collect the rent.
Since she was a minor he accompanied her to her house to make sure that the amount was received by her mother, the first plaintiff.
His evidence on the point is in the follow ing words: "It is incorrect to say that I have not paid the rent for May June 1974.
In June, the daughter of Rameshwar Babu had come to demand Rs.200 towards the rent for May June 1974 and I had given the (Illegible) at that time.
I had demanded the receipt,_ but he was unwell and as such did not give it". "Rameshwar Babu was not living in his senses in June, 74.
His brain was not in proper condition.
In June, 74 I gave Rs.200 to his wife (plaintiff), after taking the same to his house.
Even subsequently my brother had gone to pay the rent to the plaintiff, Gita Devi for two three times.
" This evidence is supported by DW 7.
He is the Accountant of the first defendant firm of which defendants Nos. 2 and 3 who are brothers are partners.
Referring to these partners, and a neighbour by name Nandi (DW 6), this is what he says: "In June 74, the defendants, Bibhuti and Prahalad Chandra Dutta had given Rs.200 two hundred rupees to the daughter of Rameshwar Babu.
Nandi Babu, Bibhuti Babu and I were (present) in the shop, at that time.
This money was paid towards the rent of the house".
Nandi (DW 6) also speaks on this point: "The defendants always used to pay the rent in my presence . .
In June, 1974, they had given Rs.200 as rent to the younger daughter of Ramesh Babu in my presence.
I told (them) that as she was a small girl, they should also accompany her.
Then Bibhuti Bhusan Dutta reached the girl.
" The evidence of these three defence witnesses is that the rent for the months of May and June.
1974 had been duly paid in June 1974 in 156 the sum of Rs.200 by the second defendant (DW 8) to the landlord, Rameswarlal Sultania by handing over the amount to his minor daughter who went to the defendants ' shop to collect the same and by accompanying her to her house to see to the safe delivery of the same to the first plaintiff, her mother who obviously received it on behalf of her husband, the landlord.
The evidence seems to be clear on the point and we see no contradiction in this.
The courts below did not appreciate that this much evidence was staring in the face, and there was total ab sence of evidence on the point on the side of the plantiffs to contradict the defence evidence.
The plaint allegation regarding arrears was not spoken to on the plaintiffs ' side by any person having personal knowledge.
The plaintiffs made no attempt to let in any reliable evidence on the point.
The evidence of PW 4 who admittedly had no personal knowledge on the point is no evidence at all.
On the other hand, the evidence of DW 8, supported by the evidence of his Account ant (DW 7) and his neighbour (DW 6) is categoric and clear.
The learned District Judge disbelieved this evidence on the assumption that DW 6 contradicted himself when he stated that the amount was paid to the daughter and also to her monther.
In his written statement he stated that the amount had been paid to the landlord, Rameswarlal Sultania.
In the light of what we have stated above, we see no contradiction in these statements.
The amount was, in our view, rightly stated to have been paid to Rameswarlal Sulta nia when it was handed over to the daughter to be paid over to her monther, viz., the first plaintiff who was reasonably understood to have received it for and on behalf of her husband.
If the statement is true, there is no contradiction in it and it is categoric and clear.
We see no reason to suspect that it is not true for there is no evidence on the side of the plantiffs to the contrary.
As stated earlier, there is no evidence at all on the side of the plaintiffs that rents were in arrears.
In the absence of any reason to disbelieve the clear and categoric testimony of the defence witnesses on the point, we see no reason to suspect that the rents remained in arrears.
In the circumstances, we are of the view that the courts came to the conclusion, as they did, without any evidence whatsoever to support it and contrary to the available evidence let in by the defence.
Their conclusion was, therefore, perverse, irrational and totally unjustified.
For this reason, we set aside the impugned decree and judgment of the courts below.
The appeal is allowed with costs.
P.S.S. Appeal allowed.
| IN-Abs | The appellant defendants fell in arrears of rent for the months of February and May to August 1974 for the demised premises.
The respondent plaintiffs sought their eviction under section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 on the grounds of default.
Decreeing the suit, the trial court found that rent for the said five months had not been paid.
The decree was affirmed by the appellate court in part, that is, in respect of May and June, 1974.
That finding was affirmed by the High Court.
Allowing the appeal by special leave, the Court, HELD: The Supreme Court does not ordinarily interfere in proceedings under Article 136 of the Constitution particu larly when all the courts below had reached the same conclu sion.
But where the finding of fact is based on no evidence or opposed to the totality of evidence and contrary to the rational conclusion to which the state of evidence must reasonably lead, then the Court will in the exercise of its discretion intervene to prevent miscarriage of justice.
[154C D] In the instant case, there was no reliable oral evidence on the side of the plaintiffs to support the allegation that rents were in arrears.
Nor was there any documentary evi dence in support of their case.
Neither the first plaintiff, the widow nor the other two plaintiffs, her children, testi fied in support of the allegation PW 4, who verified the plaint on behalf of the plaintiffs admittedly had no person al knowledge that the defendants were in arrears of rent or whether the first plaintiff or anybody else had demanded rent from the defendants.
[156F G] On the other hand, DW 8, one of the defendants, stated that for the months of May and June 1974 he had paid the rent in June 1974 by 153 handing over the amount to the first plaintiff 's daughter when she went to his shop tO collect the rent.
Since she was a minor he accompanied her to her house to make sure that the amount was received by her mother, the first plaintiff.
This evidence has been supported by DW 7.
He was the Ac countant of the first defendant firm.
DW 6 also spoke of the fact that in June 1974 the defendants had given Rs.200 as rent to the younger daughter of the plaintiff.
These state ments of defence witnesses were categoric and clear.
There was no contradiction in term for there was no evidence on the side of the plaintiffs to the contrary.
The conclusion arrived at by the courts below that rents remained in ar rears was, therefore, perverse and totally unjustified.
[155A B, E; 156D, F, G]
|
: Criminal Appeal No. 49 of 1990.
From the Judgment and Order dated 13.2.1989 of Delhi High Court in Crl.
W. No. 25 of 1989.
S.R. Setia, C.S. Vaidyanathan and K.V. Viswanathan for the Appellant.
V.C. Mahajan, Ms. Sushma Suri, P. Parmeshwaran, A.K. Srivastava and T.T. Kunhikannan for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
Special leave granted.
After the Appellant landed at Trivandrum Airport from Abu Dhabi, he was intercepted by the customs officials detecting that he smuggled 13 gold sheets weighing 1280 gms.
valued at Rs.4,26,240 concealed inside the plywood panels of his blue suitcase which was seized along with his two pass ports, old and new.
He was arrested on 31 1 1988 and was produced before the Chief Judicial Magistrate (Economic Offences) Ernakulam who remanded him to judicial custody till 12 2 1988.
On 12 2 1988 he was granted bail on condi tion, inter alia, that he would report before the Superintendent (Intelligence) Air Customs, Trivandrum on every Wednesday until further orders, and that he would not change his residence without prior permission of Court to "25 2 1988.
" The impugned detention order dated 25 6 1988 was passed by the Home Secretary, Government of Kerala.
It stated that the Government of Kerala was satisfied with respect to the appellant that with a view to preventing him from smuggling gold it was necessary to detain him and, therefore, in exercise of powers conferred by section 3(1)(i) of the Conservation of Foreign Exchange and Preven tion of Smuggling Activities Act, 1974 (Central Act 52 of 1974), hereinafter referred to as 'the COFEPOSA Act, the Government of Kerala directed that he be detained and kept in custody in the Central Prison, Trivandrum.
The grounds of detention, which were also served, inter alia, gave the details as to how the smuggled gold was detected in his possession having been smuggled 214 into India in violation of the provisions of the , Foreign Exchange Regulation Act, 1973 and Import and Export Control Act, 1947; what were his statements at the time of seizure of his blue suitcase, his new and old passports and the air ticket used for the journey from Dubai to Trivandrum and the return open air ticket from Bombay to Abu Dhabi; and the gist of his statements given on 30/31 1988 under section 108 of the before the Intelligence Superintendent, Air Customs, Trivandrum.
It was also stated that after his arrest on 31 1 1988 he was pro duced before the Additional Chief Judicial Magistrate (Economic Offences) Ernakulam on the same date and he was remanded to judicial custody and was subsequently released on bail; and that even though the departmental adjudication and prosecution proceedings under were pending against him, the detaining authority was satisfied that he should be detained under section 3(1)(i) of the COFEPOSA Act with a view to prevent him from smuggling gold to Trivan drum.
On 23 8 1988 the appropriate authority declared that he was satisfied that the detenu was likely to smuggle goods into and through Trivandrum Airport which was an area highly vulnerable to smuggling as defined in Explanation 1 to section 9(1) of the COFEPOSA Act.
On 24th September, 1988, the detenu appeared before the Advisory Board which reported that there was sufficient cause for his detention.
The detenu challenged his detention moving a Habeas Corpus petition under Article 226 of the Constitution of India read with section 483 Cr.
C.P. in the High Court of Delhi and the same having been dismissed in limine the appellant appeals therefrom by special leave.
In para 11 of the Special Leave Petition it has been stated that the various grounds urged in the writ petition before the High Court have also been added in this petition and the writ petition itself has been annexed as Vol.
II to the Special Leave Petition.
The main grounds on which the detention order is being challenged by the learned counsel for the appellant Mr. C.S. Vaidyanathan, inter alia, are that after the event there was inordinate delay in passing the detention order which showed that there was no genuine need for detention of the appel lant; that there was inordinate and unexplained delay of 38 days in execution of the detention order; that all the documents and materials, particularly the appellant 's bail application, the bail order, the show cause notice and his reply thereto were not placed before the detaining authori ty; that these documents and the fact that the appellant 's old and new passports were seized and without those it would not be possible for the appellant to carry on 215 smuggling were not brought to the notice of the declaring authority and ',hat there was non application of mind.
Mr. T.T. Kunhikannan, the learned counsel for the State of Kerala submits, inter alia, that there was no such delay between the date of detention and the date of passing the impugned order of detention as to make the grounds stale or to snap the relation; that the delay in execution of the detention order has been explained; that the bail applica tion as well as the bail order were placed before the de taining authority but the same having not been referred to or relied on by the detaining authority the copy thereof was not required to be furnished to the detenu along with the grounds of detention; that all the papers which were placed before the detaining authority for passing the order of detention were also placed before the declaring authority and it was not necessary to place the show cause notice and the detenu 's reply thereto; and that the detention order suffered from no infirmity whatsoever and this appeal is liable to be dismissed.
Mr. V.C. Mahajan, the learned coun sel for the Union of India emphatically submits that all the documents and materials that were required to be placed before the declaring authority were duly placed and on consideration of the relevant materials the declaring au thority validly made the declaration which was, therefore, unassailable.
We now take the first submission, namely, delay in passing the detention order.
Mr. Vaidyanathan, referring to paragraph 6 of the Writ Petition, submits that while the interception and seizure took place on 30 1 1988 and the detenu was arrested formally on 31 1 1988, the detention order was passed only 25 6 1988 and this delay remained unexplained and as such there was no nexus between the incident and the detention.
In the counter affidavit filed in this Court there is no specific denial on this point.
Mr. Kunhikannan submits that it so happened because this ground was not taken in the Special Leave Petition.
The appellant having stated that the grounds urged in the Writ Petition should also be added, it cannot be said that this ground was not taken.
Of course when other ground surged in the Writ Petition have also been taken specifically in the Special Leave Petition this ground could also have been so taken.
However, on the basis of the Records Mr. Kunhikannan submits that the Collector of Customs sent the proposal for deten tion on 27 5 1988 along with the draft grounds, and the Screening Committee meeting proposed to be held on 10th June, 1988 was postponed and was held on 21 6 1988 on which date the detenu 's case was considered to be fit for deten tion under the COFEPOSA Act.
It is submitted for the State that thorough investigation of the case was 216 required on the part of the Customs authorities both for the proceedings under the and for prosecution in the criminal Court, and as such the proposal could not have been hurried through.
These facts have not been shown to be untrue.
Under the above circumstances can it reasonably be held that the nexus between the Smuggling Act and the deten tion order was snapped or that the grounds became stale? Where the seemingly long time taken for passing the detention order after the prejudicial act is the result of full and detailed investigation and consideration of the facts of the case, the ground cannot be held to be remote and the detention cannot be held to be bad on that ground.
In Ashok Narain vs Union of India, , where the detenu was apprehended for breach of Foreign Exchange Regulation in February, 1981 and without launching any prosecution the detenu was detained in October, 1981 the passage of time being the result of full and detailed con sideration of facts and circumstances of the case after thorough examination at various levels, this Court observed that it could not be said that the detention was in any way illegal inasmuch as the detaining authority had fully and satisfactorily applied his mind to the question of deten tion.
As was held in Smt.
Rekhaben Virendra Kapadia vs State of Gujarat, ; , whether the time lag between the commission of the offence and the detention was enough to snap the reasonable nexus between the prejudicial activi ty and the purpose of detention would depend upon the facts of each case.
The test of proximity is not a rigid or me chanical calendar test to be blindly applied by merely counting the number of months and days between the offending act and the order of detention.
The question is whether the past activities of the detenu were such that the detaining authority could reasonably come to the conclusion that the detenu was likely to continue in his unlawful activities.
In Sheikh Salirn vs The State of West Bengal, ; , there was a gap of about 4 months in between.
The explanation of the interval was that the petitioner was being prosecuted and the order of discharge had to be ob tained on June 17, 1972.
The order of detention was passed 4 days before the order of discharge was passed.
This Court repelling the contention observed: "We do not suppose that the length time which a decision takes necessarily reflects the care or openness brought to bear upon it.
" 217 In Rajendrakumar Natvarlal Shah vs State of Gujarat, ; , even unexplained delay (of 5 months in that case) in making the order against economic offenders under the COFEPOSA Act or other anti social elements such as those involved in illicit traffic in liquor trade under Gujarat Prevention of Anti Social Activities Act having large resources and influence, it was held, would not be sufficient to vitiate the order if the grounds were not stale and the nexus between the grounds and the order of detention still existed.
It was observed that a distinction must be drawn between the delay in making of an order of detention under a law relating to preventive detention like the COFEPOSA Act and the delay in complying with the proce dural safeguards of Article 22(5) of the Constitution.
It has been laid down by this Court in a series of decisions that the rule as to unexplained delay in taking action is not inflexible.
Mere delay in making of an order of deten tion under a law like the COFEPOSA Act enacted for the purpose of dealing effectively with persons engaged in smuggling and foreign exchange racketeering who, owing to their large resources and influence, have been posing a serious threat to the economy and thereby to the security of the nation, the courts should not merely on account of the delay in making of an order of detention assume that such delay, if not satisfactorily explained, must necessarily give rise to an inference that there was no sufficient material for the subjective satisfaction of the detaining authority or that such subjective satisfaction was not genuinely reached.
Taking of such a view would not be war ranted unless the Court finds that the grounds are stale or illusory or that there was no real nexus between the grounds and the impugned order of detention.
In that case, there was no explanation for the delay between February 2, and May 28, 1987, yet it could not give rise to legitimate inference that the subjective satisfaction arrived at by the District Magistrate was not genuine or that the grounds were stale or illusory or that there was no rational connection between the grounds and the order of detention.
This Court reiterat ed what was stated in Olia Mallick vs The State of West Bengal, ; Golam Hussain vs The Commissioner of Police, ; ; Odut Ali Miah vs The State of West Bengal, and Vijay Narain Singh vs State of Bihar, The Court also referred to Gora vs State of West Bengal, ; ; Raj Kumar Singh vs State of Bihar, ; and Smt.
Hemlata Kantilal Shah vs State of Maharashtra, ; Applying the law enunciated and settled by the foregoing decisions we are of the view that in this case, considering the given explanation of the period in between the intercep tion on 30 1 1988 and the 218 order of detention on 25 6 1988 the nexus was not snapped and the ground was not rendered stale and the order of detention was not rendered invalid thereby.
The submission is accordingly rejected.
As regards the submission as to delay in execution it was urged.
that there was inordinate and unexplained delay in execution of the detention order passed on 25 6 1988 as the detenu was taken into custody only on 2 8 1988 despite the fact that the detenu was reporting in compliance of the bail order.
Relying on a full bench decision of the Delhi High Court in Mohammed Saleem vs Union of India, since reported in 1989(3) Delhi Lawyer 77, it is submitted that this delay of 38 days was indicative of the fact that there was no genuine need for the detention order.
This ground though taken in the Writ Petition was not repeated specifi cally in the Special Leave Petition and Mr. Kunhikannan prayed for an opportunity, for filing an additional counter affidavit, which we declined.
However, explaining the delay counsel points out from the Records that on 27 6 1988 the Home Secretary wrote to the Superintendent of Police, Malap uram, with detailed instructions requesting him to arrange for the immediate execution of the detention order.
On 19 7 1988 a teleprinter message was sent by the Home Secre tary to the Superintendent of Police, in the nature of a reminder, requesting that the person be immediately appre hended and compliance reported and that the delay in execu tion may also be reported.
On 27 7 1988 the Superintendent of Police, Malapuram wrote back to the Home Secretary that the detention order could not be executed since the warran tee was absconding and his 'present ' whereabouts were not known and that the C.I. had been instructed to make all possible efforts to apprehend the warrantee.
On 2 8 1988 the Superintendent of Police, Malapuram sent a wireless message to the Home Secretary stating that the detention order had been served on the detenu on 2 8 1988 at his residence and his acknowledgement obtained and he had been sent to the Central Prison, Trivandrum.
Mr. Vaidyanathan 's submission that the detenu could not have been absconding in view of his reporting as required by the bail order is not accept able.
The second condition in the bail order said: "that he will not change residents without prior permission of Court to 25 2 1988".
There was no mention regarding the period thereafter.
There is also no statement in the affidavit to the effect that the detenu was all along available at his residence or that he had not changed it.
But even assuming that he was residing there, there is no reason to disbelieve the statement of the police that they were unable to find him earlier than they actually did.
219 Where the passage of time is caused by the detenu him self by absconding, the satisfaction of the detaining au thority cannot be doubted and the detention cannot be held to be bad on that ground.
In Bhawarlal Ganeshmalji vs State of Tamil Nadu and Anr., ; , where the appel lant had been evading arrest and surrendering after three years of the making of order of detention under the COFEPOSA Act the order was held to be still effective as the detenu himself was to be blamed for the delay.
This Court observed that there must be a 'live and proximate link ' between the grounds of detention alleged by the detaining authority and the avowed purpose of detention, namely, the prevention of smuggling activities.
In appropriate cases it could be assumed that the link was snapped if there was a long and unexplained delay between the date of order of detention and the arrest of the detenu and in such a case the order of detention could be struck down unless the grounds indicated a fresh application of mind of the detaining authority to the new situation and the changed circumstances.
But where the delay is not only adequately explained but also is found to be the result of the recalcitrant or refractory conduct of the detenu in evading arrest, there is warrant to consid er the 'link ' not snapped but strengthened.
In that case the order of detention was made on December 19, 1974.
The detenu was found to be absconding.
Action was taken pursuant to section 7 of the COFEPOSA Act and he was proclaimed as a person absconding under section 82 of the Criminal Procedure Code.
The proclamation was published in several leading English and local daily newspapers.
Several other steps were taken despite which he could not be arrested until he sur rendered himself on February 1, 1978.
In Shafiq Ahmad vs District Magistrate, Meerut, [989] 4 SCC 556, relied on by appellant, it has been clearly held that what amounts to unreasonable delay depends on facts and circumstances of each case.
Where reason for the delay was stated to be abscondence of the detenu, mere failure on the part of the authorities to take action under section 7 of the National Security Act by itself was not sufficient to vitiate the order in view of the fact that the Police force remained extremely busy in tackling the serious law and order problem.
However it was not accepted as a proper explanation for the delay in arresting the detenu.
In that case the alleged incidents were on April 2/3/9, 1988.
The detention order was passed on April 15, 1988 and the detenu was arrested on October 2, 1988.
The submission was that there was inordinate delay in arresting the petitioner pursuant to the order and that it indicated that the order was not based on a bona fide and genuine belief that the action or conduct of the petitioner were 220 such that the same were prejudicial to the maintenance of public order.
Sabyasachi Mukharji J., as my Lord the Chief Justice then was, observed that whether there was unreasona ble delay or not would depend upon the facts and circum stances of a particular situation and if in a situation the person concerned was not available and could not be served, then the mere fact that the action under section 7 of the Act had not been taken, would not be a ground for holding that the detention order was bad.
Failure to take action even if there was no scope for action under section 7 of the COFEPOSA Act, would not by itself be a decisive or determi native of the question whether there was undue delay in serving the order of detention.
In Shafiq 's case the affidavit affirmed by the detaining authority showed that several raids of the petitioner 's premises for the service of the order dated 15 4 1988 were conducted and the authorities had made all efforts to serve the order on the detenu, but he was all along absconding and the house of the petitioner for this purpose was raided on several occasions.
However, in view of the fact that in that case from April 15, 1988 to May 12, 1988 no attempt had been made to contact or arrest the petitioner and there was no explanation as to why from September 27, 1988 to October 2, 1988 no attempt had been made, there was unexplained delay and it was, therefore, not possible for the Court to be satisfied that the District Magistrate had applied his mind and arrived at the subjective satisfaction that there was genuine need for detention of the detenu.
The detention order was accordingly quashed.
We have already noted how in the instant case the Home Secretary sent detailed instructions to the Superintendent of Police, Malapuram on 27 6 1988 and sent the teleprinter message on 19 7 1988 and the Superintendent of Police wrote back on 27 7 1988 stating that the detenu was absconding and his whereabouts were not known and all possible efforts were being made to execute the order and on 2 8 1988 the Superin tendent of Police reported that the order was served on 2 8 1988 at his residence and that he was sent to the Cen tral Prison, Trivandrum.
Though it could not be denied that the detenu was reporting before the Superintendent (Intelli gence) Air Customs, Trivandrum on every Wednesday, the Superintendent of Police, Malapuram apparently was not aware of it.
Under the above facts and circumstances we are of the view that there was no inordinate and unexplained delay in the period of 38 days between the detention order and its execution so as to snap the nexus between the two or to render the grounds stale or to indicate that the detaining authority was 221 not satisfied as to the genuine need for detention of the detenu.
This submission is accordingly rejected.
We may pause here to point out that the circumstances in the present case seem to indicate a certain degree of lack of coordination between the detaining authorities and those entrusted with the execution of the detention order.
This is clearly seen from two circumstances in the present case.
Though the detention order was sent for service on 27 6 1988, a reminder was issued only on 19 7 1988.
Apparently, the Superintendent of Police was finding it difficult to trace the detenu but he did not report this immediately and mentioned it to the detaining authority only on 27 7 1988.
He was obviously not aware that, under the terms of the bail order the detenu had to report every week at the Customs Office.
If he had reported his difficulty earlier or if the detaining authorities had apprised him of the terms of the bail order, it would have been possible to have had the detention order served earlier.
These communication gaps should, we think, be avoided since it is of the very essence of a detention order to have it served at the earliest.
While we have accepted the explanation tendered in the present case for this delay, we would like the State to ensure that such delays do not occur as, apart from giving the detenu a ground for attacking the detention order.
such delay really tends to frustrate and defeat the very purpose of preventive detention.
The next submission of counsel was that the detaining authority should have realised that the seizure of the detenu 's passports was by itself sufficient to restrain the detenu 's smuggling activities, if any, and refrained from passing the order of detention.
We see no force in this contention.
This was no doubt one of the factors that the detaining authority should have taken (and did in fact take) into account but it was for him to assess the weight to be attached to such a circumstance in arriving at his final decision and it is not open to us to interfere with the merits of his decision.
We, therefore, reject this conten tion of Mr. Vaidyanathan.
The next submission is that of non supply of the bail application and the bail order.
This Court, as was observed in Mangalbhai Motiram Patel vs State of Maharashtra, ; , has 'forged ' certain procedural safeguards for citizens under preventive detention.
The Constitutional imperatives in Article 22(5) are two fold: (a) The detaining authority must, as soon as may be i.e. as soon as practica ble, after the detention communicate to the detenu the grounds on which the order of detention has been made, and (2) the detaining authority 222 must afford the detenu the earliest opportunity of making the representation against the order of detention.
The right is to make an effective representation and when some docu ments are referred to or relied on in the grounds of deten tion, without copies of such documents, the grounds of detention would not be complete.
The detenu has, therefore, the right to be furnished with the grounds of detention along with the documents so referred to or relied on.
If there is failure or even delay in furnishing those documents it would amount to denial of the right to make an effective representation.
This has been settled by a long line of decisions: Ramachandra A. Kamat vs Union of India, ; ; Frances Coralie Mullin vs W.C. Kharnbra & Ors., ; ; Smt.
Ichhu Devi Chararia vs Union of India, ; ; Pritam Nath Hoon vs Union of India, ; ; Shri Tushar Thakkar vs Union of India, ; Lallubhai Jogibhai Patel vs Union of India, ; ; Kirit Kumar Chaman Lal Kundaliya vs Union of India, and Smt.
Ana Carelina D 'Souza vs Union of India, It is immaterial whether the detenu already knew about their contents or not.
In Mehrunissa vs State of Maharash tra, , it was held that the fact that the detenu was aware of the contents of the documents not fur nished was immaterial and non furnishing of the copy of the seizure list was held to be fatal.
To appreciate this point one has to bear in mind that the detenu is in jail and has no access to his own documents.
In Mohd. Zakir vs Delhi Administration, 16 it was reiterated that it being a Constitutional imperative for the detaining authori ty to give the documents relied on and referred to in the order of detention pari passue the grounds of detention, those should be furnished at the earliest so that the detenu could make an effective representation immediately instead of waiting for the documents to be supplied with.
The ques tion of demanding the documents was wholly irrelevant and the infirmity in that regard was violative of Constitutional safeguards enshrined in Article 22(5).
It is also imperative that if the detenu was already in jail the grounds of detention are to show the awareness of that fact on the part of the detaining authority, otherwise there would be non application of mind and detention order vitiated thereby.
In the instant case though the order of detention ex facie did not mention of the detenu having been in jail, in paragraph 3 of the grounds of detention it was said that he was arrested by the Superintendent (Intelli gence) Air Customs, Trivandrum on 31 1 1988 and he was produced before the Additional Chief Judicial Magistrate (Economic Offences), Erna 223 kulam the same day.
It was clearly said: "You were remanded to judicial custody and you were subsequently released on bail," From the Records it appears that the bail application and the bail order were furnished to the detaining authority on his enquiry.
It cannot, therefore, be said that the detaining authority did not consider or rely on them.
It is difficult, therefore, to accept the submission of Mr, Kunhi kannan that those were not relied on by the detaining au thority.
The bail application contained the grounds for bail including that he had been falsely implicated as an accused in the case at the instance of persons who were inimically disposed towards him, and the bail order contained the conditions subject to which the bail was granted including that the accused, if released on bail, would report to the Superintendent (Intelligence) Air Customs, Trivandrum on every Wednesday until further order, and that "he will not change his residence without prior permission of court to 25 2 1988".
This being the position in law, and non supply of the bail application and the bail order having been apparent, the legal consequence is bound to follow.
In Khudiram Das vs State of West Bengal, ; , this Court held that where the liberty of the subject is involved it is the bounden duty of the Court to satisfy itself that all the safeguards provided by the law have been scrupulously observed and that the subject is not deprived of his personal liberty otherwise than in accordance with law.
The Constitutional requirement of Article 22(5) is that all the basic facts and particulars which influenced the detaining authority in arriving at the requisite satisfac tion leading to making the detention order must be communi cated to the detenu so that the detenu may have an opportu nity of making an effective representation against the order of detention.
"It is, therefore, not only the right of the Court, but also its duty as well, to examine what are the basic facts and materials which actually and in fact weighed with the detaining authority in reaching the requisite satisfaction.
The judicial scrutiny cannot be foreclosed by a mere statement of the detaining authority that it has taken into account only certain basic facts and materials and though other basic facts and materials were before it, it has not allowed them to influence its satisfaction.
The Court is entitled to examine the correctness of this state ment and determine for itself whether there were any other basic facts or materials, apart from those admitted by it, which could have reasonably influenced the decision of the detaining authority and for that purpose, the Court can certainly require the detaining authority to produce and make available to the Court the entire record of the case which was before it.
That is the least the Court can do to ensure observance of the requirements of law by the detain ing authority.
" 224 From the decision in Ramesh Yadav vs District Magis trate, Etah & Ors.
, , it can be said that the facts of the detenu having been in jail and his being granted bail are by themselves not enough to justify the passing of the detention order.
In that case it was men tioned in the grounds of detention: "At this time you were detained in the District Jail, Main puri and you have filed an application for bail in the court of law which is fixed for hearing on September 17, 1984, and there is positive apprehension that after having bail you will come out of the jail and I am convinced that after being released on bail you will indulge in activities preju dicial to the maintenance of public order.
" It was observed that the detention order was passed as the detaining authority was apprehensive that in case the detenu was released on bail, he would again carry on his criminal activities in the area.
If the apprehension of the detaining authority was true, the bail application had to be opposed and in case bail was granted, challenge against that order in the higher forum had to be raised.
Merely on the ground that an accused in detention as an under trial prisoner was likely to get bail an order of detention under the National Security Act should not ordinarily be passed.
The detention order was accordingly quashed.
In State of U.P. vs Kamal Kishore Saini, ; , the application of a co accused as well as statements made in the bail application filed on behalf of the detenu alleging that the detenu was falsely implicated and the Police report thereon were not produced before the detaining authority before passing the detention order.
Holding that the detention order was invalid on that ground, it was observed: "Similarly with regard to ground No. 3, the application of the co accused as well as the statement made in the bail application filed on behalf of the detenus alleging that they had been falsely implicated in the same case and the police report thereon, were not produced before the detain ing authority before passing of the detention order . .
It is incumbent to place all the vital materials before the detaining authority to enable him to come to a subjective satisfaction as to the passing of the order of detention as mandatorily required under the Act.
" 225 Non consideration of the bail order would have, there fore, in this case amounted to non application of mind.
In Union of India vs Manoharlal Narang, ; , the Supreme Court 's interim order in pending appeal against High Court 's quashing of a previous order of detention against the same detenu was not considered by the detaining authori ty while making the impugned subsequent order against him.
By the interim order Supreme Court had permitted the detenu to be at large on condition of his reporting to the police station daily.
It was held that non consideration of the interim order which constituted a relevant and important material was fatal to the subsequent detention order on ground of non application of mind.
If the detaining authori ty considered that order one could not state with definite ness which way his subjective satisfaction would have react ed and it could have persuaded the detaining authority to desist from passing the order of detention.
If in the in stant case the bail order on condition of the detenu 's reporting to the Customs authorities was not considered the detention order itself would have been affected.
Therefore, it cannot be held that while passing the detention order the bail order was not relied on by the detaining authority.
In section Gurdip Singh vs Union of India, , follow ing Ichhu Devi Choraria vs Union of India, (supra) and Smt.
Shalini Soni vs Union of India, ; , it was reiterated that if the documents which formed the basis of the order of detention were not served on the detenu along with the grounds of detention, in the eye of law there would be no service of the grounds of detention and that circum stances would vitiate his detention and make it void ab initio.
Mr. Kunhikannan relies on Haridas Amarchand Shah V.K.L. Verma; , , wherein the application for bail and the order dated September 15, 1987 passed by the Metro politan Magistrate granting conditional bail were placed before the detaining authority, but the application dated September 21, 1987 for variation of the conditions and the order made by the Metropolitan Magistrate thereon were not placed before the detaining authority, this Court held that the application for variation of conditions on bail and the order passed by the Metropolitan Magistrate varying the conditions of bail were, in its opinion, not vital and material documents inasmuch as the granting of bail by the Magistrate enabled the detenu to come out and carry on his business as before and variation of the conditions were not considered vital for the satisfaction as to need for deten tion.
That case is, therefore, distinguishable on facts.
Considering the facts in the instant case, the bail applica tion and 226 the bail order were vital materials for consideration.
If those were not considered the satisfaction of the detaining authority itself would have been impaired, and if those had been considered, they would be documents relied on by the detaining authority though the specifically mentioned in the annexure to the order of detention and those ought to have formed part of the documents.
supplied to the detenu with the grounds of detention and without them the grounds them selves could not be said to have been complete.
We have, therefore, no alternative but to hold that it amounted to denial of the detenu 's right to make an effective represen tation and that it resulted in violation of Article of the Constitution of India rendering the continued detention of the detenu illegal and entitling the detenu to be set at liberty in this case.
Mr. Vaidyanathan 's last submission is that the order of declaration dated 23 8 1988 is bad on the ground that the show cause notice dated 7 7 1988 and his reply thereto dated 26 7 1988, the bail application and the bail order dated 12 2 1988 as also the fact that the two passports of the detenu were seized were not placed before the declaring authority before he issued the declaration order under section 9(1) of the COFEPOSA Act.
Mr. Mahajan clearly stated that all the materials that were placed before the detaining authority were also placed before the declaring authority, which meant that the show cause notice, the reply thereto, and the seizure list of the passports were not placed before him.
The declaration made under section 9 of the COFEPOSA Act by the Additional Secretary to the Government of India on 23 8 1988 reads as under: "Whereas Shri M. Ahamedkutty S/o Shri Cheriya Saidukutty has been detained on 2 8 1988 in pursuance of order No. 35158/SSAI/88/Home dated 25 6 1988 of the Government of Kerala made under Section 3(1) of the Conservation of For eign Exchange and Prevention of Smuggling Activities Act, 1974 with a view to preventing him from smuggling gold; And whereas I, the undersigned, specially empowered in this behalf by the Central Government, have carefully considered the grounds of detention and the material served on the detenu: 227 Now, therefore, I. the undersigned, hereby declare that I am satisfied that the aforesaid Shri Ahamedkutty S/O Shri Cheriya Saidukutty is likely to smuggle goods into and through Trivandrum Airport which is an area highly vulnera ble to smuggling as defined in Explanation 1 to Section 9(1) of the .
" This order ex facie says that the declaring authority had carefully considered the grounds of detention and the materials served on the detenu and on those materials the authority was satisfied that the detenu was likely to smug gle goods into and through Trivandrum Airport which was an area highly vulnerable to smuggling as defined in Explana tion 1 to section 9(1) of the COFEPOSA Act.
The question is whether there were adequate materials for the authority being satisfied that the detenu was likely to smuggle goods.
The detenu having already been under detention and his detention confirmed by the Government under section 8, the Advisory Board having reported that there was sufficient cause for continued detention of the detenu, were there still enough materials to be satisfied that the detenu was likely to smuggle goods into Trivandrum vulnerable area? To decide this question, Mr. Vaidyanathan urged, it is neces sary to remember that the passports of the detenu had been seized by the authorities.
According to counsel, if the detaining authority had applied his mind to this important fact, he could not have been satisfied that his detention was necessary to restrain the detenu 's activities of smug gling.
This point we have touched upon earlier.
In any event, Mr. Vaidyanathan submits, the declaring authority could not have been satisfied that the detenu "was likely to smuggle goods into and through the Trivandrum airport" (which is the vulnerable area) for, without a passport, he could not come in or go out through the airport.
In Smt.
Rekhaben Virendra Kapadia vs State of Gujarat & Ors., ; , the declaring authority who passed an order under section 9(1) had also stated that the detenu "engages" and "is likely to engage" in transporting smuggled goods.
To that extent it was observed by this Court that there was no material for coming to the conclusion that the detenu was "engaging" himself in the unlawful activities as the detenu had been under detention.
However, in an appro priate case if the declaring authority came to the conclu sion taking into account the past activities of the detenu that he was likely to continue to indulge in such activities in future there might be no justification for this Court to interfere.
It was quite likely that persons 228 who were systematically involved in smuggling activities could cause reasonable apprehension in the minds of the declaring authority that they were likely to continue their prejudicial activities.
The emphasis in section 9 appears to be on the satisfac tion that the detenu (a) smuggles or is likely to smuggle goods into, out of or through any area highly vulnerable to smuggling; or (b) abets or is likely to abet the smuggling of goods into, out of or through any area highly vulnerable to smuggling; or (c) engages or is likely to engage in transporting or concealing or keeping smuggled goods in any area highly ' vulnerable to smuggling; and in making a decla ration to that effect within 5 weeks of the detention of the person.
Explanation i defines "area highly vulnerable to smuggling" and Explanation 2 defines 'customs airport" and the "customs station".
It is true that under section 10 of the COFEPOSA Act, where the provisions of section 9 apply, the maximum period of detention shall be a period of two years from the date of detention or the specified period whichever period expires later.
However, nothing contained in section 9 shall affect the power of the appropriate Government in either case to revoke or modify the detention order at any earlier time.
This may imply an obligation on the part of the detaining authority to place the facts and materials that occurred between the date of detention and the date of declaration, so as to justify prolongation of the period of detention.
In Smt.
Madhu Khanna vs Administra tor, Union Territory Delhi, , where detenu 's representation was rejected and declaration under section 9(1) was made on the same day but in different files, mere non reference of the representation in the declaration was held not to have shown failure of the declaring authority to consider the representation before making the declaration.
However, as we have taken the view that non furnishing of the copies of the bail application and the bail order has resulted in violation of Article 22(5) of the Constitution, we do not express any opinion on this submission.
In the result, the detention order and the impugned judgment are set aside, the appeal is allowed and the detenu is to be set at liberty in this case.
R.S.S. Appeal allowed.
| IN-Abs | After the appellant landed at Trivandrum Airport from Abu Dhabi, he was intercepted by the Customs officials detecting that he smuggled 1280 gms.
of gold.
He was arrest ed on 31.1.1988.
On 12.2.1988 he was granted bail on certain conditions.
With a view to preventing the appellant from smuggling gold, the impugned detention order was passed against him on 25.6.1988 by the Home Secretary, Government of Kerala, in exercise of the powers conferred by section 3(1)(i) of the .
The appellant was taken into custody on 2.8.1988.
The Appropriate Authority and the Advisory Board found sufficient cause for his detention.
The detenu challenged his detention moving a Habeas Corpus petition under Article 226 of the Constitution, read with section 482, Cr.
P.C., which was dismissed in limine by the High Court.
Before this Court.
the main grounds of challenge to the detention order were that (1) after the event there was inordinate delay in passing the detention order which showed that there was no genuine.
need for detention of the appel lant; (2) there was inordinate and unexplained delay of 38 days in execution of the detention order; (3) all the docu ments and materials, particularly the appellants bail appli cation, the bail order, the show cause notice and his reply thereto were not placed before the detaining authority; (4) these documents and the fact that the appellant 's old and new passports were seized and without those it would not be possible for the appellant to carry on smuggling, were not brought to the notice of the declaring authority; and (5) there was 210 non application of mind.
On behalf of the State of Kerala it was submitted, inter alia, that (1) there was no such delay between the date of detection and the date of passing the order of detention so as to make the grounds stale or to snap ' the relation; (2) that the delay in execution of the detention order had been explained; and (3) that the bail application as well as the bail order were placed before the detaining authority but the same having not been referred to or relied on by the detaining authority, copies thereof were not required to be furnished to the detenu along with the grounds of detention.
On behalf of the Union of India it was submitted that all the documents and materials that were required to be placed before the declaring authority were duly placed and on consideration of the relevant materials the declaring authority validly made the declaration.
Allowing the appeal and setting aside the order of detention, this Court, HELD: (1) It has been laid down by this Court in a series of decisions that the rule as to unexplained delay in taking action is not inflexible.
Under a law like the COFE POSA Act enacted for the purpose of dealing effectively with persons engaged in smuggling and foreign exchange racketeer ing who, owing to their large resources and influence, have been posing a serious threat to the economy and thereby to the security of the nation, the courts should not merely on account of the delay in making of an order of detention assume that such delay, if not satisfactorily explained.
must necessarily give rise to an inference that there was no sufficient material for the subjective satisfaction of the detaining authority or that such subjective satisfaction was not genuinely reached.
Taking of such a view would not be warranted unless the Court finds that the grounds are stale or illusory or that there was no real nexus between the grounds and the impugned order of detention.
[217B E] Ashok Narain vs Union of India, ; Smt.
Rekhaben Virendra Kapadia vs State of Gujarat, ; ; Sheikh Salim vs The State of West Bengal, ; ; Rajendrakumar Natvarlal Shah vs State of Gujarat, ; ; Olia Mallick vs The State of West Bengal, ; Golam Hussain vs The Commissioner of Police, ; ; Odut Ali Miah vs The State of West Bengal, ; Vijay Narain Singh vs State of Bihar, 211 ; Gora vs State of West Bengal, ; ; Rai Kumar Singh vs State of Bihar, ; ; Smt.
Hemlata Kantilal Shah vs State of Maharasthra, ; , referred to.
(2) In appropriate cases it could be assumed that the link was snapped if there was a long and unexplained delay between the date of order of detention and the arrest of the detenu and in such a case the order of detention could be struck down unless the grounds indicated a fresh application of mind of the detaining authority to the new situation and the changed circumstances.
But where the delay is not only adequately explained but also is found to be the result of the recalcitrant or refractory conduct of the detenu in evading arrest, there is warrant to consider the 'link ' not snapped but strengthened.
[219C D] Mohammed Saleem vs Union of India, [1989] 3 Delhi Lawyer 77; Bhawarlal Ganeshmalji vs State of Tamil Nadu, ; ; Shafiq Ahmad vs District Magistrate, Meerut, [1989] 4 SCC 556, referred to.
(3) Seizure of the detenu 's passports was no doubt one of the factors that the detaining authority should have taken (and did in fact take) into account, but it was for him to assess the weight to be attached to such a circum stance in arriving at his final decision and it is not open to the Court to interfere with the merits of his decision.
[221E F] (4) From the records it appears that the bail applica tion and the bail order were furnished to the detaining authority on his enquiry.
It is difficult, therefore, to accept the submission of the State Government that those were not relied on by the detaining authority.
[223A B] (5) The constitutional requirement of Article 22(5) is that all the basic facts and particulars which influenced the detaining authority in arriving at the requisite satis faction leading to making the detention order must be commu nicated to the detenu so that the detenu may have an oppor tunity of making an effective representation against the order of detention.
It is immaterial whether the detenu already knew about their contents or not.
[223E F] Ramchandra A. Kamat vs Union of India, ; ; Frances Coralia Muffin vs W.C. Khambra.
; ; Smt.
Ichhu Devi Choraria vs Union Of India, ; ; Pritam Nath Hoon vs Union of India, ; ; Shri Tushar Thakkar vs Union of India, ; Lallubhai Jogibhai Patel vs Union of 212 India; , ; Kirit Kumar Chaman Lal Kundaliya vs Union of India, ; Smt.
Ana Carolina D 'Souza vs Union of India, ; Mehrunissa vs State of Maharashtra, ; Mohd. Zakir vs Delhi Administration, and Khudiram Das vs State of West Bengal, ; , referred to.
(6) If the documents which formed the basis of the order of detention were not served on the detenu along with the grounds of detention, in the eye of law there would be no service of the grounds of detention and that circumstance would vitiate his detention and make it void ab initio.
[225D E] State of U.P. vs Kamal Kishore Saini, ; ; Union of India vs Manoharlal Narang, ; ; section Gurdip Singh vs Union of India, ; Ichhu Devi Choraria vs Union of India, ; ; Smt.
Shalini Soni vs Union of India, ; , referred to.
Haridas Amarchand Shah vs K.L. Verma, ; distinguished.
(7) The bail application and the bail order, in the instant case, were vital materials for consideration.
If those were not considered the satisfaction of the detaining authority itself would have been impaired, and if those had been considered, they would be documents relied on by the detaining authority though not specifically mentioned in the annexure to the order of detention and those ought to have formed part of the documents supplied to the detenu with the grounds of detention and without them the grounds themselves could not be said to have been complete.[226A B] (8) There is no alternative but to hold that non supply of essential documents to the detenu amounted to denial of the detenu 's right to make an effective representation and that it resulted in violation of Article 22(5) of the Con stitution rendered the continue detention of the detenu illegal and entitling the detenu to be set at liberty.
[226B C] (9) Sections 9 and 10 of the COFEPOSA Act imply an obligation on the part of the detaining authority to place the facts and materials that occurred between the date of detention and the date of declaration, so as to justify prolongation of the period of detention.
[228D E] 213 Smt.
Rekhaben Virendra Kapadia vs State of Gujarat & Ors., ; ; Smt.
Madhu Khanna vs Administrator, Union Territory of Delhi, , referred to.
|
Criminal Appeal No. 669 of 1989.
From the Judgment and Order dated 18.5.1989 of the Designated Court, Poona in Crl.
Bail Application No. 11 of 1989.
G. Ramaswamy, Additional Solicitor General, S.V. Tar kunde and A.M. Khanwilkar for the Appellant.
U.R. Lalit and V.N. Ganpule for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
By the impugned order dated the 18th May, 1989 the Designated Court, Pune directed the respondent to be released on bail.
The respondent was accused of having committed offence under Section 3(1) of the Terrorist and Disruptive Activities (Prevention) Act, 1987 (hereinafter referred to as 'the Act ') besides the offences punishable under Sections 148, 149, 120 B and 302 of the Indian Penal Code.
The respondent was the member of the Shiv Sena Party and the Chief of the Thane District Unit.
In consequence of the defeat of the party in Mayoral election held on 20th March, 1989 the party felt that 75 there was cross voting and there were traitors among them.
There had been a declaration by the respondent that such traitors would not be spared.
The respondent was arrested in connection with the murder of one of the Corporators Shrid har Khopkar on 21.4.
1989 on registering Crime No. 1348/89.
In releasing the respondent on bail while investigation was pending, the Designated Court appears to have been influenced by the fact that respondent was the leader of Political Party.
The court assumed that as a leader, he would not be involved in such crimes and that there are reasonable grounds for believing that the respondent is not guilty of any offence under the Act.
Having heard both the sides, we feel that the whole approach by the learned Judge was misconceived and the order is unsustainable.
We have been taken through the entire proceedings.
We find that the learned Judge has not noticed the relevant provisions of the Act which restrict the powers of the Court in granting bail.
The learned Judge had also refused to consider the materials placed before it for the purpose of satisfying himself whether there are no reasona ble grounds to believe that the respondent has committed the offence.
In the course of the investigation witnesses have been questioned and their statements have been reduced to writing.
The learned Judge refused to consider the state ments recorded in the course of the investigation for the simple reason that such statements had not been read out in open Court though the Court was empowered to peruse the case diary for the purpose of satisfying itself as to the stage of investigation and the nature of the evidence that had been collected.
Sub Section (8) of Section 20 of the Act clearly pro vides that unless the Court is satisfied for the reasons to be recorded that there are reasonable grounds to believe that the respondent is not involved in disruptive activi ties, bail shall ordinarily be refused.
Even under the provisions of Sections 437 and 438 of the Code of Criminal Procedure, the powers of the Sessions Judge are not unfet tered.
The salient principles in granting bail in grave crimes have not been taken note of.
This Court would not ordinarily interfere with the discretion of the lower court in granting or refusing bail but in cases where bail has been granted on irrelevant considerations, such as the status or influence of the person accused and regardless of the nature of the accusa tion and relevancy of materials on record, this Court would not 76 hesitate to interfere for the ends of justice.
There are no hard and fast rules regarding grant or refusal of bail, each case has to be considered on its own merits.
The matter always calls for judicious exercise of discretion by the Court.
Where the offence is of serious nature the Court has to decide the question of grant of bail in the light of such considerations as the nature and seri ousness of offence, character of the evidence, circumstances which are peculiar to the accused, a reasonable possibility of presence of the accused not being secured at the trial and the reasonable apprehension of witness being tampered with, the larger interest of the public or such similar other considerations.
In the present case the learned Judge observed that it is a case of respectable person of a big political organisa tion, his freedom cannot be curtailed if he is entitled to bail.
His liberty cannot be curbed if enlarged on bail and, therefore, no kind of condition is required to be imposed.
The Court also observed that being a leader of the big political organisation one cannot expect that the respondent will commit any offence if enlarged on bail and he cannot be called to be a criminal.
The learned Judge was obsessed by the fact that the respondent was associated with a political party and was oblivious of the nature of the allegations made against him and the relevant materials indicating that the respondent had been making utterances inciting violence.
The respondent gave repeated statements to the Press saying that the traitors ' life will be made difficult and probably they will be killed.
This was published in Marathi Daily 'Navakal ' on 22.3.89.
He repeated his threat and this ap peared in an interview given to the reporter of the Weekly Magazine 'Lokprabha ' in its issue of 9.4.1989.
In an inter view in daily 'Urdu Times ' dated 16.4.1989 the respondent asserted that he knew the names of the traitors but could not disclose the same.
He also asserted that the punishment for traitors is death and they would be killed and this decision has not been taken by him in anger.
In the backdrop of such assertions, it was necessary for the Court to consider the further materials collected by the investigating agency by recording statements of witness es.
The court below misdirected itself in refusing to look into such statements and concluding that it is a case for granting bail taking into account only the position held by the respondent in the party.
The court clearly erred in disposing of the application for bail.
77 In view of what has been stated above, we set aside the order of the Designated Court and allow the appeal and cancel the bail granted to the respondent, without prejudice to his right to move the Designated Court at any subsequent stage.
G.N. Appeal allowed.
| IN-Abs | The respondent was a member of a political party.
Conse quent upon the defeat of the party in Mayoral elections held in March, 1989, the party felt that there was cross voting and there were traitors among them and the respondent made a declaration that such traitors would not be spared.
Thereaf ter the respondent was arrested in connection with the murder of one of the Corporators.
He was accused of having committed offence under Section 3(1) of the Terrorist and Disruptive Activities (Prevention) Act, 1987, besides of fences punishable under Sections 148, 149, 120 B and 302 of the Indian Penal Code.
The designated court released the respondent on bail while the investigation was pending.
This appeal by the State is against the order of the designated court.
Allowing the appeal, this Court, HELD: 1.
Sub Section (8) of SeCtion 20 of the Act clear ly provides that unless the court is satisfied for the reasons to be recorded that there are reasonable grounds to believe that the respondent is not involved in disruptive activities bail shall ordinarily be refused.
Even under the provisions of Section 437 and 438 of the Code of ' Criminal Procedure, the powers of the Sessions Judge are not unfet tered.
[75F] 2.
Where the offence is of serious nature the Court has to decide the question of grant of bail in the light of such considerations as the nature and seriousness of offence, character of the evidence, circums 74 tances which are peculiar to the accused, a reasonable possibility of presence of the accused not being secured at the trial and the reasonable apprehension of witness being tampered with, the larger interest of the public or such similar other consideration.
[76B C] 3.
In the instant case, the salient principles in grant ing bail in grave crimes have not been taken note of.
The Court was obsessed by the fact that the respondent was associated with a political party and was oblivious of the nature of the allegations made against him and the relevant materials indicating that the respondent had been making utterances inciting violence.
[76D] 4.
This court would not ordinarily interfere with the discretion of the lower court in granting or refusing bail but in cases where bail has been granted on irrelevant considerations, such as the status or influence of the person accused and regardless of the nature of the accusa tion and relevancy of materials on record, this Court would not hesitate to interfere for the ends of justice.
[75G H; 76A]
|
Civil Appeal No. 10234 of 1983.
From the Judgment and Order dated 3.1.19/9 of the Alla habad High Court in Civil Revision No. 3714 of 1978.
K.B. Rohtagi for the Appellant.
R.K. Garg and D.K. Garg for the Respondent.
The Judgment of the Court was delivered by AHMADI, J.
The short question which arises for our consideration in this appeal by special leave is whether a tenant of a premises constructed in 1967 is entitled to the protection of Section 39 of the U.P. Urban Buildings (Regu lation of Letting, Rent and Eviction) Act, 1972 (Act No. 13 of 1972 as amended by Act No. 17 of 1985), hereinafter called 'the Act ', in an eviction suit instituted before the commencement of the Act.
The Act came into force w.e.f.
15th July, 1972 by virtue of the notification issued by the State Government in exercise of power conferred by Sub Section 4 of Section 1 of the Act, vide Notification No. 3409/XXIX 59 72 dated 27th June, 1972 published in the U.P. Government Gazette, Extra, dated 1st July, 1972.
The Act was enacted for inter alia regulation of letting and eviction of tenants from certain classes of buildings situate in urban areas specified in Sub Section (3) of Section 1.
Section 2 indicates the buildings to which the Act shall not apply.
We are concerned with Sub Section (2) of Section 2, the rele vant part whereof reads as under: "Except as provided in sub section (5) of section 12, sub section (1 A) of Section 21, sub section (2) of Section 24, Sections 24 A, 24 B, 24 C or sub section (3) of section 29, nothing in this Act shall apply to building during a period of ten years from the date on which its construction is completed".
Since it is not disputed before us that the construction of the suit property was completed in 1967, we need not set out the provisos and the explanations to the sub section.
Section 3 defines the various expressions used in the Act.
Under 189 clause (a) 'tenant ', in relation to a building means a person by whom its rent is payable and 'building ' according to clause (i) means a residential or non residential roofed structure including any land, garages and out houses appur tenant thereto.
Any person to whom rent is or if the build ing were let, would be, payable, including his agent or attorney or such person, is a 'landlord ' within the meaning of clause (j) of that section.
It would thus seem that but for the exemption granted by Section 2(2), the provisions of the Act would have applied to the letting of the suit prem ises.
The scheme of Section 2 is that buildings referred to in clauses (a) to (f) are exempt from the operation of the Act for all times (subject of course to legislative changes) whereas the exemption granted by Section 2(2) is for a period of ten years from the date of completion of construc tion.
Chapter III regulates to letting.
Section 11 provides that no person shall let any building except in pursuance of an allotment order issued by the District Magistrate under Section 16.
Chapter IV regulates eviction.
Section 20 inter alia prohibits the institution of a suit for eviction of a tenant from any building except on the grounds catalogued in clauses (a) to (g) of sub section (2) thereof.
Section 21 provides for the eviction of a tenant if the building is bonafide required by the landlord for his own use or the use of any of his family member.
The scheme of Chapters III & IV clearly shows that both the letting of and eviction from the buildings to which the Act applies are regulated by the provisions of the Act.
Section 39 of the Act with which we are mainly concerned finds its place in Chapter VII entitled Miscellaneous and Transitional Provisions.
That section reads as under: "Pending suits for eviction relating to building brought under regulation for the first time In any suit for evic tion of a tenant from any building to which the old Act did not apply, pending on the date of commencement of this Act, where the tenant within one month from such date of com mencement or from the date of his knowledge of the pendency of the suit, whichever be later, deposits in the court before which the suit is pending, the entire amount of rent and damages for use and occupation (such damages for use and occupation being calculated at the same rate as rent) to gether with interest thereon at the rate of nine per cent per annum and the landlord 's full cost of the suit, no decree for eviction shall be passed except on any of the 190 grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20, and parties shall be entitled to make necessary amendment in their pleadings and to adduce additional evidence where necessary.
" This Section carried an explanation which came to be omitted by Section 8(iv) (and be deemed always to have been omitted) of the Civil Laws Amendment Act, 1972.
Section 40 lays down that where an appeal or revision arising out of a suit for eviction of a tenant from any building to which the old Act did not apply is pending on the date of commencement of this Act, it shall be disposed of in accordance with the provi sions of Section 39, which shall mutatis mutandis apply.
The plain reading of Section 39 makes it clear that the said section obliges the court to refuse to pass a decree for eviction, except on any of the grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20, if the following four require ments are satisfied: (i) the building is one to which the old Act (the U.P. (Temporary) Control of Rent and Eviction Act, 1947 U.P. Act No. III of 1947) did not apply; (ii) the eviction suit must be pending on the date of commencement of the Act i.e., 15th July, 1972: (iii) the tenant deposits in court the entire amount of rent/damages for the use and occupation of the building together with interest at 9% per annum and the landlord 's full cost of the suit; and (iv) such deposit is made within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the eviction suit, whichever is later.
The benefit of Section 39 is extended mutatis mutandis to an appeal or revision arising out of an eviction suit to which the old Act did not apply provided the said appeal or revi sion was pending on the date of commencement of the Act.
On a plain reading of Section 39 it becomes clear that in a suit for eviction to which the said provision applies, the Court trying the suit is 191 precluded from passing a decree for eviction if the tenant deposits in court the entire amount of rent and damages together with interest at 9% per annum and the landlord 's full cost of the suit within the time allowed but this embargo does not apply if eviction is sought on the ground or grounds mentioned in the proviso to Sub section (1) or in clauses (b) to (g) of Sub section (2) of Section 20.
The ground mentioned in the proviso to sub section (1) of Sec tion 20 is determination of tenancy by efflux of time where the duration of tenancy is fixed under a compromise or adjustment arrived at with reference to a suit, appeal, revision or execution proceeding which is recorded in Court or is otherwise reduced to writing and signed by the tenant.
Sub section (2) of Section 20 enumerates the grounds in clauses (a) to (g) on which an eviction suit can be rounded against a tenant.
Clause (a) permits the institution of a suit for eviction if the tenant is in arrears of rent for not less than four months and has failed to pay the same within one month from the date of service of a notice of demand upon him.
The grounds in clauses (b) to (g) are other than arrears of rent.
From the fact that a suit rounded on anyone or more of the grounds set out in the proviso to sub section (1) and clauses (b) to (g) of sub section (2) of Section 20 is exempt from the operation of Section 39, it would seem that the legislature desired to grant protection from eviction where the same is sought on the sole ground of arrears of rent.
That is why in the exemption clause con tained in Section 39, clause (a) to sub section (2) of Section 20 which permits eviction on the ground of arrears of rent is deliberately and intentionally excluded and an embargo is created against the passing of an eviction decree if the tenant deposits in court within the time allowed the entire arrears of rent together with interest and costs.
If the suit is on anyone or more of the exempted grounds, the landlord is permitted to proceed with the same, if necessary by effecting an amendment in the pleading and by adducing additional evidence.
Such a suit may be continued and if the ground or grounds pleaded is/are proved, the court is enti tled to grant eviction.
It, therefore, seems clear to us that the legislature intended to protect eviction of a tenant on the ground of arrears of rent if the tenant com plied with the conditions of Section 39.
In the present proceedings it is not disputed that the construction of the demised premises was completed in 1967 and the letting had taken place in the same year.
It is also not disputed that immediately on the completion of ten years the tenant deposited on 2nd September, 1977 an amount of Rs.4,005 being the arrears of rent inclusive of interest and cost.
It is not disputed that this payment was made within one month after the expiry of the period of ten years stipu lated in 192 Section 2(2) of the Act to take advantage of Section 39 of the Act.
The eviction suit was admittedly filed on 27th May, 1972 i.e. before the commencement of the Act i.e. 15th July, 1972.
There is also no dispute that the provisions of the old Act did not apply to the suit.
On these undisputed facts the trial court gave the benefit of Section 39 and refused to order ejectment of the tenant.
The landlord filed a revision application which was rejected by the Second Addi tional District Judge, Bulandshahr, on 15th July, 1978.
The High Court rejected the landlord 's further revision applica tion on the ground that the question was concluded by the decision in R.D. Ram Nath & Co. & Anr.
vs Girdhari Lal & Anr.
, It is against the said decision that the present appeal is preferred.
The question then is wheth er or not the provision of Section 39 of the Act is attract ed in the backdrop of the above facts.
We may now consider the case law on the point to which our attention was called.
In Ram Swaroop Rai vs Lilavathi, ; 3 SCC 452, this Court while con struing section 2(2) of the Act observed that the burden is on the landlord to show that his case falls within the exemption engrafted in the said sub Section.
In the present case, since the facts are not in dispute the question of onus recedes in the background.
In Om Prakash Gupta etc.
vs Dig Vijen: drapal Gupta etc.
; , , a three Judge Bench had to consider the effect of section 2(2) read with section 39 of the Act.
In that case, an eviction suit was filed against the appellant tenant on the ground that the provisions of the Act did not apply to the demised shop and the tenant was therefore liable to be evicted.
The Trial Court decreed the suit on the finding that the construction of the suit shop was completed in 1967 and since 10 years had not elapsed from the date of completion of the construc tion the provisions of the Act had no application.
The tenant carried the matter in revision but the judgment and decree of the Trial Court was substantially maintained.
The tenant thereupon moved the High Court under section 115, C.P.C. The learned Single Judge who heard the revision remitted the matter to the Trial Court for recording a finding as to on what date the construction of the building could be said to have been completed within the meaning of section 2(2) read with Explanation I(a) thereto.
The Trial Court returned a finding to the effect that the construction of the disputed shop must be taken to have been completed on the date of the first assessment, i.e. 1st April, 1968, within the meaning of the said provision.
The tenant chal lenged the finding on the ground that the date of occupation should have been taken to be the date of completion of the construction and not the date of the first assessment.
The Division 193 Bench to which the case was referred concluded that the construction of the shop must be deemed to have been com pleted on 1st April, 1968 i.e. at the date of the first assessment and not at the date of actual occupation and hence the provisions of the Act had no application to the building till the date of the decision of the revision application on 23rd March, 1978 as the period of 10 years expired later on 31st March, 1978.
This Court upheld the finding that the date of construction must be taken, as the date of first assessment i.e. 1st April, 1968 and not the date of actual occupation.
To overcome this difficulty it was contended on behalf of the tenant that on a correct reading of section 2(2) the exemption engrafted therein would not embrace buildings constructed prior to the en forcement of the Act.
This Court construing the language of section 2(2) of the Act held that the sub section nowhere provided that the building should have been constructed after the commencement of the Act; to so interpret it would tantamount to adding words in it which was not permissible.
This Court, therefore, negatived the contention that the exemption under the sub section did not embrace buildings constructed before the Act came into force.
As pointed out earlier the revision application was decided on 23rd March, 1978 whereas the period of 10 years from the date of comple tion of the construction i.e. 1st April, 1968 was to end on 31st March, 1978 i.e. a week later.
Section 39 of the Act, therefore, clearly did not apply in the facts of that case.
Secondly, it was found that the suit was instituted on 23rd March, 1974 long after the commencement of the Act and was therefore not pending on 15th July, 1972 to attract the application of Section 39 of the Act.
For these reasons, this Court came to the conclusion that the appellant Om Prakash was not entitled to tile protection of section 39 of tile Act.
Two features which distinguish this case from the case on hand are: (i) that the revision application was disposed of by the High Court before the expiry of the moratorium period of 10 years granted by section 2(2) of the Act; and (ii) the suit having been filed long after the commencement of the Act on 15th July, 1972 could not be said to be pending at the date of the commencement of the Act to enable the tenant to seek redress under section 39 of the Act.
In Vineet Kumar vs Mangal Sain Wadhera, ; , an , eviction suit was filed on the ground of arrears of rent and damages for use and occupation of the demised premises pendente lite.
The tenant was inducted in the building stated to have been constructed in 1971 on 7th February, 1972, on a monthly rent of Rs.250.
The building in suit was assessed to house and water tax on 1st October, 197 1.
The tenant defaulted in the payment of rent 'despite service of notice dated 24th 194 March, 1977.
Admittedly, the suit was filed after the com mencement of the Act.
The point for consideration was wheth er the building which was not 10 years ' old on the date of the suit and was therefore exempted from the operation of the Act, would be governed by it on the expiry of the period of 10 years pendente lite.
Dealing with this contention this Court observed in paragraph 13 of the judgment as under: "The moment a building becomes ten years old to be reckoned from the date of completion, the new Rent Act would become applicable.
" The decision in Om Prakash Gupta 's case (supra) was rightly distinguished on the ground that it was not neces sary in that case to deal with the question whether the tenant would be entitled to the benefit of Section 39 as the building had not become ten years old when the revision was disposed of by the High Court on 23rd March, 1978.
Dealing next with the contention that the Court had to decide the case on the basis of the cause of action that had accrued before the institution of the suit and not on a new cause of action, this Court, relying on the observations to the effect that subsequent developments can be looked into made in paragraph 14 of the decision in Pasupuleti Venkates warlu vs
Motor and General Traders; , , ob served as under: "Normally amendment is not allowed if it changes the cause of action.
But it is well recognised that where the amend ment does not constitute an addition of a new cause of action, or raise a new case, but amounts to no more than adding to the facts already on the record, the amendment would be allowed even after the statutory period of limita tion.
The question in the present case is whether by seeking the benefit of Section 39 of the new Act there is a change in the cause of action." After referring to the case of A.K. Gupta & Sons vs Damodar Valley Corporation, ; , this Court further observed: "The appellant in the present case only seeks the protection of the new Rent Act which became applicable to the premises in question during the pendency of the litigation.
We see no reason why the benefit of the new Rent Act be 195 not given to the appellant.
Section 20 of the new Rent Act 'provides a bar to a suit for eviction of a tenant except on the specified grounds as provided in the section.
Subsection (4) of Section 20 stipulates that in any suit for eviction on the grounds mentioned in clauses (a) to sub section (2), viz. the arrears of rent, if at the first hearing of the suit the tenant in default pays all arrears of rent to the landlord or deposits in court the entire amount of rent and damages for use and occupation of the building due from him, such damages for use and occupation being calculated at the same rate as rent together with interest thereon at the rate of nine per cent per annum and the landlord 's cost of the suit in respect thereof after deducting therefrom any amount already deposited by the tenant under sub section (1) of Section 30, the court may, in lieu of passing a decree for eviction on that ground, pass an order relieving the tenant against his liability for eviction on that ground.
Sections 39 and 40 of the new Rent Act also indicate that the benefit of the new Act will be given to the tenant if the conditions contemplated in those sections are satisfied.
Section 39 also indicates that the parties are entitled to make neces sary amendment in their pleadings and to adduce additional evidence where necessary.
" On this line of reason this Court set aside the judgment and decree of the High Court insofar as it related to evic tion.
We find, with respect, that Their Lordships committed an error in overlooking the text of Section 39 of the Act.
That section in terms says that the suit must be pending at the commencement of the Act to seek the benefit of that provi sion.
Admittedly, the suit in question was filed after the commencement of the Act and hence the tenant was not enti tled to the benefit of Section 39 of the Act.
But that apart, in a subsequent decision of this Court in Nand Ki shore Marwah vs Samundri Devi, ; , this Court dissented from the view in Vineet Kumar 's case on the ground that the attention of the Court was not drawn to Om Prakash Gupta 's case (supra) which specifically considered the provisions of the Act and in particular the language of Section 39 of the Act to point out that in order to attract that provision it must be shown that the suit was pending at the commencement of the Act i.e. on 15th July, 1975.
Refer ring to Section 20 of the Act, which bars institution of a suit for eviction of a tenant except on grounds specified in clauses (a) to (g) this Court observed as under: 196 "This clearly indicates that the restriction put under Section 20 is to the institution of the suit itself and therefore it is clear that if the provisions of this Act applied then no suit for eviction can be instituted except on the ground 'specified in the sub sections of this sec tion.
Keeping in view the language of this section if we examine the provisions contained in sub section (2) of Section (2) it will be clear that for a newly constructed building the provisions of this Act will not apply for 10 years and therefore so far as the restriction under Section 20 is concerned they will not apply and therefore it is clear that within 10 years as provided for in sub section (2) of Section 2 restriction on the institution of suit as provided for in Section 20 subsection (1) quoted above will not be applicable and it is thus clear that during the pendency of the litigation even if 10 years expired the restriction will not be attracted as the suit has been instituted within 10 years and therefore restriction as provided for in Section 20 cannot be attracted.
" It may with respect, be pointed out that the comment that the Court 's attention was drawn to Om Prakash Gupta 's case is not correct as this case is specifically mentioned in paragraph 14 of the judgment in that case.
Lastly, in Atma Ram Mittal vs Ishwar Singh Punia, ; , the appellant landlord had filed an eviction suit in respect of a shop which had been rented to the respondent in 1978.
The suit was filed on the ground that the tenant was in arrears of rent from ist December, 1981 to 31st May, 1982 and the tenancy had been duly terminated by a notice.
The suit was filed under sub section (3) of Section 1 of the Haryana Urban (Control of Rent and Eviction) Act, 1973.
That sub section provided that "nothing in the Act shall apply to any building the construction of which is completed on or after the commencement of this Act for a period of ten years from the date of its completion".
Section 13(1) enumerated the usual grounds on which possession of a building or land could be obtained from a tenant.
In November 1984, the tenant applied for dismissal of the suit on the ground that the moratorium period of 10 years expired in June/984 since admittedly the demised shop was constructed sometime in June 1974.
Quoting the following passage from Ram Swaroop Rai 's, case (supra): 197 "The legislature found that rent control law had a chilling effect on new building construction, and so, to encourage more building operations, amended the statute to release, from the shackles of legislative restriction, 'new construc tions ' for a period of ten years.
So much so, a landlord who had let out his new building could recover possession with out impediment if he instituted such proceeding within ten years of completion.
" this Court held as under: "It is well settled that no man should suffer because of the fault of the court or delay in the procedure.
Broom has stated the maxim "actus curiae neminem gravabit" an act of court shall prejudice no man.
Therefore, having regard to the time normally consumed for adjudication, the ten years ' exemption or holiday from the application of the Rent Act would become illusory, if the suit has to be filed within that time and be disposed of finally.
It is common knowledge that unless a suit is instituted soon after the date of letting it would never be disposed of within ten years and even then within that time it may not be disposed of.
That will make the ten years holiday from the Rent Act illusory and provide no incentive to the landlords to build new houses to solve problem of shortages of houses.
The purpose of legislation would thus be defeated.
Purposive interpreta tion in a social amelioration legislation is an imperative irrespective of anything else.
" Proceeding further, this Court said: "We are clearly of the opinion that having regard to the language we must find the reason and the spirit of the law.
If the immunity from the operation of the Rent Act is made and depended upon the ultimate disposal of the case within the period of exemption of ten years which is in reality an impossibility, then there would be empty reasons.
In our opinion, bearing in mind the well settled principles that the rights of the parties crystallise to the date of the institution of the suit as enunciated by this Court in Om Prakash Gupta vs Digviiendrapal Gupta, the meaningful con struc 198 tion must be that the exemption would apply for a period of ten years and will continue to be available until suit is disposed of or adjudicated.
Such suit or proceeding must be instituted within the stipulated period of ten years.
Once rights crystallise the adjudication must be in accordance with law.
" In order to appreciate the controversy in the correct perspective it would not be out of place to notice the legislative changes.
During the second world war certain orders were issued under the Defence of India Rules, 1939, relating to the control and letting of accommodations to cope with the paucity of accommodation.
This was followed by an ordinance promulgated in 1946 which was repealed by the U.P. (Temporary) Control of Rent and Eviction Act, 1947 described as the Old Act by Section 3(h) of the Act.
The measure which was intended to be of a temporary character only continued till the passing of the Act in 1972.
When the old Act replaced the 1946 ordinance, the expectation was that the acute shortage of accommodation was only a tempo rary feature and would disappear with the passage of time.
The hope was belied and the stringent restrictions placed on the landlord 's rights in the matter of fixation and recovery of rent and eviction from the rented premises had to be continued indefinitely.
These restrictions discouraged building activity which added to the already serious housing problem.
There was an urgent need to provide incentives and thereby encourage new constructions.
With that in view Section 2(2) provided that nothing in the Act shall apply to a building during a period of ten years from the date on which its construction is completed.
In other words the legislature has relieved the owner of a new building from the restrictive provisions relating to rent, etc., contained in Sections 4 to 9 of the Act.
So also such owners are granted a holiday or recess of ten years from the restric tive provisions regulating letting (Chapter III) and Evic tion (Chapter IV) contained in the Act.
This freedom from the operation of the Act for ten years is given for the obvious purpose of encouraging building activity to ease the problem of scarcity of accommodation.
The provisions of the Act in this behalf must, therefore, be understood in this background.
Section 2(2) in terms says that the provisions of the Act will not apply to new constructions for a period of ten years from the date of completion of the construction.
Read positively it means that the Act will apply to such build ings on the expiry of the recess period.
But how are suits already filed during the recess period to be dealt with? Does 199 the Act offer any clue in this behalf? In this connection the only provisions which come to mind are sections 39 and 40 of the Act.
Section 39 deals with suits pending on the date of commencement of the Act.
Section 40 extends protec tion to an appeal or revision pending on the date of com mencement of the Act provided it has arisen out of an evic tion suit filed against a tenant to which the old Act did not apply.
Such an appeal or revision has to be disposed of in the same manner as the suit is required to be dealt with under Section 39 of the Act.
In order to secure the benefit of Section 39 or 40 it must be shown that the suit, appeal or revision was pending on the date of commencement of the Act.
Secondly, if the suit is rounded on the allegation of nonpayment of rent, the tenant must, within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the suit, deposit in court the entire amount of rent and damages for use and occupation of the building with interest as prescribed and landlord 's entire cost of the suit, to take the benefit of the said provision.
If both these conditions are satisfied, the law, Section 39.
mandates that no decree for eviction shall be passed except on any of the grounds specified in the proviso to sub section (1) or clauses (b) to (g) of sub section (2) of Section 20 of the Act.
Similarly Section 40 lays down that if an appeal or revision (arising out of a suit for eviction of a tenant from any building to which the old Act does not apply) is pending on the date of commencement of the Act, the benefit of Section 39 will be available to the tenant.
What these two provisions emphasise is that in order to avail of the benefit engrafted therein, the proceedings i.e., the suit, appeal or revision application must be pending at the date of commencement of.
the Act, i.e., 15th July, 1972, and the tenant must have deposited the arrears of rent and damages together with interest and full cost of the landlord in the court within one month from the date of such commencement.
Once the four conditions of Section 39 set out in the earlier part of this judgment are satisfied, the court is debarred from passing a decree in ejectment except on any of the grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20 of the Act.
Therefore, even in a suit, appeal or revision application pending at the date of commencement of the Act, a decree for eviction can be passed if the case is brought within the exemption clause of Section 39 not withstanding the fact that the tenant has deposited the full amount of arrears of rent and damages together with interest and cost as required by that section.
It, therefore, seems clear to us on the plain language of Section 39 of the Act that the legislature desired to grant protection from evic tion where the same was sought on the sole ground of arrears of rent.
In cases falling within the exemption clauses of that section, the legislature has 200 itself permitted the landlord to proceed with the suit and claim eviction on any of the grounds enumerated in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20 of the Act, if necessary by making the required amendment in the pleadings and by adducing additional evidence where necessary.
It therefore seems to us that the legislature desired to limit the scope of the application of Sections 39 and 40 to suits, appeals and revisions pending on the date of com mencement of the Act, i.e. 15th July 1972, relating to buildings to which the old Act did not apply and to which the new Act was to apply forthwith and not at a later date.
This is clear from the fact that the section contemplates deposit of arrears of rent and damages together with inter est and cost within one month from "such date of commence ment" meaning the date of commencement of the Act.
To put it differently the section expects the tenant to make the deposit within one month from 15th July, 1972.
This may not be possible unless the Act is to apply to the building forthwith.
Of course the benefit of an extended date is given to those cases where the knowledge about the pendency of the proceedings is gained after 15th July, 1972.
For example where a suit is actually filed before the commence ment of the Act but the summons of the suit is served in October 1972, the tenant would be entitled to make the deposit within one month from the service of the summons to avail of the benefit of this provision.
So also it can apply to cases where the tenant had died before the Act came into force or before the expiry of one month from the date of commencement of the Act and the landlord took time to bring the legal representative on record; in which case the legal representative would be entitled to seek the benefit from the date of knowledge.
Of course this benefit would not be available where the tenant dies after the expiry of the period within which the right is to be exercised.
The same would be the case in the case of an appeal or revision application.
It seems to us that the legislature intended to give the benefit of Sections 39 and 40 to suits, appeals or revisions which were pending on 15th July, 1972 and in which the deposit came to be made within one month from that date.
The expression such preceding the word 'commencement ' is clearly suggestive of the fact that it has reference to the date of commencement of the Act and the payment must be made within one month from such commencement.
Unless we give such a restricted meaning to the section we would not be able to advance the legislative intent to relieve the landlords of new buildings from the rigours of the Act.
This interpreta tion is also in tune with the ratio in Ram Swaroop Rai 's case (supra).
201 was argued that the words 'commencement of this Act ' should be construed to mean the date on which the moratorium period expired and the Act became applicable to the demised buildings.
Such a view would require this Court to give different meanings to the same expression appearing at two places in the same section.
The words 'on the date of com mencement of this Act ' in relation to the pendency of the suit would mean 15th July, 1972 as held in Om Prakash Gupta (supra) but the words 'from such date of commencement ' appearing immediately thereafter in relation to the deposit to be made would have to be construed as the date of actual application of the act at a date subsequent to 15th July, 1972.
Ordinarily the rule of construction is that the same expression where it appears more than once in the same statute, more so in the same provision, must receive the same meaning unless the context suggests otherwise Besides, such an interpretation would render the use of prefix 'such ' before the word 'commencement ' redundant.
Thirdly such an interpretation would run counter to the view taken by this Court in Atma Ram Mittal 's case (supra) wherein it was head that no man can be made to suffer because of the court 's fault or court 's delay in the disposal of the suit.
To put it differently if the suit could be disposed of within the period of ten years, the tenant would not be entitled to the protection of Section 39 but if the suit is prolonged beyond ten years the tenant would be entitled to such protection.
Such an interpretation would encourage the tenant to pro tract the litigation and if he succeeds in delaying the disposal of the suit till the expiry of ten years he would secure the benefit of Section 39, otherwise not.
We are, therefore, of the opinion that it is not possible to uphold the argument.
In the above view of the matter we are of the opinion that the courts below committed an error in giving the benefit of Section 39 of the Act to the tenant since admit tedly the tenant could not and had not made the deposit within one month from the date of commencement of the Act on 15th July, 1972 but had made the deposit within a month after the moratorium period expired in 1977.
As stated above the legislature intended to limit the application of Sec tions 39 and 40 of the Act to cases where the Act became applicable immediately and the deposit could be made within one month from its applicability and not to cases where the moratorium period was to expire long thereafter.
For the reasons stated above we think the courts below were wrong in the view they took.
We, therefore, set aside the judgment and decree of the courts below by allowing this appeal.
Having regard 202 to the fact that the respondent will have to look for alter native accommodation we give him a year 's time to vacate on condition that he pays all the arrears of rent and damages, if due, within one month and files an undertaking in the usual form within even time.
In the circumstances of the case we think the parties may be left to bear their own costs.
R.S.S. appeal allowed.
| IN-Abs | On the completion of construction of the demised prem ises in 1967, the appellant landlord had let it out to the respondent tenant in the same year.
Later, on 27th May, 1972 the landlord filed the eviction suit against the tenant.
On 15th July, 1972 the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act.
1972 came into force.
The tenant deposited in the Court on 2nd September, 1977 an amount of Rs.4005 being the arrears of rent inclusive of interest and cost.
This payment was made within one month after the expiry of the period of ten years stipulated in section 2(2) of the Act to take advantage of section 39 of the Act.
Section 2(2) inter alia provided that nothing in the Act shall apply to a building for a period of ten years from the date on which its construction was completed, while section 39 dealt with pending suits for eviction relating to building brought under the regulation for the first time.
The Trial Court gave the benefit of section 39 and refused to order ejectment of the tenant.
The landlord 's revision application was rejected by the Additional District Judge, and his further revision was dismissed by the High Court.
Allowing the appeal, this Court.
, HELD: (1) In order to secure the benefit of Section 39 or 40 it must be shown that the suit, appeal or revision was pending on the date of commencement of the Act.
Secondly, if the suit is rounded on the allegation of non payment of rent, the tenant must, within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the suit, deposit in court the entire amount of rent and damages for use and occupation of the building with interest as prescribed and landlord 's entire cost of the suit, to take the benefit of 187 the said provision.
If both these conditions are satisfied, the law, section 39, mandates that no decree for eviction shall be passed except on any of the grounds specified in the proviso to sub section (1) or clauses (b) to (g) of sub section (2) of section 20 of the Act.
Similarly, section 40 lays down that if an appeal or revision (arising out of a suit for eviction of a tenant from any building to which the old Act does not apply) is pending on the date of commence ment of the Act, the benefit of section 39 will be available to the tenant.
[199B E] The legislature intended to give the benefit of sec tions 39 and 40 to suit, appeals or revisions which were pending on 15th July, 1972 and in which the deposit came to be made within one month from that date.
The expression 'such ' preceding the word 'commencement ' is clearly sugges tive of the fact that it has reference to the date of com mencement of the Act and the payment must be made within one month from such commencement.
unless such a restricted meaning to the section is given, it would not be able to advance the legislative intent to relieve the landlords of new buildings from the rigours of the Act.
[200F H] (3) The Legislature desired to limit the scope of the application of sections 39 and 40 to suits, appeals and revisions pending on the date of commencement of the Act, i.e., 15th July, 1972, relating to buildings to which the old Act did not apply and to which the new Act was to apply forthwith and not at a later date.
This is clear from the fact that the section contemplates deposit of arrears to rent and damages together with interest and cost within one month from 'such date of commencement ' meaning the date of commencement of the Act.
[200B C] R.D. Ram Nath & Co. & Anr.
vs Girdhari Lal & Anr., ; Ram Swaroop Rai vs Lilavathi, ; 3 SCC 452; Om Prakash Gupta etc.
vs Dig Vijen drapal Gupta etc.
; , ; Vineet Kumar vs Mangal Sain Wadhera, ; ; Pasupuleti Venkateswarlu vs Motor and General Traders, ; A.K. Gupta & Sons vs Damodar Valley Corporation, [1966] I SCR 796; Nand Kishore Marwah vs Samundri Devi, ; and Atma Ram Mittal vs Ishwar Singh Punia, ; , referred to.
(4) The Courts below committed an error in giving the benefit of section 39 of the Act to the tenant since admit tedly the tenant could not and had not made the deposit within one month from the date of commencement of the Act on 15th July, 1972 but had made the deposit 188 SUPREME COURT REPORTS [1990] 1 S.C.R. within a month after the moratorium period expired in 1977.
[201F]
|
ivil Appeal No. 1932 of 1982.
From the Judgment and Order dated 7.9.
1981 of the Patna High Court in C.R. No. 341 of 1980 (R).
M.C. Mahajan, Hemant Sharma and Ms. A. Subhashini for the Appellant.
M.P. Jha for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
This appeal by special leave is against the judgment dated 7.9.1981 of the High Court of Judicature at Patna, Ranchi Bench, Ranchi in Civil Revision No. 341 of 1981.
The short question that falls for consider ation in this appeal is whether the Coal Mines Provident Fund Commissioner is a 'public officer ' as defined in sec tion 2(17) of the Code of Civil Procedure.
Section 80 of the Code requires a notice to be issued as prescribed before instituting a suit against a public offi cer in respect of any act purporting to be done by such pubic officer in his official capacity.
The respondent herein instituted a suit against the appellant the Coal Mines Provident Fund Commissioner without a notice under section 80 C.P.C.
The objection in this behalf was repelled by the trial court 183 and the High Court holding that the Coal Mines Provident Fund Commissioner is not a public officer.
According to the appellant the Commissioner is a public officer within the meaning of the term occurring in section 80 of the C.P.C., and, therefore, the suit is incompetent.
The term 'public officer ' is defined in section 2(17) of the Code of Civil Procedure.
Public Officer means a person falling under any of the descriptions in clauses (a) to (h).
It is contended on behalf of the appellant that the Coal Mines Provident Fund Commissioner falls under the descrip tion in clause (h) which reads as under: "(h) Every Officer in the service or pay of the government or remunerated by fees or commission for the performance of any public duty.
" It is necessary to refer to the relevant provision in the for the purpose of determining whether the appel lant answers this description.
Under section 3, the Central Government may, by notification in the Official Gazette, frame the Coal Mines Provident Fund Scheme for the estab lishment of a provident fund for employees and specify the coal mines to which the said scheme shall apply.
The fund shall vest in, and be administered by the Board constituted under section 3A.
The Board thus constituted consists of (a) a Chairman appointed by the Central Government; (b) the Coal Mines Provident Fund Commissioner, ex officio; and others specified in the section.
The other relevant provisions read thus: "3B.
The Board of Trustees constituted under section 3A shall be a body corporate under the name specified in the Notification constituting it, having perpetual succession and a common seal and shall by the said name sue and be sued.
3C. Appointment of Officers: (1) The Central Government shall appoint a Coal Mines Provident Fund Commissioner, who shall be the Chief Executive Officer of the Board and shall be subject to the general control and superintendence of the Board.
184 4.
The method of recruitment, salary and allowances, disci pline and other conditions of service of the Coal Mines Provident Fund Commissioner shall be such as may be speci fied by the Central Government and such salary and allow ances shall be paid out of the Fund.
" It is thus seen that the Commissioner is an officer appointed by the Central Government as the Chief Executive Officer of the Board.
Though subject to the general control of the Board, discipline and the condition of service are such as may be specified by the Central Government.
The salary and allowances are paid out of the fund.
The Commis sioner may exercise the powers exercisable by the Central Government under the Act or scheme framed thereunder on delegation of such power under section 10C.
It will be clear from these provisions that an officer in the service the Government by virtue of his office, is appointed as Commissioner by the Government and he performs public duties.
The fact that the Commissioner receives the salary and allowances out of the fund and not from the Government during the tenure as Commissioner would make no difference when the description as an officer in service of the Government is answered.
The word 'service ' in section 2 (17)(h) must necessarily mean something more than being merely subject to the orders of Government or control of the Government.
To serve means "to perform function; do what is required for".
The Commis sioner appointed by Government performs the functions as envisaged in the Act and the scheme thereunder.
When he is actually acting in the capacity of Provident Fund Commis sioner, he does not cease to be an officer in the service of the Government.
In Liquidator of Society Sangakheda Kalan Co operative Bank, Hoshangabad vs Ayodhyaprasad Shiamlal, , Pollock, J. held that liquidator is a public officer as he is appointed by the Government and discharges public duties.
This decision is distinguished in Kuppu Govinda Chettiar vs Uttukottai Co operative Society, AIR 1940 Madras 831 holding that Deputy Registrar acting as Liquidator is not a public officer.
The reasoning adopted is that qualiq uidator he is not an officer in the service of the Govern ment.
In Vishnu Wasudeo Joshi vs T.L.H. Smith Pearse, AIR 1949 Nagpur 362 it was held that a person who was a member of the Indian 185 Educational Service but whose services were lent to the Rajkumar College, Raipur as principal is a public officer within section 2(17)(h) and did not cease to be in the service of the Crown by reason of deputation.
In Commissioner of Wakfs, Bengal vs Shahebzada Mohammed Zahangir Shah, the Court said that the expression "public duty" refers to duty concerning to the affairs or service of the public and the word 'public ' may include any class of the public or any community.
In this view, the Commissioner of Wakfs who functions in relation to such public endowments in general was held to perform a public duty and, therefore, a public officer within the meaning of section 80 of the Code.
In Kamta Prasad Singh vs The Regional Manager, F.C.I., AIR 1974 Patna 376 the question arose whether the officers of the Food Corporation of India are public officers.
The Corporation is a body corporate.
The Court held that Govern ment does not include a Corporation and that officers of the Corporation are not in the service of Government and are not public officers.
These are cases where the concerned officer did not hold his office in the Corporation by virtue of his being a Government employee.
In the present case, the Provi dent Fund Commissioner holds the office of Commissioner on appointment by Government by virtue of his office.
His services are temporarily placed at the disposal of the Board.
He does not, therefore, cease to be an officer in the service of the Government.
The payment of his pay out of the Fund does not alter his status as Government employee.
We are, therefore, of the opinion that the courts below have erred in holding that the Coal Mines Provident Fund Commi sioner is not a public officer within the meaning of the term in section 2(17)(h) of the C.P.C. We, accordingly, allow the appeal and remit the case to the trial court for disposal in the light of what has been stated above.
G.N. Appeal allowed.
| IN-Abs | Respondent instituted a suit against the appellant, the Coal Mines Provident Fund Commissioner without a notice as required under section 80 C.P.C. Appellant objected stating that he was a public officer within the meaning of the term occurring in section 80 C.P.C. and that the suit was incom petent.
The trial court overruled the objection and held that the appellant was not a public officer.
The High Court confirmed the same.
Aggrieved, the appellant, has preferred this appeal by special leave.
Allowing the appeal, this Court, HELD: 1.
I The courts below have erred in holding that the Coal Mines Provident Fund Commissioner is not a public officer within the meaning of the term in section 2(17)(h) of the C.P.C.
The word 'service ' in section 2 (17)(h) C.P.C. must necessarily mean something more than being merely subject to the orders of Government or control of the Gov ernment.
To serve means "to perform function; do what is required for".
The Commissioner appointed by Government performs the functions as envisaged in the Act and the scheme thereunder.
When he is actually acting in the capaci ty of Provident Fund Commissioner, he does not cease to be an officer in the service of the Government.
[184E F; 185F] 1.2 The fact that the Commissioner receives the salary and allowances out of the Coal Mines Provident Fund and not from the Government during the tenure as Commissioner would make no difference when the description as an officer in the service of the Government is answered.
[184D] 182 2.
In the present case, the Provident Fund Commissioner holds the office of Commissioner on appointment by Govern ment by virtue of his office.
His services are temporarily placed at the disposal of the Board constituted under Sec tion 3 of the .
He does not, therefore, cease to be an officer in the service of the Government.
The payment of his pay out of the Fund does not alter his status as Government employee.
[185E] Liquidator of Society Sangakheda Kalan Co Operative Bank, Hoshangabad vs Ayodhyaprasad Shiamlal, ; Kuppu Govinda Chattiar vs Uttukottai Co Operative Society, AIR 1940 Madras 831; Vishnu Wasudeo Joshi vs T.L.H. Smith Pearse, AIR 1949 Nagpur 362; Commissioner of Wakfs, Bengal vs Shahebzada Mohammed Zahangir Shah, AIR 1944 Cal cutta 206 and Kamta Prasad Singh vs The Regional Manager, F.C.I., AIR 1974 Patna 376, referred to.
|
vil Appeal Nos.
11;55 to 1188 (NT) of 1990.
From the Judgments and Orders dated 7.11.1985, 12.8.85, 6.2.85 and 24.7.86 of Madras High Court in T.C.P. Nos, 739/85, 3 13/85, 260/84 and 42/86.
T.A. Ramachandran and Mrs. Janaki Ramachandran for the Appellants.
S.C. Manchanda, B.B. Ahuja and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
These four petitions for grant of 270 special leave arise out of the orders of the High Court of Judicature at Madras in the corresponding four Tax Case Petitions rejecting the assessee 's applications under Sec tion 256(2) of the Income tax Act, 1961 and the reference of a question of law whether the disallowance under Section 40(b) of the Income Tax Act, 1961 (Act) of the interest paid by the firm to its partner should be the gross amount of such interest or should be confined to the net amount after setting off the interest, in turn, paid_by the partner to the firm on his borrowings from the firm.
In each of these cases the Income Tax Appellate Tribunal had, in substance, held that what was disallowable was the entirety of the interest paid by the firm to the partner without reference to any interest that may, in turn, have been paid by the partner to the firm.
The Tribunal in the appeals preferred by the Revenue before it, allowed the appeals and reversed the view to the contrary taken in favour of the assessees by the first appellate authority.
The Tribunal also declined to state a case and refer a question of law under Section 256(1) of the Act to the High Court; whereupon the assessees moved the aforesaid Tax Case Petitions before the High Court under Section 256(2).
The High Court rejected these applications on the view that there was no referable question of law arising out of the appellate orders or ' the Tribunal, having regard to the earlier pronouncement of the High Court in C.I.T. vs O.M.S.S. Sankaralinga Nadar & Co., ITR 332 on which the Tribunal had relied.
The correctness of the decision of the High Court in the said Sankaralinga Nadar 's case has come to be examined by this Court in Keshavji Ravji & Co. vs C.I.T., ; this Court has taken a view in the light of which Sankaralinga Nadar & Co. 's case cannot be held to have laid down the law correctly in all respects.
The pronouncement of this Court in the said Keshavji Ravji & Co 's case (supra) covers the point raised in these Special Leave Petitions.
However, as the present special leave petitions arise out of the orders of the High Court rejecting the Tax Case Petitions under Section 256(2) of the Act, we should, in the normal course, grant special leave, register the correspond ing civil appeals and after setting aside the orders of the High Court remit the corresponding Tax Case Petitions to the High Court with a direction to allow petitions and 20 direct the Income Tax Appellate Tribunal to state a case and refer a question of law for the opinion of the High Court and thereafter, to 270 dispose of the references in the light of the pronouncement of this Court in the said Keshavji Ravji & Co. 's case.
This procedure would, indeed, be an idle, time consuming and wholly avoidable formality in the circumstances of the present cases.
As the position is now settled, we are of the opinion that interests of justice would be served by treat ing the present Special Leave Petitions as directed against and arising from the main Appellate Orders of the Income Tax Appellate Tribunal, Madras, and after granting Special Leave, set aside that part of the appellate orders as per tain to the extent of disallowance of the interest under Section 40(b) of the Act and direct the Tribunal to dispose of the appeals on the point afresh in the light of the aforesaid pronouncement of this Court.
These petitions are, therefore, treated as directed against the main Appellate Judgments dated 9.3.1984 in ITA 1521/Mds/1982; 29.2.84 in ITA No. 898/Mds/1982; 30.8.1983 in ITA 1520/Mds/82 and 22.2.
1984 in ITA 1848/Mds/83 'of the Income Tax Appellate Tribunal, Madras and Special Leave granted.
The orders of the Tribunal made under Section 256(1) of the Act in each of these cases as well as the orders of the High Court in Tax Case Petition 739 of 1985, 3 13 of 1985, 260 of 1984 and 42 of 1986 are set aside.
Further, the appellate orders of the Income tax Appel late Tribunal, in so far as they pertain to the extent of disallowance of interest under Section 40(b) of the Act, are set aside and the said appeals remitted to the Tribunal for a fresh disposal of the appeals on the point in the light of the pronouncement in Keshavji Ravji & Co. 's case.
There will, however, be no order as to costs.
N.P.V. Appeals al lowed.
| IN-Abs | The Income Tax Appellate TribUnal in appeals preferred before it the revenue held that the entirety of interest paid by a firm to its partner was disallowable under Section 40(b) of the Income Tax Act without reference to tile inter est that might, in turn, have been paid by the partner to the firm on his borrowings.
On appellants assessees ' appli cation under Section 256(1) of the Act, the Tribunal de clined to state a case and refer a question of law for the opinion of the High Court.
The appellants assessees then moved Tax case petitions under Section 256(2) of the Act before the High Court.
The High Court rejected the applica tions on the view that there was no referable question of law arising out of the appellate order of the Tribunal having regard to its earlier decision in C.I.T. vs O.M.S.S. Sankaralinga Nadar & Co., , on which the Tribunal had relied.
The appellants assessees filed special leave petitions in this Court.
Treating the special leave petitions as directed against the main appellate order of the Tribunal, and allowing the appeals, this Court, HELD: It is now settled by the pronouncement of this Court in Keshavji Ravji & Co. vs C.I.T., ; that where two or 269 more transactions on which interest is paid to or received from the partner by the firm are shown to have the element of mutuality and are referable to the funds of the partner ship as such, Section 40(b) should not be so construed as to exclude in quantifying the interest, if any, paid to a partner by the firm in excess of what was received from the partner.
[270F] Keshavji Ravji & Co., ; , followed.
C.I.T. vs O.M.S.S. Sankaralinga Nadar & Co., , over ruled.
In the instant case, the appeals were directed against the High Court 's orders rejecting the assessee 's applica tions under Section 256(2) of the Act.
However, remitting the cases to the High Court In the normal course for neces sary action would be an idle, time consuming and avoidable formality.
Further, as the position is settled on the point raised, interests of justice would be served by treating the appeals as directed against the main appellate orders of the Tribunal and remitting the cases to the Tribunal for dispos al.
[270B; 271A B] Accordingly, the orders of the Tribunal and of the High Court are set aside, and the appeals remitted to the Tribu nal for disposal afresh on the extent of disallowance of interest under Section 40(b) of the Act in the light of pronouncement of this Court in Keshavji Ravji & Co. vs C.I.T., [1990] 1 S.C.R.243.
[271E F]
|
ivil Appeal No. 1027 of 1990.
From the Judgment and Order dated 27.10.1989 of the Karnataka High Court in Writ Appeal No. 2017 of 1989.
K. Parasaran, C.S. Vaidyanatha, S.R. Bhat, S.R. Setia, K.V. Mohan and Mrs. Sunitha B. Singh for the Petitioner.
K.N. Bhatt, Rajinder Sachhar, Vineet Kumar, B. Mohan and K.G. Raghvan for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The petitioner is aggrieved by the award of a contract by the Karnataka Power Corporation Ltd. (K.P.C.), an instrumentality of the State of Karnataka, in favour of the Mysore Construction Co. (M.C.C.).
His writ petition and a further writ appeal in the Karnataka High Court having been unsuccessful, he has preferred this Spe cial Leave Petition from the judgment of the High Court in the writ appeal.
We have heard counsel for both sides at length.
We 231 grant Special leave and proceed to dispose of the appeal.
Though, at an earlier stage of the proceedings there were some allegations of favoritism, the plea of the peti tioner, as urged before us, is that the K.P.C. should not at all have entertained the tender of M.C.C. as the M.C.C. did not fulfill certain preliminary requirements which, under the Notification Inviting Tenders (N.I.T.), had to be ful filled even before the forms of tender could be supplied to any intending contractor.
The contract pertained to the construction of a Main Station Building of a Power House at the Raichur Thermal Power Plant at an estimated cost of about Rs. 1.8 crores.
The N.I.T. dated 27.12.1988 invited tenders from registered contractors of appropriate class.
Paragraph I of the notifi cation listed three "Minimum qualifying requirements" viz., that the intending tenderer: (1) should have executed civil and architectural works including insulation in a power plant/industrial complex, preferably in power plant; (2) should have executed atleast 1000 cubic metres per month of concrete pouring and atleast 300 cubic metres per month of brick work at one site; and (3) should have had an annual turnover of atleast 1 crore for each of the preceding three years.
Para V required the intending tenderers to furnish the following information "along with the application for issue of blank tender books", namely: (a) Audited Balance Sheet/Certificate from Chartered Ac countant for preceding three years; (b) Latest income tax clearance Certificate; (c) Copy of the Registration Certificate (d) Annual output of the works of all the above nature at any site accompanied by a certificate from the organisation for whom the tenderer had carried out the works furnishing details such as rate of pouring of concrete.
manufacturing of hollow concrete 232 block, precast concrete block, . . etc., and period of completion scheduled/envisaged, equipments and their deploy ment i.e., man months etc.
The N.I.T. specified January 17, 1989, as the last date for receipt application forms for issue of blank tender books.
The issue of blank tender books was to be between 23rd January to 27th January, 1989 and the completed tender books had to be submitted by 3.00 p.m. on 6.2.89.
It is common ground, however, that subsequently this time frame was altered.
The last date for receipt of application form for issue of blank tender books remained as 17th January, 1989 but the other items were altered to read as follows: "1.
Last date for receipt of 10.2.89 clarification: 2.
Period to issue blank tender 10.2.89 to books 16.2.89 3.
Last date and time for receipt 27.2.89 completed tender books: upto 3.00 P.M.
It appears that six parties applied for tender books.
These were scrutinized with reference to the pre qualifying requirements and data on experience, work done etc.
as furnished by each of the applicants.
Four of the firms were found to be pre qualified by the Chief Engineer and tender books were issued to them.
Only three of them, however, submitted completed tender books by February 27, 1989.
These tenders were examined by the Chief Engineer as well as an independent firm of Engineering Consultants, namely, Tata Consulting Engineers (T.C.E.).
Both the Chief Engineer as well as T.C.E. recommended acceptance of the tender of M.C.C. (which was the lowest tender) in view of the fact that M.C.C. had adequate experience in the construction of R.C.C. works and they were capable of mobilising the work force required for the work.
It may be mentioned that after making necessary adjustments it was found that the tender of M.C.C. was Rs. 15 lakhs less than the tender of the peti tioner.
The principal argument advanced on behalf of the peti tioner is that paragraphs I and V of the N.I.T. specified certain pre qualifying requirements.
Unless these require ments were fulfilled, the contractor was not even entitled to be supplied with a set of tender documents.
It is submit ted that M.C.C. did not comply with these requirements and 233 hence its application for tender forms should have been rejected at the outset.
The learned single Judge in the High Court went into the matter in great detail and came to the conclusion that the petitioner 's contentions were not well founded.
He took the view that the pre requisites for supply of tender forms were only the three conditions set out in para I of the N.I.T. and that the details called for in para V could be supplied at any time.
He, therefore, rejected the petitioner 's con tention that the extensions of time given to M.C.C. to submit the tender with requisite clarifications were not warranted.
The Division Bench, on appeal, did not express any clear opinion as to the nature of the requirements set out in Para V but was satisfied, on an overall view, that there was nothing unfair or arbitrary about the award of the contract tO the M.C.C. It observed: "We have carefully considered these contentions.
We are of the view that while exercising jurisdiction under Article 226 of the Constitution, it is not for us to reap praise the facts on merits and come to one conclusion or other with regard to these aspects of the matter.
Why we are obliged to say this is if the Court is satisfied there is nothing arbitrary or unfair in the award of the contract, it cannot convert itself into a super technical Committee and find out whether the requirements have been fulfilled or not.
While saying so, we are conscious of the fact that what is argued before the learned single Judge is with reference to prequalifications or in other words the eligibility.
Nevertheless where the person who is incharge of award of contract was satisfied about the eligibility and that too after consultancy through an independent agency like Tata 's, we cannot come to a contrary conclusion and then say a particular certificate does not in terms meet the require ment laid down under clause V(d).
That we consider is no function of the Court.
After all the object of tender in most matters like this is to satisfy the authority that the person who undertakes to execute the work or the person who offers the tender would be really worth and then he would perform to the best of his ability and to the requirement of the person who wants to have the contract.
If these basic principles are kept in mind, we do not think we can intro duce nuances of law to enter into the realm of contract which we consider should be kept out of the purview of writ 234 jurisdiction.
From this point of view, we are unable to find out any justification to interfere with the order of the learned single Judge.
" The first question that falls to be considered is as to whether there is any difference between the requirements in paras I and V and whether only para I and not para V sets out the pre conditions of eligibility to submit a tender for the contract.
In our opinion, it is difficult to accept the view of the learned single Judge of the High Court that it is only para I that stipulates the pre conditions and that all the documents referred to in the other paras can be supplied at any time before the final award of the contract.
It is seen that paras I to XIII set out various terms and conditions some of which relate to the pre tender stage and some to later stage.
For instance, paras X and XI come into operation only after the tenders are received and para XII makes it clear that the K.P.C. 's decision regarding the fulfilment of para IV may remain open right till the actual award of the contract.
However, on the contrary, the condi tion set out in para VI has clearly to be fulfilled even before asking for tender forms.
Para V seems to stand some where in between.
If one reads paras I and V together, it will be seen that a common thread runs through them and that they are really meant to supplement each other.
It is in order to satisfy itself that the requirements of para I(1) and (2) are fulfilled that the K.P.C. calls for the certifi cates mentioned in para V and the fulfilment of the require ment in para I(3) has obviously to be verified by reference to the audited balance sheets called for under clause (a) of para V.
The reference in clause (d) of para V to the "annual output of the works of the above nature" is also obviously a reference to the works of the nature described in para I.
It is clear that at least some, if not all, of the documents referred to in para V, are intended to verify the fulfilment of the three prequalifying requirements of para I. The stipulation of the time element within which the information asked for in para V should be supplied is also of some significance; it specifically requires the information to be supplied along with the application for tender forms.
As pointed out by this Court in its judgment dated 3.3.1989 in Ram Gajadher Nishad vs State of U.P., C.A. 1819/89, an intending tenderer can be perhaps letigimately excluded from consideration for a contract, if the certificates such as the ones under clauses (b) and (c) of para V are not fur nished.
It may not, therefore, be correct to read para I in isolation and treat it as the only condition precedent for the supply of forms of tender.
The more harmonious and practical way of construing the N.I.T. is by saying that, before the tender books can be supplied, an intending ten derer should satisfy the K.P.C, by supplying such of the documents called for in para V as are material in assessing the fulfilment of the condition in para I, that he fulfills the three 235 conditions set out in para I.
It seems clear to us that, apart from para I, there are some other requirements in the N.I.T. which have to be complied with before the applicant can be eligible for supply of tender forms.
These include, if not all, at least such of those documents referred to in para V(d) as have a direct bearing on the three conditions outlined in para I. Bearing this approach in mind, let us examine to what extent, according to the appellants, the M.C.C. failed to fulfil the N.I.T. requirements: So far as para I is concerned, two defects were pointed out.
The first was that, as against the requirement that the applicant "should have executed . . works including insulation", the certificate of 25.1.1989 produced by the M.C.C. was only to the effect that it "is constructing" a building in Hyderabad for the National Geophysical Research Institute "in which they have done wall insulation and roof insulation for airconditioning work".
The second was that, as against the second requirement of para I that the appli cant should have executed "at least 300 cubic metres per month of brick work at one site, the certificate from Vasa vadatta Cements produced by the M.C.C. on 1.2.89 only stated that it had "constructed over 300 cubic meter of brick masonry for the packing plant and D.G. building totaling to 327.29 cubic metre during the month of June 1985".
These certificates, it is submitted, do not come up to the re quirements of Para I.
We think that this criticism, based on the differences in wording as between the language of para I and the certificates produced by the M.C.C., is too weak to be accepted.
It was for the K.P.C. to consider the suffi ciency of these certificates.
The conditions only required that the applicant should supply information to show that he had experienced in insulation work and that he could carry out brick work in a month to the extent indicated.
It was for the K.P.C. to assess the value of the certificates furnished in this regard and if the K.P.C. considered them sufficient to warrant the issue of a tender form to the applicant, we do not think we should interfere with their decision.
So far as para V is concerned, the criticism is that two items of information concerning the requirements of clause (d) of Para V were not supplied along with the request for application of tender forms.but were supplied much later.
It was only on 21.6.89 that M.C.C. furnished a certificate that they had executed "hollow cement blocks work" for the Indian Telephone Industries Ltd. but even that certificate gave no details.
It vaguely stated that "the item had been executed as per our bill of quantities".
Again, it was only on 18.8.89 that M.C.C. produced a certificate from Vasvadatta Cements regarding the work of concreting done by it.
It is pointed out incidentally that 236 this is also a part of the specific requirements in para I and, as such, the VI.C.C. cannot be said to have satisfied the preliminary conditions Tendering it eligible to tender for the contract.
The second of these does not really cause much difficulty.
For, even as early as 11.1.89 along with its application for tender dated 3.1.89 M.C.C. had produced a certificate from the K.P.C. itself that it had done 35,000 cubic metres of concreting during 7 months and this was apparently considered sufficient for the K.P.C. subsequently called for a certificate only regarding brick work.
This leaves only the first of the criticisms that the details regarding hollow cement block works done by the M.C.C. was furnished only on 21.5.89.
Should the M.C.C. have been denied altogether the right to Tender for the contract consequent on the delay in sub mitting this document is the second question that arises for consideration.
Sri Parasaran, for the appellant would have us answer this question in the affirmative on the principle enunciated by Frankfurter, J. and approved by this Court in Raman Daygram Sherry vs The International Airport Authority of India & Ors., ; Bhagwati, J. (as his Lordship then was) formulated in the following words a principle which has since been applied by this Court in a number of cases: "It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them.
This rule was enunciated by Mr. Justice Frankfurter in Viteralli vs Seton, 359 U.S. 535:3 Law.
(Second series) 1012, where the learned Judge said: An executive agency must be rigorously held to the standards by which it professes its action to be judged.
Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the require ments that bind such agency, that procedure must be scrupu lously observed.
This judicially evolved rule of administra tive law is now add, rightly so.
He that takes the procedur al sword shall perish with the sword." "This Court accepted the rule as valid and applicable in India in A.S. Ahluwalia vs Punjab, ; and in subsequent decision given in Sukhdev vs Bhagatram, ; Mathew, J., quoted the above referred observations of Mr. Justice Frankfurter with approval.
It may be noted that this rule, though supportable also as emanation 237 from Article 14, does not rest merely on mat article.
It has an independent existence apart from Article 14.
It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority.
If we turn to the judgment of Mr. Justice Frank furter and examine it, we find that he has not sought to draw support for the rule from the equality clause of the United States Constitution, but evolved it purely as a rule of administrative law.
Even in England, the recent trend in administrative law is in that direction as is evident from what is stated at pages 540 41 in Prof. Wade 's Administra tive Law 4th edition.
There is no reason why we should hesitate to adopt this rule as a part of our continually expanding administrative law.
XXX XXX XXX It is, therefore, obvious that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the stand ard or norm laid down in paragraph I of the notice inviting tenders which required that only a person running a regis tered.
Find II Class hotel or restaurant and having at least 5 years ' experience as such should be eligible to tender.
It was not the contention of the appellant that this standard or norm prescribed by the 1st respondent was dis criminatory having no just or reasonable relation to the object of inviting tenders namely, to award the contract to a sufficiently experienced person who would be able to run efficiently a find class restaurant at the airport.
Admit tedly the standard or norm was reasonable and non discrimi natory and once such a standard or norm for running a Find Class restaurant should be awarded was laid down, the 1st respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm.
If there was no acceptable tender from a person who satis fied the condition of eligibility, the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbi trarily accept the tender of the 4th respondents.
When the 1st respondent entertained the tender of the 4th respondents even though they did not have 5 years ' expe 238 rience of running a II Class restaurant or hotel, denied equality of opportunity to others similarly situate in the matter of tendering for the contract.
There might have been many other persons, in fact the appellant himself claimed to be one such person, who did not have 5 years ' experience of running a II Class restaurant, but who were otherwise compe tent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the con tract, but they were precluded from doing so by the condi tion of eligibility requiring five years ' experience.
The action of the 1st respondent in accepting the tender of the 4th respondents, even though they did not satisfy the pre scribed condition of eligibility, was clearly discriminato ry, since it excluded other person similarly situate from tendering for the contract and it was plainly arbitrary and without reason.
The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhibiting arbitrary action." Shri Vaidyanathan, who supplemented the arguments for the petitioner, contended that this rule has been demonstra bly infringed in the present case, even on the K.P.C. 's own showing.
He cited two documents filed by the K.P.C. to substantiate this contention.
The first is "A note on the tendering system in K.P.C." which, inter alia, reads: "2.00 Brief tender notification containing description of the work, estimated cost of the work, period of completion and the minimum prequalifying/eligibility conditions required and other general requirements such as the value/ fashion of C.M.D. to be furnished, latest certificates works, and furnishing of audited balance sheet etc.
, duly indicating the dates for issuing and receipt of tenders is widely circulated and also advertised in leading newspapers for the information of the intending tenderers.
Where prequalifying conditions are notified in the notification, the applications for the issue of tenders is carefully scrutinised with reference to these requirements and the tenders will be issued to those who comply with all the prequalifying/ eligibility requirements.
Apart from the prequalifying conditions contained in the brief tender notification, certain general requirements as described above will also be looked into.
any deficiency in the gener al requirements 239 will, however, not disqualify the tenderers from receiving the tender books as these conditions could be satisfied prior to acceptance of the successful tender.
Any clarifica tions required on the prequalifying requirements/general requirements will also be obtained before issue of tender documents from the intending tenderers.
The tenders will be issued to those tenderers who comply with the prequalifying conditions.
The second is the record of minutes showing what they actu ally did: "57.01 There was extended discussion on the issue.
C.M.D. also informed that one of the tenderers had sent a represen tation objecting to the consideration of the tender of M/s M.C.C. on the ground that they had not fulfilled the prequalifying requirements.
There was a discussion as to whether the stipulations mentioned in the N.I.T. other than those stipulated under prequalifying conditions have to be mandatorily fulfilled before the tenders were filed.
It was clarified that only three prequalifying conditions were prescribed in the N.I.T. and other details called for vide para 5(c) of N.I.T., were only for information and are such they could be met before consideration of the tenders.
It was clarified that while tenders which did not meet minimum prequalifying conditions were not eligible to be considered at all, any shortcoming in furnishing the details at the time of tendering would not disqualify the tenderer from bidding for the work, so long as the conditions could be met before finalisation of the award.
It was further clarified that the word 'shall ' used in the N.I.T. has been the normal practice in all tenders and agreement clauses and the deci sion of the K.P.C. and the application other than the mini mum qualifying requirement should be prerogative of K.P.C. only.
It was informed that the practice in K.P.C. so far has been to go by the minimum qualifying requirements as stated in the N.I.T. and the rest of the information were only for assessing the capabilities of the tenderers as well as their eligibility and simply because Mr. G.J. Fernandez has made a complaint it would not be proper to deviate from this estab lished procedure.
As per clause 11, the Corporation reserves the fight to reject or accept the tender without assigning any reasons.
In this particular case, the lacuna in furnish ing the information has been set right subsequently by the tenderer before opening of the price documents, the Chief Engineer had 240 come to the conclusion that the firm had fulfilled all the prequalifying requirements and as such the tender of M/s M.C.C. had been found to be in order.
It was also clarified by GM(T) that the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used as this item of work was essentially for a filler wall and the walls would be non load bearing.
It was clarified that those who were prequalified had satisfied the condition with regard to quantity of brick masonry work.
57.02 Under the circumstances, the Committee recommended entrustment of work to M/s M.C.C. at their quoted rates amounting to Rs.209.39 lakhs together with their stipulation regarding release of security deposit against furnishing bank guarantee.
57.03 However, it was decided that in future it should be made clear that only prequalifying conditions would be mandatory.
" These two documents, particularly the last sentence of the second one, clearly show, Shri Vaidyanathan urged, that the K.P.C. had relaxed its N.I.T. standards in favour of the M.C.C. Interesting as this argument is, we do not see much force in it.
In the first place, although, as we have ex plained above, para V cannot but be read with para I and that the supply of some of the documents referred to in para V is indispensable to assess whether the applicant fulfills the prequalifying requirements set out in para I, it will be too extreme to hold that the omission to supply every small detail referred in para V would affect the eligibility under para I and disqualify the tenderer.
The question how far the delayed supply, or omission to supply, any one or more of the details referred to therein will affect any of the prequalifying conditions is a matter which it is for the K.P.C. to assess.
We have seen that the documents having a direct learning on para I viz. regarding output of concrete and brick work had been supplied in time.
The delay was only in supplying the details regarding "hollow cement blocks" and to what extent this lacuna effected the conditions in para I was for the K.P.C. to assess.
The minutes relied upon show that, after getting a clarification from the General Manager (Technical), the conclusion was reached that "the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used".
In other words, the contract was unlikely to need any work in hollow cement blocks and so the documents in question was consid ered to be of no importance in judging the pre qualifying requirements.
There is nothing wrong with this, 241 particularly as this document was eventually supplied.
Secondly, whatever may be the interpretation that a court may place on the N.I.T, the way in which the tender documents issued by it has been understood and implemented by the K.P.C. is explained in its "note", which sets out the general procedure which the K.P.C. was following in regard to N.I.T.s issued by it from time to time.
Para 2.00 of the "note" makes it clear that the K.P.C. took the view that para I alone incorporated the "minimum prequalifying/eligi bility conditions" and the data called for under para V was in the nature "general requirements".
It further clarifies that while tenders will be issued only to those who comply with the prequalifying conditions, any deficiency in the general requirements will not disqualify the applicant from receiving tender documents and that data regarding these requirements could be supplied later.
Right or wrong, this was the way they had understood the standard stipulations and on the basis of which it had processed the applications for contracts all along.
The minutes show that they did not deviate or want to deviate from this established procedure in regard to this contract, but, on the contrary, decided to adhere to it even in regard to this contract.
They only decided, in view of the contentions raised by the appellant that para V should also be treated as part of the prequali fying conditions, that they would make it specific and clear in their future N.I.T.s that only the fulfilment of prequal ifying conditions would be mandatory.
If a party has been consistently and bona fide interpreting the standards pre scribed by it in a particular manner, we do not think this Court should interfere though it may be inclined to read or construe the conditions differently.
We are, therefore, of opinion that the High Court was right in declining to inter fere.
Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences.
The first is that the party issuing the tender has the right to punc tiliously and rigidly enforce them.
Thus, if a party does not strictly comply with the requirements of paras III, V or VI of the N.I.T., it is open to the K.P.C. to decline to consider the party for the contract and if a party comes to Court saying that the K.P.C. should be stopped from doing so, the Court will decline relief.
The second consequence, indicated.by this Court in earlier decisions, is not that the K.P.C. cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination.
It comes in for application where the non conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general.
For example, in this very case, the K.P.C. made some changes in the time frame origi 242 nally prescribed.
These changes affected all intending applicants alike and were not objectionable.
In the same way, changes or relaxations in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others.
The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, likewise, an extension of time for filing a similar certificate or document but was declined the benefit.
It may perhaps be said to cause prejudice also to a party which can show that it had refrained from applying for the tender documents only because it thought it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed.
But neither of these situations is present here.
Sri Vaidhyanathan says that in this case one of the appli cants was excluded at the preliminary stage.
But it is not known on what grounds that application was rejected nor has that party come to Court with any such grievance.
The ques tion, then, is whether the course adopted by the K.P.C. has caused any real prejudice to the appellant and other parties who had already supplied all the documents in time and sought no extension at all? It is true that the relaxations of the time schedule in the case of one party does affect even such a person in the sense that he would otherwise have had one competitor less.
But, we are inclined to agree with the respondent 's contention that while the rule in Ramana 's case (supra) will be readily applied by Courts to a case where a person complains that a departure from the qualifi cations has kept him out of the race, injustice is less apparent where the attempt of the applicant before Court is only to gain immunity from competition.
Assuming for pur poses of argument that there has been a slight deviation from the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract; on the other hand, its tender has received due and full consideration.
If, save for the delay in filing one of the relevant docu ments, M.C.C. is also found to be qualified to tender for the contract, no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the M.C.C. and in the K.P.C. going in for a choice of the better on the merits.
The appellant had no doubt also urged that the M.C.C. had no experience in this line of work and that the appellant was much better quali fied for the contract.
The comparative merits of the appel lant vis a vis M.C.C. are, however, a matter for the K.P.C. (counselled by the T.C.E.) to decide and not for the Courts.
We were, therefore, rightly not called upon to go into this question.
For the reasons discussed above, this appeal fails and is dismissed.
But we make no order as to costs.
R.N.J. Appeal dis missed.
| IN-Abs | The petitioner aggrieved by the award of a contract by the respondent in favour of Mysore Construction Company (M.C.C.) filed a Writ Petition and a further Writ Appeal in the Karnataka High Court.
Being unsuccessful there he came up in appeal before this Court by way of special leave.
The single judge of the High Court had taken the view that prerequisites for the supply of tender forms were contained in Para I of the Notification Inviting Tender (NIT) and the details called for in Para V could be supplied any time.
The Division Bench on appeal did not express any opinion regarding the requirements set out in para V but was of the view that there was nothing unfair or arbitrary about the award of the contract to the MCC.
In appeal before this Court the plea of the petitioner is that the Karnataka Power Corporation should not have accepted the tender of MCC, as the MCC did not fulfil certain preliminary requirements contained in Para I and V of the NIT which according to him have to be fulfilled before the forms of tender could be supplied to any intending contractor.
Dismissing the appeal of the petitioner, the Court, HELD: Para V cannot but be read with para I. The supply of some of the documents referred to in para V is indispens able to assess whether the applicant fulfills the prequali fying requirements set out in para I.
It will be too extreme to hold that the omission to supply every small detail referred to in para V would affect the eligibility under para I and disqualify the tenderer.
[240E F] 230 If a party has been consistently and bona fide inter preting the standards prescribed by it in a particular manner, this Court should not interfere though it may be inclined to read or construe the conditions differently.
[241E] Assuming for purposes of argument that there has been a slight deviation from the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract.
On the other hand its tender has received due and full consideration.
If, save for the delay in filing one of the relevant documents, MCC is also found to be qualified to tender for the contract.
no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the MCC and in the KPC going in for a choice of the better on the merits.
[242E G] The comparative merits of the appellant ViS a vis MCC are, however, a matter for the KPC to decide and not for the Courts.[243C D] Ram Gajadher Nishad vs State of U.P., (C.A. 1819/89); Ramana Dayaram Sherry vs The International Airport Authority of India & Ors., ; , referred to.
|
ivil Appeal No. 3002 of 1983.
From the Judgment and Order dated 20.8.1982 of the Madras High Court in S.A. No. 83 of '1982.
G. Ramaswamy (N.P.), Mrs. Anjani and K. Ramkumar for the Appellant.
P.S. Poti and K.V. Sreekumar for the Respondent.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave arises out of a suit filed by the respondent in representative capacity for permanent injunction against the appellant Tamil Nadu Hous ing Board from demanding and collecting from the allottees any additional amount for settlement of lands with buildings in the colony Ashok Nagar fully described in the plaint.
In pursuance of a Housing Scheme the appellant Board proceeded to settle a large number of residential plots to different groups of applicants including one described as low income group.
A number of allottees, including the plaintiff respondent, were selected and settlement in their favour was made in 1963.A copy of the document executed separately in respect to the plots is on the record of this case as Exh.
B 3, setting out the terms and conditions of the lease.
The term as mentioned in the 15th clause, which is quoted below, has been referred to by the parties in support of their respective cases: "15.
The Lessor agrees to sell the property more particu 274 larly described in the schedule hereunder to the Lessee for such price as the Administrative Officer of the Lessor may at any time in his sole discretion fix, and at which time the Administrative Officer of the Lessor is entitled to consider details regarding development charges, cost of amenities, cost of buildings, etc., and whether the price of the land acquired under the Land Acquisition Act together with suitable modifications thereto by the local laws has become final by a conclusive adjudication thereon by the concerned Tribunals and Courts.
The final decision of the Administrative Officer of the Lessor as to the final price of the property as determined under these presents is con clusive and binding on the Lessee and the Lessee agrees to purchase the property from the Lessor at the said price on the terms and conditions hereinafter mentioned.
Excepting the fixation of price with reference to the claim or compensation adjudicated or awarded by courts finally and conclusively with regard to the lands acquired under the scheme, the Lessor shall fix the price of the property after taking into consideration the development charges, cost of amenities and buildings etc. within a period of three years from the date of allotment and which price is subject only to a revision on account of excess compensation if any awarded by courts for the lands as aforesaid." Tentative price for the property was fixed, subject to a final determination within a stipulated period under the agreement and the allottees occupied the properties on that basis.
After a lapse of more than a decade fresh demands were made in 1975 threatening dispossession in case of non payment, which led to the filing of the suit.
It is stated in the plaint that the cases of all the allottees in low income group of Ashok Nagar made under the lease deeds are identical and the plaintiff was representing them in asking for permanent injunction restraining the Board from enforc ing the belated supplementary demands.
Besides, objecting to the maintainability of the suit, the defendant Board pleaded that it was entitled in law to finally determine the correct price for the settle ment of the properties even belatedly, and the challenged demands were perfectly valid.
It was stated that the land for the scheme had been acquired under the provisions of the Land Acquisition Act, and until the final award of the 275 compensation for the acquired lands was made, the value of the lands was not capable of being ascertained.
The trial court overruled the technical pleas, but, dismissed the suit on merits.
The first appellate court confirmed the decree.
The plaintiff filed a second appeal to the Madras High Court, and the Housing Board a cross objection against the adverse findings.
The High Court while confirming the maintainability of the suit reversed the finding on merits and passed a decree.
The impugned demand included the excess compensation awarded by courts for acquisition of the land as also the development charges, cost of amenities and buildings, etc., without splitting up the two demands.
The High Court held that it was open to the Board to determine within a reasonable time what portion of the additional demand represented the excess compensation awarded for the lands and to take steps for its realisation after service of a demand notice on the allottee, but, granted a decree for injunction in regard to the entire demand at the present stage as the two amounts have not been separately mentioned.
The learned counsel for the appellant has pressed two points in support of the appeal, namely, the decision of the High Court on the merits of the dispute is erroneous and that the provisions of Order 1, Rule 8 of the Code of Civil Procedure in any event are not applicable to the case and the suit, as a representative suit, is not maintainable.
The second paragraph of clause 15 of the lease deed explicitly directs the Board to assess the final amount on account of the development charges, cost of amenities and buildings, etc.
within a period of three years from the date of the allotment, and there does not appear to be any reason for construing the provisions differently.
The High Court at considerable length considered this aspect, pointing out the unexplained long delay of about a decade after completion of the constructions, etc.
on the part of the Board.
There was no difficulty at all in making the final calculation in time, and taking steps for recovery of the same.
We entirely agree with the view of the High Court. 'The Court was also right in permitting the Board to make a fresh additional demand in regard to the enhancement in the compensation for the acquired lands and the respondents do not have any objection to that part.
On the question of maintainability of the suit in a representative capacity under Order 1, Rule 8 of the Code of Civil Procedure, it has been contended that since the injury complained of is in regard to 276 demand of money and that too by a separate demand against each ' of the allottees, giving rise to different causes of action, the Rule 1 has application.
The learned counsel proceeded to say that it is not known whether each of the allottees in Ashok Nagar had been even served with an addi tional demand before the suit was filed; and further empha sised that those who had been so served are interested in defeating only the demand individually referable to each of them.
Each one of them is not interested in what happens to the others.
It is, therefore, suggested that only such of the allottees who have already been served with additional demands are entitled to maintain an action in court, and they also should do it by filing separate suits.
We do not find any merit in the argument.
The provisions of Order 1 of Rule 8 have been included in the Code in the public interest so as to avoid multiplicity of litigation.
The condition necessary for application of the provisions is that the persons on whose behalf the suit is being brought must have the same interest.
In other words either the interest must be common or they must have a common grievances which they seek to get redressed.
In Kodia Goundar and Another vs Velandi Goundar and others, |LR 1955 Madras 339, a Full Bench of the Madras High Court observed that on the plain language of Order 1, Rule 8, the principal requirement to bring a suit within that Rule is the sameness of interest of the numerous person on whose behalf or for whose benefit the suit is instituted.
The Court, while considering whether leave under the Rule should be granted or not, should exam ine whether there is sufficient community of interest to justify the adoption of the procedure provided under the Rule.
The object for which this provision is enacted is really.
to facilitate the decision of questions, in which a large number of persons are interested, without recourse to the ordinary procedure.
The provision must, therefore, receive an interpretation which will subserve the object for its enactment.
There are no words in the Rule to limit its scope to any particular category of suits or to exclude a suit in regard to a claim for money or for injunction as the present one.
Coming to the relevant circumstances in the present case it will be seen that all the allotments in Ashok Nagar were made under the same Scheme and all the relevant facts are common.
The basis of the impugned demand of the appel lant is equally applicable to all the allottees and the plea of the plaintiff is available to all of them.
The trial court was, therefore, perfectly right in permitting the plaintiff to proceed under Order 1, Rule 8 of the Code of Civil Procedure.
Nobody in this situation can complain of any inconvenience or injustice.
On the other hand, the appellant is being saved from being 277 involved in unnecessary repeated litigation.
It is true that each of the allottees is interested individually in fighting out the demand separately made or going to be made on him and, thus, separate causes of action arise in the case, but, that does not make Order 1.
Rule 8 inapplicable.
Earlier there was some doubt about the Rule covering such a case which now stands clarified by the Explanation introduced by the Code of Civil Procedure (Amendment) Act, 1976, which reads as follows: "Explanation For the purpose of determining whether the persons who sue or are sued, or defend, have the same inter est in one suit, it is not necessary to establish that such persons have the same cause of action as the persons on whose behalf, or for whose benefit, they sue or are sued, or defend the suit, as the case may be.
" The objects and reasons for the amendment were stated below: "OBJECTS AND REASONS: Clause 55; sub clause (iv), Rule 8 of Order 1 deals with representative suits.
Under this rule, where there are numerous persons having the same interest in one suit, one or more of them may, with the permission of the Court, sue or be sued, on behalf of all of them.
The rule has created a doubt as to whether the party represent ing others should have the same cause of action as the persons represented by him.
The rule is being substituted by a new rule and an explanation is being added to clarify that such persons need not have the same cause of action.
" There is, therefore, no doubt that the persons who may be represented in a suit under Order 1, Rule 8 need not have the same cause of action.
The trial court in the present case was right in permitting the respondent to sue on behalf of all the allottees of Ashok Nagar.
We, therefore, do not find any merit in this appeal which is dismissed with costs.
Before closing, however, we would like to point out that the plaintiff has represented only those in the low income group in Ashok Nagar who will be governed by this judgment, and nothing what has been said or decided in this case is ap plicable to any other group or colony.
R.N.J. Appeal dismissed.
| IN-Abs | In pursuance of a Housing Scheme the Tamil Nadu Housing Board, Madras had allotted residential plots over the land acquired under the Land Acquisition Act, to different groups of applicants including the low income group on terms and conditions stipulated in the lease deed Exh.
B 3 sometime in the year 1963.
After a lapse of more than a decade of the allotment, fresh demands were made from the allottees in 1975.
Objecting to the same, the respondent herein filed a suit for self and on behalf of all the allottees of low income group settled in the Colony named Ashok Nagar, pray ing for a permanent injunction restraining the Board from enforcing the demand.
The defendant Board questioned the very maintainability of the suit in a representative capacity and also pleaded that it was entitled to finally determine the correct prices for the plots after taking into account the final award of the compensation for acquired land and until then the prices were tentative.
The trial court negatived the objection to the maintainability of the suit but dismissed it on merits.
The first appellate court confirmed the decree.
On second appeal, the High Court reversed the finding on merits.
The High Court held that it was open to the Board to determine within a reasonable time what portion of the demand included the excess on account of compensation awarded by the courts for acquisition of the land and realize the same after serving fresh demand notices.
But since the impugned demand included both the excess amount of compensation as also the additional developmental charges injunction was granted in regard to the entire demand as the two amounts were not separately mentioned.
Dismissing the appeal of the Board, this Court, HELD: The provisions of Order 1 of Rule 8 have been included in the Code in the public interest so as to avoid multiplicity of litigation.
The condition necessary for application of the provisions is that the 273 persons on whose behalf the suit is being brought must have the same interest.
In other words either the interest must be common or they must have a common grievance which they seek to get redressed.
[276C D] The Court, while considering whether leave under the Rule should be granted or not, should examine whether there is sufficient community of interest to justify the adoption of the procedure provided under the Rule.
[276E] Persons who may be represented in a suit under Order I, Rule 8 need not have the same cause of action.
[277F]
|
vil Appeal Nos.1177 to 1184 (NT) of 1990.
From the Judgments and Order dated 5.3.85, 21.1.85, 25.2.85, 11.2.85, 14.10.85, 11.2.85 and 20.10.86 of the Madras High Court in T.C. Nos.694/82,565/80, 1404/80, 637/81,638/81,521/81,429/83 and 572/83.
T.A. Ramachandran and Mrs. Janki Ramachandran for the Appellant.
S.C. Manchanda, B.B. Ahuja and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
These Special Leave Petitions arise out of and are directed against the orders of the High Court of Judicature at Madras disposing of references made under Section 256(1) of the Income Tax Act 1961 (Act for short) in Tax Case Nos. 694 of 1982, 565 of 1980, 1404 of 1980, 637 and 638 of 1981, 521 of 1981, 429 of 1983 and 572 of 1983.
The High Court following its earlier pronouncement of that Court in Commissioner of Income tax vs O.M.S.S. Sankaralinga Nadar & Co., answered the question of law, similar in all the cases, in favour of the revenue.
The question was whether in making a disallowance for the inter est paid by a partnership firm to a partner under Section 4O(b).of the Act the interest, in turn, paid by the partner on his borrowings from the firm should be taken account of and deducted and only the balance disallowed under Section 40(b).
On this question, there is a sharp divergence of judi cial opinion in the High Courts.
In Sri Ram Mahadeo Prasad vs C.I.T., 1; C.I.T. vs Kailash Motors, ; C.I.T. vs T.V. Roman sigh & Sons, ; C.I.T. vs Kothari & Co., ; C.I.T. vs Balaji Commercial Syndicate, ; C.I.T. vs Motiisi Ramjiwan and Co., ; C.I.T. vs Precision Steel and Engg.Works, & Har.), the High Courts have taken the view that where a firm pays interest to its partner and the partner also pays interest to the firm, only the net amount of interest paid by the firm to the partner is liable to disallowance under Section 40(b) of the Act.
However, in C.I.T. vs O.M.S.S. 250 Sankaralinga Nadar & Co., , the High Court of Madras has taken a contrary view.
We have heard Shri Ramachandran, learned senior counsel for the appellants and Sri Manchanda, learned Senior Counsel and Sri B.B. Ahuja for the revenue.
Special Leave is granted.
The appeals are taken up for final hearing, heard and are disposed of by this common judgment.
We may refer to the facts in SLP(C) No. 14291/1985 which is representative of and typifies the context in which the question arises.
The appellant, M/s. Keshavji Ravji & Co. is a registered firm consisting of 6 partners and car ries on a business in the manufacture and export of stain less steel articles.
In the accounting year ended 13.11.1974, corresponding to the assessment year 1975 76, the firm paid interest to the partners on the amounts standing to their respective credits in the firm.
The firm also received from the partners interest on their borrowings from the firm.
For the relevant assessment year, the appellant filed a return disclosing a total income of Rs.2,55,225.
The Income tax Officer while disallowing the amount of interest paid to partners did not set off the interests received from the partners on their own borrowings.
With this disallow ance, the income of the firm was assessed at Rs.2,79,730.
In the assessee 's appeal, the Appellate Assistant Commissioner of Income Tax by his order dated 18.10.1977 allowed the claim of the appellant that only the net interest paid to the partners, after setting off the interest received from them, was to be disallowed.
The Revenue took up the matter in further appeal before the Income Tax Appellate Tribunal which by its order dated 6.1.1979 dismissed the appeal and affirmed the appellate order of the Assistant Commissioner.
The Tribunal, as did the Appellate Assistant Commissioner, placed reliance on the decision of the Allahabad High Court in Sri Ram Mahadeo Prasad vs C.I.T., At the instance of the revenue the Tribunal stated a case and referred the following question of law for the opinion of the High Court. "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that net interest should be disallowed under section 40(b) of the Income tax Act, 1961 ?"
This reference under Section 256(1) of the Act was registered in 251 the High Court as Tax Case No. 694/82 and the High Court by its order dated 5.3.1985 answered the question in the negative and against the appellant relying, as stated earli er, on its earlier pronouncement in Sankaralinga Nadar 's case.
Broadly, similar are the circumstances under which the other appeals arise.
Before we advert to and evaluate the merits of the contentions, it is appropriate to refer to the statutory provision as it then stood.
Section 40 of the Act provided: "40. "Notwithstanding anything to the contrary in sections 30 to 39, the following amounts shall not be deducted in computing the income chargeable under the head 'Profits and gains of business or profession", (a) ] (1) ] to ] Omitted as unnecessary (v) ] (b) in the case of any firm, any payment of interest, salary bonus, commission or remuneration made by the firm to any partner of the firm." (c) ] ] Omitted as unnecessary (d) ] By the Taxation Laws (Amendment) Act, 1984, several amend ments were introduced in the body of Section 40.
One of them was the introduction of Explanation 1 in clause (b) of Section 40.
That Explanation reads: "Explanation 1: Where interest is paid by a firm to any partner of the firm who has also paid interest to the firm, the amount of interest to be disallowed under this clause shall be limited to the amount by which the payment of interest by the firm to the partner exceeds the payment of interest by the partner to the firm.
" Referring to the new Explanation inserted in clause (b) of Section 40 by the amendment, the "Notes on Clauses" say: 252 "This clause seeks to insert three new Explanations to section 40(b) of the Act.
Explanation 1 seeks to provide that where interest is paid by a firm to a partner who has also paid interest to the firm, the amount of interest to be disallowed under section 40(b) of the Act shall be limited to the net amount of interest paid by the firm to the part ner, that is, the amount by which the payment of interest by the firm to the partner exceeds the payment of interest by the partner to the firm."
"The proposed amendments will take effect from 1st April, 1985, and will, accordingly, apply in relation to the as sessment year 1985 86 and subsequent years.
" The Explanation I, which was introduced in 1984, proprio vigore, does not apply to the assessment relating, as here, to an earlier year.
Whether the Explanation brings about a change in, or admits of being understood as an exposition of, the law is, however, a different matter.
It is, perhaps, also appropriate here to refer to the circular No. 33 D (XXV 24) of 1965 of the Central Board of Direct Taxes, the operative part of which provides: "However where a firm pays interest to as well as receives interest from the same partner, only the net interest can be stated to have been received or paid by the firm, as the case may be, and only the net interest should be taken into consideration.
This view also finds support in the decision of the Allahabad High Court in the case of Sri Ram Mahadeo Prasad, In view of the above, the in structions contained in Board 's Circular No. 55 of 1941 may be treated as modified accordingly .
Section 40 imposes a restriction on the deductibility of certain outgoings and expenses which are, otherwise, enabled under Sections 30 39 of the Act and constitutes an exception to these sections.
Clause (b) of Section 40 is analogous, with some enlargement, to Section 10(4)(b) of the predecessor Act of 1922.
The prohibition in Section 40 against the deductibility of certain outgoings is in mandatory terms.
It is this aspect that has loomed large in the reasoning supporting the view accepted by the Madras High Court in Sankaralinga Nadar 's case and emphasised by the learned counsel for the Revenue.
The reasoning of the Madras High Court in that case and of the Andhra Pradesh High Court in Commissioner of Income tax vs T.V. Ramanaiah & Sons, 157 illustrate the rival points of view.
The Madras High Court held: "The collocation of the words shows that what is disallowed in the matter of payment of interest cannot be the net interest, but can only be interest paid with refer ence to a given account relating to payment of interest by the firm to the partner.
This is because the subject of disallowance in the matter of payment of interest appears in section 40(b) cheek by jowl with salary, bonus, commission or remuneration made by the firm to the partner.
There cannot be any net salary or net bonus or net remuneration as mat ters of disallowance.
They can only be salary, as such, or bonus, as such, or commission, as such, or remuneration as such which are the subject of disallowance.
In like manner, when the section speaks of payment of interest by the firm to a partner as the subject of disallowance, it can only be payment of 'gross ' interest in the particular account in which interest is payable.
Salary, bonus, commission or remuneration do not have what may be characterised as a two way traffic . " " . .
In the earliest of the cases, the Allahabad High Court endorsed the Tribunal 's decision to disallow only the net interest.
The court did so, not on a construction of the words of the section, but on equitable grounds of fairness". " (P. 336)
The Andhra Pradesh High Court, however, taking the contrary view relied on, what it considered, the revenue 's own understanding of the legal position as made manifest in the Board 's circular that the "real purpose of Section 40(b) of the Act was to add back only the net amount of interest and not the gross amount".
On the interpretation of Section 40(b), the High Court in Rarnanaiah 's case said: "As a matter of interpretation of section 40(b) of the Act, we find that there is nothing in the provision which expressly states that the amount to be added back is either gross or net.
The provision requires that "any pay ment of interest" by a partnership firm to a partner shall not be deducted in computing the income of the partnership firm.
For the purpose of finding out the amount paid by way of 254 interest, it is necessary for the Income tax Officer to find out the amount of interest paid by the partnership firm to the partner and also see if the same partner paid any inter est to the partnership firm and ascertain the amount of interest effectively paid by the partnership firm to the partner . " at p. 304] 5A.
The arguments of the learned counsel on both sides covered a wide range of contentions.
The submissions of Sri Ramachandran in support of the appeals admit of being formu lated thus: (a) The scheme of Section 40 of the Act does not evince any intention to penalise a firm for the outgoings which are rendered non deductible; but the sole object of Section 40(b) is, having regard to the special features and legal incidents of a partnership, to enable the assessment of the 'real income ' of the firm.
The outgoings disallowed by Section 40(b) are not really outgoings at all, but constitute what are, otherwise, ingredients or components of the real income of the firm.
Therefore, the ascertainment of the real income or the real commercial profits does not require or compel the exclusion of the cross interest paid by a partner in determining the quantum to be disallowed under Section 40(b).
(b) The extent of the embargo under Section 10(4)(b) of the 1922 Act on the disallowance of "interest" paid to a partner was judicially interpreted and ascertained in Sri Ram Maha deo Prasad vs Commissioner of Income tax, and when the legislature re enacted those provisions in Section 40(b) of the 1961 Act in substantially the same terms, legislature must be held to have used that expression with the same implications attributed to it by the earlier judicial exposition.
(c) Interest payable by the partners to the firm pursuant to an agreement between the partners is of the same nature as that payable by the firm to the partners on the capital, brought in by them.
Interest paid to and received from a partner are both integral parts of a method adopted by the partners for adjusting the division of profits and in that sense both payments partake of the same character.
In identifying and quantifying the 'interest ' for purposes of 255 Section 40(b) it would be permissible to take both the payments into consideration and treat only such excess, ii any, paid by the firm as susceptible to the exclusionary rule in Section 40(b).
(d) The circular No. 33 D(XXV 24) of 1965 of the Central Board of Direct 'Faxes, which is statutory in character, is binding on the authorities.
The High Court was in error in taking a view of the legal position different from the one indicated in it.
(e) The amendment of 1984 inserting Explanation I in Section 40(b), though later in point; of time, constitutes a legis lative exposition of the correct import of the provision and so construed offers a guide to the correct understanding of the provisions in Section 40(b) in its application to the earlier years as well.
Re: Contention (a) The premises of the argument is good in parts; but the inference does not logically follow.
Section 40(b), it is true, seeks to prevent the evasion of tax by diversion of the profits of a firm; but the legislative expedience adopt ed to achieve that objective requires to be given effect on its own language.
Section 40 opens with the non obstante clause and directs that certain outgoings specifically enumerated in it "shall not be deducted" in computing the income chargeable under the head "profits and gains of business or profession": As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible.
The supposed intention of the legislature can not then be ap pealed to whittle down the statutory language which is otherwise unambiguous.
If the intendment is not in the words used it is nowhere else.
The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the Legislature.
In Doypack Systems Pvt. Ltd. vs Union of India, ; it was observed: "The words in the statute must, prima facie, be given their ordinary meanings.
Where the grammatical construction is clear and manifest and without doubt, that construction ought to prevail unless there are some strong and obvious reasons to the contrary . " (p. 33 1)
256 "It has to be reiterated that the object of interpretation of a statute is to discover the intention of the Parliament as expressed in the Act.
The dominant purpose in construing a statute is to ascertain the intention of the legislature as expressed in the statute, considering it as a whole and in its context.
That intention, and therefore the meaning of the statute, is primarily to be sought in the words used in the statute itself, which must, if they are plain and unam biguous, be applied as they stand . " (Emphasis Supplied) (p. 332)
Artificial and unduly latitudinarian rules of construc tion which, with their general tendency to "give the tax payer the breaks", are out of place where the legislation has a fiscal mission.
Indeed, taxation has ceased to be regarded as an "impertinent intrusion into the sacred rights of private property" and it is now increasingly regarded as a potent fiscal tool of State policy to strike the required balance required in the context of the felt needs of the times between citizens ' claim to enjoyment of his property on the one hand and the need for an equitable distribution of the burdens of the community to sustain social services and purposes on the other These words of Thomas M. Cooley in 'Law of Taxation ' Vol.2 are worth mentioning; "Artificial rules of construction have probably found more favour with the courts than they have ever deserved."
Their application in legal controversies has often times been pushed to an extreme which has defeated the plain and mani fest purpose in enacting the laws.
Penal laws have sometimes had all their meaning construed away and in remedial laws, remedies have been found which the legislature never intend ed to give.
Something akin to this has befallen the revenue laws . . " (Emphasis Supplied) There are, indeed, strong and compelling considerations against the adoption of the test suggested by Sri Ramachan dran.
Limiting of the ambit of Section 40(b) on the supposed 'real income ' test would, perhaps, lead to positions and results, whose dimensions and implications are not, to say the least, fully explored.
The test suggested by Sri Rama chandran, might on its own extended logic, validate a set off of the interest paid to one partner against interest received from another and likewise 'interest ' received from one partner on some other deal 257 ings between him and the firm against interest paid to another partner on his or her capital contribution.
The test of 'real income ' as one on which the operation of Section 40(b) could be sought to be limited is not a reliable one.
Indeed, the following observations of this Court on the concept of 'Real Income ' in State Bank of Travancore vs C.I.T. ; at 155, though made in a different context, are apposite: .
The concept of real income is certainly applicable in judging whether there has been income or not but, in every case, it must be applied with care and within well recognised limits.
We were invited to abandon legal fundamentalism.
With a problem like the present one, it is better to adhere to the basic fundamentals of the law with clarity and con sistency than to be carried away by common cliches.
The concept of real income certainly is a well accepted one and must be applied in appropriate cases but with circumspection and must not be called in aid to defeat the fundamental principles of the law of income tax as developed".
This contention of Sri Ramachandran rests on generalisation which incur the criticism of being too broad and have cer tain limitations of their own.
Contention (a) does not advance appellants ' case.
Re: Contention (b) The submissions of Sri Ramchandran on the point are that where the meaning of a word used in a statute had been judicially ascertained by a court and where the legislature, while re enacting the law on the subject, uses the same word, it must be taken to have been aware of the meaning so judicially ascertained earlier and not to have used the word with a different content.
This is, no doubt, a well recog nised guide to construction.
When words acquire a particular meaning or sense because of their authoritative construction by superior courts, they are presumed to have been used in the same sense when used in a subsequent legislation in the same or similar context.
This principle was stated by the Judicial Committee in H.H. Ruckmaboye vs Lulloobhoy Mottic hund, Moore 's Indian Appeals, Vol. 5, p. 234 at 250 thus: 258 " . it is, therefore, of considerable importance to ascertain what has been deemed to be the legal import and meaning of them, because, if it shall appear that they have long been used, in a sense which may not improperly be called technical, and have been judicially construed to have a certain meaning, and have been adopted by the Legislature in that sense, long prior to the Statute, 21 James I., c. 16, the rule of construction of Statutes will require, that the words in the Statute should be construed according to the sense in which they had been so previously used, al though that sense may vary from the strict literal meaning of them."
This principle has been reiterated by this Court in several pronouncements.
But the limitations of its application in the present cases arise out of the circumstance that the decision of the Allahabad High Court in Sri Ram Mahadeo Prasad vs Commissioner of Income tax, did not proceed or rest on any special or technical connotation of the word "interest" nor any special legal sense which that word could be said to have acquired by the earlier judicial ascertainment of its amplitude.
The decision proceeded on a construction of the relevant provision i.e. Section 10(4)(b) of the 1922 Act and on what the High Court considered as affording to the assessee a fair treatment.
Nothing particu lar stemmed from the interpretation of the expression "interest".
The appeal to this principle of construction is, in our opinion, somewhat out of place in this case.
The rules of interpretation are not rules of law; they are mere aids to construction and constitute some broad pointers.
The interpretative criteria apposite in a given situation may, by themselves, be mutually irreconcilable.
It is the task of the Court to decide which one, in the light of all relevant circumstances, ought to prevail.
The rules of interpretation are useful servants but quite often tend to become difficult masters.
It is appropriate to recall the words of Lord Reid 's in Maunsell vs olins, "Then rules of construction are relied on.
They are not rules in the ordinary sense of having some binding force.
They are our servants not our masters.
They are aids to construction, presumptions or pointers.
Not infrequently one 'rule ' points in one direction, another in a different direction.
In each case we must look at all relevant circumstances and decide as a matter of judgment what weight to attach to any particular 'rule '.
" 259 This passage was referred to with approval by this Court in Utkal Contractors and Joinery vs State of Orissa, ; at 330.
Contention (b) is, therefore, not of any assistance to the appellants.
Re: Contention (c) There are certain aspects of the legal relationship amongst partners which do impart a special complexion to the question under consideration.
The point raised in these appeals in confined to a situation where a partner receives interest on the capital subscribed by him and the same partner pays interest on the drawings made by him.
A firm under the general law is not a distinct legal entity and has no legal existence of its own.
The partner ship property vests in all the partners and in that sense every partner has an interest in assets of the partnership.
However, during the subsistence of the partnership no part ner can deal with any portion of the property as his own.
In Narayanappa vs Krishtappa, ; , this Court referred to the nature of the interest of a partner in the firm and observed: " . .The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable property.
Once that is done whatever is brought in would cease to be the exclusive property of the person who brought it in.
It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of the partnership.
The person who brought it in would, therefore, not be able to claim or exercise any exclusive right over any property which he has brought in, much less over any other partnership property.
He would not be able to exercise his right even to the extent of his share in the business of the partnership .
In CIT vs Chidambaram, at 295 & 296 this Court observed: "Here the first thing that we must grasp is that a firm is not a legal person even though it has some at tributes of personality.
Partnership is a certain relation between 260 persons, the product of agreement to share the profits of a business. 'Firm ' is a collective noun, a compendious expres sion to designate an entity, not a person.
In income tax law, a firm is a unit of assessment, by special provisions, but is not a full person which leads to the next step that since a contract of employment requires two distinct persons viz. the employer and the employee, there cannot be a con tract of service, in strict law, between a firm and one of its partners.
So that any agreement for remuneration of a partner for taking part in the conduct of the business must be regarded as portion of the profits being made over as a reward for the human capital brought in.
Section 13 of the Partnership Act brings into focus this basis of partnership business." " . .
It is implicit that the share income of the part ner takes in his salary.
The telling test is that where a firm suffers loss, the salaried partner 's share in it goes to depress his share of income.
Surely, therefore, salary is a different label for profits, in the context of a partner 's remuneration" (Underlining Supplied) In Lindley on Partnership (14th Edn.), we find this statement of the law: " . .
In point of law, a partner may be the debtor or the creditor of his co partners, but he cannot be either debtor or creditor of the firm of which he is himself a member, nor can he be employed by his firm, for a man cannot be his own employer." (p. 30)
The position as stated above was approved by this Court in Chidabaram 's case.
In Regional Director Employees State Insurance Corpora tion, Trichur vs Ramanuja Match Industries, , this Court dealing with the question whether there could be a relationship of master and servant between a firm on the one hand and its partners on the other, indicated that under the law of partnership there can be no such relationship as it would lead to the anomalous position of the same person being both the master and the servant.
The following observations of Justice Mathew in Ellis vs Joseph Ellis & Co., were referred to with approval: 261 "The argument on behalf of the applicant in this appeal appears to involve a legal impossibility, namely, that the same person can occupy the position of being both master and servant, employer and employed." (p. 126) And observed: ". .
A partnership firm is not a legal entity.
This Court in Champaran Cane Concern vs State of Bihar and Anr., pointed out that in a partnership each partner acts as an agent of the other.
The position of a partner qua the firm is thus not that of a master and a servant or employee which concept involves an element of subordination but that of equality.
The partnership business belongs to the partners and each one of them is an owner thereof . " (p. 123) "It is thus clear that in the United States, Great Britain and Australia, a partner is not treated as an employee of his firm merely because he receives a wage or remuneration for work done for the firm.
This view is in complete accord with the jurisprudential approach.
In the absence of any statutory mandate, we do not think there is any scope for accepting the view of the Rajasthan High Court." (p. 127)
Sri Ramachandran 's contention is that both the capi tal brought in by the partners to the firm and the amounts that may be drawn by them from the partnership firm partake of the same nature and character as the funds of the partnership.
This may be so.
But in effectuating the conse quences of the recognition of this position, it is necessary to ensure that express provisions of the statute departing from the general law are not whittled down.
To the extent that the statute expressly or by necessary implication departs from the general law, the latter cannot be invoked to displace the effect of the statute.
But, if there is no such statutory departure the general principles operating in that branch of the law determine the nature of the legal relationship.
Sir Francis Bennion in his Statutory Interpretation observes: "Unless the contrary intention appears, an enactment by 262 implication imports any principle or rule of law (whether statutory or non statutory) which prevails in the territory to which the enactment extends and is relevant to its opera tion in that territory." (p. 350)
"Unless the contrary intention appears, an enactment by implication imports the principle of any legal maxim which prevails in the territory to which the enactment extends and is relevant to the operation of the enactment in that terri tory." (p. 354)
What follows is that, to the extent not prohibited by the statute, the incidents of the general law of partners are attracted to ascertain the legal nature and character of a transaction.
This is quite apart from distinguishing the 'substance ' of the transaction from its 'from '.
In Sargaison vs Roberts, [1969] 45 Tax Cases 612 at 617 & 618, Megarry, J., observed: "I appreciate that what I have to do is to construe the words used, and not to insert words which are not there, or to resort to a so called "equitable construction" of a taxing statute.
But even when I have given full weight to this consideration, I think that I am entitled to distin guish between the substance of a transaction and the machin ery used to carry it through . . " ". . "Substance" and "form" are words which must no doubt be applied with caution in the field of statutory construction.
Nevertheless, where the technicalities of English conveyancing and land law are brought into juxtaposition with a United Kingdom taxing statute, I am encouraged to look at the realities at the expense of the technicalities.
In Commissioner of Income tax vs Gillanders Arbuthnot & Co., at 418, this Court said: ". .The taxing authority is entitled and is indeed bound to determine the true legal relation resulting from a trans action.
If the parties have chosen to conceal by a device the legal relation, it is open to the taxing authority to unravel 263 the device and to determine the true character of the relationship.
But the, legal effect of a transaction cannot be displaced by probing into the substance of the transaction" (Emphasis Supplied)
The Court is not precluded from treating what the trans action is in point of fact as one in point of law also.
How do these principles operate on the present controversy?
It appears to us that if in substance interest paid by the firm to a partner and the interest, in turn, received from the partner are mere expressions of the appli cations of the funds or profits of the partnership and which, having regard to the community of interest of the partners, are a mere variations of the method of adjustment of the profits, there should be no impediment in treating them as part of the same transaction if, otherwise, in general law they admit of being so treated.
The provisions of Section 40(b) do not exclude or prohibit such an approach.
If instead of the transactions being reflected in two separate or distinct accounts in the books of the part nership they were in one account, the quantum of interest paid by the firm to the partner would to the extent of the drawings of the partner, stand attenuated.
The mere fact that the transactions are split into or spread over to two or more accounts should not by itself make any difference if, otherwise, the substance of the transaction is the same.
One of the relevant tests would be whether the funds on which interest is paid or received partake of the same character.
A broad analogy, though in itself may not be conclusive, is furnished by the idea of "mutual dealings" and the prin ciple of set off statutorily recognised in bankruptcy pro ceedings under Section 46 of the Provincial Insolvency Act and attracted also to proceedings for winding up of compa nies by virtue of Section 529 of the , where the 'mutual credit ' clause steps in to avoid the injustice, which would otherwise, arise, of compelling a creditor to pay the official assignee the full amount of the debt due from him to the insolvent, while the creditor would, perhaps, only receive a small dividend on the debt due from the insolvent to him under a pari passu payment.
This principle was recognised by this Court in Official Liquidator vs Lakshmikutty, ; The set off in this case is, no doubt, the result of a statutory provision.
In the case of partners, the special legal incidents of their relationship would substitute for the statutory provi sion and govern the situation.
Indeed, even the idea of 264 a set off itself, which presupposes a duality of entities, may be out of place in the very nature of the relationship between a firm and its partners where the former is a mere compendious reference to the latter.
But even to the extent the income tax law which identifies the firm as a distinct entity and unit of assessment goes, the idea of set off may be invoked in view of the mutuality implicit in the putative duality inherent in deeming the firm as a distinct entity under the Act for certain purposes.
The fiction may have to be pushed to its logical conclusions.
The decision of the Madras High Court in Sankaralin ga Nadar 's case speaks of income tax and equity being strangers.
To say that a Court could not resort to the so called "equitable construction" of a taxing statute is not to say that where a strict literal construction leads to a result not intended to subserve the object of the legisla tion, another construction, permissible in the context, should not be adopted.
In Commissioner of Income tax vs J.H. Gotla, , this Court said: " . . we should find out the intention from the language used by the Legislature and if strict literal construction leads to an absurd result, i.e., a result not intended to be subserved by the object of the legislation found in the manner indicated before, then if another construction is possible apart from strict literal construction, then that construction should be preferred to the strict literal construction.
Though equity and taxation are often strang ers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction.
Furthermore, in the instant case, we are dealing with an artificial liability created for coun teracting the effect only of attempts by the assessee to reduce tax liability by transfer . " (p. 339 40) In this respect taxing statutes are not different from other statutes.
In A. G vs Carlton Bank, , Lord Russel of Killowen, CJ said: "I see no reason why any special canons of construction should be applied to any Act of Parliament, and I know of no authority for saying that a taxing Act is to be construed 265 differently from any other Act.
The duty of the court is, in my opinion, in all cases the same, whether the Act to be construed relates to taxation or any other subject, viz. to give effect to the intention of the legislature . "
We, accordingly, accept the submission of Sri Rama chandran on this point.
In our opinion, where two or more transactions on which interest is paid to or received from the partner by the firm are shown to have the element of mutuality and are referable to the funds of the partnership as such, there is no reason why Section 40(b) should be so construed as to exclude in quantifying the interest on the basis of such mutuality.
In such circumstances the interest, if any, paid to a partner by the firm in excess of what is received from the partner could alone be excluded from deduction under Section 40(b).
Contention 'c ' is held and answered accordingly.
Re: Contention (d) Sri Ramachandran contended that circular of 1965 of the Central Board of Direct Taxes was binding on the authorities under the Act and should have been relied upon by the High Court in support of the Court 's construction of Section 40(b) to accord with the understanding of the provision made manifest in the circular.
This contention and the proposition on which it rests, namely, that all circulars issued by the Board have a bind ing legal quality incurs, quite obviously, the criticism of being too broadly stated.
The Board cannot pre empt a judi cial interpretation of the scope and ambit of a provision of the 'Act ' by issuing circulars on the subject.
This is too obvious a proposition to require any argument for it.
A circular cannot even impose on the tax prayer a burden higher than what the Act itself on a true interpretation envisages.
The task of interpretation of the laws is the exclusive domain of the courts.
However, this is what Sri Ramachandran really has in mind circulars beneficial to the assessees and which tone down the rigour of the law issued in exercise of the statutory power under Section 119 of the Act or under corresponding provisions of the predecessor Act are binding on the authorities in the administration of the Act.
The Tribunal, muchless the High Court, is an authority under the Act.
The circulars do not bind them.
But the benefits of such circulars to the assessees have been held to be permissible even though the circulars might have departed from the strict tenor of the statutory provision and mitigated the 266 rigour of the law.
But that is not the same thing as saying that such circulars would either have a binding effect in the interpretation of the provision itself or that the Tribunal and the High Court are supposed to interpret the law in the light of the circular.
There is, however, support of certain judicial observations for the view that such circulars constitute external aids to construction.
In State Bank of Travancore vs C.I.T., ; , however, this Court referring to certain circulars of the Board said: "The earlier circulars being executive in character cannot alter the provisions of the Act.
These were in the nature of concessions and could always be prospectively withdrawn.
However, on what lines the rights of the parties should be adjusted in consonance with justice in view of these circulars is not a subject matter to be adjudicated by us and, as rightly contended by counsel for the Revenue, the circulars cannot detract from the Act." (Emphasis Supplied) (p. 139)
The expression 'executive in character ' is, presumably, used to distinguish them from judicial pronouncements.
The circulars referred to in that case were also of the Central Board of Direct Taxes and were, presumably also, statutory in character.
However, this contention need not detain us, as it is unnecessary to examine whether or not such circulars are recognised, legitimate aids to statutory construction.
In the present case, the circular of 1965 broadly accords with the view taken by us on the true scope and interpretation of Section 40(b) in so far as the quantification of the inter est for purposes of Section 40(b).
Contention (d) is disposed of accordingly
Re: Contention (e) Sri Ramachandran urged that the introduction, in the year 1984, of Explanation I to Section 40(b) was not to effect or bring about any change in the law, but was intend ed to be a mere legislative exposition of what the law has always been.
An 'Explanation ', generally speaking, is in tended to explain the meaning of certain phrases and expres sions contained in a statutory provision.
There is no gener al theory as 267 to the effect and intendment of an Explanation except that the purposes and intendment of the 'Explanation ' are deter mined by own words.
An Explanation, depending on its language, might supply or take away something from the contents of a provision.
It is also true that an Explanation may this is what Sri Ramachandran suggests in this case be introduced by way of abundant caution in order to clear any mental cobwebs surrounding the meaning of a statutory provision spun by interpretative errors and to place what the legislature considers to be the true meaning beyond controversy or doubt.
Hypothetically, that such can be the possible purpose of an 'Explanation ' cannot be doubted.
But the question is whether in the present case, Explanation I inserted into Section 40(b) in the year 1984 has had that effect.
The notes on clauses appended to the Taxation Laws (Amendment) Bill, 1984, say that Clause 10 which seeks to amend Section 40 will take effect from 1st April, 1985 and will, accordingly, apply in relation to the assessment year 1985 86 and subsequent years.
The express prospective opera tion and effectuation of the 'Explanation ' might, perhaps, be a factor necessarily detracting from any evincement of the intent on the part of the legislature that the Explana tion was intended more as a legislative exposition or clari fication of the existing law than as a change in the law as it then obtained.
In view of what we have said on point (c) it appears unnecessary to examine this contention any further.
Contention (e) is disposed of accordingly.
In the result, for the foregoing reasons these appeals are allowed; the orders of the High Court under appeal set aside and the question of law referred for opin ion is answered in the affirmative in terms of para 12 (supra).
In the circumstances, there will be no orders as to the costs in these appeals.
P.S. S Appeals allowed.
| IN-Abs | Section 40(b) of the Income Tax Act, 1961, as it stood at the relevant time, prohibited deduction of interest, salary, bonus, commission or remuneration paid by the firm to the partner.
Explanation 1 introduced thereto by the Taxation Laws (Amendment) Act, 1984, which took effect from 1st April, 1985, provided that where interest is paid by a firm to a partner who has also paid interest to the firm, the amount of interest to be disallowed shall be limited to the net amount of interest paid by the firm to the partner.
Circular No. 33D(XXV 24) of 1965 issued by the Central Board of Direct Taxes provided that where a firm pays interest to as well as receives interest from the same partner, only the net interest can be stated to have been received or paid by the firm.
The assessee appellant, a registered partnership firm, in the accounting year for the assessment year 1975 76, paid interest to the partners on the amounts standing to their respective credits.
It also received from the partners interest on their borrowings from the firm.
The Income tax Officer 244 while disallowing the amount of interest paid to the part ners did not set off the interest received from them on their borrowings.
The Appellate Assistant Commissioner allowed the claim of the appellants that only the net inter est paid to the partners after setting off the interest received from them was to be disallowed.
The Appellate Tribunal affirmed the appellate order.
The High Court an swered the reference in favour of the Revenue on the view that the Tribunal was not justified in holding that net interest should be disallowed under section 40(b) of the Act.
In these appeals by special leave it was contended for the appellants that: (a) the sole object of section 40(b) was, having regard to the special features and legal incidents of a partnership, to enable the assessment of the 'real income ' of the firm and did not require or compel the exclusion of the cross interest paid by a partner in determining the quantum to be disallowed; (b) the extent of the embargo under section 10(4)(b) of the 1922 Act on the disallowance of interest paid to a partner was judicially interpreted and ascertained in Sri Ram Mahadeo Prasad vs CIT, All.
and when the legislature re enacted those provisions in section 40(b) of the 1961 Act in substantially the same terms, legislature must be held to have used that expression with the same implications attributed to it by the earlier judi cial exposition; (c) the interest paid to a partner on the capital brought in by him and the interest received from a partner on his borrowings from the firm were both integral parts of a method adopted by the partners for adjusting the division of profits and in that sense both payments partook of the same character and it would be permissible to take both the payments into consideration in quantifying the interest and treat only such excess, if any, paid by the firm as susceptible to the exclusionary rule in section 40(b); (d) the circular of the Central Board of Direct Taxes, which was statutory in character, was binding on the authorities and the High Court was in error in taking a view of the legal position different from the one indicated in it; and (e) the amendment of 1984 inserting Explanation 1 in section 40(b), though later in point of time, constitutes a legisla tive exposition of the correct import of the provision and so construed offers a guide to the correct understanding of the provisions in section 40(b) in their application to the earlier years as well.
Allowing the appeals, the Court, HELD: 1.1 As long as there is no ambiguity in the statu tory language, resort to any interpretative process to unfold the legislative intent becomes impermissible.
The supposed intention of the legislature cannot then be ap pealed to whittle down the statutory 245 language.
If the intendment is not in the words used it is nowhere else.
[255E F] Doypack Systems Pvt. Ltd. vs Union of India, ; , referred to.
1.2 Section 40 of the Income Tax Act, 1961 opens with the nonobstante clause and directs that outgoings such as interest, salary, bonus, commission or remuneration specifi cally enumerated in cl.
(b) shall not be deducted in comput ing the income chargeable under the head "profits and gains of business or profession".
The words used therein on their own terms, are plain and unambiguous.
They manifest the intention of the legislature and must, therefore, be applied as they stand.
[255D E, F G, 256B] 1.3 Artificial and unduly latitudinarian rules of con struction, with their general tendency to 'give the tax payer the breaks ', are out of place where the legislation has a fiscal mission.
Taxation is regarded as a potent fiscal tool of State policy to achieve equitable distribu tion of the burdens of the community to sustain social services.
[256C D] Thomas M. Cooley: Law of Taxation, Vol. 2, referred to.
1.4 The test of 'real income ' as one on which the opera tion of section 40(b) could be sought to be limited is not a reliable one.
It might on its own extended logic validate a set off of the interest paid to one partner against interest received from another and likewise, interest received from one partner on some other dealings between him and the firm against interest paid to another partner on his or her capital contribution and thus lead to positions and results, whose dimensions and implications are not fully explored.
It must not, therefore, be called in aid to defeat the funda mental principles of the law of income tax.
[257 A, 256A, 256G, 257D1 State Bank of Travancore vs CIT, ; at 155, referred to.
2.1 When words acquire a particular meaning or sense because of their authoritative construction by superior courts, they are presumed to have been used In the same sense when used In a subsequent legislation In the same or similar context.
[257G] H.H. Ruckmaboye vs Lulloobhoy Mottichund, Moore 's Indian Appeals, Vol.
5, p. 234 at 250, referred to.
2.2 However, the rules of interpretation are not rules of law.
they 246 are mere aid to construction and constitute some broad pointers.
The interpretative criteria apposite in a given situation may, by themselves, be mutually irreconcilable.
It is the task of the court to decide which one, in the light of all relevant circumstances, ought to prevail.
[258E F] Maunsell vs Olins, and Utkal Contrac tors & Joinery vs State of Orissa, ; at 330, referred to.
2.3 The decision in Sri Ram Mahadeo Prasad vs CIT, All.) proceeded on a construction of the relevant provision i.e.s. 10(4)(b) of the 1922 Act and on what the High Court considered as affording to the assessee a fair treatment.
It did not rest on any special or technical connotation of the word 'interest ' nor any special legal sense which that word could be said to have acquired by the earlier judicial ascertainment of its amplitude.
The appeal to this principle of construction in the instant case is, therefore, out of place.
[258D E] 3.1 To the extent the statute expressly or by necessary implication departs from the general law, the latter can not be invoked to displace the effect of the statute.
But if there is no such statutory departure the general principle operating in that branch of law would determine the nature of legal relationship.
[261F H] Sir Francis Bennion, on Statutory Interpretation, p. 350, 354, referred to.
In the case of partners, therefore, to the extent not prohibited by section 40(b) of the Act, the incidents of the general law of partners would be attracted to ascertain the legal nature and character of a transaction.
This is quite apart from distinguishing the 'substance ' of the transaction from its 'form '.
But the legal effect of a transaction, cannot be displaced by probing into the substance of the transaction.
The Court, however, is not precluded from treating what the transaction is in point of fact as one in point of law also.
[262C D, 263A B] Sargaison vs Roberts, [1969] 45 Tax Cases 612; CIT vs Gillanders Arbuthnot & Co., ; Narayanappa vs Krishtappa; , ; CIT vs Chidambaram, ; Lindley on Partnership, (14th Edn.) p. 30; Regional Director Employees State Insurance Corporation, Trichur vs Ramanuja Match Industries, and Ellis vs Joseph Ellis & Co., referred to.
3.2 If interest paid by the firm to a partner and the inter est, in 247 turn, received from the partner are mere expressions of the application of the funds or profits of the partnership and which, having regard to the community of interest of the partners, are mere variations of the method of adjustment of the profits, they could be treated as part of the same transaction if, otherwise, in general law they admit of being so treated.
The provisions of section 40(b) do not exclude or prohibit such an approach.
[263B D] If instead of the transactions being reflected in two separate or distinct accounts in the books of the partner ship they were in one account, the quantum of interest paid by the firm to the partner would, to the extent of interest on drawings of the partner, stand attenuated.
The mere fact that the transactions were split into or spread over to two or more accounts would not by itself make any difference if, otherwise.
the substance of the transaction was the same.
[263D E] Official Liquidator vs Lakshmikutty, ; , referred to.
Even the idea of a set off itself, which presupposes a duality of entities may be out of place in the very nature of the relationship between a firm and its partners where the former is a mere compendious reference to the latter.
But even to the extent the income tax law which identifies the firm as a distinct entity and unit of assessment goes, the idea of set off may be invoked in view of the mutuality implicit in the putative duality inherent in deeming the firm as a distinct entity under the Act for certain pur poses.
The fiction may have to be pushed to its logical conclusions.
[263H 264B] 3.3 Where a strict literal construction leads to a result not intended to subserve the object of the legisla tion another construction, permissible in the context should be adopted.
Therefore, though equity and taxation are often strangers, attempts should be made that these do not remain always so.
More so, a taxing statute being not different from other statutes it is not to be construed differently.
The duty of the Court is to give effect to the intention of the legislature.
[264C, E F, G H, 265A] CITv.
J.H. Gotla, and A.G.V. Carlton Bank, , referred to.
3.4 Accordingly, where two or more transactions on which interest is paid to or received from the partner by the firm are shown to have the element of mutuality and are referable to the funds of the 248 partnership as such, section 40(b) should not be so construed as to exclude in quantifying the interest on the basis of such mutuality.
If that be so, the interest, if any paid to a partner by the firm in excess of what is received from the partner could alone be excluded from deduction under section 40(b).
[265B C] C.I.T. vs T.V. Ramanaiah & Sons, A.P., approved.
C.I.T. vs O.M.S.S. Sankaralinga Nadar & Co., Mad., overruled.
The Central Board of Direct Taxes cannot pre empt a judicial interpretation of the scope and ambit of a provi sion of the Income Tax Act by issuing circulars on the subject.
A circular cannot even impose on the tax payer a burden higher than what the Act itself on a true interpreta tion envisages.
Nor can it detract from the Act.
The task of interpretation of the laws is the exclusive domain of the courts.
The circulars do not bind them.
[265E F, 266D, 265F, G H] State Bank of Travancore vs CIT, ; , re ferred to.
Since the circular of 1965 broadly accords with the view taken on the true scope and interpretation of section 40(b) as regards qualification of interest it is unnecessary to examine whether or not such circulars are recognised legiti mate aids to statutory construction.
[266E F] 5.
An 'Explanation ' is generally intended to explain the meaning of certain phrases and expressions contained in a statutory provision.
There is no general theory as to the effect and intendment of the Explanation except that the purpose and intendment of the Explanation are determined by its own words.
An Explanation depending on its language, might supply or take away something from the contents of a provision.
An Explanation may also be introduced by way of abundant caution in order to clear the meaning of a statuto ry provision and to place what the legislature considers to be the true meaning beyond controversy or doubt.
[266G 267B] In the instant case, the notes on clauses appended to the Taxation Laws (Amendment) Bill, 1984 say that clause 10 which seeks to amend section 40will take effect from 1st April, 1985 and will, accordingly, apply in relation to the assess ment year 1985 86 and subsequent years.
In view of the express prospective operation and effectuation of the Expla nation 249 it is not necessary to examine its possible purpose any further.
[267C E]
|
Criminal Appeal Nos. 11 & 12 of 1990.
From the Judgment and Order dated 7.9.1989 of the Delhi High Court in Criminal Writ No. 591 & 591 A of 1988.
Harjinder Singh, R.N. Joshi and Latha Krishnamurthy for the Appellants.
Soli J. Sorabjee, Attorney General, P. Parameswaran, B. Parthasarthy, N.N. Johari and Uma Nath Singh for the Re spondents.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
These appeals, by special leave, arise out of the judgment of the High Court of Delhi whereby the writ petitions filed under Article 226 of the Constitution to challenge the legality of the orders dated October 11, 1988 passed under Section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 (hereinafter referred to as 'the Act ') for the deten tion of the appellants have been dismissed.
This Court by the order dated January 11, 1990 allowed the appeals and after setting aside the orders of detention dated October 11, 1988 directed that the appellants be set at liberty forthwith and that reasoned judgment would follow.
We are hereby indicating our reasons for the order passed on Janu ary 11, 1990.
Dharmendra Suganchand Chelawat (the Appellant in Crimi nal Appeal No. 11/90) here in after referred to as 'Dharmen dra ' is the son of Suganchand Kanhaiyyalal Chelawat (the Appellant in Criminal Appeal No. 12 of 1990) hereinafter referred to as 'Suganchand '.
In the grounds of detention furnished to the appellants it is stated that on September 21, 1988 the officers of the Directorate of Revenue Intelli gence, Bombay Zonal Unit, searched the godown of Siddharth Trot 306 ters Pvt. Ltd., Kothari Mansion, at 357, S.V.P. Road, Bombay and five card board cartons containing in all 2,51,000 mandrax tablets weighing 125.5 Kgs.
and valued at Rs.7,53,000 were seized from there.
During the follow up investigation the officers of the Central Excise & Customs searched the premises of Suganchand at Indore (M.P.) which resulted in the recovery of 51 Kgs.
of mandrax tablets from a Maruti Van parked in the house compound on September 22/23, 1988 which was seized.
In addition to 20.
500 Kgs.
of mandrax tablets, 148.300 Kgs. of methaqualone powder and 97.700 Kgs.
of white powder was recovered from the residence itself.
Suganchand in his statement which was recorded on September 23, 1988 stated that he had manufactured mandrax tablets at his factory at Indore and that he was assisted by his son, Dharmendra.
Suganchand was arrested on September 23, 1988 and produced before the Additional Chief Judicial Magistrate, Indore on September 24, 1988 who remanded him to the police custody till September 30, 1988.
On September 30, 1988 Suganchand was remanded to judicial custody till Octo ber 13, 1988.
A bail application was submitted by Suganchand in the Sessions Court on September 28, 1988 and the same was rejected by the Sessions Court on October 1, 1988.
Dharmendra was arrested on October 4, 1988 and he was remanded to the police custody upto October 5, 1988.
On October 5, 1988 he was remanded to judicial custody till October 13, 1988.
During the course of arguments Shri Har jinder Singh, the learned counsel for the appellants, stated that a bail application was submitted on behalf of Dharmen dra and the same was rejected on October 5, 1988.
On October 11, 1988 orders were passed by Shri K.L. Verma, Joint Secretary to the Government of India, Ministry of Finance, Department of Revenue, under Section 3(1) of the Act for the detention of the appellants.
In the order of detention the detaining authority has stated that he was satisfied from the record of the case with respect to the appellants that with a view to preventing them from engaging in the transportation and abetting in the export inter state of Psychotropic Substances it is necessary to make the order directing that the appellants be detained and kept in custo dy.
The said order of detention was served on appellants on October 13, 1988 while they were in custody.
The appellants were also served with the grounds of detention dated October 11, 1988 as well as the documents on which reliance was placed by the detaining authority.
Writ Petitions under Article 226 of the Constitution of India 307 were filed by Kumari Archana Chelawat, the daughter of Suganchand and sister of Dharmendra, wherein the legality of the detention of the appellants was challenged before the Delhi High Court.
The said writ petitions have been dis missed by the High Court by order dated September 7, 1989.
Thereafter the appellants moved this Court for special leave to appeal against the judgment of the Delhi High Court and special leave to appeal was granted on January 11, 1990.
Hence these appeals.
Shri Harjinder Singh, the learned counsel for the appel lants has urged that since the appellants were in custody on October 11, 1988, the date of passing of the impugned order of detention, there was no apprehension that the appellants would be engaging in any prejudicial activity and the order for detention of the appellants under Section 3(1) of the Act could not be validly passed.
In support of the aforesaid submission Shri Harjinder Singh has placed reliance on the decision of this Court in Ramesh Yadav vs District Magis trate, Etah and Others, ; Suraj Pal Sahu vs State of Maharashtra & Others, ; and N. Meera Rani vs Government of Tamil Nadu & Another, ; The learned Attorney General, on the other hand, has supported the decision of the High Court and has submitted that in the facts and the circumstances of the present cases the orders for detention of the appellants were validly passed on October 11, 1988.
The submission of the learned Attorney General is that the appellants had been remanded to judicial custody upto October 13, 1988 only and the detain ing authority could have apprehended that the said remand may not be extended beyond October 13, 1988 and the appel lants may be released from custody on October 13, 1988 and thereafter they would be free to engage in prejudicial activities.
In view of the aforesaid submissions the question which needs consideration is whether in the facts and the circum stances of the present cases, the detaining authority was justified, in law, in passing the orders for the detention of the appellants under Section 3(1) of the Act on October 11, 1988 when the appellants were in custody.
The question as to whether and in what circumstances an order for preven tive detention may be passed against a person who is already in custody has come up for consideration before this Court.
In Rameshwar Shaw vs District Magistrate, Burdwan & Anr., ; decided by the Constitution Bench, it has been laid down that the question as to whether an order for detention can be passed against a 308 person who is in detention or in jail will always have to be determined in the circumstances of each case and it has been observed: "As an abstract proposition of law, there may not be any doubt that section 3(1)(a) does not preclude the authority from passing an order of detention against a person whilst he is in detention or in jail; but the relevant facts in connec tion with the making of the order may differ and that may make a difference in the application of the principle that a detention order can be passed against a person in jail.
Take for instance, a case where a person has been sentenced to rigorous imprisonment for ten years.
It cannot be seriously suggested that soon after the sentence of imprisonment is pronounced on the person, the detaining authority can make an order directing the detention of the said person after he is released from jail at the end of the period of the sen tence imposed on him.
In dealing with this question, again the considerations of proximity of time will not be irrele vant.
On the other hand, if a person who is undergoing imprisonment, for a very short period, say for a month or two or so, and it is known that he would soon be released from jail, it may be possible for the authority to consider the antecedent history of the said person and decide whether the detention of the said person would be necessary after he is released from jail, and if the authority is bona fide satisfied that such detention is necessary, he can make a valid order of detention a few days before the person is likely to be released.
" In Masood Alam Etc. vs Union of India and Others, ; it has been held that merely because the person concerned has been served with the order of detention while in custody when it is expected that he would soon be re leased that service cannot invalidate the order of deten tion.
This Court has observed as under: "The real hurdle in making an order of detention against a person already in custody is based on the view that it is futile to keep a person in dual custody under two different orders but this objective cannot hold good if the earlier custody is without doubt likely to cease very soon and the detention order is made merely with the object of rendering it operative when the previous custody is about to cease. ' 309 In Dulal Roy vs District Magistrate, Burdwan, ; it was held that if a person was serving a long time of imprisonment or was in jail custody as an undertrial and there was no immediate or early prospect of his being re leased on bail or otherwise, the authority would not legiti mately be satisfied on the basis of his past history or antecedents that he was likely to indulge in similar preju dicial activities after his release in the distant or indef inite future.
In Vijay Kumar vs State of Jammu & Kashmir and Others, ; this Court has observed: "Preventive detention is resorted to, to the art future action.
If the detenu is already in jail charged with a serious offence, he is thereby prevented from acting in a manner prejudicial to the security of the State.
May be, in a given case there yet may be need to order preventive detention of a person already in jail.
But in such a situa tion the detaining authority must disclose awareness of the fact that the person against whom an order of preventive detention is being, made is to the knowledge of the authori ty already in jail and yet for compelling reasons a preven tive detention order need to be made." In Alijan Mian vs District Magistrate, Dhanbad and Others, [1983] 4 SCC 301 in the grounds of detention it was stated that the subject is in jail and is likely to be released on bail and that if he was allowed to remain at large, he will indulge in activities prejudicial to the maintenance of public order.
After considering the said statement in the grounds of detention this Court has ob served: "The position would have been entirely different if the petitioners were in jail and had to remain in jail for a pretty long time.
1n such a situation there could be no apprehension of breach of 'public order ' from the petition ers.
But the detaining authority was satisfied that if the petitioners were enlarged on bail, of which there was every likelihood, it was necessary to prevent them from acting in a manner prejudicial to public order.
" In Ramesh Yadav vs District Magistrate, Etah and Others, (supra) in the grounds of detention it was mentioned that the detenu had filed an application for bail and there was positive apprehension that after having bail he would come out of jail and would indulge in activity 310 prejudicial to the maintenance of the public order.
This Court has observed: "On a reading of the grounds, particularly the paragraph which we have extracted above, it is clear that the order of detention was passed as the detaining authority was appre hensive that in case the detenu was released on bail he would again carry on his criminal activities in the area.
the apprehension of the detaining authority was true, the bail application had to be opposed and in case bail granted, challenge against that order in the higher forum had to be raised.
Merely on the ground that an accused in detention as an under trail prisoner was likely to get bail an order of detention under the National Security Act should not ordi narily be passed.
We are inclined to agree with counsel for the petitioner that the order of detention in the circum stances is not sustainable and is contrary to the well settled principles indicated by this Court in a series of cases relating to the preventive detention." in Suraj Pal Sahu vs State of Maharashtra & Others, (supra) after considering the earlier decisions this Court has observed: "If there was an imminent possibility of the man being set at liberty and his detention coming to an end, then it appears, as a principle, if his detention is otherwise necessary and justified then there is nothing to prevent the appropriate authorities from being satisfied about the necessity of passing an appropriate order detaining the person concerned." In Binod Singh vs District Magistrate, Dhanbad, Bihar and Others, ; it has been laid down: "If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised.
In the instant case when the actual order of detention was served upon the detenu, the detenu was in Jail.
There is no indication that this factor or the question that the said detenu might be released or that there was such a possibility of his release, was taken into consideration by the detaining authority properly and seri ously before the service of the order.
A bald statement 311 is merely an ipse dixit of the officer.
If there were cogent materials for thinking that the detenu might be released then these should have been made apparent." In Smt.
Shashi Aggarwal vs State of U.P. & Others ', this Court while referring to the decision in Ramesh Yadav vs District Magistrate, Etah (Supra) has observed: "What was stressed in the above case is that an apprehension of the detaining authority that the accused if enlarged on bail would again carry on his criminal activities is by itself not sufficient to detain a person under the National Security Act." This Court has further observed: "Every citizen in this country has the right to have re course to law.
He has the right to move the Court for bail when he is arrested under the ordinary law of the land.
If the State thinks that he does not deserve bail the State could oppose the grant of bail.
He cannot, however, be interdicted from moving the court for bail by clamping an order of detention.
The possibility of the court granting bail may not be sufficient.
Nor a bald statement that the person would repeat his criminal activities would be enough.
There must also be credible information or cogent reasons apparent on the record that the detenu, if enlarged on bail, would act prejudicially to the interest of public order.
" In Vijay Kumar vs Union of India, ; , it has been head that two facts must appear from the grounds of detention, namely: (i) awareness of the detaining authority of the fact that the detenu is already in detention, and (ii) there must be compelling reasons justifying such deten tion, despite the fact that the detenu is already under detention.
Shetty, J., in his concurring judgment, has posed the question: what should be the compelling reason justifying the preventive detention, if the person is already in jail and where should one find it? The learned judge has rejected the contention that it can be found from 312 material other than the grounds of detention and the con nected facts therein and has held that apart from the grounds of detention and the connected facts therein, there cannot be any other material which can enter into the satis faction of the detaining authority.
The learned judge has also observed that if the activities of the detenu are not isolated or casual and are continuous or part of the trans action or racket, then, there may be need to put the person under preventive detention, notwithstanding the fact that he is under custody in connection with a case.
The learned judge has quoted the following observations from the judg ment of this Court in Suraj Pal Sahu vs State of Maharash tra, (Supra): "But where the offences in respect of which the detenu is accused are so interlinked and continuous in character and are of such nature that these affect continuous maintenance of essential supplies and thereby jeopardize the security of the State, then subject to other conditions being fulfilled, a man being in detention would not detract from the order being passed for preventive detention." In N. Meera Rani vs Government of Tamil Nadu and Anoth er, (Supra) the legal position has been summed up as under: "We may summarise and reiterate the settled principle.
Subsisting custody of the detenu by itself does not invali date an order of his preventive detention and the decision must depend on the facts of the particular case; preventive detention being necessary to prevent the detenu from acting in any manner prejudicial to the security of the State or to the maintenance of public order etc.
ordinarily it is not needed when the detenu is already in custody; the detaining authority must show its awareness to the fact of subsisting custody of the detenu and take that factor into account while making the order; but, even so, if the detaining authority is reasonably satisfied on cogent material that there is likelihood of his release and in view of his an tecedent activities which are proximate in point of time he must be detained in order to prevent him from indulging in such prejudicial activities the detention order can be validly made even in anticipation to operate on his release.
This appears to us, to be the correct legal position.
" In this case this Court has pointed out that there was no indication in 313 the detention order read with its annexure that the detain ing authority considered it likely that the detenu could be released on bail and that the contents of the order showed the satisfaction of the detaining authority that there was ample material to prove the detenu 's complicity in the Bank dacoity including sharing of the booty in spite of absence of his name in the FIR as one of the dacoits.
The Court held that the order for detention was invalid since it was made when the detenu was already in jail custody for the offence of bank dacoity with no prospect of his release.
The decisions referred to above lead to the conclusion that an order for detention can be validly passed against a person in custody and for that purpose it is necessary that the grounds of detention must show that (i) the detaining authority was aware of the fact that the detenu is already in detention; and (ii) there were compelling reasons justi fying such detention despite the fact that the detenu is already in detention.
The expression "compelling reasons" in the context of making an order for detention of a person already in custody implies that there must be cogent materi al before the detaining authority on the basis of which it may be satisfied that (a) the detenu is likely to be re leased from custody in the near future, and (b) taking into account the nature of the antecedent activities of the detenu, it is likely that after his release from custody he would indulge in prejudicial activities and it is necessary to detain him in order to prevent him from engaging in such activities.
If the present cases are examined in the light of the aforesaid principles, it can be said that the first condi tion is satisfied in as much as the grounds of detention show that the detaining authority was aware of the fact that the appellants were in custody on the date of passing of the order of detention.
Can it be said that there was a compel ling reason for passing the order for the detention of the appellants, although they were in custody? The learned Attorney General wants the said question to be answered in the affirmative.
He has invited our attention to the grounds of detention and has submitted that the appellants were found engaging in the transportation and abetting in the export inter state of Psychtropic Substances and in the event of their release from custody, the appellants would continue to engage in those activities.
The learned Attorney General has also pointed out that the appellants had been remanded to judicial custody upto October 13, 1988 only and their further remand could be refused by the Magistrate and the appellants could be released from custody on October 13, 1988.
The submission of the learned Attorney General 314 is that, keeping in view the ' activities of the appellants and the likelihood of their being released from custody on their remand being not extended by the Magistrate on October 13, 1988, the detaining authority, on October 11, 1988, when it passed the order of detention, was satisfied that the detention of the appellants was necessary even though they were in custody at that time.
We have given our careful consideration to the aforesaid submission of the learned Attorney General.
We are, however, unable to agree with the same.
In the grounds of detention the detaining authority has only mentioned the fact that the appellants has been remanded to judicial custody till Octo ber 13, 1988.
The grounds of detention do not show that the detaining authority apprehended that the further remand would not be granted by the Magistrate on October 13, 1988, and the appellants would be released from custody on October 13, 1988.
Nor is there any material in the grounds of deten tion which may lend support to such an apprehension.
On the other hand we find that the bail applications moved by the appellants had been rejected by the Sessions Judge a few days prior to the passing of the order of detention on October 11, 1988.
The grounds of detention disclose that the appellants were engaged in activities which are offences punishable with imprisonment under the provisions of the .
It cannot, therefore, be said that there was a reasonable prospect of the appellants not being further remanded to custody on October 13, 1988 and their being released from custody at the time when the order for preventive detention of that appellant was passed on October 11, 1988.
In the circumstances, we are of the view that the order for deten tion of the appellants cannot be sustained and must be set aside and the appellants should be released forthwith.
These are the reasons on the basis of which we passed the order for the release of the appellants on January 11, 1990.
It is, however, clarified that in case the appellants are released from custody in the aforesaid criminal proceedings, the question of their preventive detention under the Act on the above material may be reconsidered by the appropriate authority in accordance with law and this decision shall not be construed as an impediment for that purpose.
| IN-Abs | The appellants were arrested for offences punishable under the provisions of the Narcotic Drugs and Psychotropic Substances Act, 1988.
They were remanded to judicial custody till October 13, 1988.
On October 11, 1988 orders were passed under Section 3(1) of the Prevention of illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 for the detention of the appellants on the ground that with a view to preventing the appellants from engaging in the transportation and abetting in the export inter state of Psychotropic Substances, it was necessary to detain them and to keep in custody.
The orders were served on them on Octo ber 13, 1988, while in custody.
The High Court dismissed the Writ Petitions filed on behalf of the appellants, challeng ing the legality of their detention.
In the Special Leave Petitions filed in this Court, it was contended that since the appellants were in custody on October 11, 1988, the date of passing of the detention order, there was no apprehension that the appellants would be engaging in any prejudicial activity, and the detention order could not be validly passed.
On behalf of the respondents, it was contended that the detention order was validly passed on October 11, 1988 since the appellants had been remanded to judicial custody upto October 13, 1988 only, and the detaining authority could have apprehended that the remand may not be extended beyond that date and the appellants may be released from custody, and would be free thereafter to engage in prejudicial activ ities.
Allowing the appeals, this Court passed an order on January 11, 1990, setting aside the detention order and directing the release of the appellants.
304 Giving reasons for its order, this Court, HELD: An order for detention can be validly passed against a person in custody and for that purpose it is necessary that the grounds of detention must show that (i) the detaining authority was aware of the fact that the detenu is already in detention; and (ii) there were compel ling reasons justifying such detention despite the fact that the detenu is already in detention.
The expression "compel ling reasons" in the context of making an order for deten tion of a person already in custody implied that there must be cogent material before the detaining authority on the basis of which it may be satisfied that (a) the detenu is likely to be released from custody in the near future and (b) taking into account the nature of the antecedent activi ties of the detenu, it is likely that after his release from custody he would indulge in prejudicial activities and it is necessary to detain him in order to prevent him from engag ing in such activities.
[313C E] Rameshwar Shaw vs District Magistrate, Burdwan & Anr., ; ; Masood Alam Etc.
vs Union of India and Others, ; ; Dulal Roy vs District Magistrate, Burdwan, ; ; Vijay Kumar vs State of Jammu & Kashmir and Others, ; ; Alijan Mian vs District Magistrate Dhanbad and Others, [1983] 4 SCC 301; Ramesh Yadav vs District Magistrate, Etah and Others, ; Suraj Pal Sahu vs State of Maharashtra & Others, ; ; Binod Singh vs District Magistrate Dhanbad, Bihar and Others, ; ; Smt.
Shashi Aggarwal vs State of U. P. & Others, ; ; Vijay Kumar vs Union of India, ; and N. Meera Rani vs Government of Tamil Nadu & Another, ; , referred to.
In the instant case, the detaining authority was aware of the fact that the appellants were in custody on the date of the passing of the order of detention.
Though the fact that the appellants have been remanded to judicial custody till October 13, 1988 has been mentioned, the grounds of detention do not show that the detaining authority appre hended that further remand would not be granted by the Magistrate on October 13, 1988 and the appellants would be released from custody on October 13, 1988.
Nor is there any material in the grounds, which may lend support to such an apprehension.
On the other hand, the bail applications moved by the appellants had been rejected by the Sessions Judge a few days prior to the passing of detention order on October 11, 1988.
The grounds disclose that the appellants were engaged in activities which are offences punishable with imprisonment under the 305 provisions of the Narcotic Drugs and Psychotropic Substances Act, 1988.
It cannot, therefore, be said that there was a reasonable prospect of the appellants not being further remanded to custody on October 13, 1988 and their being released from custody at the time when the order for preven tive detention was passed on October 11, 1988.
[313F; 314C E] In such circumstances, the order for detention of the appellants cannot be sustained.
[314F]
|
iminal Appeals Nos. 102 and 103 of 1958.
Appeals by special leave from the judgment and order dated March 28, 1958, of the Calcutta High Court in Criminal Appeal No. 428 of 1957 and reference section 374 Cr. P. C. No. 8 of 1957 arising out of the 1325 judgment and order dated September 21, 1957, of the Court of the Sessions Judge of Cooch Behar in Sessions Trial No. 2 of 1957 (Sept. Sessions) (Sessions Case No. 18 of 1957).
section K. Kapur, for the appellants.
B. Sen, P. K. Ghosh for P. K. Bose, for the respondent.
September 19.
The Judgment of the Court was delivered by IMAM J.
In these appeals the appellants were convicted for the murder of Malchand Bhadani.
A charge under section 302, Indian Penal Code had been framed against each of them.
The Sessions Judge found that the murder had been committed in the furtherance of their common intention.
In his opinion as appellant Bipin Behari Sarkar had actually committed the murder he convicted this appellant under section 302 of the Indian Penal Code.
He convicted the appellant Bishnu Charan Saha under section 302/34 of the Indian Penal Code.
He sentenced both the appellants to death.
The appellants appealed to the Calcutta High Court while the Sessions Judge made a reference for the confirmation of the death sentence passed by him.
The High Court found the appellants guilty under section 302/34 of the Indian Penal Code.
It accordingly confirmed the sentence of death imposed on the appellants by the Sessions Judge.
According to the prosecution, one Tarachand Bhadani had a cloth shop at Mathabhanga in the district of Cooch Bihar.
He was joint in business and mess with his two sons, Prithiraj and the deceased Malchand.
The annual turn over of the shop was between Rs. 50,000 to Rs. 60,000.
On December 18, 1956, Tarachand had gone to Rajasthan and Prithiraj had gone to Falakata Hat.
Accordingly at the shop on that day Malchand was the only person in charge of it.
At about 8 30 p. m., after the close of the day 's business, Malchand was counting the cash in the iron safe in an ante room of the shop when the appellants with one Sanatan Das, who was acquitted at the trial, 1326 called at the shop.
Malchand came out of the anteroom into the shop to attend to these late customers.
He had left open the safe and one of its drawers on the floor.
The appellants purported to make certain purchases and examined various pieces of cloth.
After selection of the cloth they were put into packets.
Cash memoes in duplicate were prepared and signed by Malcliand and the appellant Bishnu Charan Saha.
The cash memoes had been completely filled in.
Two of them had been separated from the cash memo book, but before the 3rd cash memo could be detached from the book, Malchand was struck down by the appellants with a heavy cutting instrument which they had carried.
The neck was so severely cut that the head was nearly severed from the trunk.
Just about then, a neighbour called out to Malchand by way of casual enquiry before retiring for the night.
This so frightened the miscreants that they fled.
The money in the open safe was left untouched.
The motive for the murder was to steal the money from the safe.
On December 25, 1956, the police seized a sharp cutting weapon variously described as a sword or a dagger.
It was found lying close to some shrubbery near Malchand 's shop.
It was stained with human blood.
It was a practice of the shop of Tarachand Bhadani to despatch from time to time, after obtaining Hundis, the accumulated proceeds of the business to Calcutta.
On the morning of December 18, 1956, Prithiraj, before he went to Falakata Hat, had made enquiries from the firm of Bhairabhan Bhowrilal whether any Hundi was available.
As Bhowrilal was not able to supply him the Hundi the cash remained in the shop.
The contents of the safe showed that on December 18, 1956, before Malchand was murdered there was a sum of Rs. 3,913 in cash and 8 1/4 tolas of gold.
There was, therefore, a substantial amount in the safe at the shop which would have been stolen were it not that the miscreants fled after murdering Malchand because of a neighbour calling out to him.
The conviction of the appellants, as pointed out by the High Court, depended entirely on circumstantial 1327 evidence.
The High Court did not rely upon the confessional statement made by the appellant Bishnu Charan Saha to a Magistrate, as, in its opinion, it was not a voluntary statement.
Reference will be made to the circumstantial evidence, upon which the High Court relied, in due course.
Before we deal with that aspect of the case it is necessary to refer to a submission made on behalf of the appellants concerning the tender of pardon under section 337 of the Code of Criminal Procedure to Bishnu Charan Saha and, the failure of the prosecution to comply with the provisions of section 339 of the Code of Criminal Procedure.
It was urged that the provisions of section 339 of the Code not having been complied with the trial ",as vitiated as the appellant Bishnu Charan Saha could not be tried alongwith the appellant Bipin Behari Sarkar.
In order to understand this submission it is necessary to state a few facts.
Bishnu Charan Saha was arrested at about 3 p. m. on December 19, 1956.
His confession was recorded by the Magistrate Mr. section C. Chaudhury on December 20, 1956.
A charge sheet against the appellants and Sanatan Das was submitted by the police on June 20, 1957.
On June 22, 1957, a prayer was made to the Sub divisional Magistrate on behalf of the prosecution that Bishnu Charan Saba may be tendered a pardon under section 337 of the Code of Criminal Procedure and the Magistrate recorded an order to the effect that this appellant was tendered pardon under section 337 of the Code of Criminal Procedure on condition of his making a full and true disclosure of the whole of the circumstances within his knowledge relating to the offence and to every other person concerned whether as principal or abettor in the commission thereof.
The Sub divisional Magistrate bad already reported on June 20, 1957, to the District Magistrate that both he and the other Magistrate of Mathabhanga should not hold the commitment proceedings as they had had something to do with the investigation.
On August 1, 1957, the Magistrate Mr. Sinha, to whom the case had been ultimately transferred, recorded an order to the effect that the three accused had been produced before him and that he had seen the Court 1328 Inspector 's petition praying that the accused Bishnu be made an approver in the case under section 337 of the Code of Criminal Procedure.
This accused had, however, stated that he made the confessional statement before the Magistrate at Mathabhanga as he had been assaulted by the police and that he did not wish to become an approver.
After the completion of the enquiry before commitment, the appellants and Sanatan Das were committed to the Court of Session to stand their trial for the murder of Malchand.
Section 339(1) of the Code provides that " where a pardon has been tendered under section 337 or section 338, and the Public Prosecutor certifies that in his opinion any person who has accepted such tender has, either by wilfully concealing anything essential or by giving false evidence, not complied with the condition on which the tender was made, such person may be tried for the offence in respect of which the pardon was so tendered, or for any other offence of which lie appears to have been guilty in connection with the same matter ".
The proviso to this sub section prohibits the trial of such person jointly with any of the other accused and that such person shall be entitled to plead at such trial that he had complied with the condition upon which such tender was made.
The provisions of this section clearly pre suppose that the pardon which had been tendered to a person had been accepted by him and that thereafter that person had wilfully concealed anything essential or had given false evidence and therefore bad not complied with the condition on which the tender was made to him.
Section 337 of the Code, under which a pardon is tendered, shows that such tender is made on the condition that the person to whom it is tendered makes a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence and to every other person concerned whether as a principal or an abettor to the commission thereof.
Sub section (2) of this section requires that every person who has accepted a tender shall be examined as a witness in the court of the Magistrate taking cognizance of the offence and in the subsequent trial, if any.
1329 It is clear, therefore, that a mere tender of pardon does not attract the provisions of section 339.
There must be an acceptance of it and the person who has accepted the pardon must be examined as a witness.
It is ' only thereafter that the provisions of section 339 come into play and the person who accepted the pardon may be tried for the offence in respect of which the pardon was tendered, if the Public Prosecutor certifies that in his opinion he has, either wilfully concealed anything essential or had given false evidence and had not complied with the condition on which the tender was made.
In the present case, there is nothing on the record to show that on July 22, 1957, although Bishnu Charan Saha had been tendered a pardon, he had accepted the tender.
Indeed, the order sheet of the Sub divisional Magistrate of that date does not even disclose that Bishnu Charan Saha had been produced before him.
On the other hand, when Bishnu Charan Saha and his co accused were produced before the Magistrate Mr. Sinha, to whom the case had been transferred, the prosecution made a prayer to the Magistrate that Bishnu Charan Saha may be made an approver in the case under section 337 of the Code of Criminal Procedure.
This would show that upto that time Bishnu Charan Saha had not accepted the tender of pardon made to him by the Sub divisional Magis trate on June 22,1957.
On the prayer of the Prosecutor made to Mr. Sinha on August 1, 1957, Bishnu Charan Saba flatly denied that he wished to be an approver and had stated that the confessional statement made by him to Mr. Chaudhury was not a voluntary one.
On the facts of the present case, therefore, all that is proved is that at one stage of the proceedings a tender of pardon had been made to Bishnu Charan Saba.
There was, however, no proof that that tender had been accepted by him.
Such being the situation it could not be said that there was in existence an effective pardon under section 337 and that its provisions applied to the facts of the present case.
Consequently, no question arises about the applicability of section 339 to the proceedings before the Magistrate holding an enquiry before commitment or to the trial of the appellants, because the 1330 provisions of section 339 can only come into operation if there is in existence an effective pardon under section 337 of the Code.
In our opinion, on the facts of the present case, there is no foundation for the submission which had been made.
Coming now to the circumstantial evidence in the case upon which the High Court relied for upholding the conviction of the appellants, which may be summed up as follows: (1) The evidence clearly established that the appellants were local men who lived or worked not far from Malchand 's shop.
They accordingly had the means and the opportunity of knowing the state of things obtaining at his shop at a particular date.
(2) The association of the appellants and Sanatan Das immediately prior to the murder.
(3) The evidence of their movements towards the direction of Malchand 's shop.
(4) The evidence concerning their presence in the shop of Malchand shortly before the latter was murdered.
(5) The evidence concerning the appellant Bipin Bihari Sarkar hurrying away from the direction of Malchand 's shop closely followed by the appellant Bishnu Charan Saha.
(6) The evidence of injuries on the palms or fingers of the appellants found at the time of their arrest which took place within 24 hours, or shortly thereafter, of the murder.
(7) The evidence of the presence of human bloodstains on the shirt of Bishnu Charan Saha and bloodstains on the wrapper of Bipin Behari Sarkar with burnt holes at places where the stains were found.
(8) The cash memoes with the signatures of the appellant Bishnu Charan Saha.
(9) In the opinion of the doctor the nature of the injuries on Malchand showed that probably he was overpowered by someone first and then another person pressed the weapon against his neck.
The matter for consideration is whether the circumstantial evidence, as stated above, is sufficient to prove 1331 that the appellants had participated in the murder of Malchand.
Two findings of the High Court may be stated at, this stage before the circumstantial evidence is referred to.
One concerned the cash memoes signed by Bishnu Charan Saha and the other concerned the colour of the wrapper worn by Bipin Behari Sarkar when he was seen by Kali Mohan Sarkar, P. W. 7 going away from a place near the shop of Malchand after the murder.
The cash memoes bore the date 11 12 56 and not 18 12 56.
The High Court gave good reasons for holding that the date 11 12 56 was wrongly entered in these cash memoes after examining the account books of Malchand 's shop and the other circumstances in the case as well as the admission of Bishnu Charan Saha that on December 18, 1956, between 1 30 and 2 p. m. be had caused three cash memoes to be issued in the shop of Malchand.
We find ourselves in complete agreement with the findings of the High Court in this respect.
The wrapper worn by Bipin Behari Sarkar at the time he was seen by Kali Mohan Sarkar was described by the witness as blue in colour whereas, in fact, the recovered wrapper from the house of this appellant was green in colour.
The High Court thought and, in our opinion, rightly that what was in fact green in colour might have appeared to be blue to a witness when seen at night by him.
A mistake in describing the colour accurately in the circumstances of the present case did not materially affect the evidence that Bipin Behari Sarkar was wearing a wrapper at the time he was seen at a spot near Malchand 's shop after the murder.
Further reference to the wrapper will be made when we consider the case of this appellant.
Mohan Lal Sarma, P. W. 4 had stated that at about 8 p.m. on December 18, 1956, he had seen the appellants and Sanatan Das sitting in the latter 's shop.
Bishnu Charan Saha was the first to leave the shop.
10 or 15 minutes later, Bipin Behari Sarkar and Sanatan Das left after padlocking Sanatan 's shop.
The evidence of this witness had been fully accepted 169 169 1332 by the High Court.
Sudhir Ranjan De, P. W. 8 deposed that in the evening of December 18, 1956, at about 7 30 p.m. he had seen Bishnu Charan Saha passing in front of Gostha 's shop which was nearly opposite Malchand 's shop.
He had on his body a Sujni Chaddar.
4 or 5 minutes later, Bipin Behari Sarkar and Sanatan Das were seen going in the same direction.
The High Court believed the evidence of this witness.
It came to the conclusion that on the evidence of Mohan Lal Sarma and Sudhir Ranjan De it was established that at about 8 p.m. the appellants and Sanatan Das were moving towards Malchand 's shop.
There was no doubt some discrepancy about the timing but, as was pointed out by the High Court, the witnesses were giving the time approximately and did not purport to give the exact time.
Kumud Lal Saha, P. W. 2 deposed that at about 8 30 p.m. on December 18,1956, he saw the appellants and Sanatan sitting with Malchand in the latter 's shop.
Malchand was at that time placing cloth for their inspection.
The High Court referred to the various criticisms levelled against the testimony of this witness and after dealing with them came to the conclusion that the witness was a truthful witness and that his evi dence established that the appellants were at the shop of Malchand at about 8 30 p.m. and that Malchand was last seen alive with them.
The evidence of Khum Chand Bothers, P.W. 3 proved that at about 8 30 p.m. on the night of Malchand 's murder he had called out "Malchand " " Malchand ", but had received no reply.
Kali Mohan Sarkar, P. W. 7 proved that at about 8 p.m. on the night in question when he was going home he met the appellant Bipin Behari Sarkar who was going away hurriedly from the direction of the Bazar.
On some enquiry made by the witness this appellant stated that he had been pressed by a call of nature.
Thereafter, the appellant Bishnu Charan Saha was seen coming behind Bipin Behari Sarkar.
Bipin Behari Sarkar had on his person a blue coloured wrapper.
The spot at which he had met the appellant Bipin Behari Sarkar was at a distance of about 100 cubits to the south of the passage meant for sweepers 1333 of Malchand 's house.
He had heard Bishnu Charan Saha calling out " Hei, Hei " to Bipin Behari Sarkar .
The evidence of these witnesses, which had been accepted by the High Court, established that the appellants were seen going in the direction of Malchand 's shop.
Thereafter, they were seen with Malchand at his shop.
Subsequent to that, Bipin Behari Sarkar was seen going away hurriedly at a place not far from Malchand 's shop followed by Bishnu Charan Saha who was calling out to him " Hei, Hei ".
The last time that Malchand was seen alive was in the company of the appellants.
The existence of the cash memoes, which were stained with human blood, with the signatures of Bishnu Charan Saha clearly established that at least Bishnu Cliaran Saha must have been present at the time of the murder because the cash memoes were being made out for him and they were stained with human blood which shows that Malchand was murdered while he was handling the cash memoes.
It had been further proved that Bishnu Charan Saha had on him certain injuries of which one was an incised injury.
The evidence of the doctor was that this injury could have been caused by the same instrument with which the neck injury of Malchand had been caused.
It had been further established that the shirt of Bishinu Charan Saha was stained with human blood.
The explanation offered by Bishnu Charan Saba for the injuries on his person was not accepted by the High Court and, in our opinion, rightly.
Bishnu Charan Saha had stated to the doctor at the time of his examination that injury No. 1 was caused as the result of contact with a grass cutting dao and injuries Nos. 2 and 3 by having drawn his hand over a rough piece of wood, but to the doctor this explanation was unacceptable inasmuch as this appellant was not a left handed person a fact which appeared clear from his formation and development.
When examined under section 342 of the Code of Criminal Procedure Bishnu Charan Saha told the Court that 2 days prior to his examination by the doctor lie had been cutting straw for his cattle with his left hand when his daughter aged about 1334 4 came up from behind and pushed him which resulted in the injury to his finger by its contact with the dao and that he had also received injuries on the back of his finger by striking it against a piece of wood.
So far as the shirt stained with human blood, which was found on his person at the time of his arrest, was concerned, Bishnu Charan Saha seriously disputed the identity of the shirt.
The identity of the shirt, however, had been clearly established.
His explanation to the Court was that some of the stains had been caused by betel spit and that one or two might have been caused by some drops of blood falling on the shirt at the time he had sustained his injuries.
This explanation was also not accepted by the High Court and, we think, rightly.
The evidence therefore established that so far as Bishnu Charan Saha was concerned he was seen in the company of Bipin Behari Sarkar and Sanatan Das near about 8 p. m.
He was seen shortly thereafter, as were the other two, going in a direction which was towards the shop of Malchand.
He was seen along with the other two persons at the shop of Malchand at about 8 30 p.m.
Thereafter, he was seen not far from the shop of Malchand going in the same direction as Bipin Behari Sarkar and calling out to him.
The cash memoes at Malchand 's shop had been signed by him.
He had injuries on his person consistent with their having been caused while the murder of the deceased took place.
The shirt that he was wearing at the time of his arrest was stained with human blood for which he gave no reasonable explanation.
In our opinion, the sum total of the evidence against Bishnu Charan Saha established beyond any reasonable doubt that he had participated in the murder of Malchand.
Coming now to the case of Bipin Behari Sarkar the evidence against him is the same as against Bishnu Charan Saha about the movements towards the shop of Malchand, presence at the shop of Malchand and being seen going away at a place near the shop of Malchand and the existence of injuries on his person.
In addition there was the evidence that a wrapper was seized the next morning after his arrest with marks of 1335 burning round which there were traces of blood.
Unlike the case of Bishnu Charan Saba no signatures of his were found on the cash memoes.
It is a matter for consideration whether in the case of this appellant ' any reasonable doubt could arise as to his guilt.
It was urged that mere movements towards the shop of Malchand, his presence at the shop of Malchand and his being seen going away at a place near the shop of Malchand would not be sufficient circumstantial evidence to convict him.
So far as the injuries were concerned the doctor had admitted that they could have been caused by a split bamboo.
The doctor had at no time stated that they could have been caused by the same weapon which caused injuries to the neck of Malchand.
The existence of the injuries, therefore, was no additional incriminating circumstance from which any conclusion could be drawn against this appellant.
So far as the wrapper was concerned, there was no evidence that the burnt marks found on it were not there before December 18, 1956.
Although blood stains had been found on this wrapper it had not been established that they were human blood stains.
The wrapper was also, therefore, n0 additional incriminating circumstance against this appellant.
It is, however, to be remembered that this appellant was with Bishnu Charan Saha and that Malchand was last seen alive in the company of the appellants.
The murder of Malchand had already taken place when this appellant followed by Bishnu Charan Saha was seen going away hurriedly at a spot near the shop of Malchand and Bishnu Charan Saha was calling out " Hei, Hei " to him.
It is remarkable that this appellant was seen not only at the shop of Malchand but near that shop after he bad been murdered and that he was found to have injuries oil his person when he was arrested at 10 30 p.m. on December 19, 1956.
It would be a remarkable coincidence that both he and Bishnu Charan Saha should have injuries on their persons so shortly after the murder.
Bipin Behari Sarkar denied ownership of the wrapper.
His explanation was not that the burnt marks on the wrapper were there before December 18.
1336 This wrapper had blood stains.
They were too small in quantity to enable a Serologist to determine their origin, but it is remarkable that wherever the bloodstains were found on the wrapper an attempt had been made to burn out those marks.
Unfortunately, for the appellant, his attempt to burn out the bloodstains on the wrapper was not entirely successful.
This was in our opinion, an incriminating circumstance against this appellant.
The circumstantial evidence taken as a whole leaves no room for a reasonable doubt in our minds about the guilt of this appellant.
In our opinion, the High Court rightly found the appellants guilty under section 302/34 of the Indian Penal Code.
It could not be said that the sentence of death for a murder of the kind proved in this case was unduly severe.
The appeals are accordingly dismissed.
Appeals dismissed.
| IN-Abs | The two appellants and one other person were accused of committing a murder.
The second appellant made a confession before a Magistrate.
The police submitted a charge sheet against the three accused.
Thereafter the prosecution made a prayer to the sub divisional Magistrate that the second appellant may be tendered a pardon under section 337, Code of Criminal Procedure and the Magistrate recorded an order to the effect that he was tendered a pardon under section 337 on condition of his making a full and true disclosure of the whole of the circumstances within his knowledge.
Before the Committing Magistrate the second appellant stated that the confession made by him was not voluntary and that he did not wish to become an approver.
The appellants were committed to the Court of Sessions and were convicted of the murder and were sentenced to death.
On appeal the High Court confirmed the conviction and sentence.
It was contended by the appellants that the second appellant having been tendered a pardon the joint trial of the appellants was vitiated as it was barred by the proviso to section 339(I) Of the Code.
Held, that there was no effective pardon under section 337 Of the Code and consequently the provisions of section 339 did not come into operation in this case.
A mere tender of pardon does not attract the provisions of section 339 ; there must be an acceptance of the pardon by the accomplice and he must be examined as a witness.
It is only after this that section 339 comes into play if the accomplice who has accepted the pardon fails to comply with the conditions on which the pardon was tendered.
In the present case though a tender of pardon was made to the second appellant there was no proof that it was accepted by him and as such it could not be said that there was in existence an effective pardon under section 337.
|
ivil Appeal No. 2422 of 1989.
From the Judgment and Order dated 3.9.1988 of the Bombay High Court in Appeal from Order No. 707 of 1987.
Soli J. Sorabjee, R.F. Nariman, Raian Karanjawala, Ms. Meenakshi Arora, Ms. Nandini Gore and Ms. Manik Karanjawala for the Appellant.
Anil Diwan, Harish N. Salve, Ms. Indu Malhotra, Mrs. Ayesha Karim, I.R. Joshi, M. Gandhi and H.J. Javeri for the Respondents.
The Judgment of the Court was delivered by V. RAMASAMI, J.
This appeal arises out of notice of motion taken by the plaintiff in Civil Suit No. 2987 of 1987 on the file of the Bombay City Civil Court at Bombay for interim injunction pending the suit restraining defendants 1 to 3 from parting with possession and defendants 4 and 5 from entering into or taking possession and or remaining in possession or enjoyment of the suit property, namely, Dorab Villa, 29, Perry Cross Road, Bandra, Bombay, or any part or portion thereof.
The appellant is the plaintiff and defend ants 1 to 5 are respondents 1 to 5.
The appellant is the owner of an undivided half share in the suit property.
The suit property was purchased original ly under a deed dated 12th January, 1934 by Cawasji Dorabji Warden, Banubai Warden and the appellant as joint owners.
Cawasji Dorabji Warden and Banubai are respectively the father and mother of the appellant.
It appears that the super structure on the land was constructed subsequent to the purchase.
At the time when the property was purchased 337 the appellant was a minor.
By a registered deed of declara tion that the appellant made a declaration that the appel lant has an undivided share in the said piece of land and the building erected thereon as joint tenants with the declarants, and that in the event of the appellant 's surviv ing the declarants, he shall by virtue of the said joint tenancy and his survival becomes solely and beneficially entitled to the said piece of land and the building thereon.
However, this deed reserved a right to either or both the declarants and the appellant from severing the joint tenancy at any time.
On the death of Banubai on 9th June, 1946 the appellant and his father as surviving joint tenants came to own the entire property.
Under an agreement dated 23rd of August, 1951 the appellant and his father, who were then the joint tenants of the said property, agreed to hold the same as tenants in common, each having an equal undivided share therein so that each can dispose of his undivided share in the property and each share become a separate stock of descent.
On 16th April, 1952 the appellant 's father trans ferred his undivided haft share in the suit property in favour of his another son by name Sohrab Warden in cansider ation of the said Sohrab releasing in favour of his father his undivided share in some other property described in the second schedule to that document.
Thus the appellant and his brother Sohrab came to hold an equal undivided one half share each, as tenants in common in respect of the said property.
Sohrab died intestate on 12th October, 1976 leaving behind him his widow the first respondent and his two minor sons the second and third respondents in this appeal.
Re spondents 1 to 3 sold their undivided one half share in the said property to the fourth respondent and his wife under a sale deed dated 16th April, 1987.
On the 18th April, 1987 praying for a decree directing respondents 1, 2 and 3 from parting with possession of the said property or any part thereof and/or inducting any third party including respond ent 4 into the said property or any part or portion thereof, and for further directions against respondents 4 and 5 from entering into or taking possession and/or remaining in possession or enjoyment of the suit property from defendants 1, 2 and 3 or otherwise.
The fifth respondent was impleaded on the assumption that he and the fourth respondent jointly purchased the property but it is now accepted that he is not one of the purchasers and the property was purchased by the fourth respondent and his wife.
Pending the suit the appel lant prayed for an interim injunction restraining the re spondents 1 to 3 from parting with possession of the said property or any part thereof and/or inducting the fourth respondent into the suit property or any part or portion thereof and a similar injunction restraining the fourth respondent from entering into or taking possession and/or 338 remaining in possession or enjoyment of the suit property or part thereof.
The suit was filed on the ground that the suit property is a dwelling house belonging to an undivided family, that there had not been any division of the said property at any time, that the plaintiff and his deceased brother Sohrab during his fife time were for convenience occupying differ ent portions, the plaintiff occupying the first floor while the deceased Sohrab was occupying the ground floor.
After the death of Sohrab respondents 1 to 3 continue to be in occupation of that portion which was in the occupation of Sohrab.
In the circumstances the fourth defendant who is a stranger to the family has no right to have joint possession or common enjoyment of the property along with the plaintiff on the basis of the purchase of the undivided share.
On this ground the appellant plaintiff claimed that he is entitled to perpetual injunction as prayed for in the suit.
He fur ther claimed that pending the suit he is entitled to an interim relief as prayed for and that if the said relief is not granted irreparable loss and great prejudice will be caused to him which cannot be compensated in terms of money, and that the equity and balance of convenience is in his favour and no prejudice or loss would be caused to the respondents.
In the counter affidavit filed by the fourth respondent and the first respondent on behalf of herself and two minor sons it was contended that though the appellant and respond ents 1, 2 and 3 were owning the property in equal moity they were holding it in their individual capacity and not as members of joint family and that the suit property is not joint family property or property belonging to an undivided family.
The further case of the defendant was that since 1968 when Sohrab got married the appellant and 'his family had been in exclusive occupation of the upper floor of the Bungalow and a garage while the entire ground floor of the building of the said property and another garage was in the exclusive use and possession of Sohrab and his family and that the compound, staircase and the terrace were in joint possession.
They were also having separate mess, separate electricity and water meters and that they were paying proportionate taxes.
After the death of the said Sohrab, respondents 1 to 3 continued to stay and occupy exclusively the said ground floor as well as the garage till the said one half portion of the property was sold and conveyed absolutely to the fourth respondent and his wife.
1n the circumstances though the property was held as tenants in common, there had already been a partition as to the user of the property.
The fourth respondent had taken possession of that portion of the property which was in 339 occupation of respondents 1 to 3 in pursuance of the sale deed.
The further contention was that it is not the appel lant who would suffer irreparable loss and great prejudice if the injunction is granted but it is the respondents who would suffer the loss and prejudice and that the balance of convenience is not in favour of the appellant.
The trial court found that the suit property is dwelling house belonging to an undivided family, that there was no partition of the same by metes and bounds at any time, that the plaintiff and his father at the material time were undivided qua the entire suit property, that though the family of the appellant and the family of his brother Sohrab may be divided for food and worship they were not divided qua the suit property, that so far as the suit property is concerned the appellant and his family and the family of respondents 1, 2 and 3 were joint and undivided and that the case would fall within the scope of the second paragraph of section 44 of the Transfer of Property Act and that, there fore, respondent 4 and his wife as strangers were not enti tled to joint possession of the said family dwelling house.
Since the defendant had claimed that he already entered into possession interim mandatory injunction was granted to the effect that the fourth respondent, his servants and his agents are restrained "from remaining in possession or enjoyment of the suit property" or any part or portion thereof.
However, the learned Judge ordered that this in junction order would not prevent the fourth respondent to occasionally enter the suit property to enquire that on one else other than the plaintiff and his family members is entering into possession of the portion of the ground floor and one garage which he has purchased.
On appeal the High Court was of the view that prims facie the facts indicate that throughout the parties have lived separately, that there appear to have been severance in status and it is not possible to give a finding that there has been no partition between the parties, that the matter requires evidence on either side as to what extent the ground floor could have ever been considered as a family dwelling house that granting of interim mandatory injunction will have the effect of virtually deciding the suit without a trial and that the plaintiff has not made out a prima facie case that the plaintiff would suffer irreparable damage, if any injunction is not granted or that the balance of convenience is in his favour.
In that view the learned Single Judge allowed the appeal and set aside the order granting the injunction but directed that during the penden cy of the suit the fourth respondent and his wife shall not make any permanent alterations in the suit 340 premises nor shall they induct any third party, or create any third party interest over the suit property.
Sale deed in favour of the fourth respondent recites that the possession of that portion of the property which was the subject matter of the sale had been handed over to the purchaser and that purchaser can continue to be in possession without any let or hindrance by the vendees.
At the time of the Commissioner 's inspection immediately after filing of the suit except that there were some of the items belonging to respondents 1 to 3, it was found that the fourth respondent had taken possession.
That was the finding of the trial court and it was on that basis the injunction in a mandatory form was granted.
In fact, in this Court also the learned counsel appearing for the parties proceeded on the basis that the purchaser was inducted in the possession of the disputed portion of the house even by the time the Commissioner visited the place.
We, therefore, hold that the purchasers have occupied the disputed portion and the ques tion, therefore, for consideration is whether the appellant is entitled to the injunction in a mandatory form directing the fourth respondent purchaser to vacate the premises.
The trial court gave an interim mandatory injunction directing the fourth respondent not to continue in posses sion.
There could be no doubt that the courts can grant such interlocutory mandatory injunction in certain special cir cumstances.
It would be very useful to refer to some of the English cases which have given some guidelines in granting such injunctions.
In Shepherd Homes Ltd. vs Sandham, , Megarry J. observed: "(iii) On motion, as contrasted with the trial, the court was far more reluctant to grant a mandatory injunction; in a normal case the court must, inter alia, feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted; and this was a higher stand ard than was required for a prohibitory injunction.
" In Evans Marshall & Co. Ltd. vs Bertola SA, the Court of Appeal held that: "Although the failure of a plaintiff to show that he had a reasonable prospect of obtaining a permanent injunction at 341 the trial was a factor which would normally weigh heavily against the grant of an interlocutory injunction, it was not a factor which, as a matter of law, precluded its grant;".
The case law on the subject was fully considered in the latest judgment in Films Rover International Ltd. & Ors.
vs Cannon Film Sales Ltd., [1986] 3 AIIER 772 Hoffmann, J. observed in that case: "But I think it is important in this area to distinguish between fundamental principles and what are sometimes de scribed as 'guidelines ', i.e. useful generalisations about the way to deal with the normal run of cases falling within a particular category.
The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or manda tory, is that there is by definition a risk that the court may make the 'wrong ' decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alterna tively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial.
A fundamental princi ple is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been 'wrong ' in the sense I have described.
The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle.
" Again at page 781 the learned Judge observed: "The question of substance is whether the granting of the injunction would carry that higher risk of injustice which is normally associated with the grant of a mandatory injunc tion.
The second point is that in cases in which there can be no dispute about the use of the term 'mandatory ' to describe the injunction, the same question of substance will determine whether the case is 'normal ' and therefore within the guideline or 'exceptional ' and therefore requiring special treatment.
If it appears to the court that, excep tionally, the case is one in which withholding a mandatory interlocutory injunction would be in fact carry a greater risk of.
injustice than granting it even though the court does not feel a 'high degree of assurance ' about the plain tiff 's chances of establishing his right, there cannot be any rational basis for withholding the injunction.
" 342 and concluded that: "These considerations lead me to conclude that the Court of Appeal in Locabail International Finance Ltd. vs Agroexpon, at 906, at 664 was not intending to 'fetter the court 's discretion by laying down any rules which would have the effect of limiting the flexi bility of the remedy ', to quote Lord Diplock in the Cyanamid case ; at 510, (1975) AC 396 at 407.
Just as the Cyanamid guidelines for prohibitory injunctions which require a plaintiff to show no more than an arguable case recognise the existence of exceptions in which more is required (compare Cayne vs Global Natural Resources plc, , so the guideline approved for mandatory injunctions in Locabail recognises that there may be cases in which less is sufficient.
" On the test 1 to he applied in granting mandatory injunc tions on interlocutory applications in 24 Halsbury 's Laws of England (4th Edn.) para 948 it is stated: "A mandatory injunction can be granted on an interlocutory application as well as at the hearing, but, in the absence of special circumstances, it will not normally be granted.
However, if the case is clear and one which the court thinks ought to be decided at once, or if the act done is a simple and summary one which can be easily remedied, or if the defendant attempts to steel a march on the plaintiff, such as where, on receipt of notice that an injunction is about to be applied for, the defendant hurries on the work in respect of which complaint is made so that when he receives notice of an interim injunction it is completed, a mandatory injunction will be granted on an interlocutory applications.
" The law in United States is the same and it may be found in 42 American Jurisprudence 22 Edn.
page 745 etc.
As far the cases decided in India we may note the fol lowing cases.
In one of the earliest cases in Rasul Karim & Anr.
vs Pirubhai Amirbhai, ILR , Beaman, J. was of the view that the 343 court 's in India have no power to issue a temporary injunc tion in a mandatory form but Shah, J. who constituted a Bench in that case did not agree with Beaman, J. in this view.
However, in a later Division Bench judgment in Champ sey Bhimji & Co. vs The Jamna Flour Mills Co. Ltd., ILR 191416 Bom.
566, two learned Judges of the Bombay High Court took a different view from Beaman, J. and this view is now the prevailing view in the Bombay High Court.
In M. Kandas wami Chetty V.P. Subramania Chetty, ILR 191841 Mad. 208, a Division Bench of the Madras High Court held that court 's in India have the power by virtue of Order 39 Rule 2 of the Code of Civil Procedure to issue temporary injunction in a mandatory form and differed from Beaman 's view accepting the view in Champsey Bhimji & Co. vs Jamna Flour Mills Co. (supra).
In Israil vs Shamser Rahman, ILR 191441 Cal.
436, it was held that the High Court was competent to issue an interim injunction in a mandatory form.
It was further held in this case that in granting an interim injunction what the Court had to determine was whether there was a fair and substantial question to be decided as to what the rights of the parties were and whether the nature and difficulty of the questions was such that it was proper that the injunc tion should be granted until the time for deciding them should arrive.
It was further held that the Court should consider as to where the balance of convenience lie and whether it is desirable that the status quo should be main tained.
While accepting that it is not possible to say that in no circumstances will the Courts in India have any juris diction to issue an ad interim injunction of a mandatory character, in Nandan Pictures Ltd. vs Art Pictures Ltd. & Ors., AIR 1956 Cal.
428 a Division Bench was of the view that if the mandatory injunction is granted at all on an interlocutory application it is granted only to restore the status quo and not granted to establish a new state of things differing from the state which existed at the date when the suit was instituted.
The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining.
But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injus tice or irreparable harm, courts have evolved certain guid lines.
Generally stated these guidelines are: 344 (1) The plaintiff has a strong case for trail.
That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.
(2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money.
(3) The balance of convenience is in favour of the one seeking such relief.
Being essentially an equitable relief the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the Court to be exercised in the light of the facts and circum stances in each case.
Though the above guidelines are nei ther exhaustive or complete or absolute rules, and there may be exceptional circumstances needing action, applying them as prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion.
The suit is one filed under section 44 of the Transfer of Property Act (hereinafter referred to as 'the Act ').
In considering the question of interim mandatory injunction in a suit filed under section 44 of the Act the Court has also to keep in mind the restriction on the rights of the trans feree to joint possession under that section.
The section reads as follows: "44.
Where one of two or more co owners of immoveable property legally competent in that behalf transfers his share of such property or any interest therein, the trans feree acquires, as to such share or interest, and so far as is necessary to give effect to the transfer, the transfer or 's right to joint possession or other common or part enjoyment of the property, and to enforce a partition of the same, but subject to the conditions and liability affecting, at the date of the transfer, the share or interest so trans ferred.
Where the transferee of a share of a dwelling house belong ing to an undivided family is not a member of the family, nothing in this section shall be deemed.
to entitle him to joint possession or other common or part enjoyment of the house.
" In order to attract the second paragraph of this section the 345 subject matter of the transfer has to be a dwelling house belonging to an undivided family and the transfer is a share in the same to a person who is not a member of the family.
Therefore, in order to satisfy the first ingredient of clear existence of the right and its infringement, the plaintiff will have to show a probable case that the suit property is a dwelling house and it belonged to an undivided family.
In other words, on the facts before the Court there is a strong probability of the plaintiff getting the relief prayed for by him in the suit.
On the second and third ingredients having regard to the restriction on the rights of a trans feree for joint possession and the dominant purpose of the second paragraph of section 44 of the Act, there is danger of an injury or violation of the corresponding rights of the other members of the family and an irreparable harm to the plaintiff and the Court 's interference is necessary to protect the interest of the plaintiff.
Since the relief of an interim injunction is all the same an equitable relief the Court shall also consider whether the comparative mis chief or inconvenience which is likely to issue from with holding the injunction will be greater than that which is likely to arise from granting it, which means that the balance of convenience is in favour of the plaintiff.
The first point that has to be considered, therefore, is whether one can have a reasonably certain view at this stage before the actual trial that the suit property is a 'dwell ing house belonging to an undivided family ' within the meaning of section 44 of the Act.
As to what is the meaning of these words in the section, the leading case is the one decided by the Full Bench of the Allahabad High Court in Sultan Begam and Ors.
vs Debi Prasad, All. 324.
That was concerned with the meaning of the phrase "dwelling house belonging to an undivided family" in section 4 of the Partnership Act, 1893.
That section provides that where a share of a dwelling house belonging to an undivided family has been transferred to a person who is not a member of such family and such transferee sues for partition, the Court shall, if any member of the family, being a share holder shall undertake to buy the share of such transferee make a valuation of such share in such manner as it thinks fit and direct the ' sale of such share to such shareholder.
The argument was that the words 'undivided family ' as used in the section mean a joint family and are confined to Hindus or to Muhammadans, who have adopted the Hindu rule as to joint family property.
The counter argument was that the expression is of general application and means a family whether Hindu, Muhammadan, Christian etc.
possessed of a dwelling house which has not been divided or partitioned among the members of the family.
The case itself related to a Muslim family to whom the house belonged.
The full Bench observed: 346 ". in it (section 4 of the Partition Act) we find nothing to indicate that it was intended to apply to any limited class of the community.
The words 'undivided family ' as used in this section appear to be borrowed from section 44 of the Transfer of Property Act.
The last clause of that section prescribes that where the transferee of a share of a dwell ing house belonging to an undivided family is not a member of the family, nothing in this section shall be deemed to entitle him to joint possession or other common or part enjoyment of the dwelling house.
This provision of the Statute is clearly of general application, and the effect of it is to compel the transferee of a dwelling house belonging to an undivided family, who is a stranger to the family, to enforce his rights in regard to such share by partition.
There appears to me to be no reason why the words 'undivided family ' as used in section 4 of the Partition Act, should have a narrator meaning than they have in section 44 of the Transfer of Property Act.
If the Legislature intended that section 4 should have limited operation, we should expect to find some indication of this in the language of the section.
For example, instead of the words 'undivided family ' the expression 'undivided Hindu family ' or 'joint family ' might have been used.
With reference to the object and purpose of such a provision the Full Bench further observed: "as was pointed out by Mr. Wells, Judicial Commissioner, in the case of Kalka Parshad vs Bankey Lall, [1906] 9 Oudh Cases, 158 is to prevent a transferee of a member of a family who is an outsider from forcing his way into a dwell ing house in which other members of his transferor 's family have a right to live, and that the words 'undivided family ' must be taken to mean 'undivided qua the dwelling house in question, and to be a family which owns the house but has not divided it '.
" Again in construing the word "family" and 'undivided family ' a Division bench of the Calcutta High Court in Khirode Chandra Ghoshal & Anr.
vs Saroda Prosad Mitra, observed: "The word 'family ', as used in the Partition Act, ought to be given a liberal and comprehensive meaning, and it does 347 include a group of persons related in blood, who live in one house or under one head or management.
There is nothing in the Partition Act to support the suggestion that the term 'family ' was intended to be used in a very narrow and re stricted sense, namely, a body of persons who can trace their descent from a common ancestor.
" The decision in Nil Kamal Bhattacharjya & Anr.
vs Kamak shya Charan Bhattacharjya & Anr., related to a case of a group of persons who were not the male de scendants of the common ancestor to whom the property in the suit originally belonged but were respectively the sons of the daughter of a grandson of the common ancestor and the sons of a daughter of a son of the said common ancestor.
The learned Judge applied the principle enunciated in Sultan Begam vs Debi Prasad, (supra) to this family and held that it was an undivided family since the house had not been divided by metes and bounds among themselves.
The Madras High Court also followed and applied the ratio of this judgment in the decision in Sivaramayya vs Venkata Subbamma & Ors., AIR 1930 Madras 561.
The next decision to be noted is the one reported in Bhim Singh vs Ratnkar., AIR 1971 Orissa 198.
In that case the undivided family consisted of the plaintiff and the defendants 1 and 2 therein.
The first defendant had alienated 1/3 of his half share in the house property in favour of defendants 7 and 10 who were the appellants before the High Court.
The suit was filed for a permanent injunction restraining defendants 7 and 10 from jointly possessing the disputed house alongwith the plain tiff and defendant 2.
The facts as found by the courts were that by an amicable arrangement among plaintiff and defend ants 1 and 2 they were living separately for a long time, had separated their residences and were living in different houses unconnected with each other but all situate in one homestead and that after the first defendant had alienated his separate interest as well as his separate house in favour of the alienees and in pursuance thereof the alienees were put in possession.
After referring to the judgments we have quoted above and following the principles therein, Ranganath Misra, J. as he then was held: "If in this state of things, a member of the family trans fers his share in the dwelling house to a stranger paragraph 2 of section 44 of the Transfer of Property Act comes into play and the transferee does not become entitled to joint possession or any joint enjoyment of the dwelling house although he would have the right to enforce a partition of his share.
The object of the provision in section 44 is to prevent the 348 intrusion of the strangers into the family residence which is allowed to be possessed and enjoyed by the members of the family alone in spite of the transfer of a share therein in favour of a stranger.
The factual position as has been determined is that the property is still an undivided dwell ing house, possession and enjoyment whereof are confined to the members of the family.
The stranger transferees being debarred by law from exercising right of joint possession which is one of the main incidences of co ownership of the property should be kept out.
" On the question whether the enjoyment of ascertained sepa rate portions of the common dwelling house and the alienee taking possession made any difference the learned Judge quoted the following passage from Udayanath Sahu vs Ratnakar Bej, AIR 1967 Orissa 139 with approval: "If the transferee (stranger) get into possession of a share in the dwelling house, the possession becomes a joint pOs session and is illegal.
Courts cannot countenance or foster illegal possession.
The possession of the defendant trans feree in such a case becomes illegal.
Plaintiff 's co owners are entitled to get a decree for eviction or even for in junction where the transferee threatens to get possession by force.
If there had been a finding that there was severance of joint status but no partition by metes and bounds, de fendant 1 was liable to be evicted from the residential houses and Bari under section 44 of the T.P. Act.
" The learned Judge further held: The last contention of Mr. Pal is that the plaintiff sued for injunction only.
The learned trial judge, however, has decreed ejectment of the transferee defendants and that decree has been upheld.
Once it is held that the plaintiff is entitled to protection under the second part of section 44 of the Transfer of Property Act and the stranger purchas ers are liable to be restrained, it would follow that even if the defendants have been put in possession or have come jointly to possess they can be kept out by injunction.
The effect of that injunction would necessarily mean ejectment.
In that sense and to the said extent, the decree of the trial court upheld by the lower appellate court must be taken to be sustainable.
The remedy of the stranger purchas er is actually one of partition.
Until then, he is obliged to keep 349 out from asserting joint possession.
" We may respectfully state that this is a correct state ment of the law.
There could be no doubt that the ratio of the decisions rendered under section 4 of the Partition Act equally apply to the interpretation of the second paragraph of section 44 as the provisions are complementary to each other and the terms "undivided family" and "dwelling house" have the same meaning in both the sections.
It is not disputed that prior to 1951 the suit dwelling house belonged to the undivided family of the appellant and his father and they were owning the same as joint tenants.
The High Court has relied on a letter dated 12th March, 1951 of the appellant to his father in which the appellant had expressed a desire to retain his share separately so as to enable him to dispose of the same in a manner he chooses and also enable his heirs to succeed.
In pursuance of this letter the appellant and his father executed an agreement dated 23rd of August, 1951 by which they declared that they have severed their status as joint tenants and that hence forth they were holding the said piece of land and building as tenants in common in equal undivided half share.
In the view of the High Court this conversion of joint tenancy of an undivided family into a tenancy in common of the members of that undivided family amounts to a division in the family itself with reference to the property and that, therefore, there shall be deemed to have been a partition between the appellant and his father.
In support of this conclusion the High Court also relied on the further fact that subsequent to the death of the father and marriage of Sohrab the appel lant 's family and Sohrab 's family were occupying different portions of the suit property and enjoying the same exclu sively.
We are afraid that some notions of co parcenary property of a Hindu joint family have been brought in which may not be quite accurate in considering section 44; but what is relevant for the purpose of these proceedings was whether the selling house belonged to an undivided family.
We have already pointed out that even if the family is divided in status in the sense that they were holding the property as tenants in common but undivided qua the property that is the property had not been divided by metes and bounds it would be within the provisions section 44 of the Act.
We had also noticed earlier that Cawasji, the father of the appellant transferred his undivided half share in the suit property in favour of his son Sohrab under a deed dated 16 4 1982.
Two questions may arise for consideration whether this transaction is covered by section 350 44 of the Act and whether after the transfer, the appel lant 's brother and the appellant can be said to be holding the property as undivided family.
The transfer by the father in favour of Sohrab was a transfer in favour of a member of a family as Sohrab was living with them.
Sohrab attained the age of 18 only on 25th December, 1951 and as seen from the other documents he was living with his father and brother till 1968 when he got married.
It is only after he was married the appellant and Sohrab were occupying different portions of the suit property and having different mess.
In the absence of a document evidencing partition of the suit house by metes and bounds and on the documentary evidence showing that the property is held by the appellant and his brother in equal undivided shares, we are of the view that the plaintiff appellant has shown a prima facie case that the dwelling house belonged to an undivided family consist ing of himself and his brother.
The two brothers, therefore, shall be deemed to be holding the property as members of an undivided family and in the absence of the partition by metes and bounds qua this property they shall be deemed to have been holding the dwelling house as an undivided family.
Prima facie, there fore, the transfer by defendants 1 to 3 would come within the mischief of second paragraph of section 44 of the Act.
The next question for consideration is whether irrepara ble injury would be caused to the appellant which could not be compensated in terms of money and whether the balance of convenience is in favour of the appellant.
While section 44 does not give a transferee of a dwelling house belonging to an undivided family a right to joint possession and confer a corresponding right on the other members of the family to deny the right to joint possession to a stranger transferee, section 4 of the Partition Act gives a right to a member of the family who has not transferred his share to purchase the transferee 's share on a value to be fixed in accordance with law when the transferee filed a suit for partition.
Both these are valuable rights to the members of the undivided family whatever may be the object or purpose for which they were conferred on such members.
As we have pointed out in some cases it is stated that the right to joint possession is denied to a transferee in order to prevent a transferee who is an outsider from forcing his way into a dwelling house in which the other members of his transferee 's family have a right to live.
In some other cases giving joint possession was considered to be illegal and the only right of the stranger purchaser is to sue for partition.
All these considerations in our opinion would go only to show that denying an injunction against a transferee in such cases would prima facie cause irreparable injury to the other members of the family.
351 Mr. Sorabjee the learned counsel for the appellant brought to our notice a number of circumstances which go to show that the fourth respondent was fully aware of the limited and restrictive title of respondents 1, 2 and 3 and the bar for joint possession provided in the second para graph of section 44 of the Transfer of Property Act and having purchased with such full knowledge tried to over reach the Court by keeping the whole transaction secret and taking possession of the property purchased before the appellant could get legal redress from the Court.
Apart from the fact that the various recitals in the agreement to sell dated 21.12.1986 and the sale deed 16.4.1987 executed by respondents 1 to 3 in favour of the fourth respondent clear ly show that the fourth respondent was fully aware of the provisions of section 44 of the Act and that he had pur chased the property with the full knowledge of the rights of the other members of the family taking, a complete risk.
Clause 6 of the agreement also specifically provided that: "In case pending the completion of this sale any suit be filed by the said co owner Dorab or other person against the Vendors, or any one or more of them, and an injunction (not being an ad interim injunction) is obtained restraining the Vendors from selling or disposing of the said property, then the Vendors shall have the option to keep this sale in abeyance or to cancel and rescind this agreement.
In the latter case, the earnest money will be returned and the Vendors shall transfer their right, title and interest in the said Bangalow property to the purchaser or his nominee . " This provision in the agreement clearly show that the fourth respondent knew that respondents 1 to 3 have only a limited right to transfer their undivided one half share to a stranger purchaser and they contemplated litigation in this regard.
The said sale was itself hurriedly executed in a hush hush manner keeping the entire transaction secret from the appellant.
The purchasers were also inducted in the premises in a manner which clearly suggests that the re spondents were attempting to forestall the situation and to gain an undue advantage in a hurried and clandestine manner defeating the appellant 's attempt to go to court for appro priate relief.
The suit itself was filed on 18th April, 1987 within two days of the sale without any delay.
On that very day the appellant obtained an interim exparte order in the injunction application but when it was sought to be executed it was reported that the 4th respondent had already taken possession and in view of that the interim order was granted by bracketing the words "remaining 352 in possession" without giving an effect to it pending fur ther consideration of the interim application.
By consent of parties a Commissioner was appointed on 22.4.1987 itself.
The report of the Commissioner showed that not all the articles of Vendors have been removed and the moveables of the purchasers were also only in the process of being brought into the house.
These facts showed the anxiety of the fourth respondent to complete the taking of possession before any order could be obtained by the appellant from the Court.
The learned counsel also referred to the affidavit filed by the first respondent wherein she has still claimed that she is residing in the suit property and the affidavit filed by the fourth respondent in the suit as if he is residing somewhere else and not in the suit property.
The learned counsel also referred to some telephone directories, telephone numbers and addresses given therein which also show that the fourth respondent is residing and having an office in some other places also other then the suit prem ises.
These evidences go to show that the purchaser has occupied the disputed property merely for the purpose of establishing his claim and he did not vacate his earlier permanent residence.
On the other hand the appellant had to leave from the portion of the house where he was living as it was not possible for him to reside there with stranger.
The respondents in such circumstances cannot be permitted to take advantage of their own acts and defeat the claim of the appellant in the suit by saying that old cause of action under section 44 of the Transfer of Property Act no longer survived in view of their taking possession.
In such circum stances it is but just and necessary that a direction should go to the respondents to undo what they have done with knowledge of the appellant 's rights to compel the purchaser or to deny joint possession.
These facts in our view clearly establish that not only a refusal to grant an interim mandatory injunction will do irreparable injury to the appellant but also balance of convenience is in favour of the appellant fox, the grant of such injunction.
In the result we allow the appeal, set aside the judgment of the High Court and restore that of the trial court with costs in this appeal.
We may add that our observations on facts are not to be taken as binding at the time of final disposal of the suit after trial.
We also make it clear that if the vendors desire to come and stay in the portion of the house which was in their possession earlier, they may indicate it to the Court and the trial court on such request will pass appro priate orders in that regard.
R.S.S. Appeal allowed.
| IN-Abs | The appellant along with his father and mother, were the joint owners of the suit property.
After the death of the appellant 's mother, he and his father executed an agreement dated 23rd August, 1951 by which they severed their status as joint owners and agreed to hold the property as tenants in common.
On 16th April, 1952 the appellant 's father trans ferred his undivided half share in the suit property in favour of his another son Sohrab.
Thus, the appellant and his brother Sohrab came to hold an equal undivided one half share each as tenants in common in respect of the said property.
After Sohrab 's death, his widow, the first respondent, and his minor sons, the second and third respondents, sold on 16th April, 1987 their undivided one half share in the property to the fourth respondent and his wife.
On 18th April, 1987 the appellant filed a suit under section 44 of the Transfer of Property Act against the respondents inter alia on the ground that the suit property was a dwelling house belonging to an undivided family and therefore the.
fourth respondent who was a stranger to the family had no right to have joint possession or common enjoyment of the property on the basis of purchase of undivided share.
The appellant also took out a notice of motion in the suit in which it was claimed that he was entitled to inter im/perpetual injunction restraining respondents 1, 2 and 3 from parting with possession of the suit property.
He fur ther claimed that if the said relief was not granted irrepa rable loss and great prejudice will be caused to him which could not be compensated in terms of money, and that the equity and balance of convenience was in his favour.
The, Trial Court granted interim injunction the same day but when the order was sought to be executed, it was report ed that the 4th respondent had already taken possession.
333 The suit and the notice of motion were resisted on the grounds that the appellant and respondents 1, 2 and 3 were owners of the property in equal moity but the property was not joint family property or property belonging to an undi vided family; that there had already been a partition as to the user of the property with the result that Sohrab 's family were in exclusive possession of ground floor and a garage in the building, and that the fourth respondent had already taken possession of that portion of the property.
It was further contended that the respondents would suffer irreparable loss and great prejudice if the injunction was granted, and that the balance of convenience was not in favour of the appellant.
The Trial Court found that the suit property was a dwelling house belonging to an undivided family, that there was no partition of the same by metes and bounds; that so far as the suit property was concerned the appellant and his family and the family of respondents 1, 2 and 3 were joint and undivided; that the case would fail within the scope of the second paragraph of section 44 of the Transfer of Property Act; and that respondent No. 4 and his wife as strangers were not entitled to joint possession of the said dwelling house.
Since the 4th defendant had claimed that he had already entered into possession, the Court granted interim mandatory injunction to the effect that the fourth respondent, his servants and agents were restrained from remaining in possession or enjoyment of the suit property.
On appeal, the High Court was of the view that prima facie the facts indicate that throughout the parties have lived separately; that there appears to have been a sever ance in status and it is not possible to give a finding that there has been no partition between the parties, that the matter requires evidence on either side as to what extent the ground floor could have ever been considered as a family dwelling house; that granting of interim mandatory injunc tion will have the effect of virtually deciding the suit without a trial; and that the plaintiff has not made out a prima facie case that he would suffer irreparable damage if injunction was not granted or that the balance of conven ience was in his favour.
In that view, the learned Single Judge allowed the appeal and set aside the order granting the injunction.
Before this Court it was also contended on behalf of the appellant that the fourth respondent was fully aware of the limited and restrictive title of respondents 1, 2 and 3 and the bar for joint possession provided in the second para graph of section 44 of the Transfer of Property Act, and having purchased with such full knowledge he tried to over reach 334 the Court by keeping the whole transaction secret and taking possession Of the property purchased before the appellant could get legal redress from the Court.
Allowing the appeal, this Court, HELD: (1) The courts can grant interlocutory mandatory injunction in certain special circumstances.
[340E] (2) The relief of interlocutory mandatory injunction is granted generally to preserve or restore the status quo of the last non contested status which preceded the pending controversy until the final hearing when full relief may be granted.
But since the granting or non granting of such an injunction may cause great injustice or irreparable harm to one of the parties, the Courts have evolved certain guide lines.
[343F H] (3) Generally stated, the guidelines are: (1) The plain tiff has a strong case for trial.
That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction; (2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money; (3) The balance of convenience is in favour of the one seeking such relief.
[344A B] Shepherd Homes Ltd. vs Sandham, ; Evans Marcgall & Co. Ltd.
Bertola SA, ; Films Rover International Ltd. & Ors.
vs Cannon Film Sales Ltd., ; Rasul Karim & Anr.
vs Pirubhai Amirbhai, ILR ; Champsey Bgimji & Co. vs The Jamna Flour Mills Co. Ltd., ILR 1914 (16) Born.
566; M. Kandaswami Chetty vs P. Subramania, ILR ; Israil vs Shamser Rahman, ILR and Nandan Pictures Ltd. vs Art Pictures, AIR 1956 Cal.
428, referred to.
(4) Being essentially an equitable relief, the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the Court to be exercised in the light of the facts and circum stances in each case.
[344C] (5) In considering the question of interim mandatory injunction in a suit filed under section 44 of the Act, the Court has also to keep in mind the restriction on the rights of the transferee to joint possession under that section.
[344D] 335 (6) In order to attract the second paragraph of section 44 of the Act the subject matter of the transfer has to be dwelling house belonging to an undivided family and the transfer is of a share in the same to a person who is not a member of the family.
[345A] Sultan Begam and Ors.
vs Debi Prasad, All 324; Khirode Chandra Ghoshal & Anr.
vs Saroda Prasad Mitra, ; Nil Kamal Bhattacharjya & Anr.
vs Kamakshya Charan Bhattacharjya & Anr., ; Sivaramayya vs Benkata Subbamma, AIR 1930 Madras 561; Bhim Singh vs Ratnakar, AIR 1971 Orissa 198 and Udayanath Sahu vs Ratnakar Bej, AIR 1957 Orissa 139, referred to.
(7) The ratio of the decisions rendered under section 4 of the Partition Act equally apply to the interpretation of the second paragraph of section 44 as the provisions are complementary to each other and the terms "undivided family" and "dwelling house" have the same meaning in both the sections.
[349B] (8) Even if the family is divided in status in the sense that they were holding the property as tenants in common but undivided qua the property, that is, the property had not been divided by metes and bounds, it would be within the provisions of section 44 of the Act.
[350D] (9) In the absence of a documents evidencing partition of the suit house by metes and bounds and on the documentary evidence showing that the property is held by the appellant and his brother in equal undivided shares, the plaintiff appellant has shown a prima facie case that the dwelling house belonged to an undivided family consisting of himself and his brother.
Therefore, the transfer by defendants 1 to 3 would come within the mischief of second paragraph of section 44 of the Act.
[350B C] (10) Clause 6 of the agreement to sell clearly shows that the fourth respondent knew that respondents 1 to 3 had only a limited right to transfer their undivided one half share to a stranger purchaser and they comtemplated litiga tion in this regard.
The said sale was itself hurriedly executed in a hush hush manner keeping the entire transac tion secret from the appellant.
The purchasers were also inducted in the premises in a manner which clearly suggests that the respondents were attempting to forestall the situa tion and to gain an undue advantage in hurried and clandes tine manner defeating the appellant 's attempt to go 336 to court for appropriate relief.
The respondents in such circumstances cannot be permitted to take advantage of their own acts and defeat the claim of the appellant in the suit by saying that old cause of action under section 44 of the Transfer of Property Act no longer survived in view of their taking possession.
(11) The facts in the instant case clearly establish that not only a refusal to grant an interim mandatory in junction will do irreparable injury to the appellant but also balance of convenience is in favour of the appellant for the grant of such injunction.
[352F]
|
No. 975 of 1986.
(Under Article 32 of the Constitution of India).
D.D. Thakur, V.C. Mahajan, section Markandaya, G.S. Rao, Sreepal Singh and Ms. Kusum Chowdhary for the Petitioners.
R N. Trivedi, S.C. Batra and Raju Ramachandran for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The dispute in this group of writ petitions under Article 32 of the Constitution relates to allotment of land for residential purposes by New Okhla Industrial Development Authority (shortly known as 'NOIDA ').
NOIDA is a trans Jamuna housing project set up by the Uttar Pradesh Government in the year 327 1976.
Prior to the setting up of the NOIDA, the Defence Services Cooperative Housing Society Ltd. and other socie ties had acquired lands in the area for purposes of housing of their members and when the same came to be notified for acquisition for NOIDA, writ petition No. 9034 of 1983 was filed challenging the acquisition; the federation also filed a separate writ petition being 1588 of 1984.
Some other writ petitions by the different parties were also filed.
On 14th January, 1985, after hearing parties a Bench of this Court inter alia made the following directions: "Both sides presented a fair and nearly accurate picture of the present situation.
Spirit of re conciliation rather than confrontation prevailed all throughout.
All reasonable suggestions emanating from both sides either accepted or seriously considered by both sides with a view to implement ing the scheme under which plots were to be allotted.
Only three points remain which necessitated court 's intervention.
Having examined them we direct: (1) NOIDA shall hand over actual possession of plots to each allottee of each society involved in the dispute.
To identi fy them a list setting out their names has to be supplied within six weeks from today.
(2) Mr. G.L. Sanghi, learned counsel urged that NOIDA will be entitled to escalation charges for the year 1981 and 1982 which works out at the rate of Rs.20 per square metre.
He repeatedly pointed out that the NOIDA would be entitled to the same under the scheme.
May be there was substance in the submission.
However, having regard to the fact that a sum of Rs.5.50 crores has already been deposited by the allottees with the NOIDA for some time and as the scheme had not been implemented as per time schedule provided in the scheme itself, to meet possession of plot to each allottee had to be handed over some where in 1982 and which would be now done in 1985 pursuant to the directions yet without setting a precedent and having regard to the facts of this case and special circumstances pointed out to this Court with regard to the present position, we are of the opinion that the NOIDA is not entitled to escalation charges for the year 1981 and 1982.
(3) The third point of a minor difference was that a special 328 charge has to be paid by all allottees whose plots are said to be situated at a comparable advantageous position, such as, corner plots, plots abutting to the main road or both etc.
There may be advantage in taking the corner plot or a plot abutting on the road, but that is fortuitous and not be one 's volitional selection.
Having regard to the special facts of this case and the element of luck in getting a particular plot we direct that the NOIDA would not be enti tled to collect special charge or anything extra for such plots.
We order accordingly.
It was further pointed out that there were some applicants who applied for the plots but who failed to keep to the time schedule in the matter of payment.
If the number of such applicants had not been very large, the Court would have examined each case.
But the number of such applicants appears to be quite big.
Mr. Soli Sorabjee, learned counsel, in this con nection pointed out that under the interim order of this Court dated September 3, 1988, amongst others NOIDA was directed to reserve 269 acres of land in sectors 41 and 42 or in adjoining sectors in addition to the land already allotted to the petitioners.
Therefore, their cases deserve consideration as requisite area of land is available.
At the suggestion of the Court Mr. G.L. Sanghi, learned counsel agrees to appoint Shri Z.H. Kazmi, Law Assistant Registrar (Housing), Lucknow who would be specifi cally directed to look into the case of each such applicant and decide whether any one deserves allotment avoiding technical approach and by approaching the matter from the angle of social justice with broad vision.
If there is any dispute which cannot be resolved liberty to move this Court . . " On 16th December, 1985, the following order was made: "The parties are agreed that the dispute in regard to pay ment of interest and the eligibility for allotment of plots may be decided by Shri D.A. Desai, Chairman, Law Commission, as mediator and not as Arbitrator.
The parties agree that whatever decision is given by Shri D.A. Desai 329 will be accepted by them as binding and there will be no question of challenging it in any form whatsoever.
The parties also agree that simultaneous with the execution of documents possession of the plots shall be forthwith handed over to those who are admitted as eligible for allotment and interest shall be paid by them at the rate of 15% per annum from the date of the order made by this Court, namely, 2.4.1985, subject to adjustment one way or the other accord ing to the decision which may be given by Shri D.A. Desai.
" The decision contemplated by the December order took some time to be given and the report furnished to this Court came to be hotly debated.
More than three years have been taken on that account.
It is unnecessary to deal with the different problems which arose in the proceedings before this Court after submission of the report till the matter has been heard in the third week of January this year.
We suggested to Mr. Thakur, learned counsel appearing for the Federation of Co operative Housing Societies and Mr. Trivedi, learned Additional Advocate General of Uttar Pra desh appearing for NOIDA and counsel appearing for the different parties to sit across the table and work out an acceptable modality by which the problem could be best answered and we are happy to note that their efforts have been to a large extent successful and the scope of what at one time appeared to be an unending dispute had now been substantially reduced and confined to certain issues which require to be dealt with by this order of ours.
It is agreed that the total number of persons who are entitled to allotment is 2,380 and the Federation represent ing the various cooperative societies has drawn up the particulars of these 2,380 applicants.
At the hearing, counsel and NOIDA authorities present in Court had agreed to allotment of 90 acres out of the 269 acres set apart by this Court 's earlier order.
In a written note submitted by Mr. Thakur it has been brought to our notice that if their initial requirement of 130 acres is reduced to 90 acres, a plot of 112.5 square metres will have to be scaled down to 77.73; similarly a plot of 162 square metres will have to be reduced to 112.3 square metres; a plot of 202.5 square metres will have to be reduced to 140.45 square metres; and a plot of 250 square metres will have to be reduced to 173.59 square metres.
It has not been disputed that the four categories of plots were stipulated in the scheme.
If this scaling down is to be done the plots are 330 bound to be of odd sizes and working out may be difficult.
We have, therefore, decided that instead of 90 acres of land the total area to be released on that account should be 96.29 acres in all and different sizes of plots as provided in the scheme shall stand reduced to the sizes indicated below: section No. As per scheme Plots now to be allotted (Sq. metres} (Sq. metres) 1.
112.5 100 2. 162 130 3. 202 150 4.
250 180 Apart from 2,380 eligible allottees there are separate applications which are before the Court already and are being dealt with separately.
To meet their claims we are of the view that 71 decimals should also be set apart and the same would be subject to such orders as the Court may ulti mately make in these cases.
In the event of any area being unallotted the same would revert back to NOIDA.
The plots to be allotted are to be developed by NOIDA.
While the federation and the other petitioners wanted that a three months ' limit should be fixed it has been pleaded on behalf of the NOIDA that the time limit should be two years.
There is a limit to waiting and human patience and the span of the life of the applicants is not available to be extend ed by NOIDA.
Taking an overall picture of the matter we direct that a period of nine months beginning from 1st of March, 1990, is the limit within which developed plots shall be allotted to the 2,380 entitled persons now represented by the Federation and such other persons as referred to above.
The next relevant point for consideration is what should be the price to be paid.
We have already indicated that this Court in its order dated 14th January, 1985, had not agreed for any escalation charges.
More than five years have since been rolled by.
Turn of events have taken an unwieldy course.
Prices have gone up in every sphere and the rupee has lost its value over the years.
To bind NOIDA by the terms of its scheme at this point of time would not at all be fair.
We may point 331 out at this stage that these 2,380 persons have already deposited huge amounts of money said to be about five crores of rupees with NOIDA and the money has been held on account without utilisation, as no final decision had been taken.
Undoubtedly this money must be fetching interest.
Mr. Rama chandran learned counsel appearing for NOIDA has indicated that current rate per square metre is Rs. 1,200.
Taking into consideration the fact that these 2,380 members have waited too long for allotment of their plots, we are of the view that NOIDA should be permitted to charge @ Rs. 1,000 per square metre.
Every member who has deposited any sum of money with NOIDA against proposed allotment shall be enti tled to 12% interest on such amount from the date of deposit till the actual allotment and such interest accrued in favour of the person shall be entitled to adjustment of such interest against actual price of land to be worked out @ Rs. 1,000 per square metre.
Balance amount, if any, shall have to be paid by every person included in the figure of 2,380 within three months from now in monthly instalments.
The 1st instalment is to be paid on or before 31st March, 1990; the 2nd instalment to be paid on or before 30th April, 1990; and the 3rd instalment to be paid on or before 31st May, 1990.
It shall be the obligation of the Federation to duly notify every member of the direction and the time factor forthwith as failure to pay any of these instalments within the time limit indicated above shall disqualify such person from allotment and NOIDA would thereafter be only obliged to refund the money lying to the credit of the defaulter with bank rate of interest.
The terms in regard to allotment for the remaining few persons as stated above shall also be the same.
Town planning in NOIDA is said to be in accordance with the norms laid down by itself and the same are prescribed by the Board of which the Chief Town and Country Planner of Uttar Pradesh is a member.
We direct that all the norms laid down by NOIDA in the matter of development shall be strictly followed.
Supervision of this operation of course shall be by NOIDA but we hope and trust that the federation of the different societies would cooperate with NOIDA in this regard.
The order reserving 269 acres of land is vacated, sub ject to the allotments indicated.
The writ petition is disposed of with these directions.
There shall be no order as to costs.
P.S.S. Petitions disposed of.
| IN-Abs | Certain cooperative housing societies comprising of the petitioners and others had acquired lands in the trans Jamuna area of Uttar Pradesh prior to the setting up of the New Okhla Industrial Development Authority in 1976.
When the said lands came to be notified for the Development Authority writ petitions were filed in 1983 under Article 32 of the Constitution for quashing the acquisition.
In its order dated January 14, 1985 the Court had directed the Authority to hand over actual possession of plots to allottees in volved in the dispute.
Since a dispute had arisen as to the eligibility of a large number of applicants who had failed to keep to the time schedule in the matter of payment the Court in its interim order dated September 2, 1983 had directed the Authority to reserve 269 acres of land in addition to the land already allotted.
The petitioners in the instant case belong to this category.
The total number of persons entitled to allotment has been determined at 2,380.
The Authority 's scheme for the petitioners had stipulated four sizes of plots viz. 112.5 sq. metres, 162 sq. metres, 202.5 sq. metres and 250 sq. metres.
They, therefore, claimed an area of 130 acres out of the 269 acres set apart for them.
The Authority, however, sought to reduce this area to 90 acres and the plot area to 77.73, 112.3, 140.45 and 173.53 sq. metres respectively.
Disposing of the petitions, the Court.
HELD: If the scaling down from 130 acres to 90 acres is to be done the plots are bound to be of odd sizes and work ing out may be difficult.
Therefore, instead of 90 acres of land the total area to be released on that account should be 96.29 acres and the different sizes of plots as provided in the scheme shall stand reduced to 100 sq. metres, 326 130 sq. metres, 150 sq. metres and 180 sq. metres respec tively.
71 decimals of land should also be set apart for the other applicants being dealt with separately.
The plots are to be developed by the Authority in accordance with the norms laid down, and allotted within a period of nine months beginning from 1st of March, 1990.
[329H 330F, 331F] Prices have gone up in every sphere.
To bind the Author ity by the terms of its scheme at this point of time would not at all be fair.
These 2,380 persons have already depos ited huge amounts of money said to be about five crores of rupees with the Authority and the money has been held on account without utilisation, as no final decision had been taken.
The current rate per square metre is Rs.1,200.
Taking into consideration the fact that the members have waited too long for allotment of their plots, the Authority should be permitted to charge Rs.1,O00 per square metre.
Every member who has deposited any sum of money with the Authority against proposed allotment shall ble entitled to 12% inter est on such amount from the date of deposit till the actual allotment and such interest accrued in favour of the person shall be entitled to adjustment against actual price of land to be worked out @ Rs. 1,000 per square metre.
Balance amount, if any, shah have to be paid by every person includ ed in the figure or 2,380 within three months from the date of the order in monthly instalments.
Failure to pay any of the instalments within the time limit indicated shall dis qualify such person from allotment.
The terms in regard to allotment for the remaining few persons shall also be the same.
[330G 331E]
|
ivil Appeal No. 32 17 of 1988.
From the Judgment and Order dated 30.5.88 of the Cus toms Excise and Gold (Control) Appellate Tribunal, New Delhi in E/Misc/ 194/87 A & E/A No. 1365/85 A & Order No. 308/88 A. Gauri Shankar, Mrs. H. Wahi, Manoj Arora and section Rajjappa for the Appellant.
Soli J. Sorabjee, Attorney General, V.C. Mahajan, R.P. Srivastava and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by KANIA, J.
This is an appeal preferred by the appellant (assessee) from a judgment of the Central Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter re ferred to as "the said Tribunal"].
As the controversy before us is an extremely limited one, we propose to set out only the facts necessary for appreciating that controversy.
The appellant is a public limited company engaged inter alia in the manufacture of paper and paper boards which were assessable under Tariff Item No. 17 of the First Schedule to the (hereinafter referred to as "the Central Excises Act").
The period with which we are concerned in this appeal is the period September 9, 1979 to July 26, 1983.
The appellant filed several price lists in Part I and Part II in respect of the clearances of paper and 322 paper boards made by the appellant.
Section 4 of the Central Excises Act prescribes the mode of valuation of excisable goods for the purposes of charging of the duty of excise.
Under clause (a) of subsection (1) of section 4, it is provided, in brief, that the duty of excise is chargeable on any excisable goods with reference to value which shall, subject to the other provisions of the Act, be deemed to be the normal price thereof and the normal price, generally speaking, is the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place or removal, where the buyer is not a related person and the price is the sole consideration for the sale.
In the fixation of the normal price of paper and paper boards manufactured by the appel lant for the purposes of levy of excise duty, the appellant claimed several deductions.
One of these deductions was described as "trade discount" and another as "service charge discount".
The trade discount was the discount paid to the purchaser in accordance with the normal practice of the trade.
The appellant had engaged several dealers with a view to promote its sales.
A specimen of the usual agreements entered into by the appellant with its dealers has been taken on record.
The opening part of the said agreement shows that the appellant is referred to in the agreement as the company and the contracting dealer is referred to as the Indentor.
We propose to refer to the dealers engaged by the appellant to promote the sales of its products as "Inden tors" for the sake of convenience.
Clause (3) of the agree ment shows that the Indentor agreed to purchase in his own name or procure acceptable indents from third parties for paper and paper boards manufactured by the company would be of such quantities and varieties as set out in the Schedule A to the agreement.
The Indentors agreed to deposit with the company a certain amount of money as security.
Clause (8) of the agreement shows that the Indentors held themselves responsible for the immediate clearance of the documents relating to the supply of paper on presentation by the bankers and that all bank charges other than discounting charges would be on the consignee 's account.
It is common ground that in the invoices in respect of the paper and paper boards supplied and sold pursuant to the aforesaid agreement with the Indentors, in most cases the name of the dealer concerned was shown as the Indentor and the names of the parties to whom the goods were to be deliv ered were shown as the purchasers but in some cases the Indentors were themselves shown as purchasers.
It was urged by Dr. Gauri Shankar, learned counsel for the appellant, that although the discount allowed to the Indentors in respect of some of the aforesaid sales might have been described as service charge 323 discount that name could not govern the real nature of the transaction and the discount was really a trade discount.
It was submitted by him that this discount should have been allowed as a deduction in the determination of the normal price of the aforesaid goods for the purpose of levy of excise duty.
He relied upon the decision of this Court in Union of India & Ors.
vs Bombay Tyres International Pvt. Ltd., [1984] 17 E.L.T. 329 (S.C) and submitted that the nomenclature given to the discount could not be regarded as decisive of the real nature of the discount.
There can be no quarrel with this proposition.
But it is equally well set tled that in the determination of the normal price for the purposes of levy of excise duty, it is only a normal trade discount which is paid to the purchaser which can be allowed as a deduction and commission paid to selling agents for services rendered by them as agents cannot be regarded as a trade discount qualifying for deduction (Coromandel Ferti lizers Limited vs Union of India and Ors., [1984] 17 E.L.T. 607 (S.C.).
The correctness of this proposition was not disputed by learned counsel for the appellant but it was submitted by him that in several cases where supplies had been effected pursuant to the aforesaid agreements, the Indentors were really themselves the purchasers and hence, the normal trade discount paid to them should have been allowed as a deduction in the determination of the normal price for the purposes of levy of excise duty.
We find from the judgment of the Tribunal and the lower authorities that there is no dispute that wherever the Indentors are shown as the purchasers in the respective invoices, the trade dis count given to them has been allowed as a deduction.
More over, to obviate any controversy in this regard, learned Attorney General who appears for the respondent fairly states that when the matter goes back to the Tribunal, the respondent is agreeable that the normal trade discount may be allowed in those cases where the Indentor is also shown as the purchaser in the concerned invoice.
It is, however, submitted by learned counsel for the appellant that although in some of the cases the Indentor might not be shown as the purchaser and the purchaser shown is the different party, yet the real nature of the transaction was that the Indentor purchased the goods referred to in the said invoice and in turn sold it to a customer whose name was shown as the purchaser in the invoice for the sake of convenience so that the delivery could be directly effected to him.
We are of the view that it is not open to the appellant to raise this contention at this stage.
No case has ever been made out right upto the Tribunal and even before the Tribunal that in respect of any particular invoice although the name of the purchaser was other than that of the Indentor, it was really the Indentor who was the purchaser and he in turn has sold the goods to the third party whose name was shown as 324 purchaser or even that the Indentor had entered into the transaction as the agent of the purchaser.
If such a conten tion had been raised, the factual position could have been examined and different considerations might have been ap plied.
But it is certainly not open to the appellant to raise this contention at this stage, in this appeal, partic ularly keeping in mind that the Tribunal is the final fact finding authority.
No other contention has been raised before us.
In our opinion, there is no merit in the appeal.
There will, however, be one clarification that, as agreed to learned Attorney General, if in any case the purchaser named in the invoice is the same as the Indentor, normal trade discount given to the Indentor will be allowed as a deduc tion in the determination of the normal price for the levy of excise duty subject to other relevant considerations.
In the result, the appeal fails and is dismissed, save to the extent of the aforesaid clarification.
The appellant to pay the costs of the appeal to the respondent.
R.S.S. Appeal dis missed.
| IN-Abs | The appellant who was engaged in the manufacture of paper and paper boards which were assessable under Tariff Item No. 17 of the First Schedule to the .
engaged several dealers referred to as Indentors, with a view to promote its sales.
In the fixation of the normal price of these items under section 4 of the Act for the purpose of levy of excise duty, the appellant claimed deduction on account of 'service charge discount ' paid to the Indentors, in addition to the 'trade discount ' paid to the purchasers.
Having failed before the assessing authority and the Central Excise and Gold (Control) Appellate Tribunal in respect of the deduction claimed on account of 'service charge discount ' the appellant appealed to this court.
It was contended on behalf of the appellant that al though in some of the sales the discount allowed to the Indentors might have been described as 'service charges discount ', that name could not govern the real nature of the transaction and the discount was really a 'trade discount '.
It was further contended that in several cases the indentors were really the purchasers themselves and hence, the normal trade discount paid to them should have been allowed as a deduction.
Dismissing the appeal, this Court, HELD: (1) The trade discount was discount paid to the purchaser in accordance with the normal practice of the trade.
In the determination of the normal price for the purposes of levy of excise duty, it is only a normal trade discount which is paid to the purchaser which can be allowed as a deduction and commission paid to selling agents for services rendered by them as agents cannot be regarded as a 321 trade discount qualifying for deduction.
[323B C] Union of India & Ors.
vs Bombay Tyres International Pvt. Ltd., [1984] 17 E.L.T. 329 (S.C.) and Coromandel Ferti lizers Limited vs Union of India & Ors., [1984] 17 E.L.T. 607 (S.C.), referred to, (2) If in any case the purchaser named in the invoice 18 the same as the Indentor, normal trade discount given to the Indentor will be allowed as a deduction in the determi nation of the normal price for the levy of the excise duty subject to other relevant considerations.
[324B C]
|
ivil Appeal No. 3804 of 1989.
From the Judgment and Order dated 26.5.89 of the Delhi High Court in SAO No. 84 of 1989.
Dr. Y.S. Chitale, Mrs. and Mr. Rajan Karanjawala, Atul Chitale and H.S. Anand for the Appellant.
K.K Jain, J.P. Gupta, Mrs. Darshan Gupta and P.D. Sharma for the Respondent.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
This appeal is against the order for reinduction of the tenant into the premises under section 19(2) of the Delhi Rent Control Act, 1958 ( 'The Act ').
The facts are these: The appellant filed two eviction peti tions 317 against the respondents; one was under section 14(1)(e) on the ground of personal bona fide requirement for occupation and the other was under section 14(1)(e) for non payment of rent.
The former suit was registered as Suit No. 288/77 and the later as Suit No. 330/77.
On December 24, 1977 Suit No. 288/77 was decreed in favour of the appellant.
The respond ent was granted six months time to evict the premises.
In fact the landlord has no right to evict the tenant for six months when the eviction order is made on the ground speci fied under section 14(1)(e).
Section 14(7) prohibits the landlord from obtaining possession of the premises before the expiration of a period of six months from the date of the eviction order.
On April 17, 1978 the Suit No. 330/77 was compromised as between the parties.
Under the compromise the appellant accepted Rs.6,000 as arrears of rent as against the claim of Rs. 29,000 in the suit.
The respondent tenant in turn agreed to put the appellant in possession of the premises.
Accord ingly, the tenant delivered the possession of the premises, a fact which is not in dispute.
It may be significant to note that when the tenant delivered possession of the premises, six months period provided under section 14(7) did not expire for executing the eviction decree obtained in Suit No. 288/77.
For some reason or the other the appellant could not continue in the premises.
She has to let out the same to a third party.
There then the tenant filed an application under sub section (2) of Section 19 claiming re entry into the premises.
The Rent Controller rejected that application, but upon appeal the Rent Control Tribunal has given relief to the tenant directing the appellant to put back the tenant in possession of the premises.
The High Court has dismissed the Revision Petition in limine.
It will be convenient if at this stage, we read sub section (1) of Section 19 of the Act: "19(1) Recovery of possession for occupation and reentry Where a landlord recovers possession of any prem ises from the tenant in pursuance of an order made under clause (e) of the proviso to sub section (1) of Section 14 (or under Sections 14 A, 14 B, 14 C, 14 D and 21), the landlord shall not, except with the permission of the Con troller obtained in the prescribed manner, re let the whole or any 318 part of the premises within three years from the date of obtaining such possession, and in granting such permission, the Controller may direct the landlord to put such evicted tenant in possession of the premises.
" Sub section (1) refers to recovery of possession of any premises from the tenant in pursuance of an order made under Section 14(1)(e) or under sub section 14 A, 14 B, 14 C, 14 D and 21.
The landlord shall not re let such premises within three years from the date of obtaining possession from the tenant without the permission of the Controller.
Sub section (2) of Section 19 is more important and must be set out in full: "19(2) Where a landlord recovers possession of any premises as aforesaid and the premises are not occupied by the land lord or by the person for whose benefit the premises are held, within two months of obtaining such possession or the premises having been so occupied are, at any time within three years from the date of obtaining possession, re let to any person other than the evicted tenant without obtaining the permission of the Controller under subsection (1) or the possession of such premises is transferred to another person for reasons which do not appear to the Controller to be bona fide, the Controller may, on an application made to him in this behalf by such evicted tenant within such time as may be prescribed, direct the landlord to put the tenant in possession of the premises or to pay him such compensation as the Controller thinks fit." This sub section again operates in favour of the tenant who has suffered an order of eviction under section 14(1)(e) or under Section 14 A to 14 D and 21.
The landlord after recovering possession of the premises does not occupy the same or it is not occupied by the person for whose benefit the premises are held, within 2 months of obtaining such possession, the tenant may move the Controller for a direc tion against the landlord to put him in possession of the premises or to pay him such compensation as the Controller thinks fit.
Not merely that, the tenant has a further right to move the Controller for such reliefs if the landlord has at any time within three years from the date of obtaining possession, re let the premises to third party without obtaining permission of the Controller under sub section (1) of section 19, or the 319 possession of such premises is transferred to another person not bona fide.
This right of the tenant to re enter the premises is, however, restricted only in cases where the tenant is ordered to be evicted either under section 14(1)(e) or under sections 14 A to 14 D and 21.
If the possession is recovered under any order other than those referred to in sub section (1) the tenant has no right to invoke the provisions of sub section (2) of section 19.
With these requirements of the statute, it may now be examined whether the tenant has a right to seek re induction into the premises under sub section (2) of section 19.
From the narration of facts it will be seen that the parties entered into a compromise in Suit No. 330/77 by which the tenant has willingly surrendered possession with payment of Rs.6,000 to the appellant as arrears of rent.
On that day there was no execution of the decree for eviction obtained in Suit No. 288/77.
It was, however, contended that the tenant willingly surrendered possession of the premises without waiting for the execution of the eviction decree in Suit No. 288/77 and there is no such bar for surrendering of possession under section 14(7) of the Act.
We could have accepted this submission if there was only a decree for possession in Suit No. 228/77, but that is not so in the instant case.
The possession was actually delivered to the appellant by the tenant as per the compromise recorded in the suit based on arrears of rent under section 14(1)(a) and delivery of such possession cannot therefore, be referable to the decree for eviction under section 14(1)(e).
In fact, that decree for eviction in Suit No. 288/77 was not put into execution and it was perhaps found unnecessary to execute that decree since the tenant has surrendered possession of the premises as per the compromise in Suit No. 330/77 based on arrears of rent.
The application filed by the tenant under sub section (2) of section 19 of the Act was, there fore, clearly not maintainable.
In the result the appeal is allowed, and in reversal of the order of the Rent Control Tribunal as affirmed by the High Court, we restore the order of the Rent Controller.
In the circumstances of the case, we make no order as to costs.
G.N. Appeal allowed.
| IN-Abs | The appellant filed two eviction petitions against the respondent.
The first of these was under section 14(1)(e) of the Delhi Rent Control Act, 1958, on the ground of personal bona fide requirement.
The same was decreed in favour of the appellant, and the respondent was granted six months time to vacate the premises.
This was in accordance with section 14(7) of the Act prohibiting the landlord from obtaining possession before the expiry of six months from the eviction order.
The second eviction petition filed under Section 14(1)(a) of the Act for non payment of rent, was compromised between the parties, and the respondent agreed to put back the appellant in possession of the said premises.
The tenant delivered possession of the premises.
When the possession was delivered, six months period stipulated under Section 14(7) did not expire, for executing the eviction decree obtained in the first suit.
Owing to some reasons, the appellant could not continue in the premises and wanted to let out the premises to a third party.
At that point of time, the erstwhile tenant filed an application under Section 19(2) of the Act claiming re entry into the premises.
The Rent Controller rejected the application.
On appeal, the Rent Control Tribunal directed the appellant to put back the tenant in possession of the premises.
A revision petition was filed by the appellant before the High Court.
It was dismissed in limine.
Appellant has preferred this appeal against the order of the High Court.
Allowing the appeal, this Court, HELD: 1.
Sub Section (2) of section 19 operates in favour of the tenant who has suffered an order of eviction under section 14(1)(e) or under Sections 14 A to 14 D and 21.
The tenant may move the Rent Controller for a direction against the landlord to put him in possession of the 316 premises or to pay him such compensation as the Controller thinks fit, if the premises is not occupied by the landlord after recovering possession, or not occupied within two months by the person for whose benefit the premises are held.
The tenant has a further right to move the Controller for such reliefs if the landlord has at any time within three years from the date of obtaining possession, re let the premises to third party without obtaining permission of the Controller under sub section (1) of Section 19, or the possession of such premises is transferred to another person not bona fide.
If the possession is recovered under any order other than those referred to in sub section (1) the tenant has no right to invoke the provisions of sub section (2) of section 19.
[318F H; 319A B] 2.
In the instant case, the possession was actually delivered to the appellant by the tenant as per the compro mise recorded in the suit based on arrears of rent under section 14(1)(a) and delivery of such possession cannot therefore, be referable to the decree for eviction under section 14(1)(e).
In fact, that decree for eviction in Suit No. 288/77 was not put into execution and it was perhaps found unnecessary to execute that decree since the tenant has surrendered possession of the premises as per the com promise in Suit No. 330/77 based on arrears of rent.
The application filed by the tenant under sub section (2) of section 19 of the Act was, therefore, clearly not maintain able.
[319E F]
|
ivil Appeal No. 1102 of 1990.
From the Judgment and Order dated 7.10.1988 of the Patna High Court in C.W.J.C. No. 2075 of 1988.
A.K. Sen, K.D. prasad, J. Krishna and Mrs. Naresh Bakshi for the Appellant.
S.K. Sinha and U.S. Prasad for the Respondents.
The Judgment of the Court was delivered by: K. JAGANNATHA SHETTY, J.
Special Leave is granted.
This appeal from an order of the Patna High Court raises an important question as to the scope of section 33 B of the ( 'The Act ').
The facts can be quite shortly stated: The appellant company is mainly engaged in construction of coal washeries on contract basis in different collieries and also doing allied and incidental work.
Shivaji Prasad Sinha respondent No. 4 was a Senior Supervisor in the company 's establishment at Dhanbad.
It is said that he was caught red handed when carrying 55 pieces of electromagnetic clutch plates kept concealed in the tool box of his scooter.
The management held domestic enquiry into the incident and found him guilty of committing theft.
He was accordingly dismissed from service.
The dispute arising therefrom was referred under Section 10(1)(c) of the Act to Labour Court Dhanbad for adjudication.
The Labour Court registered the case as refer ence case No. 4 of 1988 and issued notice to the parties.
The parties entered appearance and filed their respective pleadings.
When the matter was thus pending consideration the respondent seems to have written to the Government stating that it would be difficult for him to attend the Labour Court Dhanbad since he has been residing at Hajipur and it would be convenient for him if the case is trans ferred to Labour Court Patna.
That application was made without intimation to the management.
The Government howev er, has acceded to the request of the respondent and without opportunity to 294 the management transferred the case to Labour Court Patna.
The Notification issued in that regard reads as follows: "NOTIFICATION Patna dated 8th August 1988 S.O.
In exercise of powers conferred by sub section (1) of Section 33 B of the (14 of 1947) the Governor of Bihar after careful consideration of the application of the petitioner Shri Shivajee Prasad Sinha wherein he has prayed for the transfer of adjudication proceedings to Patna keeping in view to the difficulties expressed by him to attend the labour court, Dhanbad, regu larly due to his residence at Hajipur is pleased to withdraw the proceeding shown in Annexure 'A ' pending before Labour Court, Dhanbad and transfer the said proceeding to the Labour Court, Patna for speedy disposal from the stage at which the case is transferred.
" The management moved the High Court by way of writ petition under Article 226 of the Constitution to have the Notification quashed.
The High Court did not agree and summarily dismissed the writ petition with an observation: "Since no prejudice is being caused to the petitioner and no allegation of mala fide has been made against the presiding officer, Patna, we are not inclined to interfere with the order under challenge.
This application is dismissed" The management in the appeal challenges the Government notification withdrawing and transferring the pending case from the Labour Court Dhanbad to Labour Court Patna.
Since the impugned notification has been issued under Section 33 B of the Act, we may for immediate reference set out that Section.
Omitting immaterial words, it is in these terms: "33.B. Power to transfer certain proceedings: (1) The appropriate Government may, by order in writing and for reasons to be stated therein, withdraw any proceeding under this Act pending before a Labour Court, 295 Tribunal, or National Tribunal and transfer the same to another Labour Court, Tribunal or National Tribunal, as the case may be, for the disposal of the proceeding and the Labour Court, Tribunal or National Tribunal to which the proceeding is so transferred may, subject to special direc tions in the order of transfer, proceed either de novo or from the stage at which it was so transferred." The Section 33 B provides power to the appropriate Government to withdraw any proceedings pending before a labour court or Tribunal and transfer it for disposal to another labour court or Tribunal.
It could be exercised suo motu or on representations of the parties.
The expression 'may ' in sub section (1) of Section 33 B only makes it discretionary in so far as the appropriate Government taking a decision as to whether the power conferred thereunder has to be exercised or not.
But when once a decision is taken to transfer a pending case then the requirement of giving reasons becomes mandatory.
The authority is under legal obligation to record reasons in support of its decision.
Reasons would be life of the decision.
Failure to give reasons or giving reasons not germane would be fatal to the decision.
In Associated Electrical Industries (P) Ltd. vs Its Workmen, [1961] II LLJ 122, 130 the Government withdrew and transferred a reference from one tribunal to another tribu nal merely stating that expediency required the withdrawal and transfer.
The validity of the order of withdrawal and transfer was challenged inter alia on the ground that no reasons were stated for passing the order.
Gajendragadkar, J., (as he then was) speaking for this Court observed that the requirement about the statement of reasons to be record ed must be complied with both in substance and in letter.
To say that it is expedient to withdraw a case from one tribu nal and transfer it to another does not amount to giving reasons as required by the Section.
In the instant case, the key question for consideration is whether the Government before accepting the representa tion of the workman and transferring the case from the labour court, Dhanbad to labour court, Patna should have given an opportunity to the management? The validity of the reasons given by the Government for transferring the case is another question to be considered.
We will presently consider the question but before doing so a brief survey of some of the High Courts decisions bearing on this aspect may be usefully made.
The Punjab High Court in Workman of Punjab 296 Worsted Spinning Mills Chheharta vs State of Punjab & Ors., [1965] II LLJ 2 18 has expressed the view that the power to transfer pending case under section 33 B is not a mere administrative but quasi judicial power and the appropriate Government cannot transfer a case on the basis of allega tions of one party without giving reasonable opportunity to other party to represent its point of view.
This was also the view recognised by the Madras High Court in Management of Sri Rani Lakshmi Ginning and Weaving Mills Ltd. vs State of Madras, at 167.
It was explained by the Madras High Court that the reasons given by a party who moved for transfer may not be valid or relevant or may not be true at all.
Whether such reasons in fact exist and whether those reasons have any relevance for a transfer could be tested only if the other party has notice of the same.
The High Courts of Calcutta, Andhra Pradesh and Allaha bad have however, taken contrary view.
In Jay Engineering Works Ltd. vs Fourth Industrial Tribunal, Calcutta, [1977] (Lab) 1C 1739 at 1750 the Calcutta High Court has observed that it would be difficult to appreciate how under such circumstances, the Government could be called upon to give a notice to the parties before making an order under section 33 B. There could be no principle involved in giving such a notice.
Nobody 's rights could possibly have been effected in taking such action and there is no question of observing the principles natural justice.
The Andhra Pradesh High Court in Muthe Steels (India) Ltd. vs Labour Court, Hyderabad, [1979] (Lab) IC 325 at 329 has adopted a similar line of reasoning.
It was emphasized that Section 33 B in terms does not con template any notice being given before a transfer is made of any proceeding from one Labour Court to another.
There is no right to any party to have any question decided by a partic ular court.
An arbitrary exercise of power of transfer is adequately safeguarded by the statutory requirement to record reasons for such transfer.
The Allahabad High Court in Pioneer Ltd. vs Labour Court, Gorakhpur, [1983] (Lab) IC 335,338 has also expressed similar views.
After the leading English case of Ridge vs Baldwin,I ; and an equally important case of this Court in A.K. Kraipak & Ors.
vs Union of India, there was a turning point in the development of doctrine of natural justice as applicable to administrative bodies.
Both the authorities laid down that for application of rules of natural justice the classification of functions as 'judi cial ' or 'administrative ' is not necessary.
Lord Reid in Ridge case explained, 'that the duty to act judicially may arise from the very nature of the 297 function intended to be performed and it need not be shown to be super added '.
Hegde, J., in Kraipak case said that under our Constitution the rule of law pervades over the entire field of administration.
Every organ of the State under our Constitution is regulated and controlled by the rule of law.
The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner.
The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously.
The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision.
What is thus important in the modern administration is the fairness of procedure with elimination of element of arbitrariness.
The State functionaries must act fairly and reasonably.
That is, however, not the same thing to state that they must act judicially or quasijudicially.
In Keshav Mills Co. Ltd. vs Union of India, ; Mukherjea, J., said (at 30): "The administrative authority concerned should act fairly, impartially and reasonably.
Where administrative officers are concerned, the duty is not so much to act judicially as to act fairly." The procedural standards which are implied by the duty to act fairly has been explained by Lord Pearson in Pearl berg vs Varty, ,547: "A tribunal to whom judicial or quasi judicial functions are entrusted is held to be required to apply those principles (i.e. the rules of natural justice) in performing those functions unless there is a provision to the contrary.
But where some person or body is entrusted by Parliament with administrative or executive functions there is no presump tion that compliance with the principles of natural justice is required although, as 'Parliament is not to be presumed to act unfairly ', the courts may be able in suitable cases (perhaps always) to imply an obligation to act with fair ness.
" In Mohinder Singh Gill vs Chief Election Commissioner, ; at 434 Krishna Iyer, J. commented that natural justice though 298 varying is the soul of the rule as fair play in action.
It extends to both the fields of judicial and administrative.
The administrative power in a democratic set up is not allergic to fairness in action and discretionary executive justice cannot degenerate into unilateral injustice.
Good administration demands fair play in action and this simple desideratum is the fount of natural justice.
Fairness is flexible and it is intended for improving the quality of government by injecting fairplay into its wheels.
In Maneka Gandhi vs Union of India, [1978] 2 SCR 621 Bhagwati, J., expressed similar thought that audio alteram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
In Swadeshi Cotton Mills vs Union of India, Sarkaria, J., speaking for himself and Desai, J., said that irrespective of whether the power conferred on a statu tory body or tribunal is administrative or quasi judicial, a duty to act fairly, that is, in consonance with the funda mental principles of substantive justice is generally im plied.
The presumption is that in a democratic polity wedded to the rule of law, the State or the Legislature does not intend that in the exercise of their statutory powers its functionaries should act unfairly or unjustly.
In the same case, Chinnappa Reddy, J., added (at 2 12) that the princi ples of natural justice are now considered so fundamental as to be 'implicit in the concept of ordered liberty '.
They are, therefore, implicit in every decision making function, call it judicial, quasi judicial or administrative.
The learned Judge went on to state that where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice.
The implication of natural justice being presumptive, it should be followed by the authorities unless it is excluded by express words of statute or by necessary implication.
Citations could be multiplied since there is fairly abundant case law has come into existence: See, for example, Royappa vs State of Tamil Nadu, ; and Union of India vs Tulsi Ram, [1985] (Supp.) 2 SCR 13 1.
More recently in a significant judgment in Charan Lal Sahu & Ors.
vs Union of India, JT learned Chief Justice Sabyasachi Mukharji has referred to almost all the authori ties of this Court on this aspect and emphasized that the principles of natural justice are fundamental in the consti tutional set up of this country.
No man or no man 's right should be affected without an 299 opportunity to ventilate his views.
The justice is a psycho logical yearning, in which men seek acceptance of their view point by having an opportunity before the forum or the authority enjoined or obliged to take a decision affecting their right.
It may be noted that the terms 'fairness of procedure ', 'fair play in action ', 'duty to act fairly ' are perhaps used as alternatives to "natural justice" without drawing any distinction.
But Prof. Paul Jackson points out that "Such phrases may sometimes be used to refer not to the obligation to observe the principles of natural justice but, on the.
contrary, to refer to a standard of behaviour which, in creasingly, the courts require to be followed even in cir cumstances where the duty to observe natural justice is inapplicable" (Natural Justice by Paul Jackson 2nd ed.
p. 11).
We share the view expressed by Professor Jackson.
Fair ness, in our opinion, is a fundamental principle of good administration.
It is a rule to ensure the vast power in the modern state is not abused but properly exercised.
The State power is used for proper and not 'for improper purposes.
The authority is not misguided by extraneous or irrelevant consideration.
Fairness is also a principle to ensure that statutory authority arrives at a just decision either in promoting the interest or affecting the rights of persons.
To use the time hallowed phrase "that justice should not only be done but be seen to be done" is the essence of fairness equally applicable to administrative authorities.
Fairness is thus a prime test for proper and good adminis tration.
It has no set form or procedure.
It depends upon the facts of each case.
As Lord Pearson said in Pearlberg vs Varty, (at 547), fairness does not necessarily require a plurality of hearings or representations and counter repre sentations.
Indeed, it cannot have too much elaboration of procedure since wheels of administration must move quickly.
A case with a not dissimilar problem was in Pannalal Binjraj and Anr.
vs Union of India, There the Commissioner of Income Tax by the power vested under section 5(7A) of Income Tax Act, 1922, transferred an asses see 's case from one Income Tax Officer to another without hearing the assessee.
Section 5(7A) of the Income Tax Act, 1922 provided: "The Commissioner of Income Tax may transfer any case from one Income Tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income Tax Officer to another.
Such 300 transfer may be made at any stage of the proceedings, and shall not render necessary the re issue of any notice al ready issued by the Income tax Officer from whom the case is transferred.
" This Section did not provide for affording an opportuni ty to the assessee before transferring his case from one Income Tax Officer to another.
The assessee challenged the constitutional validity of the Section.
This Court upheld its validity on the ground that it is a provision for admin istrative convenience.
N.H. Bhagwati, J., speaking for this Court, however remarked (at 589): " . . it would be prudent if the principles of natural justice are followed, where circumstances permit, before any order of transfer under section 5(7A) of the Act is made by the Commissioner of Income Tax or the Central Board of Revenue, as the case may be, and notice is given to the party affected and he is afforded a reasonable opportunity of representing his views on the question and the reasons of the order are reduced however briefly to writing .
There is no presumption against the bona fide or the honesty of an assessee and normally the income tax authorities would not be justified in refusing to an assessee a reasonable oppor tunity of representing his views when any order to the prejudice of the normal procedure laid down in section 64(1) and (2) of the Act is sought to be made against him, be it a transfer from one Income Tax Officer within the State to an Income Tax Officer without it, except of course where the very object of the transfer would be frustrated if notice was given to the party affected.
" Section 5(7A) was replaced by Section 127 of the Income Tax Act, 1961, which now makes it obligatory to record reasons in making the order of transfer after affording a reasonable opportunity of being heard to the assessee in the matter.
In Ajantha Industries vs Central Board of Taxes, ; this Court considered the validity of a transfer order passed under Section 127 and it was held that merely recording of reasons on the file was not sufficient.
It was essential to give reasons to the affected party.
The order of transfer in that case was quashed for not communi cating reasons to the assessee.
In the present case, the State has withdrawn the pending refe 301 rence from the Labour Court, Dhanbad and transferred it to another Labour Court at the distant District of Patna, on the representation of the workman, without getting it veri fied from the management.
The State in fairness ought to have got it verified by giving an opportunity to the manage ment which is a party to the pending reference.
Denial of that opportunity is a fatal flaw to the decision of the Government.
The management need not establish particular prejudice for want of such opportunity.
In S.L. Kapoor vs Jagrnohan, ; at 765 Chinnappa Reddy, J., after referring to the observation of Donaldson, J., in Altco Ltd. vs Suth erland, said that the concept that justice must not only be done but be seen to be done is basic to our system and it is concerned not with a case of actual injustice but with the appearance of injustice or possible injustice.
It was emphasized that the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been observed.
The non observance of natural justice is itself prejudice to any man and proof of prejudice independ ently of proof of denial of natural justice is unnecessary.
This takes us to the reasons given by the Government in support 'of the order of transfer.
The Government has stated that the workman is having his residence at Hajipur and it would be therefore, inconvenient for him to attend the labour court regularly at Dhanbad.
However, most of the factors do not point that way.
The workman and his family members seem to be still residing in colony quarter at Dhanbad (Annexure C).
His two sons are studying in De Nobili School at Mugma which is a nearby village.
Reference may be made to a letter dated September 8, 1988 (Annexure D) of the Headmaster of the School in which the children of the work man are studying.
Reference may also be made to a letter (Annexure E) from the Assistant Electrical Engineer in proof of the electricity supplied to the quarter occupied by the workman at Dhanbad.
As against these material, the workman has not produced any proof in support of his allegation that he has been residing in a village home near Patna.
In fact, in the counteraffidavit, he has not denied the documents annexed to the Special Leave Petition, and not seriously disputed the factum of his residence in the colony quarter at Dhanbad.
Even the alleged recommendation of the Ward Commissioner referred in his counter affidavit has not been produced.
We have, therefore, no hesitation in holding that the Government was misled by the representation of the workman. 302 In the result, we allow the appeal and quash the notifi cation dated August 8, 1988 by which the Government of Bihar transferred the case from the Labour Court, Dhanbad to the Labour Court, Patna.
The Labour Court, Dhanbad shall now proceed to dispose of the matter as expeditiously as possi ble.
In the 'circumstances of the case, we make no order as to costs.
P.S. S Appeal allowed.
| IN-Abs | Sub section (1) of section 33 B of the provides that the appropriate Government may, by order in writing and for reasons to be stated therein, withdraw any proceedings pending before a Labour Court or Tribunal and transfer it for disposal to another Labour Court or Tribunal.
Respondent No. 4, a workman of the appellant company at Dhanbad, was caught red handed while stealing certain goods.
The domestic enquiry found him guilty of committing theft.
Consequently,.
he was dismissed from service.
The dispute arising therefrom was referred to the Labour Court, Dhanbad under section 10(1)(c) of the Act for adjudication.
When the matter was pending consideration the respondent sought transfer of the case to the Labour Court at Patna on the plea that since he was residing at his village near Patna it would be difficult for him to attend the proceedings at Dhanbad.
That application was made without intimation to the management.
The Government, however, without giving opportu nity to the management transferred the case to Patna by a notification dated August 8, 1988 issued under section 33B of the Act.
The writ petition filed by the management seeking to quash the notification was dismissed by the High Court on the view that no prejudice was being caused to the manage ment and no allegation of mala fide had been made against the presiding officer.
Allowing the appeal by special leave, the Court.
HELD: 1.1 The power to transfer a pending case under section 33B of the is not a mere administra tive but quasijudicial power and the appropriate Government cannot transfer a case on the basis of allegations of one party without giving a reasonable opportunity to the other party to represent its point of view.
Such 291 allegations may not be valid or relevant or may not be true at all.
That could be tested only if the other party has notice of the same.
[296A C] Punjab Worsted Spinning Mills, Chheharta vs State of punjab & Ors., [1965] II LLJ 218 and Management of Sri Rani Lakshmi Ginning & Weaving Mills Ltd. vs State of Madras, , referred to.
Jay Engineering Works Ltd. vs Fourth Industrial Tribu nal, Calcutta, [1977] (Lab) I.C. 1739; Muthe Steels (India) Ltd. vs Labour Court, Hyderabad, [1979] (Lab) I.C. 325 and Pioneer Ltd. vs Labour Court, Gorakhpur, [1983] (Lab) I.C. 335, overruled.
1.2 What is important in the modern administration is the fairness of procedure with elimination of element of arbitrariness, for fairness is a fundamental principle of good administration.
It is a rule to ensure that vast power in the modern State is not abused but properly exercised.
The State power is used for proper and not for improper purposes.
The authority is not misguided by extraneous or irrelevant consideration.
Fairness is also a principle to ensure that statutory authority arrives at a just decision either in promoting the interest or affecting the rights of persons.
The concept that 'justice should not only be done but be seen to be done ' is the essence of fairness and is equally applicable to administrative authorities.
Fairness is thus a prime test for proper and good administration.
It has no set form or procedure.
It does not necessarily re quire a plurality of hearings or representations and counter representations.
It depends upon the facts of each case.
[297C, 299C E] Ridge vs Baldwin, ; ; A.K. Kraipak & Ors.
vs Union of India, ; Keshav Mills Co. Ltd. vs Union of India; , ; Pearlberg vs Varty, , 547; Mohinder Singh Gill vs Chief Election Com missioner; , ; Maneka Gandhi vs Union Of India, [1978] 2 SCR 621; Swadeshi Cotton Mills vs Union of India, ; Royappa vs State of Tamil Nadu, ; ; Union of India vs Tulsi Ram, [1985] (Supp.) 2 SCR 131; Charan Lal Sahu & Ors.
vs Union of India, JT ; Natural Justice by Paul Jackson, 2nd ed.
p. 11 and Pannalal Binjraj & Anr.
vs Union of India, , referred to.
1.3 In the instant case, the State had withdrawn the pending reference from the Labour Court, Dhanbad and trans ferred it to another Labour Court at the distant District of Patna, on the represen 292 tation of the workman without getting it verified from the management.
The State in fairness ought to have got it verified by giving an opportunity to the management which was a party to the pending reference.
The management was not required to establish particular prejudice for want of such opportunity.
The non observance of natural justice was itself prejudice to the management and proof of prejudice independently of proof of denial of natural justice was unnecessary.
Denial of the opportunity to the management was thus a fatal flaw to the decision of the Government.
[300H 30 IA, B D] S.L. Kapoor vs Jagmohan, ; and Altco Ltd. vs Sutherland, , referred to.
The expression 'may ' in Sub section
(1) of section 33B of the Act only makes it discretionary in so far as the appropriate Government taking a decision as to whether the power con ferred thereunder has to be exercised or not.
But when once a decision has been taken to transfer a pending case then the requirement of giving reasons becomes mandatory.
The authority would be under legal obligation to record reasons in support of its decision.
Failure to give reasons or giving reasons not germane would thus be fatal to the deci sion.
[295C D] Associated Electrical Industries (P) Ltd. vs Its Work men, [1961] II LLJ 122 and Ajanta Industries vs Central Board of Taxes, ; , referred to.
2.2 In the instant case, the Government has stated that the workman was having his residence at his village near Patna and it would be, therefore, inconvenient for him to attend the Labour Court regularly at Dhanbad.
Most of the factors, however, do not point that way.
The workman and his family members seem to be still residing in the colony quarter at Dhanbad.
His two sons are studying in a school at a nearby village.
The letter dated September 8, 1988 of the Headmaster of the said school speaks of that fact.
The letter from the Assistant Electrical Engineer in proof of the electricity supplied to the quarter occupied by the workman at Dhanbad is also relevant.
As against these mate rials, the workman has not produced any proof in support of his allegation that he has been residing in a village home near Patna.
He has not denied the documents annexed to the special leave petition and not seriously disputed the factum of his residence in the colony quarter at Dhanbad.
The Government was, therefore, misled by the representation of the workman.
[301E H] 293 3.
The notification dated August 8, 1988 is quashed.
The Labour Court, Dhanbad shall proceed to dispose of the matter as expeditiously as possible.
[302A]
|
ivil Appeal No. 1201 of 1990 From the Judgment and Order dated 5.6.87 of the Punjab and Haryana High Court in C.R. No. 556/87.
Mukul Mudgal for the Appellant.
S.S. Javali, Y.P. Rao and Raju Ramachandran for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Special leave granted.
Food Corporation of India filed a suit for recovery of Rs.2 lacs against the appellant and respondents 2 to 7 on the basis of an agreement between the parties.
After service of notice, the appellant entered appearance on December 10, 1984.
On January 4, 1985, the appellant filed an application stating as follows: "That the photostat copy of the original agreement and other documents which have been produced by the plaintiff 355 in their evidence are not visible and clear, and it is very difficult for the defendants to inspect and give the written statement.
That it is very essential to get the original documents produced in the court which are in possession of the plain tiff so that the defendants may file the written statement.
It is, therefore, respectfully prayed that the plaintiff may kindly be ordered to produce the original agreement and other documents which has been filed with the plaint.
" On January 21, 1985, the appellant moved the Court under Section 34 of the for stay of the proceeding of the suit on the ground that there exists an arbitration clause in the suit agreement covering the matter in dispute.
The Food Corporation of India contended that the appellant had taken steps in the proceedings of the suit since an adjournment was taken for filing written statement.
It was however, admitted the existence of the arbitration agreement covering the matter in dispute in the suit.
The Trial Court accepted the request of the appellant and stayed the suit inter alia observing: ". .
This application did not contain any prayer for adjournment of the case for filing the written statement.
The prayer contained in this application was that the plain tiff be directed to produce the original agreement and other documents so that the defendants may file the written state ment . .
In the present case, the prayer of the defendants that the plaintiff be directed to file the original agreement and other documents in the court before they could file the written statement cannot be said to be a step in the pro ceedings because it was not a prayer for adjournment of the case for filing written statement.
" But the Additional District Judge, in the appeal pre ferred by the Food Corporation of India has reversed the order of the trial court.
He was of the view that a written request made by the defendants by their application dated January 4, 1985 for an adjournment to enable them to file the written statement was a step in the proceedings and the trial court was not justified in staying the suit.
Accord ingly, he accepted the 356 appeal and vacated the stay order and directed the trial court to proceed with the suit in accordance with law.
The High Court of Punjab and Haryana has dismissed the revision petition of the appellant.
The High Court has also observed that the defendants having moved the application dated January 4, 1985 for production of original documents and seeking an adjournment of the suit to enable them to file written statement would certainly be construed as a step taken in the proceedings.
Section 34 of the has received the consideration of this Court in State of Uttar Pradesh vs Janki Saran Kailash Chandra, [1974] 1 SCR 31, (ii) Food Corporation of India vs Yadav Engineer, ; and more recently in General Electric Co. vs Renusagar Power Co., ; It may be noted that the expression "a step in the proceeding" which would disentitle the de fendant from invoking section 34 of the is not every step taken by him in the suit.
It should be a step to abandon the right to have the suit stayed.
It should be a step in aid of the progress of the suit.
The step must have been consciously taken with a view to submit to the juris diction of the Court for the purpose of adjudicating the controversy on the merits.
In General Electric Co. 's case this Court after considering the previous decisions observed (at 155 56): . thus a step in the proceeding which would disentitle the defendant from invoking Section 34 of the should be a step in aid of the progress of the suit or submission to the jurisdiction of the court for the purpose of adjudication of the merits of the controversy in the suit.
The step must be such as to manifest the inten tion of the party unequivocally to abandon the right under the arbitration agreement and instead to opt to have the dispute resolved on merits in the suit.
The step must be such as to indicate an election or affirmation in favour of the suit in the place of the arbitration.
The election or affirmation may be by express choice or by necessary impli cation by acquiescence.
The broad and general right of a person to seek redressal of his grievances in a court of law is subject to the right of the parties to have the disputes settled by a forum of mutual choice.
Neither right is insub stantial nor the right can be allowed to be defeated by any manner of technicality.
The right to have the dispute adju dicated by a civil court cannot be allowed to be defeated by vague 357 or amorphouse mis called agreements to refer to 'arbitra tion '.
On the other hand, if the agreement to refer to arbitration is established, the right to have the dispute settled by arbitration cannot be allowed to be defeated on technical grounds.
" In the application filed by the defendants in this case, they only sought a direction to the plaintiff to produce the original agreement and other documents so that they may file written statement.
It was not stated that they would file the written statement.
They never took any other step sub mitting to the jurisdiction of the court to decide the case on merits.
The right to have the dispute settled by arbitra tion has been conferred by agreement of parties and that right should not be deprived of by technical pleas.
The Court must go into the circumstances and intention of the party in the step taken.
The Court must examine whether the party has abandoned his right under the agreement.
In the light of these principles and looking to the substance of the application dated January 4, 1985, we cannot form an opinion that the defendants have abandoned their right to have the suit stayed and took a step in the suit to file the written statement.
In the result the appeal is allowed in setting aside the order of the High Court and restoring the order of the High Court.
In the circumstances of the case, we make no order as to costs.
G.N. Appeal allowed.
| IN-Abs | In a suit filed by the Respondent for recovery of a certain amount from the appellants and others, on the basis of an agreement between the parties, appellant entered appearance and prayed for the production of original docu ments, since photostat copies were not clear, so that writ ten statement may be filed.
Thereafter the appellant moved the Court under Section 34 of the for stay of the suit on the ground that there was an arbitration clause in the suit agreement covering the matter in dispute.
Though the Re spondent Corporation admitted the existence of such a clause, it opposed the prayer for stay of the proceedings on the plea that the appellant had taken steps in the proceed ings of the suit, in that an adjournment was taken for filing written statement.
Staying the proceedings, the trial court observed that there was no prayer for adjournment of the case for filing the written statement.
On appeal by the Respondent Corporation, the First Appellate Court vacated the stay order passed by the trial court.
The Revision petition filed by the appellant was dismissed by the High Court.
This appeal, by special leave, is against the High Court 's order.
Allowing the appeal, this Court, HELD: 1.1 The expression "a step in the proceeding" which would disentitle the defendant from invoking section 34 of the is not every step taken by him in the suit.
It should be a step to abandon the right to have the suit stayed.
It should be a step in aid of the progress of the suit.
The step must have been consciously taken with a view to submit to the jurisdiction of the Court for the purpose of adjudicating the controversy on merits.
[356C D] 354 1.2 Before the trial court, the defendants only sought a direction to the plaintiff to produce the original agreement and other documents so that they may file written statement.
It was not stated that they would file the written state ment.
They never took any other step submitting to the jurisdiction of the court to decide the case on merits.
The right to have the dispute settled by arbitration has been conferred by agreement of parties and that right should not be deprived of by technical pleas.
The Court must go into the circumstances and intention of the party in the step taken.
The court must examine whether the party has aban doned his right under the agreement.
In the light of these principles and looking to the substance of the application dated January 4, 1985, one cannot form an opinion that the defendants have abandoned their right to have the suit stayed and took a step in the suit to file the written statement.
[357B D] State of U.P. vs Janki Saran Kailash Chandra, [1974] 1 SCR 31; Food Corporation of India vs Yadav Engineer, ; and General Electric Co. vs Renusagar Power Co., ; , relied on.
|
ivil Appeal No. 263 of 1983.
From the Judgment and Order dated 4.1.1983 of the Punjab and 281 Haryana High Court in Civil Revision No. 3243 of 1982.
M.K. Ramamurthi and S.K. Agarwal for the Appellants.
S.K. Mehta, Aman Vachher, Atul Nanda and K.L. Verma for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
The appeal concerns the scope and construction of Section 13 sub section 2(i) proviso of the East Punjab Urban Rent Restriction Act, 1949 (called shortly as 'The Act ').
The point at issue relates to the validity of the arrears of rent deposited by the tenant under the proviso.
Milkhi Ram the respondent in this appeal is the landlord of the premises consisting of a shop at Ludhiana.
In Febru ary 1958 the shop was taken on rent by Amar Chand.
The rent agreed was Rs.45 per month.
In December 1975 Amar Chand died.
His brother Diwan Chand succeeded to the tenancy rights.
In November 1976 he also died leaving behind his widow Pushpa Devi and his minor son Yashpal.
They are appel lants 1 and 2 in this appeal.
The landlord brought an action for eviction under section 13 of the Act on the ground of arrears of rent, sub letting etc.
His case was that appel lants 1 and 2 inducted Saligram appellant No: 3 as a sub tenant and delivered exclusive possession of the shop prem ises.
The eviction was also sought on the ground that the tenant has made alterations resulting in material impairment in the value and utility of the premises.
The appellant 's case was that the shop was taken on lease by Amar Chand as partner of the firm M/s Amar Chand in which Amar Chand, Diwan Chand and Saligram were all partners in the business from the very commencement of tenancy.
They denied that Saligram was inducted as subtenant.
They also refuted the allegations as to material alterations affecting the value and utility of the premises.
Before the Rent Controller the respondents on the first date of hearing tendered the arrears of rent, with interest and cost determined by the Controller.
The amount was ren dered evidently under the proviso to Section 13 sub section (2)(i) of the Act.
Mr. Satpal Singh the common counsel for all the respondents tendered the amount alongwith his state ment, which reads as follows: "I tender Rs.2025 as arrears of rent from 1.12.1975 to 282 31.8.
1979, Rs.240 as interest and Rs.25 as costs as as sessed on behalf of all the respondents, total amounting to Rs.2290.
" The landlord did not accept the amount but made the following endorsement: "1 do not accept the tender as it is neither legal nor valid.
The respondent No. 3 Saligram, is a sub tenent." The Rent Controller at that stage did not state whether the objection of the landlord was legal and justified.
Since the eviction was also based on other grounds, he allowed the parties to lead evidence on all the questions.
After consid ering the evidence adduced by the parties, the Controller found no substance in the allegations that the tenant has made any material alteration impairing the utility of the building.
On the question of original tenancy agreement, he found that the original tenant was not in the partnership firm of which Amar Chand was partner, but Amar Chand took the premises in his personal name and the tenancy was there fore personal to him.
He also accepted the case of unautho rised sub letting and held that respondent No. 3 was a sub tenant inducted into the premises without consent of the landlord.
On the validity of the amount tendered on behalf of all respondents including Saligram it was held that the tender was not legal and valid since Saligram was not a tenant.
In other words, he held that the rent tendered by counsel for and on behalf of all the respondents was not a legal tender in terms of Section 13 sub section (2)(i) proviso and the undisputed tenant alone ought to have ten dered the rent.
With these findings the Controller accepted the eviction petition and directed the tenant 's eviction from the premises.
The appeal preferred by the tenant was disposed of on a preliminary point, that is, on the validity of the amount deposited by the common counsel for the parties on the first date of hearing of the case.
The appellate authority held that the amount deposited on behalf of the three respondents was not valid since Saligram was a stranger.
On this aspect, the appellate authority had little discretion in view of the two decisions of the Punjab & Haryana High Court Ram Gopal & Ors.
vs Ram Prakash and Ors., [1963] RLR 1112 and Punjab Rajasthan Goods Carriers & Ors.
vs Onkar Mal, [1977] RLR 1 195.
In both the cases, the High Court has held that the tenant as defined under the Act could deposit or tender the amount under the proviso and not a stranger.
Following those decisions, the appellate authority confirmed 283 the eviction and dismissed the appeal without examining whether Saligram was also a tenant, or whether the original tenancy was in favour of the partnership firm of which Amar Chand was a partner.
The order Of the appellate authority has been confirmed by the High Court by dismissing the tenant 's revision in limine.
The tenant alongwith Saligram by obtaining leave have preferred this appeal.
Since the validity of the deposit made by the tenant under the proviso to sub section (2)(i) of Section 13 is in question and which in turn depends upon the principle laid down by the High Court in the said two authorities, it is convenient at this stage to have those cases properly analy sed.
In Ram Gopal case the arrears of rent were tendered by Chetan Ram, the tenant, his son Ram Bhagat alongwith Banarsi Das and Dhani Ram who were said to be the strangers.
The landlord refused to accept that amount on the ground that the tenant was Chetan Ram alone and as the amount was ten dered by persons other than Chetan Ram as well, there was no proper tender.
The trial court accepted the contention of the landlord.
Before the High Court it was contended for the tenant that the tender was valid since one of the tenderers was the tenant himself and the mere fact that he has joined the other persons who are strangers would not make any difference.
The tender must be deemed to be by the tenant and his associates should be ignored.
The High Court did not accept the submission.
By following some of the previous cases, it held that under the proviso the payment or tender must be made exclusively by or on behalf of the tenant and on his account.
The payment or tender made by the tenant alongwith the strangers and also on their account would be in contravention of the proviso and invalid.
The High Court accordingly affirmed the order of eviction.
Onkar Mal is also a case of eviction based on arrears of rent as one of the grounds.
The action was brought against Gulab Chand and Bhanwar Lal, the original tenants and Sohan Lal, Jagan Nath and Balkar Singh alleged to be the sub tenants inducted into the premises without consent of the landlord.
The undisputed tenant did not attend the court despite due service of notice and was proceeded ex parte.
The alleged sub tenants in their written statement claimed that they shared the tenancy since they had entered into partnership with the tenant for carrying on theft business.
They tendered the arrears of rent together with interest and costs of the proceedings on the first date of 284 hearing of the case.
The question arose whether the tender was valid and whether the alleged sub tenants could deposit the arrears of rent on their own account and also on behalf of the undisputed tenant.
The landlord however, refused to accept the amount on the ground that those who deposited the arrears were not his tenants and they had no authority to tender the rent on behalf of Bhanwar Lal and Gulab Chand.
The Rent Controller did not make any specific order on that contention.
He proceeded to consider the question of sub letting.
After considering the evidence produced by the parties he recorded a finding that there was sub letting by the tenant and consequently ordered eviction.
The appellate authority and also the High Court concurred with that opin ion.
The High Court further held that it is only the persons who fall within the definition of 'tenant ' could tender the rent under the proviso and not a third party or sub tenant inducted into the premises without consent of the landlord.
In the instant case, the appellate authority being bound by those two authorities has rejected the amount tendered by counsel as being invalid.
The correctness of that view has been challenged in this appeal.
We may begin with the relevant provisions of the Act.
The Act provides inter alia to restrict the increase of rent of certain premises situated within the limits of urban areas, and the eviction of tenants therefrom.
Section 13 sets out the grounds for eviction and prohibits eviction of tenants except in accordance with the provisions contained therein.
Sub section (2) provides that a landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf.
Clause (i) to (v) set out the grounds of eviction.
Clause (i) nonpayment of rent; clause (ii) sub letting without the consent of the landlord or misusing the building for a purpose other than that for which it was leased; clause (iii) committing such acts as are likely to impair materially the value or utility of the building or rented land; clause (iv) tenant has been guilty of such acts and conduct as are a nuisance to the occupiers of buildings in the neighbourhood; and clause (v) tenant not occupying the building for a continuous period of four months without reasonable cause where the building is situ ated in a place other than a hill station.
If the landlord establishes any one of these grounds against the tenant, the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied, he shall make an order rejecting the application.
285 Although the Act makes default in payment of rent as a ground for eviction, yet, the efficacy of the ground is different.
In this context.
Section 13 sub section (2)(i) is more important and it is, therefore.
fully extracted hereun der: "13(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf.
If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied (i) that the tenant has not paid or tendered the rent due by him in respect of the building or rented land within fifteen days after the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable.
Provided that if the tenant on the first hearing of applica tion for ejectment after due service pays or tenders the arrears of rent and interest at six per cent per annum on such arrears together with the cost of application assessed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid.
" This is a special provision made for the benefit of the tenant who has defaulted to pay the agreed rent.
Various Rent Control Acts provide protection from evic tion to the tenant with provisions similar to the proviso in question.
Reference may be made to Section 13 sub section 2(i) proviso of the Haryana Act, (ii) Section 12 Sub section 3(b) of the Bombay Rent Act, 1947, (iii) Section 14 sub section 2(j) proviso of the Himachal Pradesh Act.
Mr. Mehta learned counsel for the landlord respondent sought to justify the view taken by the High Court of Punjab in Ram Gopal and Onkar Mal Cases.
His argument went on the literal construction or strict construction based on the word 'tenant ' defined under section 2(h)(i) of the Act.
He urged that the word 'tenant ' referred to in the proviso must carry the same meaning as given to it under the definition and 'tenant ' as defined thereunder is alone entitled to avail of the benefit of the proviso and no others.
286 We recognise that Section 13 sub section (2)(i) proviso refers to the tenant and his obligation to pay or tender the arrears of rent, interest and costs if he wants to save himself from eviction.
We also recognise that under section 2(h)(i) the word 'tenant ' is defined to mean "any person by whom or on whose account rent is payable for a building or rented land and includes a tenant continuing in possession after the termination 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 landlord . .
But the law in the Court 's keeping is just not a system of logical abstraction.
Nor it is a bucket of ready made answers determined by any general formula or principle in advance.
In a famous passage Mr. Justice Holmes said: "All rights tend to declare themselves absolute to their logical extreme.
Yet all in fact are limited by the neigh bourhood of principles of policy which are other than those on which the particular right is rounded, and which becomes strong enough to hold their own when a certain point is reached . .
The boundary at which the conflicting inter ests balance cannot be determined by any general formula in advance, but points in the line, or helping to establish it, are fixed by decisions that this or that concrete case falls on the nearer or farther side." (Hudson County Water Co. V. MeCarter; , ,355 356).
It true when a word has been defined in the interpretation clause, prima facie that definition governs wherever that word is used the body of the Statute unless the context requires otherwise.
"The context" as pointed out in the book Cross Statutory Interpretation (2nd ed.
48) is both inter nal and external".
The internal context requiers the inter preter to situate the disputed words within the section of which they are part and in relation to the rest of the Act.
The external context involves determining the meaning from ordinary linguistic usage (including any special tech nical meanings) from the purpose for which the provision was passed, and from the place of the provisions within the general scheme of statutory and common law rules and princi ples.
The opening sentence in the definition of the Section states unless mere is anything repugnant in the subject or context".
In view of this qualification, the Court has not only to look at the words but also to examine the context and collocation in the light of the object of the Act and the purpose for which a particular provision was made by 287 the Legislature.
Reference may be made to the observations of Wanchoo, J., in Vanguard Five and General Insurance Co. Ltd. vs M/s Fruser and Ross & Anr., at 863 where the learned Judge said that even where the definition is exhaustive in as much as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or context.
In that case, the learned judge examined the construction of the word 'insur er ' as used in Section 33(1) and 2 D of the , in the light of the definition of that word under Section 2(9) thereof.
The by Section _(9) defines an 'insurer ' as a person carrying on the business of insurance '.
The question arose whether sections 33(1) and 2 D did not apply to an insurer who had closed his business completely as the definition of the word insurer in section 2(9) postulates actual carrying on of the business.
It was pointed out that in the context of sections 33(1) and 2 D and taking into account the policy of the Act and the pur poses for which the control was imposed on insurers, the word 'Insurer ' in the said sections also refers to insurers who were carrying on the business of insurance but have closed it.
Great artistry on the Bench as elsewhere is, therefore, needed before we accept, reject or modify any theory or principle.
Law as creative response should be so interpreted to meet the different fact situations corning before the court.
For, Acts of Parliament were not drafted with divine prescience and perfect clarity.
It is not possible for the legislators to foresee the manifold sets of facts and con troversies which may arise while giving effect to a particu lar provision.
Indeed, the legislators do not deal with the specific controversies.
When conflicting interests arise or defect appears from the language of the statute, the Court by consideration of the legislative intent must supplement the written word with 'force and life '.
See, the observation of Lord Denning in Seaford Estate Ltd. vs Asher, at 498.
The apparent purpose of the proviso was to relieve the defaulting tenant from extreme penalty of eviction.
There cannot be any doubt on this purpose.
The provision seems to be analogous to Section 114 of the Transfer of Property Act, 1892 which confers discretion to the Court to grant relief against forfeiture for non payment of rent.
But the proviso goes a step further and leaves no such discretion to the controller or court even if the tenant is a constant de faulter.
If the arrears and other amounts specified are paid or tendered on the first date of hearing, the default as a ground for eviction disappears and the Controller is pre cluded from passing a decree for eviction.
The 288 governing principle of the proviso is that the tenant could pay and stay in an action for eviction on default.
At the same time, the landlord is ensured payment of arrears, interest and the costs that he has incurred without the necessity of going to civil court to recover it.
This seems to be the will and intention of the legislature in the shape and scope or ' the proviso.
Against this backdrop, we have to construe the word 'tenant used in the proviso.
Mr. Ramamurthy, learned counsel for the appellants urged for liberal construction of the word so as to include a person claiming to be a tenant.
Reference was made to the observation of this Court in Mangat Rai vs Kidarnath, There Fazal Ali, J., said that the proviso in question affords a real and sanctified protection to tenant against eviction on the ground of default.
It should not be given a hypothetical or literal construction, but should be meaningfully construed.
We agree with this observation.
The legislative protection concerning the tenants should not be narrowly tailored.
Indeed, it should be given wider meaning and broader con cept.
We should try to understand the spirit of the text and not be bound by letter.
The argument of counsel for the landlord however, was that the proviso was intended to protect the tenant as defined under the statute and not a person claiming to be a tenant.
The persons who are not tenants could not, there fore, be given the benefit of the proviso.
This submission or the interpretation suggested by counsel does not provide a square answer for all problems coming before the court.
If there are proceedings for eviction with persons claiming tenancy along with the undisputed tenant or to his exclu sion, the acceptance of that submission may lead to arbi trary and unjust result.
Take for instance, the landlord brings an action for eviction on default against A and B where A is recognised as the tenant, but not B. B however claims that he shares the tenancy with A and joins A in tendering the arrears on the first date of hearing of the case.
A also does not dispute that claim.
But if the conten tion of the landlord that the tenant as defined under the Act is alone entitled to tender the amount is accepted, the court could make an order of eviction by discarding the deposit.
That would be repugnant to our notions of justice.
Take another hypothetical case whose occurrence is more probable and which often arises for decision.
The landlord brings an action for eviction against A on the ground of default and also on sub letting to B.
But B denies sub letting and contends that he was 289 inducted into the premises with the consent of the landlord.
A remains absent, perhaps he is not interested in the prem ises.
B however, tenders the rent on his own account, but the landlord refuses to accept it on the plea that B has no right to tender the rent since he is not a recognised ten ant.
The acceptance of that view may result in ejectment of A and B before determining the controversy between the parties.
Both of them may have to be thrown out without deciding the issue raised in the pleadings.
We cannot have "Sentence first verdict afterwards".
That is possible only by the demand of Queen in "Alice 's Adventures in Wonderland" (By Lewis Carroll p. 186).
We must construe the proviso so as to effectuate the twin considera tions which we discussed earlier.
We must eliminate the construction which is productive of injustice.
arbitrary result and undesirable consequence.
It is time for us to be explicit.
Taking into account of the intention of the legislature and the purposes for which the proviso was enacted, we are of the opinion that the obligation to tender the rent under the proviso on the first hearing date does not depend upon the existence of admitted jural relationship of landlord and tenant.
When an action for eviction is brought by the landlord on the ground of default, the proviso stands attracted.
The benefit of the proviso could be availed of by the tenant and also by those who claim to be the tenant.
The view to the contrary ex pressed by the High Court of Punjab and Haryana in Ram Gopal and Onkar Mal cases is likely to be of greater mischief to the tenants than a protection for them and is therefore overruled.
In the result, the appeal is allowed, the judgment of the appellate authority as affirmed by the High Court is reversed.
The matter stands remitted to the appellate au thority for disposal in the light of the observations made and in accordance with law.
In the circumstances of the case, we make no order as to costs.
N.V.K. Appeal allowed.
| IN-Abs | The respondent landlord filed an eviction petition against the appellants under section 13 of the East Punjab Urban Rent Restriction Act, 1949 on the grounds of arrears of rent, sub letting and making material alterations impair ing the utility of the building.
On the first date of hear ing before the Rent Controller the appellants tendered the arrears of rent but the respondent landlord refused to accept it on the ground that the tender of rent was not valid since it included rent on behalf of a disputed tenant.
Accepting the case of unauthorised subletting the Rent Controller allowed the eviction petition holding that the rent tendered was not in terms of the proviso to sub section (2)(i) of section 13 because only the undisputed tenant alone ought to have tendered the rent.
The appellate authority dismissed the appeal on the preliminary point of validity of tendering of rent, holding that the rent deposited by the appellants was not valid, since one of the appellants was a stranger.
The High Court confirmed the order of the appellate authority by dismissing the tenant 's revision in limine.
In the appeal to this Court on the question, whether the word 'tenant ' included a person claiming to be a tenant, allowing the appeal, this Court, 279 HELD: 1.
When a word has been defined in the interpreta tion clause, prima facie that definition governs wherever that word is used in the body of the Statute unless the context requires otherwise.
The context is both internal and external.
The internal context requires the interpreter to situate the disputed words within the section of which they are part and in relation to the rest of the Act.
The exter nal context involves determining the meaning from ordinary linguistic usage (including any special technical meanings) from the purpose for which the provision was passed, and from the place of the provisions within the general scheme of statutory and common law rules and principles.
[286E G] Cross: Statutory Interpretation, 2nd ed.
p. 48, referred to.
1.1 Even where the definition is exhaustive in as much as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or context.
[287B] Vanguard Fire and General Insurance Co. Ltd. vs M/s Fraser and Ross & Anr., , followed.
The opening sentence in the definition of Section 2 of the East Punjab Urban Rent Restriction Act, 1949 states "unless there is anything repugnant in the subject or con text".
In view of this qualifications, the Court has not only to look at the words but also to examine the context and collocation in the light of the object of the Act and the purpose for which a particular provision was made by the Legislature.
[286G H] 3.
The apparent purpose of the proviso to Section 13(2)(i) was to relieve the defaulting tenant from the extreme penalty of eviction.
The provision is analogous to Section 114 of the which confers discretion on the Court to grant relief against forfeiture for non payment of rent.
But the proviso goes a step further and leaves no such discretion to the controller or Court even if the tenant is a constant defaulter.
If the arrears and other amounts specified are paid or tendered on the first date of hearing, the default as a ground for eviction disappears and the Controller is precluded from passing a decree for eviction.
The governing principle of the proviso is that the tenant could pay and stay an action for eviction on default.
At the same time, the landlord is ensured payment of arrears, interest and the costs that he has incurred without the necessity of going to civil court to 280 recover it.
The proviso affords a real and sanctified pro tection to tenant against eviction on the ground of default.
It should not be given a hypothetical or literal construc tion, but should be meaningfully construed.
The legislative protection concerning the tenants should not be narrowly tailored.
Indeed, it should be given wider meaning and broader concept.
[287G H; 288A; D] Court should try to understand the spirit of the text and not be bound by letter.
[288D] Mangat Rai vs Kidarnath, ; , followed.
Hudson County Water Co. vs Me Carter, ; , referred to.
Taking into account the intention of the legislature and the purposes for which the proviso was enacted, it is clear that the obligation to tender the rent under the proviso to Section 13(2)(i) on the first hearing date does not depend upon the existence of admitted jural relationship of landlord and tenant.
When an action for eviction is brought by the landlord or the ground of default, the provi so stands attracted.
The benefit of the proviso could be availed of by the tenant and also by those who claim to be the tenant.
[289D E] Ram Gopal & Ors.
vs Ram Prakash & Ors., [1963] RLR 1112 and Punjab Rajasthan Goods Carriers & Ors.
vs Onkar Mal, [1977] RLR 1195, overruled.
Law as creative response should be so interpreted to meet the different fact situations coming before the Court.
For, Acts of Parliament were not drafted with divine pres cience and perfect clarity.
It Is not possible for the legislators to foresee the manifold sets of facts and controversies which may arise while giving effect to a particular provision.
Indeed, the legislators do not deal with the specific controversies.
When conflicting interests arise or defect appears from the language of the Statute, the Court by consideration of the legislative intent must supplement the written word with 'force and life '.
[287E F] Seaford Estate Ltd. vs Asher, , referred to.
|
ON: Civil Appeal No. 3655 of 1989.
From the Judgment and Order dated 14.8.1989 of the Customs, Excise and Gold (Control) Appellate Tribunal, West Regional Bench, Bombay in Appeal No. CD(BOM)A.
No 322 of 1989 in Order No. 704 of 1989.
Anil B. Diwan, section Ganesh, R.K. Krishnamurthy, S.R. Narain and Sandeep Narain for the Appellant.
374 A.K. Ganguli, B. Parthasarthy, K. Swami and P. Parmesh waran for the Respondent.
The Judgment of the Court was delivered by RAY, J.
This appeal under Section 130 E(b) of the Cus toms Act, 1962 is directed against the judgment and order dated August 14, 1989 passed by the Customs, Excise & Gold (Control) Appellate Tribunal.
Bombay in CD(Bom) A. No. 322 of 1989.
The most vital question that comes up for consideration in this appeal is whether marble as mentioned in Tariff Item No. 25.15 in Appendix 1 B, Schedule I to the Import (Con trol) Order, 1955 mentioning "Marble, travertine, ecaussine and other calcareous monumental or building stone of an apparent specific gravity of 2.5 or more and Alabaster, whether or not roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape" is genus within which a11 other kinds of calcareous stones are included or whether marble is a dis tinct or different item which is one of the restricted item in the List of Restricted Items described in Appendix 2, Part B of Import and Export Policy for April 1988 March 1991.
The matrix of the case is that the Appellant has been carrying on business as sole proprietor under the name and style of M/s Interior Manufacturers at A 12, Yuwan Apart ments, 413/414, Mount Mary Road, Bandra, Bombay which is a small scale industry engaged in processing of stone slabs.
In the course of his manufacturing activity the Appellant utilises and requires as raw material polishable calcareous stones viz. marble, travertine, ecaussine, alabaster and other calcareous stones.
All these different types of stones are hard and capable of taking polish.
Marble is distin guished from other calcareous rocks, by the fact that it is a metamorphic rock formed from recrystallization of lime stones and has a visibly crystallined nature.
In order to import calcareous stones covered by the Open General Licence and with a view to ensuring that the same was not marble, the Appellant took the following precautions: (1) The appellant referred to the Indian Standards Specifi cation for Marble viz.
IS: 1130 1969 which defines marble as follows: 375 Para 0.2: "Marbles are metamorphic rocks capable of taking polish, formed from the re crystallization of limestones or dolomit ic limestones and are distinguised from limestone by even visibly crystallined nature and non flaggy stratification".
Para 0.7 of the said Specification provides that: "The Sectional Committee responsible for the preparation of this standard has taken into consideration the views of producers, consumers and technologists and has related the standard to the manufacturing and trade practices followed in the country in this field.
" (2) The Appellant obtained from the foreign exporters a sample tile of Botticino ', the calcareous rock proposed to be imported and had the same tested by a reputed Geologist, Dr. S.F. Sethna who tested the sample and by his report dated October 13, 1988 confirmed that the same was not marble.
His letter dated October 14, 1988 explains now the sample tested was limestone, different from marble.
The sample tile tested and attested by Dr. Sethna was submitted to the Customs Department vide their letter dated February 20, 1989.
(3) The appellant then referred to an Italian Book MARHI ITALTA wherein the index evidenced the fact that 'Botticino ' varieties were covered under polishable calcareous rocks ' and not under true marbles (re crystallised calcareous rocks).
(4) The appellant specifically placed an order for calcare ous stones (other than marble) and asked the Exporter to certify that the said goods were not marble.
The exporter Elle Marmi of Italy by a certificate dated December 6, 1988 certified that all the goods were calcareous stone slabs other than marble.
(5) The appellant also obtained the certificate dated Decem ber 6, 1988 from one Gianni C. Baigini, a Surveyor regis tered with the Chamber of Commerce, Carrara and a Specialist for stones.
Gianni C. Baigini after checking the said con signment loaded in the containers for import by the Appel lant in Italy certified that the slabs loaded in Container Nos.
LMCU 051315/8, 050082/3, 05 15 19/2, 05 1520/6 were calcareous stones other than marble since the same were not re crystallised calcareous rocks.
376 The appellant alter taking the aforesaid precautions placed an order with Elle Marmi of Italy for import of 3120.50 sq.
of slabs of calcareous stones having a thickness of 2 cms.
at a price of Italian Lira 4.22.56.000 i.e. Rs.4,93,000 approximateIy.
The said Elle Marmi issued an invoice dated December 2, 1988 for the said purpose.
The goods arrived in Bombay by the vessel 'Orient Tri umph ' on or about 19th January, 1989.
The appellant filed a Bill of Entry No. 007569 dated 19.1.
1989 for clearance of the goods for home consumption.
The goods were declared as slabs of calcareous stones (other than marble) and were imported under OGL Appendix 6, Item 1 of Import and Export Policy for April 1988 March 1991.
The goods were inspected by the Assistant Collector (Docks) who observed as follows: "These goods under import do not appear to be marble or granite and are not polished, they are roughly squared and are having smooth edges on all four sides but are having smooth edges on 2 or 3 sides due to sawing.
" The sample of the goods was sent by the Assistant Collector (Docks) to the Assistant Collector of Customs (Group I).
The Assistant Collector of Customs (Group I) issued a query memo dated February 6, 1989 on the alleged basis that 'calcareous stones are nothing but marble only ' and therefore, governed by Entry 62, Appendix 2, Part B of Import and Export Policy for March 1988 to April 1991.
The query was allegedly based upon explanatory notes contained in the "Harmonised Commodi ty Description and Coding System" (HSN) evolved by the International Customs Cooperation Council.
The appellant set out the correct position and informed the Department by several letters dated 7th February, 1989, 13th February, 1989, 16th February, 1989 and 20th February, 1989 that the said goods could not be regarded as 'marble ' in terms of the expression 'marble ' appearing in heading 25.15 in Schedule I, Appendix I B Customs Tariff Amendment Act, 1985.
The appellant also requested for release of part of the goods pending the technical test of the sample from imported goods.
Pending the technical test report, by a letter dated February 17, 1989 the appellant was permitted to clear 50% of the goods upon the appellant submitted 100% ITC bond for the whole backed by a bank 377 guarantee.
The balance 50% of the imported consignment was detained.
The appellant accordingly cleared 50% of the imported consignment.
The appellant, however, paid import duty on the full consignment.
The Assistant Collector of Customs (Group 1) sent the sealed samples of the imported goods for testing to the Deputy Director General Petrology Department, Geological Survey of India, Central Region, Nagpur.
The sealed cover containing the samples was sent through the appellant 's representative.
The appellant also by a letter dated Febru ary 25, 1989 sent a sample of the same consignment for testing to the Geological Survey of India.
The appellant addressed further letters dated March 7, 1989, March 8, 1989 to the Customs Department.
By a letter dated March 13, 1989 the appellant forwarded to the Customs Department a sealed envelope containing a test report given by the Geological Survey of India, Nagpur on the sample of tile imported goods.
The appellant on March 17, 1989 received a letter dated March 13, 1989 from the Geological Survey of India enclosing the test report on the sample of the imported goods submit ted by the appellant to the Geological Survey of India.
This test report categorically stated that the sample was "allo chemic (Pelmicritic) limestone.
It cannot be termed as a marble.
" It is pertinent to mention that the Geological Survey of India had tested two samples from the materials imported by the appellant, one sample forwarded by the Customs Department and the other by the appellant.
The report of the Geological Survey of India on the sample forwarded by the Customs Department was set out earlier and sent in a sealed cover to the Customs Department.
The Customs Department, however, did not release the goods inspite of the categorical report of the Geological Survey of India and instead issued a show cause notice dated March 17, 1989.
The Customs Department inter alia relied upon the opinion based on visual observation received from the Indian Bureau of Mines, Government of India, Udaipur and test reports based on technical test received from the Director of Mines & Geology Department, Udaipur and Geologi cal Survey of India, Nagpur.
The test report received by the respondent from the Geological Survey of India, Nagpur was kept back and not disclosed to the appellant.
None of the three reports/opinions were disclosed to the appellant at the time of issue of show cause notice.
On the basis of these reports/opinions it was alleged in the show cause 378 notice that the imported goods were marble allegedly as per the commercial definition of marble enunciated in the show cause notice.
The Department threatened to confiscate the goods and initiate the penal action against the appellant pursuant to Section 112 of the .
The appellant by a letter dated March 20, 1989 called upon the Customs De partment to set aside the show cause notice.
The Collector of Customs, New Customs House, Ballard Estate, Bombay passed an order that the goods imported are marble and thus require a specific import licence.
He also held that these goods are liable for classification as marble and the import of these goods under OGL is not admis sible and therefore in exercise of the powers conferred under Section 111(d) of the , the Collector of Customs ordered the confiscation of the imported goods and further ordered that the Bond be enforced towards a fine of Rs.4,93,199 imposed on the said goods in lieu of confis cation.
The Assistant Collector of Customs was directed to enforce the said Bond and the Bank Guarantee for realisation of this amount of fine.
However, the importer was given option to clear the said goods for home consumption on payment of fine of Rs.5,00,000 in lieu of confiscation under Section 125 of the , the option to be exercised within 60 days from the date of receipt of the said order.
He further held that since the importer contra vened the provisions of section 111(d) of the read with Section 3 of the Import and Export (Control) Act, 1947 rendering the said goods for confiscation, the importer is liable for penal action under provisions of Section 112 of the .
Accordingly, the penalty of Rs. 10,00,000 under Section 112 of the said Act was directed to be paid forthwith.
Against this order, the appellant filed a writ petition being Writ Petition No. 1398 of 1989 which was dismissed at the admission stage on the ground that it involves disputed questions of fact which were difficult to be decided in a writ jurisdiction.
However, the appellant was permitted to clear the goods on payment of redemption fine and furnishing full bank guarantee for the penalty amount.
Aggrieved by this order, an appeal being Appeal No. 6 18 of 1989 was filed in the High Court of Bombay.
The said appeal was dismissed with liberty to file a departmental appeal by Order dated June 15, 1989.
The appellant thereaf ter filed the said appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, West Regional Bench, Bombay.
The said Appellate Tribunal after hearing the appel lant as well as the Revenue dismissed the appeal and con firmed the order of 379 the Collector of Customs but reduced the penalty amount from Rs. 10,00,000 to Rs.5,00,000.
Feeling aggrieved by the said order the appellant filed the instant appeal under Section 130 E(b) of the .
The entire controversy relates to the question whether the calcareous stone which has been imported by the appellant falling within the Tariff Item No. 25.15 of Sched ule I, Appendix I B commonly known as I.T. Schedule is marble as mentioned in Entry No. 62 of the List of Restrict ed Items, Annexure 2, Part B of the Import and Export Policy for April 1988 to March 1991 and as such the import of calcareous stone made by the appellant being not covered under OGL, is liable for confiscation and penalty for ille gal import without the specific import licence obtained from the respondent.
In Appendix I B, Schedule 1 of ITC Schedule, Entry No. 25.15 of Chapter 25 (Mineral Products) mentions: "Marble travertine, ecaussine and any other calcareous monumental or building stone of an apparent specific gravity of 2.5 or more and Alabaster, whether or not roughly trimmed or merely cut by sawing or otherwise, into blocks, of slabs of a rectangular (including square) shape.
" In the said Appendix I B, Schedule I states that each heading number in Column (1) corresponds to the respective Chapter and heading number of the first Schedule to the Customs, Tariff Amendment Act, 1985 as amended on 24.1.
1986 and each entry in Column (2) has the same scope and meaning as the corresponding Chapter and heading of the said first Schedule.
It is appropriate to refer to Appendix 6 of the Import and Export Policy for April 1988 to March, 1991 which men tions import of items under Open General Licence.
The cate gories of importers, the items allowed to be imported by them under Open General Licence and the conditions governing their importation have been set out therein: Items Category of eligible importers 1.
Raw materials components and consumables Actual Users (Non iron and steel items) other than (Industrial) those included in the Appendices 2, 3 Part A, 5 and 8 380 In Appendix II B, in the List of Restricted Items, Entry 6.2, of Import and Export Policy for March 1988 to April 1991 refers to marble/granite/onyx.
Mr. Diwan, learned counsel appearing on behalf of the appellant has submitted that for the purpose of understand ing the meaning of 'marble ' occurring in Appendix I B, Schedule I of the Imports (Control) Order, 1955 it is neces sary to refer to Mineral Products, in Chapter 25, Tariff Entry No. 25.15 which refers to Marble, Travertine, Ecaus sine and other calcareous monumental and building stone of an apparent specific gravity of 2.5 or more and Alabaster, whether or not roughly trimmed or merely cut by sawing or otherwise into blocks or slabs of a rectangular (including square) shape.
The term 'marble ' does not occur by itself or in isolation but as a inseverable part of a Tariff Entry which deals with five items referred to hereinbelow: (a) Marble (b) Travertine (c) Ecaussine (d) Other calcareous stone (e) Alabaster Each of these five items is a monumental or building stone which is hard and can be cut and sawed into the required sizes and can take polish.
The Tariff Entry draws a clear line of distinction between each of these five items and regards them as five distinct products.
The basic scheme of the Tariff Entry is important for the purposes of the present appeal.
The term 'marble ' has to be given a meaning which fits in and harmonises in the above mentioned statuto ry context, so that 'marble ' continues to remain distinct and different from the said other four items.
Thus whatever principle of interpretation or canon of construction is applied it cannot be said that the term 'marble ' include and takes within its fold any or more distinct items or goods mentioned in the said Tariff Entry, thereby rendering a part of the said Entry meaningless.
It has, therefore, been submitted on behalf of the appellant that the term 'marble ' has to be interpreted in a manner which is in consonance with the context and which does not militate against it.
It is appropriate to refer in this connection the following passage from Maxwell on Interpretation of Statutes, 12th Edition.
Page 294 set out hereunder: "The word 'land ' is generally understood as including build ing.
but if, after imposing a rate on houses, buildings, 381 works, tenements and hereditaments, an Act exempted 'land ', this word would be restricted to land unburdened with houses, buildings, or works which would otherwise have been unnecessarily enumerated.
" It has been secondly submitted on behalf of the appel lant that the general principle of interpretation of tariff entries occurring in a tax statute is that of commercial nomenclature or understanding in the trade.
It is also a settled legal position that the said doctrine of commercial nomenclature or trade understanding can and should be de parted from in a case where the statutory context in which the tariff item appears, requires such a departure.
If the application of the commercial meaning or trade nomenclature runs counter to the statutory context then the said princi ple of interpretation cannot and should not be applied.
Commercial nomenclature or trade understanding is merely a general principle of interpretation, It is well settled that the principles of interpretation are never embodied rules and the same must always yield to the context of the partic ular statute which comes up for interpretation.
It has also been submitted in this connection that the trade meaning or commercial nomenclature would be applicable if a particular product description occurs by itself in a Tariff Entry, and there is no competition between that Tariff Entry and any other tariff entry, nor is there any need to reconcile and harmonise that tariff entry with any other.
It has been submitted in this respect that the reading of the Tariff Entry No. 25.15 in Appendix I B of Imports (Control) Order, 1955 which refers to Marble, Ecaussine, Travertine and other calcareous monumental or building stones as well as Entry No. 62 in Appendix 2 B of Import and Export Policy, April 1988 March 1991 refer only to marble/granite/onyx as re stricted items of import in such a way that such interpreta tion does not exclude or render redundant any of the items included in Tariff Entry No. 25.15.
It has next been con tended that the end use of the particular product is irrele vant and of no consequence for determining its classifica tion.
In support of this proposition several decisions have been cited.
It has been further submitted that each of the five distinct items referred to in Chapter Heading 25.15 of Appendix I B of Imports (Control) Order, 1955 is a hard stone capable of being cut into the required size and of taking polish.
If, therefore, the term marble is to be given the said commercial meaning as relied upon by the Customs Authorities then the inevitable consequence would be that the term 'marble ' in Chapter Heading 25.15 would automati cally include within it the other four items thereby render ing the rest of the Tariff Entry, otiose, redundant and meaningless.
On this ground alone, it has been submit 382 ted that the test of commercial meaning or trade understand ing necessarily has to be rejected and the same cannot be applied in the present case.
It has also been contended on behalf of the appellant that from the language of the Tariff Entry itself it is only the technical meaning which can be applied for interpreting Chapter Heading 25.15.
The expres sions calcareous, travertine, ecaussine, and alabaster are all technical expressions known to the science of Geology which are found defined in dictionaries of Geology.
These are not terms of trade or expressions which businessmen use in the ordinary use to describe a product they deal in.
Moreover, the reference to the requirement of specific gravity of 2.5 or more is also more or less a technical requirement which evinces that the principle of trade nomen clature or commercial understanding is not applicable to the Tariff Item.
Valuable guidance can also be obtained from the notes which are part of the Harmonised System of Nomencla ture (HSN) with which the present Customs Tariff as amended in 1986, has been fully aligned.
The HSN Explanatory Notes specifically state that ecaussine, on being fractured, shows a granular surface, similar to granite and is, therefore, known sometimes as Belgian granite, Flanders Granite and Petiti granite.
It needs to be understood that, therefore, even though ecaussine may be known in the market as a spe cies of granite and may be dealt with and treated as a type of granite, the same is, nevertheless not classified as granite under Chapter Heading 25.16.
This is only because the technical nature of ecaussine has been taken into con sideration and applied by HSN as opposed to the trade nomen clature or commercial understanding.
It has also been submitted that the said HSN also con tains specific note regarding serpentine rocks to the effect that the same are sometimes called 'Marble ', but the same is excluded from Chapter Heading 25.15.
This clearly shows that according to HSN, Chapter Heading 25.15 must be construed according to its technical meaning.
Technically, serpentine does not fall under Heading 25.15 and the same is according ly excluded therefrom by the HSN.
If, on the other hand, the commercial meaning is to be applied, then, serpentine would definitely have to be classified under Chapter Heading 25.15 in as much as it is sometimes called marble.
The HSN Explan atory notes, therefore, clearly and conclusively establish that Chapter Heading 25.15 must necessarily be construed by its technical meaning and not by applying the commercial nomenclature test.
If the commercial nomenclature test is applied, then, as explained hereinabove, two fundamental principles of interpretation are infringed: (a) the princi ple that no part of a statute may be construed as to render it redundant 383 and otiose, and (b) that a tariff item is not to be classi fied on the basis end use in other words an item cannot be considered to be marble merely because it is a hard rock which is capable of being cut and polished and being put to same use as marble.
It has, therefore, been submitted that the findings arrived at by the Customs, Excise and Gold (Control) Appellate Tribunal that the calcareous stone slab imported by the appellant is marble as understood in the commercial or trade nomenclature and as such the import of the said slab being without a licence, is subject to the liability of confiscation and imposition of penalty and wholly unwarranted.
Mr. Ganguli, learned counsel appearing on behalf of the Revenue has submitted that in interpreting the word 'marble ' as mentioned in Tariff Item No.25.15 in Appendix 1 B, Sched ule 1 to the Import (Control) Order, 1955, the test in commercial and trade parlance has to be applied i.e. how the said product came to be commercially known by the trading people.
It is further submitted that it is not a scientific or technical word and as such it does not require to be interpreted in its scientific and technical sense.
He fur ther submitted that the general principle of expression of Tariff Entries in a text statute is that of commercial nomenclature or understanding in the trade.
The word 'mar ble ' if so interpreted will include calcareous stone of 2.5 or more specific gravity.
He has cited certain decisions in support of his above contention.
Mr. Ganguli also submitted referring to the said Tariff Entry 25.15 that it includes calcareous stones of specific gravity of 2.5 or more which are capable of polish.
Marble is the genus and all other four items of stone mentioned in the said Entry which are of apparent specific gravity of 2.5 are included within marble as they are commercially and in trade parlance known as marble.
He further submitted that the ISI specification for marble as referred to in IS: 1130 1969, item No. 0.2 which defines marble as metamorphic rocks can not be applied in the instant case especially in view of the note to the said item that sometimes rocks, such as serpentine are also polished and used in trade as marble.
Mr. Ganguli further submits that taking into consideration this note, calcareous stone imported by the appellant falls within marble which is one of the restricted 'items in the list of restricted items as mentioned in Appendix 2, Part B of the Import and Export Policy, April 1988 March 1991.
Mr. Ganguli further submitted that the word marble cannot be taken in its Geological or Petrological sense in as much as the whole purpose of put ting the marble stone slabs in the list of restricted items for import is to restrict the outflow of foreign exchange from the country.
Mr. Ganguli next submitted that the end use of the product i.e. marble and calcareous 384 stone mentioned in Item No. 25.15 of Appendix 1 B of the Import and Export Policy April 1988 March 1991 has to be taken into consideration in the determination of the other items of stones mentioned in that Entry.
Viewed from this angle, the said calcareous stone being capable of polish and used for monumental or building purposes has to be taken to be marble as has been done by the Revenue and it being one of the restricted items, a licence for import of the same is mandatory.
It has also been submitted in this connection by Mr. Ganguli that the word 'marble ' has not been defined in the Tariff Act and as such the meaning of the said word has to be given as understood by the trading communities as is known in trade parlance.
Mr. Ganguli, therefore submitted that there is no infirmity in the findings and conclusions of the Appellate Tribunal and as such the calcareous stone slabs imported by the appellant being marble, one of the restricted items, the order of confiscation of the said stone slabs and in lieu thereof the imposition of the cus toms duty and the penalty is quite in accordance with law.
The sole question to be considered in this appeal is whether the word calcareous monumental or building stones of more than 2.5 or more specific gravity as mentioned in Tariff Item No. 25.15 in Appendix 1 B, Schedule 1, commonly known as ITC Schedule to the Imports (Control) Order, 1955 comes within the purview of the restricted items mentioned in Item 62, Appendix 2, Part B of the Import and Export Policy April 1988 March 1991.
In Entry No. 62, the re stricted item is described as 'Marble/granite/onyx '.
Marble has not been defined either in the ITC Schedule or in Appen dix 2, Part B of Import and Export Policy dealing with the list of restricted items.
It is convenient to refer in this connection to para 64 of the Hand Book of Procedures, April 1988 March 1991 which is in the following terms: "Classification of Items 64.
(1) The Schedule I to the Imports (Control) Order, 1955, reproduced in Appendix 1 B to this Book, commonly known as the I.T.C. Schedule,.
contains the classification of all the articles that enter into the import trade.
(2) With effect from 1st April, 1988 the Schedule 1 to the Imports (Control) Order, 1955 reproduced in Appendix I B to this Book has been revised in alignment with the First Schedule of the Customs Tariff (Amendment) Act, 1985.
The Revised ITC Schedule contains 21 Sections subdivided into 99 Chapters.
" 385 It is also convenient to refer to the note.
to the Appendix 1 B, Schedule I to the Imports (Control) Order, 1955 which is to the following effect: Note: Each heading number in Column (1) corresponds to the respective Chapter and heading number of this first Schedule to the Customs Tariff Amendment Act, 1985 as amend ed on 24.1.1986 and each entry in Column (2) has the same scope and meaning as the corresponding Chapter and heading of the said first Schedule.
It is also appropriate to set out hereunder the relevant portion of Appendix 6 of the Import and Export Policy for April 1988 March 1991: Items Categories of eligible Importers Raw materials, components and Actual Users consumables (Non iron and steel items) (Industrial) other than those included in the Appendices 2, 3 Part A, 5 and 8.
Section 3(1) of the Imports and Exports (Control) Act, 1947 as amended upto 30th April, 1979 provides that: "The Central Government may, by order published in the Official Gazette, make provisions for prohibiting, restrict ing or otherwise controlling in all cases or in specified classes of cases and subject to such exceptions if any, as may be made by or under the order . . . . " Chapter 25 of Schedule I, Appendix i B of the ITC Sched ule mentions mineral products which can be imported under O.G.L. Entry No. 25.15 refers to marble which is as under: "Marble, travertine, ecaussine and other calcareous monumen tal or building stone of an apparent specific gravity of 2.5 or more and Alabaster, whether or not roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape." 386 Appendix 2, Part B of the Import and Export Policy for April 1988 March 1991 enumerates the restricted items.
Item No. 62 deals with marble which is to the following effect 'Marble/granite/onyx '.
In the instant case, admittedly the appellant on behalf of his firm which is a small scale industry engaged in processing of stone slabs placed an order for calcareous stone (other than marble) with the exporter Elle Marmi of Italy asking the exporter to certify that the said goods were not marble.
The exporter, Elle Marmi of Italy issued a certificate dated December 6, 1988 certifying that all the goods in question were calcareous stone slabs other than marble.
The appellant also obtained from the foreign export er a sample tile of 'Botticino ' the calcareous rock proposed to be imported and had the same tested by a reputed Geolo gist, Dr. S.F. Sethna who submitted his report dated October 13, 1988 confirming that the same sample was not marble.
It has been stated in the said report that the sample is a limestone and thus differs from the marble in being of sedimentary origin and has not undergone any metamorphism to be considered under metamorphic rocks to be described as a marble.
If the rock would have shown any slightest amount of metamorphism the recrystallization of carbonate crystals would make the individual crystals distinctly visible under the microscopic examination.
The appellant also referred to an Italian Book MARMI ITALTA wherein the index evidenced the fact that "Botticino" varieties were covered under "Polishable Calcareous Rocks" and not under 'True Marbles ' (Re crystallised Calcareous Rocks).
The appellant also while placing order asked the exporter to send a certificate about the calcareous stones for which order was placed for importation.
The exporter, Elle Marmi of Italy issued a certificate dated December 6, 1988 certifying that all the rough slabs loaded are 'calcar eous stone slabs other than marble '.
The appellant also obtained a certificate from one Gianni C. Baigini, a survey or registered with the Chamber of Commerce, Carrara and a specialist for control of marble, calcareous stones (other than Marble) and Granite.
The said expert after checking the said consignment loaded in the containers for import by the appellant in Italy certified that all rough slabs are cal careous stone slabs of good quality.
He also certified that these are calcareous stones other than marble because they are not recrystallized calcareous rocks and that the calcar eous stone slabs in the above consignment are not marble.
In Indian Standard Specification for Marble, IS: 1130 1969, 387 Entry No. 0.2 marbles have been described as metamorphic rocks capable of taking polish, formed from the re crystal lization of limestones or dolomitic limestones and are distinguished from limestone by even visible crystallined nature and non flaggy stratification.
Note to the said Entry states that sometimes rocks, such as serpentine are also polished and used in trade as marble.
The Director, Regional Petrology Laboratory where the appellant sent a sample of the rocks ordered of importation, for examination has also forwarded a technical report on study of sample by Dr. H.M. Ramachandra, a Geologist, which states: "The rock is an allochemic (Pelmicritic) limestone, it cannot be termed as a marble.
" The Indian Bureau of Mines in its letter dated March 3, 1982 has mentioned that: "Technical Definition: Geologically (petrologically) marble is recrystallised (metamorphosed) limestone.
Ordinary limestone is a sedimen tary rock but once it is metamorphosed i.e. once it has undergone recrystallisation, it is turned to marble.
So marble is metamorphosed limestone which consist essentially the minerals calcite, dolomite or a combination of the two. " "The specimen has been examined and it is observed that the rock is cryptocrystalline, fine grained, mildly metamor phosed with few bigger grains of calcite.
The specimen is hard and compact and is capable of being cut into slabs/ blocks of desired size and can take a good polish." Thus, according to all these reports as well as the ISI specification the slabs of rocks that have been imported by the appellant and claimed to be calcareous stones are not 'marble ' in the scientific and technical sense of the term marble.
As we have already stated hereinbefore that Tariff Item No. 25.15 mentions five kinds of rocks such as Marble, Travertine, Ecaussine, Alabaster and other calcareous monu mental or building stone of a specific gravity of 2.5 or more whereas in the List of Restricted Items Item No. 62 only mentions Marble/ granite/onyx are mentioned.
In the absence of any definition of the term 'marble ' it is to be decided what is the scope and meaning of the word marble and whether it includes within it the other kinds of 388 calcareous stones such as travertine, ecaussine, alabaster and other calcareous monumental or building stone of a specific gravity of 2.5 or more in order to saddle the importer with the burden of obtaining a licence for import ing the said restricted item.
It has been submitted on behalf of the appellant that as the word marble has not been defined and the tariff item refers to calcareous stone of an apparent specific gravity of 2.5 or more, it has to be taken to be used in a technical and scientific sense and as such the same cannot be interpreted in the popular commercial sense or as understood in trade parlance by persons dealing with the ' said stones.
In deciding this question the first thing that requires to be noted is that Entry No. 25.15 refers specifically not only to marble but also to other calcareous stones whereas Entry No. 62 refers to the restricted item marble only.
It does not refer to any other stones such as ecaussine, tra vertine or other calcareous monumental or building stone of a certain specific gravity.
Therefore.
on a plain reading of these two Entries it is apparent that travertine, ecaussine and other calcareous monumental or building stones are not intended to be included in 'marble ' as referred to in Entry No. 62 of Appendix 2 as a restricted item.
Moreover, the calcareous stone as mentioned in ITC Schedule has to be taken in scientific and technical sense as therein the said stone has been described as of an apparent specific gravity of 2.5 or more.
Therefore, the word 'marble ' has to be interpreted, in our considered opinion, in the scientific or technical sense and not in the sense as commercially under stood or as meant in the trade parlance.
There is no doubt that the general principle of interpretation of Tariff Entries occurring in a text statute is of a commercial nomenclature and understanding between persons in the trade but it is also a settled legal position that the said doc trine of commercial nomenclature or trade understanding should be departed from in a case where the statutory con tent in which the Tariff Entry appears, requires such a departure.
In other words, in cases where the application of commercial meaning or trade nomenclature runs counter to the statutory context in which the said word was used then the said principle of interpretation should not be applied.
Trade meaning or commercial nomenclature would be applicable if a particular product description occurs by itself in a Tariff Entry and there is no conflict between the Tariff Entry and any other Entry requiring to reconcile and harmo nise that Tariff Entry with any other Entry.
In Union of India vs Delhi Cloth & General Mills, [1963] Supp.
(1) SCR 586 the question arose as to how the term "refined oil" 389 occurring in the Tariff was to be construed.
There was no competition between that Tariff Entry with any other, nor was there any need to reconcile and harmonise the said entry with any other provision of the tariff.
This Court, there fore, considered the term "refined oil" by applying the commercial meaning or trade nomenclature test and held that only deodorised oil can be considered to be refined oil.
This Court also referred to the specification of "refined oil" by the Indian Standards Institution and held that: "This specification bY the Indian Standards Institution furnishes very strong and indeed almost incontrovertible support for Dr. Nanji 's (respondent 's) view and the respond ent 's contention that without deodorisation the oil is not "refined oil" as is known to the consumers and the commer cial community." In Dunlop India Ltd. vs Union of India and Ors., [1963] Supp. 1 SCR 586 the question arose whether the product known as V.P. Latex which was imported by the appellant can be considered to be 'rubber raw ' within the meaning of Tariff Entry No. 87 of the Indian Tariff Act, 1934.
The choice was between classifying V.P. Latex as 'rubber raw ' and the general residuary entry at the end of the Tariff (a general catch) all entry which was described as "the orphanage of the residuary clause".
In these circumstances, this Court applied the commercial meaning or nomenclature test.
In the case of Commissioner of Sales Tax, M.P. vs Jas want Singh Charan Singh; , the respondent was a dealer in firewood and charcoal.
In a proceeding for assessment of sales tax under the M.P. General Sales Tax Act, the respondent claimed that charcoal was 'coal ' within the meaning of Entry 1 of Part III of the Schedule II to the Act and therefore was taxable at the 'rate of 2%.
The Sales Tax Authorities however, held that charcoal was not 'coal ' and was taxable at 4% as it fell under the residuary Entry 1 of Part VI of Schedule II.
The Board of Revenue and the High Court held in favour of the respondent relying on the dic tionary meaning of the word 'coal '.
The Commissioner of Sales tax appealed.
It was held by this Court that in inter preting items in statutes like the Sales Tax Acts resort should be had not to the scientific or technical meaning of the terms used but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, in their commercial sense.
Viewed from this angle, both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in 390 these sense as ordinarily understood and would include 'charcoal ' in the term 'coal ' It may be pointed out that this Court has clearly and unequivocally laid down that it is not permissible but in fact it is absolutely necessary to depart from the trade meaning or commercial nomenclature test where the trade or commercial meaning does not fit into the scheme of the commercial statements.
This Court referring to the observa tions of Pullock B. in Grenfell vs Inland Revenue Commis sioner, ,248, observed: "that if a statute contains language which is capable of being construed in a popular sense such statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense, meaning of course, by the words 'popular sense ', that sense which people conversant with the subject matter with which the statute is dealing would attribute to it.
" But "if a word in its popular sense and read in an ordinary way is capable of two constructions, it is wise to adopt such a construction as is based on the assumption that Parliament merely intended to give so much power as was necessary for carrying out the objects of the Act and not to give any unnecessary powers.
In other words, the construction of the words is to be adapted to the fit ness of the matter of the statute.
" The Court has also referred to the observations of Fry, J in Holt & Co. vs Coilyet, , 720.
The observation is: "If it is a word which is of a technical or scientic character then it must be construed according to that which is its primary meaning, namely, its technical or scientific meaning." Referring to the above decisions this Court held that: "While construing the word 'coal ' in Entry 1 of Part III of Schedule II, the test that would be applied is what would be the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word.
A sales tax statute is being one levying a tax on goods must in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning ascribed to it in common parlance.
" 391 This Court in K.V. Varkey vs Agricultural Income Tax and Rural Sales Tax Officer, [1954] 5 STC 384 specifically declined to apply the popular or commercial meaning of 'Tea ' occurring in the sales tax statute holding that the context of the statute required that the technical meaning of 'a product of plant life ' required to be applied and therefore green tea leaves were tea even though they might not be tea was known in the market.
In Cannanore Spinning and Weaving Mills Ltd. vs Collec tor of Customs and Central Excise Cochin and Ors., ; this Court held that the word 'hank ' occurring in a Central Excise Notification could not be interpreted accord ing to the well settled commercial meaning of that term which was accepted by all persons in the trade in as much as the said commercial meaning would militate against the statutory context of the said exemption Notification issued in June, 1962.
The word 'hank ' as used in the Notification meant a 'coil of yarn ' and nothing more.
In Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co., ; it has been observed by this Court that it is a well settled principle of construction that where the word has a scientific or technical meaning and also in ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clearly expressed by the legislature.
It has also been observed that whether the general principle of interpreta tion was applicable or not depended on the statutory con text.
If special type of goods is subject matter of a fiscal entry then that entry must be understood in the context of that particular trade, bearing in mind and particular word.
The trade meaning is one which is prevalent in that particu lar trade where that goods is known or traded.
Where, howev er, there is no evidence either way then the definition given and the meaning flowing from particular statute at particular time would be the decisive test.
It has further been observed by this Court in this case that: "Where no definition is provided in the statute itself, as in this case, for ascertaining the correct mean ing of a fiscal entry reference to a dictionary is not always safe.
The correct guide, it appears in such a case, is the context and the trade meaning.
In this connection reference has been made to the observations of this Court in CST vs M/s.
S.N. Brothers, Kanpur, ; 392 In Collector of Customs, Bombay vs Hargovindas & Co., the import policy restricted the import of milk powder.
The importer had imported skimmed milk powder and relied upon the principle of commercial nomenclature or trade understanding in order to contend that there was a settled and accepted distinction between milk powder and skimmed milk powder which was specifically recognised and accepted by this Court in Healthways Dairy vs State of Haryana.
The Special Bench of the Tribunal negatived that contention and held that: "unlike the central excise tariff the import schedule itself provided a statutory basis of interpretation.
The controver sy before us relates to a period during which the Imports (Control) Order, 1955, issued under the Imports and Exports (Control) Act, 1947, had a separate import schedule annexed to it.
This import schedule was aligned with the import schedule of the .
The import sched ule under the Import (Control) Order itself did not contain any rules of interpretation, section notes and chapter notes.
However, a statutory Note at the beginning of the import schedule stated that the scope of various terms and headings in it was to be the same as in the import tariff schedule in the .
Thus the elaborate statutory scheme of the customs tariff import schedule got applied to the import schedule as well.
It is by now well known that the customs tariff import schedule hardly left any scope to go in for trade parlance or common parlance because it statutorily defined almost everything with the help of rules of interpretation and explanatory notes.
In such a scheme, the statutory definitions must prevail over the trade parlance or any other aides to interpretation.
" In Collector of Customs, BOmbay vs Swastic Woollens (P) Ltd. and Ors., [1988] Supp.
SCC 796 this Court has observed that the expression 'wool wastes ' which has not been defined in the or in the relevant Notifica tion is not an expression of article It may be understood, as in most of financial measures where the expressions are not defined not in a technical or pre conceived basis but on the basis of trade understanding of those who deal with these goods.
When no statutory definition is provided in respect of an item in the or the Central Excises Act, the trade understanding, meaning thereby the understanding in the opinion of those who 393 deal with the goods in question, is the safest guide.
It has also been observed therein that the Tribunal has not ignored the Technical Committee 's observation nor the Board 's Tariff Advice.
On a conspectus of all these decisions mentioned herein before the position thus emerges is that when the expression 'marble ' has not been defined in the as well as in the or in the relevant Notification regarding the restriction on import of Marble in the List of Restricted Articles, it is necessary to decide the signifi cance and true meaning of the word 'marble ' as used in the ITC Schedule as well as in the List of Restricted Items, and the not in its popular sense i.e. people who are dealing with this trade meant the same or what that term is commercially known in trade par lance but it has to be given a meaning in the context in which this word has been used in the ITC Schedule as well as in the List of Restricted items of Import.
It is also neces sary to decide whether the word 'marble ' as stated in the ITC Schedule refers to only marble or includes travertine, ecaussine, alabaster and other calcareous monumental or building stones and can be termed as marble in the commer cial sense or in trade nomenclature so as to bring the same within the restricted Item No. 62 of Appendix 2 of the Import and Export Policy for April 1988 March 1991.
We have already stated hereinbefore that in the List of Restricted Items under item No. 62 only marble has been mentioned and not the other stones including calcareous stone used for building or monumental purposes which have been left out.
Therefore, per se it may be difficult to say that marble includes the other calcareous stones mentioned in the ITC Schedule.
It is pertinent to mention in this connection to the Report of Dr. S.F. Sethna of the Department of Geology, St. Xaviers College, Bombay to whom a sample of the said calcareous slab of stone intended to be imported has been sent.
Dr. Sethna, a noted Geologist after examination of the sample specifically stated that the sample under investiga tion is a sedimentary rock which does not show any sign of metamorphic recrystallization and thus cannot be considered as a marble.
The report sent by the exporters of Italy, Elle Marmi and Andree Muciani dated December 6, 1988 also states that all the rough slabs loaded are calcareous stone slabs other than marble.
Furthermore, Gianni C. Baigini, a Survey or registered with the Chamber of Commerce of Carrara and a Specialist for control of Marble, Calcareous Stones (other than marble) and Granite sent a certificate on inspection of the sample that all rough slabs stuffed are calcareous stone slabs of good quality.
These are calcareous stones other than marble because they are not recrystallized calcareous rocks.
He 394 further certified that the calcareous stone slabs in above consignment are not marble.
One Shri S.V. Chaudhary, Direc tor, Regional Petrology Laboratory, Geological Survey of India after examination of the sample sent a report dated March 13, 1989 under the signatures of Dr. H.M. Ramachandra, Geologist to the appellant.
The said report states that, 'the rock is a allochemic (Palmicritic) limestone, it cannot be termed as a marble '.
In Invoice No. 126 88 a certificate has been given by the exporter to the following effect: "We certify that merchandise is of Italian origin.
Contents are true and authentic, prices correct and current and that it is the only invoice for the goods described therein.
" In the said invoice the goods has been described as slabs of calcareous stone of 2 Cms thick quantity.
Thus it appears from all the aforesaid reports and certificates that the slabs of stone which have been imported from Italy are nothing but calcareous stones and the same cannot be termed as marble.
Even according to item No. 0.2 of Indian Standard Specification for Marble (Blocks, Slabs and Tiles) the stone slabs imported by the appellant being not re crystallized and even being not metamorphosed cannot be considered as marble.
Of course, the Revenue has tried to contend relying on the Note to the same wherein it has been stated that sometimes rocks, such as serpentine are also polished and used in trade as marble that the slabs of calcareous stone imported are used as marble in trade.
In Harmonised System of Nomenclature (H,S.N.) marble has been defined as a hard calcareous stone, homogeneous and finegrained, often crystallie and either opaque or translu cent, Marble is usually variously tinted by the presence of mineral oxides (coloured veined marble, onyx marble, etc.), but there are pure white varieties.
The Revenue Authorities sent the sample of the calcareous stone imported by the appellant to the Department of Mines, Indian Bureau Mines.
A report has been sent by them to the Superintendent, Central Excise and Customs Division, Udaipur after testing of the sample of March 3, 1989.
The said report gives the ' Technical and Commercial definition of marble as: Technical definition: "(Geologically (Petrologically) marble is recrystallised (Metamorphosed) limestone.
Ordinary limestone is a sedi 395 mentary rock but once it is metamorphosed i.e. once it has undergone recrystallisation, it is turned to marble.
So marble is metamorphosed limestone which consist essentially the minerals calcite, dolomite or a combination of the two.
" Commercial Definition: "The usage of the term 'marble ' has a much vider applica tion.
In the commercial circle, any limestone which is sufficiently hard and coherent to take a good polish and which can be cut into desired sizes (into blocks) free of cracks can be called marble.
" It has also been stated therein that commercial marble refer to a crystalline rock composed of predominantly of one or more of following minerals; calcite, dolomite or serpentine and capable of taking a polish.
It has been further stated under the said report that the specimen has been examined and it is observed that the rock is cryptocrystalline, fine grained, mildly metamorphosed with few bigger grains of calcite.
The specimen is hard and compact and is capable of being cut into slabs/blocks of desired size and can take a good polish.
Keeping above visual observations into view, it has been concluded that the specimen under reference is marble as per commercial definition.
The Director of Mines, and Geology Department, Udaipur also sent a report to the Assistant Collector of Customs.
It has been stated in the said report that the sample is of a fine grained off white rock.
It gives very good effervescence with dilute hydro chloric acid and its hardness indicates that it is a fine grained carbonate rock.
It takes good polish and can be used as marble.
Regarding the microscopic characters it states that the rock is mainly composed of very fine grained cherty calcitic mass and iron oxides.
No polygonal crystals are present.
Recrystallization has not taken place.
The rock sample has been identified as 'fine grained cherty lime stone '.
It has also been stated that technically marble is a product of thermal metamorphism of limestone (impure lime stone) in which recrystallisation takes place and silicate minerals are also produced.
Commercially the term 'marble ' has been applied to any stone, other than those known in trade as granite, that has a pleasing appearance and will take a polish.
Thus, the term 'marble ' adopted in the trade is based on the general properties and use of the stone.
It has been further stated that the definition of marble given in IBM publication 'Marble in India ' 1983, Government of India is as under: 396 "Marble: Petrologically marble is recrystallised (Metamorphosed) limestone.
But in commercial parlance the term marble has a much wider application.
Commercial marble is any crystalline rock composed predominantly of calcite, dolomite or serpentine that is capable of taking polish.
" In Webster Comprehensive Dictionary, International Edition, the word 'Marble ' has been defined as "A compact, granular, partly crystallized limestone, occuring in many colours, valuable for building or ornamental purposes.
" In Shorter Oxford English Dictionary, the word 'Marble ' has been defined as "Limestone in a crystalline (or, less strictly, also a granular) state and capable of taking a polish, occurring in many Varieties; much used in sculpture and architecture.
" The Appellate Tribunal after considering various reports referred to hereinbefore observed that the term 'marble ' cannot be construed on geological and petrological consider ation, but has to be construed in commercial parlance.
It has also been observed that the Tribunal is unable to place reliance on these reports.
In Commercial circle any lime stone which is sufficiently hard and coherent to take good polish and which can be cut into desired sizes free of cracks can be called as marble as per the opinion given by the Indian Bureau of Mines.
The Tribunal also observed that the Tribunal has found that the specimen could be termed as 'marble ' as per the commercial definition but not technical ly referring to the report of the Director, Mines and Geolo gy Department, Udaipur.
It has also been observed by the Tribunal that in the sample re crystallization has not taken place.
The Tribunal has also held that it was not necessary to go into any other aspects in term 's of the ISI or techni cal and scientific definition and held that the impugned goods do fall under marble in trade understanding and as such the same comes within the List of Restricted Items in Item No. 62, of Appendix 2.
This finding cannot be sustained in as much as all the above reports referred to hereinbefore clearly lay down that any stone to be termed as marble falling within Entry No. 62 of the List of restricted Items in Appendix 2, has to be recrystallised.
The Indian Stand ards Institution has also given a similar definition of marble as recrystallization of limestones or dolomitic limestones.
Furthermore, Petrologically and Geologically the slabs of stones which have been imported are allochemic (pelmicritic) limestone and it cannot be termed as marble.
The Indian Bureau of Mines also observed 397 on testing the sample of rock that it is cryptocrystalline, fine grained, mildly metamorphosed with few bigger grains of calcite and identified the same as very fine grained cherry calcitic limestone.
It is apparent from all these reports that the calcare ous stone of specific gravity of 2.5% is not marble techni cally and scientifically.
The finding of the Appellate Tribunal is, therefore, not sustainable.
it is, of course, well settled that in Taxing Statute the words used are to be understood in the common parlance or commercial parlance but such a trade understanding or commercial nomenclature can be given only in cases where the word in the Tariff Entry has not been used in a scientific or technical sense and where there is no conflict between the words used in the Tariff Entry and any other Entry in the Tariff Schedule.
In the instant case, in the Tariff Entry No. 25.15 in the ITC Schedule, Appendix 1 B, Marble, Travertine, Ecaussine, Alabaster and other calcareous stones of an apparent specif ic gravity of 2.5 or more have been mentioned whereas in Entry No. 62 only the word marble has been mentioned as a restricted item for import, the other calcareous stones such as travertine, ecaussine, alabaster etc.
have not been mentioned in Entry No. 62.
In these circumstances, some significance has to be attached to the omission of the words travertine, ecaussine and other calcareous monumental or building stones of an apparent specific gravity of 2.5 or more and Alabaster from the ITC Schedule in Entry No. 62 of Part B, Appendix 2 of Import and Export Policy for April 1988 March 1991.
The only natural meaning that follows from this is that Entry 62 is confined only to marble as it is understood in a petrological or geological sense and as defined by the Indian Standard Institute and not as men tioned in the opinion given by the Indian Bureau of Mines on visual observation and it does not extend to or apply to other calcareous stones mentioned in the ITC Schedule.
Moreover, the commercial nomenclature or trade meaning cannot be given to marble in as much as such a meaning if given will render otiose, redundant the terms travertine, ecaussine, alabaster and other calcareous monumental or building stone of an apparent specific gravity of 2.5% or more whether or not roughly trimmed or merely cut by sawing.
Moreover, in Appendix 6 i.e. Import of items under Open General Licence, Item No. t refers to Raw Materials, compo nents, and consumables (Non iron and steel items other than those in Appendices 2, 3, Part A, 5 and so the other calcar eous stones excluding marble which is a restricted item of import fall within import items under Open General Licence.
Although much stress has been laid on the note to Item No. 0.2 of Indian Standards Specification for Marble (Blocks, Slabs and Tiles) wherein it has been stated that some 398 times rocks, such as serpentine are also polished and used in trade as marble but it cannot be taken into consideration in coming to the finding that marble is the genus and all the other calcareous stones referred to in Tariff Entry No. 25.15 in ITC Schedule, Appendix I B are included in it.
Moreover, the onus heavily lays upon the Revenue Authorities to prove by adducing cogent evidence that limestone without Metamorphism and recrystallisation not being opaque or translucent will fall within the category of stone called 'marble ' in Entry No. 62 of Appendix 2 as one of the re stricted items.
The appellant before placing the order took considerable precaution in ascertaining from the exporter that the calcareous stone to be imported from Italy is calcareous stone and not marble.
Moreover, he referred the sample of the calcareous stone to be imported to the Depart ment of Geology, Bombay and to the Regional Petrology Labo ratory of the Geological Survey of India to ascertain wheth er calcareous stone in question is marble or not in order to enable him to import the same under open general licence.
He also asked his exporter to send a certificate whether the calcareous stone for which order is placed is marble or not.
The exporter sent a certificate alongwith the report of the expert stating that the slabs of calcareous stones contained in the containers sent by the exporter are calcareous stones and not marble.
No tangible evidence has been produced nor even affidavits of persons attached to this trade to the effect that the slabs of calcareous stone imported by the appellant are marble as defined within Entry No. 62 of the List of Restricted Items have been filed.
The Revenue has not taken any steps to ascertain whether the calcareous stones imported are marble not by any scientific, geological or petrological test.
Considering all these reports we are of the opinion that since the term marble has not been defined in the Imports Control Order as well as in the ITC Schedule, it has to be taken in a scientific and technical sense as well as in the context the word has been used and the slabs of calcareous stones imported by the appellant from Italy cannot be held to be marble as they have not been recrystallised and meta morphosed in the geological and petrological sense of the term.
It is pertinent to refer in this connection the fol lowing passage of Maxwell on the Interpretation of Statutes, Twelfth Edition by P. St. J. Langan: "The word "land" is generally understood as including build ings, but if, after imposing a rate of houses, buildings, works, tenements and hereditaments, an Act exempted "land", this word would be restricted to land unburdened with houses, buildings or works which would ,otherwise have been unnecessarily enumerated.
" 399 As regards the submission that the end use of a particu lar item has to be taken into consideration in interpreting a product is of no relevance in determining its classifica tion as we have stated hereinbefore that in interpreting a term appearing in the Tariff Item which has not been defined either in the Tariff Schedule or in the Import Control Order, the same is to be interpreted in such a way which is in consonance with the Items specified in the ITC Schedule without leaving out any part of the Items mentioned therein.
In other words, a harmonised interpretation has to be given to each of the calcareous stones mentioned in the said Tariff Item in ITC Schedule and nothing should be left out or made redundant in giving the interpretation.
The commer cial nomenclature or understanding in the trade which is generally given in tax statute can not be taken recourse to in the instant case in as much as the statutory context in which the Tariff Item appears requires departure in the instant case.
In the Tariff.
Item the calcareous stones used for monumental or building purposes and of a specific gravi ty of 2,5% or more is used in the scientific or technical sense and as such the commercial nomenclature or understand ing in the trade should not be taken recourse to in inter preting the word 'marble '.
The reference to the requirement of gravity of 2.5% or more is also a purely technical crite ria or requirement which shows that the principle of trade nomenclature or commercial understanding is not applicable to that Tariff Item.
Moreover, the said Harmonised System of Nomenclature (HSN) contains a specific note regarding ser pentine rocks to the effect that the same are some times called marble, but the same is excluded from Chapter Heading 25.15.
This again clearly shows that according to HSN, Chapter Heading 25.15 has to be construed according to its technical meaning.
Technically, serpentine does not fall under Heading 25.15 and the same is accordingly excluded therefrom by the HSN.
If commercial meaning is to be applied then serpentine would have to be classified under Item 25.15 in as much as is sometimes called marble in the trade.
The HSN Explanatory Notes, therefore, establish that Chapter Heading 25.15% must be construed by its technical sense and not by applying a commercial nomenclature test.
Considering all these aspects, there is no other alter native but to conclude that the slabs of calcareous stone imported by the appellant are not marble as mentioned in Entry No. 62 of Appendix 2 of the Import and Export Policy for April 1988 March 1991 and so it is covered by open general licence.
The imported goods cannot be confiscated by the Government under section 111(d) of the Customs Act, 1961 nor the appellant can be given the option to clear the said goods 400 for home consumption on payment of fine of Rs. Five lakhs in lieu of confiscation under Section 125 of the .
The appellant cannot be said to have imported calcare ous stones without an import licence and as such there being no violation of the Import Control Policy the imposition of penalty of Rs.
Ten lakhs under section of the is also unwarranted and not sustainable.
Before we conclude it is relevant to mention in this connection that even if it is taken for arguments sake that the imported article is marble falling within Entry 62 of Appendix 2, the burden lies on the Customs Department to show that the appellant has acted dishonestly or contuma ciously or with the deliberate or distinct object of breach ing the law.
In the present case, the Tribunal has itself specifical ly stated that the appellant has acted on the basis of bona fide behalf that the goods were importable under OGL and that, therefore, the Appellant deserves lenient treatment.
It is, therefore, to be considered whether in the light of this specific finding of the Customs, Excise & Gold (Con trol) Appellate Tribunal, the penalty and fine in lieu of confiscation require to be set aside and quashed.
Moreover, the quantum of penalty and fine in lieu of confiscation are extremely harsh, excessive and unreasonable bearing in mind the bona fides of the Appellant, as specifically found by the Appellate Tribunal.
We refer in this connection the decision in Merck Spares vs Collector of Central Excise & Customs, New Delhi, ; Shama Engine Valves Ltd. Bombay vs Collector of Customs, Bombay,[1984] and Madhusudan Gordhandas & Co. vs Collector of Customs, Bombay, wherein it has been held that in imposing penalty the requi site mens rea has to be established.
It has also been ob served in Hindustan Steel Ltd. vs State of Orissa, [1970]1 SCR 753 by this Court that: "The discretion to impose a penalty must be exercised judi cially.
A penalty will ordinarily be imposed in cases where the party acts deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical or 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.
" 401 In the instant case, even if it is assumed for arguments sake that the stone slabs imported for home consumption are marble still in view of the binding arrived at by the Appel late Tribunal that the said product was imported on a bona fide belief that it was not marble, the imposition of such a heavy fine is not at all warranted and justifiable.
In the premises aforesaid, we allow the appeal and set aside the judgment and order passed by the Appellate Tribu nal and direct the Tribunal to release the goods to the appellant forthwith.
We also direct the Tribunal to release the personal bond given by the Appellant for a sum of Rs.2,50,000 on the basis of which one container wasreleased as per order of this Court dated October 25, 1989 and also to release the appellant from payment of detention charges and demurrage for retaining the goods.
In the facts and circumstances of the case there will be no order as to costs.
R.S.S. Appeal allowed.
| IN-Abs | The appellant on behalf of his firm, which is engaged in processing of stone slabs, placed an order for calcareous stone (other than marble) with the exporter in Italy, and asked the exporter to certify that the said goods were not marble.
The appellant further obtained from the foreign exporter a sample tile and had the same tested by a reputed geologist who confirmed that the sample was not marble.
The goods were imported under OGL Appendix 6, Item I of Import and Export Policy for April 1988 March 1991.
The Customs Department sent sealed samples of the im ported goods for testing to various technical authorities, and on the basis of some of these reports/opinions/visual observations issued a show cause notice to the appellant alleging that the calcareous stone were nothing but marble only as per the commercial definition of marble and there fore governed by Entry 62, Appendix 2, Part B of the Import lant 's contention was that the said goods could not be regarded as 'marble ' in terms of the expression 'marble ' appearing in heading 25.15 in Schedule 1.
Appendix I B, Customs Tariff Amendment Act, 1985.
The Collector of Customs however passed an order that the goods imported were marble requiring a specific import licence.
The Collector further ordered confiscation of the goods and imposition of fine and penalty.
The Customs, Excise and Gold (Control) Appellate Tribunal dismissed the appellant 's appeal but reduced the penalty amount.
370 Before this Court it was contended on behalf of the appel lant that: (1) for the purpose of understanding the meaning of 'marble ' occurring in Appendix 1 B, Schedule I of the Im ports (Control) Order, 1955 it is necessary to refer to Mineral Products, in Chapter 25, Tariff Entry No. 25.15.
the term 'marble ' therein does not occur by itself or in isolation bal as an inseverable part of a Tariff Entry which deals with five items (a) Marble (b) Travertine (c) Ecaussine (d) Other calcareous stone Alabaster; the Tariff Entry draws a clear line of distinction between each of these five items and regards them as five distinct products; (4) the term 'marble ' has to be given a meaning which fits in and harmonises in the above mentioned statutory context, so that 'marble ' continues to remain distinct and different from the said other four items: though the general principle of interpretation of tariff entries occurring in a tax statute is that of commer cial nomenclature or understanding in the trade, the said doctrine or commercial nomenclature or trade understanding can and should be departed from in a case where the statuto ry context in which the tariff item appears, requires such a departure; (6) the principles of interpretation are never embodied rules and the same must always yield to the context of the particular statute; (7) as the word 'marble ' has not been defined and the tariff item refers to calcareous stone of an apparent spe cific gravity of 2.5 or more, has to be taken to be used in a technical and scientific sense and as such the same cannot be interpreted in the popular commercial sense; the end use of the particular product is irrelevant and of no consequence for determining its classification; and (9) if the term 'marble ' is to be given the commercial meaning as relied upon by the Customs Authorities then the inevitable consequence would be that the term 'marble ' in Chapter Heading 25.15 would automatically include within it the other four items thereby rendering the rest of the Tariff Entry otiose, redundant and meaningless.
371 On behalf of the Revenue it was contended that: (1) the word 'marble ' has not been defined in the Tariff Act and as such in interpreting the word 'marble ' as men tioned in Tariff Item No. 25.15 in Appendix 1 B, Schedule 1 to the Import (Control) Order, 1955, the test in commercial and trade parlance has to be applied i.e. how the said product came to be commercially known by the trading people; (2) it is not a scientific or technical word and as such it does not require to be interpreted in its scientific and technical sense; (3) the word 'marble ' if so interpreted will include calcareous stone of 2.5 or more specific gravity; (4) marble is the genus and all other four items of stone mentioned in Tariff Entry 25.15 which are of apparent specific gravity of 2.5 are included within marble as they are commercially and in trade parlance known as marble; and (5) the end use of the product i.e. marble and calcare ous stone has to be taken into consideration in the determi nation of the other items of stone mentioned in that Entry.
Allowing the appeal, this Court, HELD: (1) According to a number of reports as well as the ISI specification the slabs of rocks that have been imported by the appellant and claimed to be calcareous stones are not 'marble ' in the scientific and technical sense of the term 'marble '.
[387F G] (2) Calcareous stone as mentioned in ITC Schedule has to be taken in scientific and technical sense as therein the said stone has been described as of an apparent specific gravity of 2.5 or more.
Therefore, the word 'marble ' has to be interpreted in the scientific or technical sense and not in the sense as commercially understood or as meant in the trade parlance.
[388D E] 4.
The general principle of interpretation of tariff entries occurring in a tax statute is that of commercial nomenclature or understanding in the trade.
The said doc trine of commercial nomenclature or understanding can and should be departed from in a case where the statutory con tent in which the tariff item appears requires such a de 372 parture.
If the application of the commercial meaning of trade nomenclature runs counter to the statutory context then the said principle of interpretation cannot and should not be applied.
[388E F] (5) Trade meaning or commercial nomenclature would be applicable if a particular product description occurs by itself in a Tariff Entry and there is no conflict between the Tariff Entry and any other Entry requiring to reconcile and harmonise that Tariff Entry with any other Entry.
[388G] Union of India vs Delhi Cloth & General Mills, [1963] Supp. 1 SCR 586; Dunlop India Ltd. vs Union of India & Ors., ; ; Commissioner of Sales Tax, M.P. vs Jaswant Singh Charan Singh, ; ; Grenfell vs Inland Revenue Commissioner, , 248; Holt & Co. vs Collyer, , 720; K.V. Varkey vs Agri cultural Income Tax and Rural Sales Tax Officer, [1954] 5 STC 384; Cannanore Spinning and Weaving Mills Ltd. vs Col lector of Customs and Central Excise Cochin, ; ; Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co., ; ; Collector of Customs, Bombay vs Hargovindas & Co., [1987] 29 LET 975 and Collector of Cus toms, Bombay vs Swastic Woollens (P) Ltd. and Ors., [1988] Supp SCC 796, referred to.
(6) The commercial nomenclature or trade meaning cannot be given to marble in as much as such a meaning if given will render otiose and redundant the terms travertine, ecaussine, alabaster and other calcareous monumental or building stone of an apparent specific gravity of 2.5 or more whether or not roughly trimmed or merely cut by sawing.
[397F G] (7) In interpreting a product its end use is of no relevance in determining the classification because in interpreting a term appearing in the Tariff Item which has not been defined either in the Tariff Schedule or in the Import Control Order, the same is to be interpreted in such a way which is in consonance with the Items specified in the ITC Schedule without leaving out any part of the Items mentioned therein.
[399A B] (8) Considering all the reports, and since the term 'marble ' has not been defined in the Imports Control Order as well as in the ITC Schedule it has to be taken in a scientific and technical sense as well as in the context the word has been used, and the slabs of calcareous stones imported by the appellant from Italy cannot be held to be marble as they have not been recrystallised and metamor phosed in the geological and petrological sense of the term.
[398F] 373 (9) The slabs of calcareous stone imported by the appel lant are not marble as mentioned in Entry No. 62 of Appendix 2 of the Import and Export Policy for April 1988 March 1991 and so it is covered by Open General Licence.
[399G] (10) The imported goods cannot be confiscated by the Government under Section III(d) of the Customs Act, 1961 nor the appellant can be given the option to clear the said goods for home consumption on payment of fine in lieu of confiscation under Section 125 of the .
[399H; 400A] (11) The appellant cannot be said to have imported calcareous stones without an import licence and as such there being no violation of the Import Control Policy the imposition of penalty under Section 112 of the is unwarranted and not sustainable.
[400A] (12) Even if it is taken for arguments sake that the imported article is marble falling within Entry 62 of Appen dix 2, the burden lies on the Customs Department to show that the appellant has acted dishonestly or contumaciously or with the deliberate or distinct object of breaching the law.
In the instant case, in view of the finding arrived at by the Appellate Tribunal that the said product was imported on a bona fide belief that it was not marble, the imposition of such a heavy fine is not at all warranted and justified.
[400B C; 401A B] Merck Spares vs Collector of Central Excise & Customs, Delhi, ; Shama Engine Valves Ltd. Bombay vs Collector of Customs, Bombay, ; Madhusu dan Gordhandas & Co. vs Collector of Customs, Bombay, and Hindustan Steel Ltd. vs State of Orissa, [1970] 1 SCR 753, referred to.
|
ivil Appeal No. 695 of 1975.
From the Judgment and Order dated 21.3.1974 of the Madras High Court in Civil Revision Petition No. 2598 of 1972.
G. Viswanatha lyer and N. Sudhakar for the Appellant.
360 V. Krishnamurthy for the Respondent.
The Judgment of the Court was delivered by AHMADI, J.
This appeal by special leave is filed against the judgment and order of the High Court of Madras whereby it remitted the matter to the Authorised Officer for dispos al in accordance with law and in the light of the observa tions made therein.
The facts giving rise to this appeal are as under: The appellant land owner held lands in Kanyakumari District in excess of 30 standard acres as on 6th April, 1960.
He filed a return in Form No. 2 as required by the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 (Act 58 of 1961), hereinafter called 'the Act '.
An enquiry was initiated by the Authorised Officer, Land Re forms, under Section 9(2)(b) of the Act.
The appellant raised several objections but they were overruled.
The Authorised Officer came to the conclusion that the family of the appellant could be reckoned to be of five members be tween 6th April, 1960 and 2nd October, 1962 and accordingly the land owner was entitled to 30 standard acres while his wife and daughter could hold 10 and 7.71 standard acres respectively as stridhana lands.
The appellant was directed to state which lands he wished to be included in his holding and identify the lands which fell surplus, failing which the Authorised Officer said he would be constrained to select the surplus lands.
The appellant was given five days time to make the option.
Feeling aggrieved by the decision of the Authorised Officer, the appellant preferred an appeal under Section 78(1) to the Lands Tribunal.
The appellant complained that the Authorised Officer had wrongly added the lands of his minor sons, unmarried daughter and wife gifted to them long before 1960 in his holdings for determining if his total holdings exceeded the ceiling limit fixed under Section 5(2) of the Act.
According to him the lands covered under the registered gift deed ought to have been excluded from his holding under the Explanation to Section 3(14) as a gift stood on par with a partition.
As a limb of the same argu ment the appellant contended that subsequent to the filing of the appeal, the Act was drastically amended by Tamil Nadu Land Reforms (Reduction of Ceiling on Land) Act, 1970 (Act 17 of 1970), hereinafter called 'the Amending Act ', whereby under Section 3(2), 'the date of commencement of this Act ' came to be fixed as 15th February, 1970 and the 'notified date ' came to be fixed as 2nd October, 1970 under Section 3(31) of the Act.
Consequently, argued 361 the appellant, his rights and liabilities with regard to the fixation of ceiling area were required to be worked out on the basis of the state of affairs existing on the revised date of commencement of the Act i.e. 15th February, 1970, fixed by virtue of the amendment in the Act.
He also relied on the fact that his eldest son who was a minor on th April, 1968 had attained majority on 1st January, 1970 (in the High Court judgment the date is 1st October, 1970) i.e. before the commencement of the Act on 15th February, 1970, and also before the notified date i.e. 2nd October, 1970, and hence his land could not be included in his holding as was done by the Authorised Officer.
It was also pointed out that his son had created a trust in respect of a portion of the land which would be exempt from the operation of the Act by virtue of Section 73(2)(b) of the Act.
It was, therefore, submitted that his eldest son Laxminarayanan was a necessary party and the proper course would be to set aside the im pugned order of the Authorised Officer and remand the matter for a de novo consideration after notice to his son.
The second submission made was that on 10th April, 1968 when the impugned order was made the appellant 's wife was pregnant, she had since delivered a daughter and had gifted to her 5.71 acres of Vadaseri land on 1st October, 1970 and later an additional 5.06 acres of the land from the same village, which developments had to be taken into account as subse quent events touching the determination of the appellant 's ceiling area.
Thirdly, it was pointed out that the appellant had transferred 2 acres 48 cents of section No. 2221, 0.82 cents of section No. 2208 A and 1 acre 66 cents of Vadaseri lands to a third party on 26th April, 1970 for services rendered to him.
Similarly a portion of section No. 2224 admeasuring 0.31 cents was sold to yet another third party on 23rd April, 1969 for valuable consideration and it was necessary to give effect to these transactions which were subsequent to the impugned order.
It was lastly contended by the appellant that his property bearing section Nos. 1387 A and 1363 A which was subject to mortgage had to be sold on 1st July, 1968, a development subsequent to the impugned order which too had to be noticed in fixing the ceiling area.
These transac tions, it was said, were protected by Section 21A of the Act.
It was, therefore, submitted that since an appeal was a continuation of the original proceedings it was obligatory on the part of the appellate authority to examine the impact of these subsequent developments and refix the ceiling area.
The appellant, however, contended that as third parties would have to be heard before deciding the issue, the proper course was to direct the Authorised Officer to consider the matter afresh in its entirety.
The appellate authority negatived all the contentions and dismissed the appeal with costs.
362 Thereupon, the appellant approached the High Court by way of a revision application.
Before the High Court the contention in regard to the subsequent transactions was confined to the documents executed between 15th February, 1970, the date of commencement of the Act, and 2nd October, 1970, the notified date.
That included the two settlement deeds dated 1st October, 1970 made in favour of the unmar ried daughters and the sale deed dated 26th April, 1970 executed in favour of a third party.
The contention was not pressed in respect of the transaction evidenced by the sale deed dated 23rd April, 1969 in favour of a third party.
This contention found favour with the High Court.
The High Court took the view, relying on an earlier Division Bench judgment in C.R.P. No. 1197 of 1971 (Fakir Mohmad vs The State of Tamil Nadu), that "even in respect of proceedings which commenced prior to the coming into force of the Amending Act, an affected person can take advantage of the provisions contained in Section 21A".
It was held that while Section 2 of the Amending Act reduced the ceiling area to half, bene fit was conferred by Section 2 IA and hence both the provi sions had to be read together.
It was, therefore, held that the three documents could not be ignored in fixing the ceiling area unless it is found that the documents were executed to defeat the provisions of the Act, in which case the transactions may be declared void under Section 22 of the Act.
In this view of the matter, the High Court directed the Authorised Officer to make further inquiries regarding the said three transactions and pass appropriate orders.
The High Court, however, rejected the rest of the contentions by which exclusion was sought, viz., (,i) on the conjoint reading of Section 10(8) and Section 3(14) insofar as it concerned Laxmmarayanan as a member of the appellant 's fami ly; (ii) in regard to lands which were locked in litigation; (iii) in regard to lands in the possession of mortgagees; and (iv) the lands which are covered under Section 73(vii) of the Act.
In this view that the High Court took, the matter was remitted to the Authorised Officer in regard to the aforesaid three transactions.
The appellant, feeling aggrieved by the rejection of his other contentions by the High Court, has preferred this appeal by special leave.
The main grievance of the appellant is that the High Court fell into an error in limiting the benefit of Section 21 A to three transactions only and by directing an enquiry under Section 22 overlooking the fact that it was not subject to Section 22.
He further contends that the High Court was wrong in thinking that the conten tion in regard to the sale deed dated 22nd April, 1969 was not pressed.
In brief the contention is that the High Court failed to appreciate the impact of the 363 amendments introduced by the Amending Act on the two settle ments of 1st October, 1970 and the sale deed of 26th April, 1970 and erred in holding that the relief under Section 21A must be determined after an enquiry under Section 22 of the Act.
This was the main thrust of the submissions made at the hearing of this appeal.
The Act (Act 58 of 1961) was notified on 2nd October, 1962 but the date of its commencement was fixed as 6th April, 1960.
The present proceedings had commenced under the said Act.
Th Act was amended by Act 17 of 1970 whereby the ceiling area was reduced from 30 standard acres for a family not exceeding five member to 15 standard acres and the date of commencement of the Act was shifted to 15th February, 1970 and the notified date to 2nd October, 1970.
There can be no doubt that after the passing of Act 17 of 1970 the family 's holding had to be determined with reference to the notified date i.e. 2nd October, 1970.
See: B.K.V. Radhamani Ammal vs Authorised Officer, Land Reforms, Coimbatore, The Act was enacted to provide for the fixation of ceiling on agricultural land holdings and matters connected therewith.
Section 5 fixes the ceiling area in the case of every family consisting of not more than five members at 15 standard acres after the amendment made in the provision by virtue of Section 2(2)(a) of the Amending Act.
Section 7 lays down that on and from the date of commencement of the Act, no person shall, except as otherwise provided by the Act, be entitled to hold land in excess of the ceiling area.
The family of the appellant consisted of himself, his wife, two minor sons and an unmarried daughter at the date of commencement of the Act and on the notified date as they stood before the Amending Act.
One son had become a major w.e.f.
1st January, 1970.
In the High Court judgment the date is stated to be 1st October, 1970.
That will not make any difference so far as the submission is concerned.
We may first notice Sections 21A and 22 of the Act as amended by the Amending Act.
They read as under: "21A.
Notwithstanding anything contained in Section 22 or in any other provision of this Act and in any other law for the time being in force, where, after the 15th day of February, 1970 but before the 2nd day of October, 1970.
(a) any person has effected by means of a registered instru ment a partition of his holding or part thereof; or 364 (b) any parent or grand parent has voluntarily transferred any land on account of natural love and affection to any minor son, unmarried daughter, minor grand son, or unmarried grand daughter in the male line; or (c) any person has voluntarily transferred any land (i) to any educational institution; or (ii) hospital.
of a public nature solely for the purposes of such institu tion or hospital; such partition or transfer shall be valid: Provided that in the case of transfer to such educational institution or hospital, the land transferred absolutely vests in the institution or hospital and the entire income from such land is appropriated for the insti tution or hospital." "22.
Where, on or after the date of the commencement of this Act, but before the notified date, any person has trans ferred any land held by him by sale, gift (other than gift made in contemplation of death), exchange, surrender, set tlement or in any other manner whatsoever except by bequest or has effected a partition of his holding or part thereof, the authorised officer within whose jurisdiction such land, holding or the major part thereof is situated may, after notice to such person and other persons affected by such transfer or partition and after such enquiry as he thinks fit to make, declare the transfer or partition to be void if he finds that the transfer or the partition, as the case may be, defeats any of the provisions of this Act.
" Section 21A begins with a non obstante clause and limits its application to partition or transfer mentioned in clauses (a) to (c) effected between 15th February, 1970 and 2nd October, 1970.
The settlement deeds, both dated 1st October, 1970 and the sale deed dated 26th April, 1970 fall within the two termini points fixed by Section 21A but the sale deed dated 23rd April, 1969 is clearly outside the scope of Section 21A and therefore it seems the learned counsel for the appellant in the High Court rightly did not press the claim in regard to the 365 land covered under the said document.
However, the learned counsel for the appellant before us pointed out that while the High Court rightly came to the conclusion that the appellant was entitled to the benefit of Section 21A insofar as the two settlement deeds of 1st October, 1970 and the sale deed of 26th April, 1970 are concerned, it fell into an error in holding "However, if those transfers are meant to defeat any of the provisions of the Act, then the Authorised Officer may declare the said transfers to be void under Section 22 of the Act" thereby totally overlooking the opening words of Section 2 IA which are intended to override Section 22.
The further observations of the High Court based on decision in Naganatha Ayyar vs Authorised Officer, [197 1]1 M.L.J. 274 make it clear that the High Court misread the observations of Ramanujam, J. when it said: "Ramanujam, J. pointed out that all transfers effected between the date of commencement of the Act and the notified date cannot be declared to be void as defeating the provi sions of the Act.
It has been pointed out that only if the transfers are really not transfers but sham and nominal transactions or bogus transactions, they would be defeating the provisions of the Act and that only then they can be declared to be void under Section 22 of the Act".
The above observations are somewhat confusing.
A sham, nominal or bogus document may not necessarily be one intend ed to defeat any provision of the Act.
A partition or trans fer evidenced by such a document would be of no avail to seek the benefit of Section 21A regardless of Section 22.
Section 21A, which begins with the words notwithstanding anything contained in Section 22 clearly overrides Section 22 and therefore the transactions referred to in Section 21A cannot be the subject matter of enquiry under Section 22.
Section 21A refers to only three types of transfers viz. ,(i) transfer of holding by a registered partition deed; (ii) transfer of land to specified individuals on account of natural love and affection; and (iii) transfer in favour of an educational institution or hospital of a public nature solely for the purposes of such institution or hospital provided the transferred land vests absolutely in the insti tution or hospital and the entire income from such land is appropriated for the institution or hospital.
Even though the transactions referred to in Section 21A cannot be de clared void under Section 22 as defeating any of the provi sions of the Act, the Authorised Officer would be entitled dehors Section 22 of the Act, to find out if the instruments of transfer or partition though answering the description of transactions under Section 21A, are in fact genuine 366 transactions and not sham, nominal or bogus ones.
Similarly the Authorised Officer would be entitled to determine if the instruments of transfer even if genuine answer the descrip tion of documents referred to in Section 21 A, and if not, he would be justified in invoking Section 22 of the Act.
To put it differently when any party seeks the benefit of Section 21A, he must show, if a doubt arises, that (i) the instrument on which he relies is a genuine one and not a sham, nominal or bogus one and (ii) it answers the descrip tion of the documents referred to by Section 21A.
If the document is not found to be genuine, the Authorised Officer will not act on it, if it is genuine, the Authorised Officer will determine if it is one referred to in Section 21A and if not he will resort to Section 22 of the Act.
On this consideration the sale deed dated 26th April, 1970 in favour of a third party clearly falls outside the purview of Sec tion 21A and the Authorised Officer will be entitled to embark on an enquiry under Section 22 of the Act, if the instrument is otherwise genuine.
In regard to the two set tlements in favour of unmarried daughters also the Autho rised Officer will have to consider if the settlements answer the description of the documents referred to in Section 21A even if they are genuine.
If he answers both these points in the affirmative he need not test the docu ments on the additional requirement of Section 22 but if he comes to the conclusion that the documents do not fall within Section 21A, he would be required to test their validity on the touchstone of Section 22 of the Act.
We have thought it necessary to clearly define the scope of the enquiry before the Authorised Officer on remand to clear the doubt, if any, arising from the observations of the High Court and to avoid unnecessary complications.
The next contention urged by the learned counsel for the appellant is based on the plain language of Section 10(2) read with the definition of 'family ' in Section 3(14) of the Act.
The appellant 's son Laxminarayanan is stated to have attained majority on 1st January, 1970, i.e. before the date of commencement of the Act on 15th February, 1970 and the notified date of 2nd October, 1970.
Even if the date stated by the High Court is correct, he attained majority before 2nd October, 1970.
On his attaining majority he ceased to be a member of the appellant 's family.
Under Section 10(2), the Authorised Officer has to take into account only those members of the family as are covered by the definition of Section 3(14) of the Act.
Although Laxminarayan was undoubt edly a member of the appellant 's family on the date on which the Authorised Officer first determined the ceiling area, the submission of the appellant 's counsel is that he having ceased to be a minor son, he cannot be included in the appellant 's family when 367 the Authorised Officer reconsiders the ceiling area on remand.
The High Court negatived this contention and in our opinion rightly.
The submission overlooks the provision contained in Section 3 of the Amending Act by which the date of commencement of the Act and the notified date were re vised.
Section 3 reads as under: "Saving (1) Subject to the provisions of sub section (2), any action taken (including any order made, notification issued, deci sion or direction given, proceeding taken, liability or penalty incurred and punishment awarded) under the provi sions of the Principal Act before the date of the publica tion of this Act in the Fort St. George Gazette, may be continued or enforced after the said date in accordance with the provisions of the Principal Act as if this Act had not been passed.
(2) Nothing in sub section (1) shall be deemed to entitle any person whether or not such person is a party to any proceeding mentioned in sub section (1), to hold after the 15th day of February 1970, land in excess of the ceiling area under the Principal Act as modified by Section 2 and the provisions of the Principal Act as modified by Section shall, after the said date, apply to such person.
" The proceedings in this case had started and concluded before the Authorised Officer long before the Amending Act saw the light of the day.
Under Section 3(1) of the Amending Act, any action taking (including any order made, decision or direction given, proceeding taken, etc.) under the provi sions of Act before the date of publication, of the Amending Act, can be continued and enforced after the said date in accordance with the provisions of the Act as if the Amending Act had not been passed.
This is, however, subject to sub section (2) which carves out an exception to sub section (1) insofar as the reduction of the ceiling area from 30 stand ard acres to 15 standard acres is concerned.
The High Court was, therefore, right in rejecting this contention.
Lastly, it was submitted that lands which were converted into orchards of topes before 1st July, 1959 are exempt from the provisions of the Act by virtue of Section 73(vii) of the Act.
The High Court has rejected this contention on the following finding: 368 "In the present case certain lands are claimed to be topes and exemption is claimed regarding the same.
But there is nothing to show that the said lands had been converted into topes prior to first day of July, 1959.
Since the factual foundation is not laid we cannot entertain this contention.
These were the only contentions urged before us.
In view of the above discussion we see no merit in this appeal and dismiss the same with costs.
Y. Lal Appeal dis missed.
| IN-Abs | The appellant land owner held lands in excess of 30 standard acres as on 6.4.1960.
He filed a return as required by the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 and an enquiry was initiated by the Authorised Officer concerned under Section 9(2)(b) of the Act.
Several objections raised by the appellant were rejected and the Authorised Officer came to the conclusion that the family of the appellant could be reckoned to be of five members be tween 6.4.1960 and 2.10.1962 and thus the appellant was entitled to 30 standard acres; his wife and daughter however could hold 10 and 7.71 standard acres respectively as strid hana.
The appellant was asked to elect which lands he wished to be included in his holding and state which lands should be treated as surplus.
Feeling aggrieved by the said deter mination, the appellant preferred an appeal under Section 78(1) to the Land Tribunal.
The appellant contended (i) that the Authorised Officer had wrongly included the lands of his minor sons, unmarried daughter and wife gifted to them long before 1960; (ii) that subsequent to the filing of the appeal, the Act was amended as a consequence whereof his rights and liabilities with regard to the fixation of ceil ing area were required to be worked out on the basis of the revised date of commencement of the Act i.e. 15.2.1970; notified date being 2.10.1970.
It was also urged by the appellant that the lands of his eldest son Laxminarayanan could not be included in his holding.
On those grounds amongst others relating to the effect of subsequent transac tions the appellant prayed that the matter ought to be remanded to the Authorised Tribunal for a de novo considera tion.
The appellant authority rejected all the contentions and dismissed the appeal, whereupon the appellant preferred a revision application before the High Court.
Before the High Court his plea regarding subsequent transactions was confined to the documents executed between 15th February 1970, the date of commencement of the 359 Act, and 2nd October 1970, the notified date; contentions regarding other transactions were not pressed.
The High Court accepted this contention and took the view that even in respect of proceedings which commenced prior to the coming into force of the Amending Act, an affected person can take advantage of the provisions contained In Section 2 IA.
The High Court held that while Section 2 of the Amending Act reduced the ceiling area to half, benefit was conferred by Section 21A and hence both the provisions had to be read together.
On that reasoning the High Court opined that the three documents relating to subsequent transactions executed between the said date, could not be ignored in fixing the ceiling area unless it was found that the documents were executed to defeat the provisions of the Act, in which case the transactions may be declared void under Section 22 of the Act.
The High Court accordingly directed the Authorised Officer to make further inquiries regarding the three trans actions in question and pass appropriate orders.
The High Court rejected the other contentions.
The appellant being aggrieved with the rejection of other points raised before the High Court has preferred this appeal by special leave.
Dismissing the appeal, this Court, HELD: The proceedings in this case had started and concluded before the Authorised Officer long before the Amending Act saw the light of the day.
Under Section 3(1) of the Amending Act, any action taken (including any order made, decision or direction given, proceeding taken, etc.) under the provisions of Act before the date of publication of the Amending Act, can be continued and enforced after the said date in accordance with the provisions of the Act as if the Amending Act had not been passed.
This is however, subject to subsection (2) which carves out an exception to sub section (1) insofar as the reduction of the ceiling area from 30 standard acres to 15 standard acres is concerned.
[367E G] B.K.V. Radhamani Ammal vs Authorised Officer, Land Reforms, Coimbatore, , referred to.
|
ivil Appeal No. 1130 of 1990.
From the Judgment and Order dated 19.6.1989 of the Patna High Court in L.P.A. No. 51 of 1987.
G.B. Pai, S.K. Patri and J.R. Das for the Appellant.
Dr. S.K. Ghose, Mrs. M. Qammaruddin and M. Qammaruddin (NP) for the Respondents.
The Judgment of the Court was delivered by 404 K. JAGANNATHA SHETTY, J.
Special Leave granted.
Whether International Labour Day (1st May) should be paid holiday in addition to the existing holidays for the employees of the appellant Company is the sole question for determination in this appeal.
The appellant is a public limited company having manufacturing units and selling outlets in the different parts of the country.
In the State of Bihar the company has an establishment at Mona Road, Burma Mines, Jamshedpur manufacturing Industrial and Medical Cases and there is another establishment located at Ranchi manufacturing liquid Oxygen Explosives.
The holidays available to the employees of the company 's establishment are provided by the settlement dated 14 March 1971.
The settlement provides for a total number of 13 holidays for office staff and 14 holidays for the factory staff.
The relevant portion of the settlement reads: "Provision of Settlement dated 14.3.
1971 ARTICLE: Leave and Holidays (c) The number of National/Festival Holidays to which the factory staff and factory general staff are entitled will be enhanced from the present number of 10 to 14 days including 3 National Holidays viz. Republic Day, Independence Day, Mahatma Gandhi 's birthday and Viswakarma Puja.
(d) The number of National/Festival holidays for office and office general staff will be enhanced from 17 to 18 days per calendar year including 3 National Holidays viz. Republic Day, Independence Day and Mahatma Gandhi 's birthday.
" In 1977, the State of Bihar enacted the Bihar Indus trial Establishments (National and Festival Holidays and Casual Leave) Act, 1971 (Act No. 17 of 1977) (called shortly as the 'Act ') making provisions for National/Festival holi days and casual leave for workers.
We are concerned with Sections 3 and 13 of the Act which must be set out in full: "Section 3 405 National and Festival Holidays: (1) Every employee shall be granted following in each calen dar year in such manner and on such terms and conditions as may be prescribed: (a) Three National Holidays on the 26th January, 15th August and 2nd October.
(b) Four other holidays on any festival out of the festivals mentioned in the schedule.
(c) International Labour Day on 1st May. (2) The Government may add to or exclude a festival from the Schedule by a notification in the official Gazette and on publication of such notification, the Schedule shall be deemed to be amended accordingly." Section 13 of the Act . "Right and privileges Under any other law not to be affect ed: Where any employee of an industrial establishment is entitled to such rights and privileges under any other law for the time being in force or under any contract or custom or usage applying to the said establishment, which are more favourable to him, than any right and privileges conferred by this Act, nothing contained in this Act shall affect such rights or privileges.
" It will be convenient if at this stage, we also read sub rule 3 of the Rule 3(2) of the Bihar Rules framed under Section 14 of the Act: "Rule 3.
National Festival Holidays: (1) xxx xxx xxx (2) Each employer of an industrial establishment shall at the beginning of each calendar year or within 60 days from the date of commencement of work in the case of new indus trial establishments, display a notice asking his employees to indicate their choice in respect of 4 festival holidays out of the list of festival holidays mentioned in the 406 schedule under sub section (1)(b) of Section 3 of the Act.
" Section 3 makes it mandatory to declare holidays on 6th January, 15th August, 1st May and 2nd October, besides 4 other holidays on festivals out of the festivals mentioned in the schedule.
Subrule (2) of rule 3 provides procedure for fixing the four festival holidays at the beginning of each calendar year.
The employer shall display a notice asking his employees to indicate their choice in respect ot 4 festival holidays out of the list of festival holidays mentioned in the schedule to section 3(1)(b).
Section 13 provides that the rights and privileges of the workmen under any other law or under any contract or custom or usage applicable to the establishment which are more favourable to the workmen than that conferred by the Act shall not be affected.
Since the employees of the compa ny 's establishment at Jamshedpur were allowed more favour able holidays every year i.e. 18 (for office staff) and 14 (for factory staff) against the total of 3 holidays provided for in the Act, the company wanted to declare the first May as holiday by adjusting the holidays allowed in the settle ment. 'The workmen, however took the stand that the first May should not be adjusted within the total number of holi days provided in the settlement but should be given as an additional holiday.
Negotiations followed but neither side was willing to give up its claim.
The conciliation officer could not bring about settlement.
Upon failure of conciliation, the statuto ry authorities directed the company to declare 1st May as holiday in addition to the holidays provided for in the settlement.
The company moved the High Court under Article 226 of the Constitution challenging the direction of the authorities.
The High Court dismissed the writ petition observing thus: "Under the existing arrangement, the employees are having 14/18 paid holidays in an year and that cannot be defeated by Section 3 of the Act.
But section 13 expressly provides that if the rights and privileges in respect of paid holi days enjoyed by the employees are more favourable than are prescribed by section 3, their existing rights and privi leges as to the total number of holidays will not be preju diced by section 3.
It is clear that section 3 is not in tended to prescribe a minimum number of paid holidays in addition to the existing ones.
The holiday on the 1st May prescribed under the Act being compulsory in nature, 407 therefore, must be in addition to the privileges already granted to the workmen under the agreement.
" We are afraid we cannot agree with this line of reason ing adopted by the High Court.
In fact, the conclusion and the reasoning seem to be inconsistent with each other.
Section 3 provides for three National holidays, one Interna tional Labour Day, and four festival holidays.
It thus statutorily fixes.eight paid holidays, four out of them are left to the choice of the management and employees for festival occasions.
These eight holidays however, are not in addition to the holidays that are mutually agreed upon in the settlement.
They are the minimum holidays which the employees are entitled to.
If there is existing settlement by which the employees are entitled to more than eight holidays the management could not take away that rights and privileges.
To protect the employees in such cases the Statute intervenes by Section 13.
If the employees are entitled to more than eight holidays ' under any contract or usage applicable to the said establishment, or under any other law for the time being in force that rights and privi leges are saved by section 13.
This seems to be the require ment of the statute.
The case with not a dissimilar problem was in Tata Oil Mills Co. vs K.V. Gopalan & Ors.
, There this Court considered the scheme and scope of sections 3 and 11 of the Kerala Industrial Establishment (National and Festival Holidays, which are similar in terms with sections 3 and 13 of the Act with which we are concerned.
Section 3 of the Kerala Act provides: "Grant of National and Festival holidays: "Every employee shall be allowed in each calendar year a holiday of one full day on the 26th January, 15th August and the 1st May and four other holidays each of one whole day for such festivals as the Inspector may, in consultation with the employer and the employees specify in respect of any industrial establishment." Section 11 of the Kerala Act reads: 'Rights and privileges under other laws, etc.
are not 408 affected Nothing contained in this Act shall adversely affect any rights or privileges which any employee is enti tled to with respect to national and festival holidays on the date on which this Act comes into force under any other law, contract, custom or usage, if such right or privileges are more favourable to him that those to which he would be entitled under this Act.
" Considering the rights of workmen under those provisions Gajendragadkar, CJ., speaking for this Court observed (at 764): "If under the existing arrangement the employees are enti tled to have more than 7 paid holidays, that right will not be defeated by section 3, because section 11 expressly provides that if the rights or privileges in respect of paid holidays enjoyed by the employees are more favourable than are pre scribed by section 3, their existing rights and privileges as to the total number of holidays will not be prejudiced by section 3.
The scheme of section 11 thus clearly shows that section 3 is not intended to prescribe a minimum number of paid holidays in addition to the existing ones, so that the respondents should be entitled to claim the seven holidays prescribed by section 3 plus the six holidays to which they are entitled under the existing arrangement.
" In the present case it may be relevant to note that the festival holidays have not been identified or specified in the settlement.
They have to be selected and declared as holidays with notice to employees every year.
It is only three National holidays that have been specified therein in addition to Vishwakarma Puja day for the factory staff and factory general staff.
Now, the statute prescribes the same three National holidays, besides International Labour Day and four festival holidays.
But these 3 holidays are not to the exclusion of or in addition to the total number of holidays agreed upon under the settlement.
Indeed, it could not be so, since three National holidays are common both in the settlement and statute.
The total number of 14 holidays under the settlement as against 3 holidays under the statute remains undisturbed by section 13 of the Act since it is more favourable to the employees than the rights and privi leges conferred by the Act.
When thus being the position, the management would be entitled to adjust the International Labour Day as a paid holiday within the fourteen days al lowed under.the settlement.
The 'demand of the employees that 409 it should be in addition to fourteen days has no support either under the settlement or by the terminology of the statute.
In the result the appeal is allowed.
The judgment of the High Court is set aside.
There will be, however, no order as to costs.
N.P.V. Appeal allowed.
| IN-Abs | The appellant a Public Limited Company had two estab lishments in the State of Bihar.
The holidays available to the employees of the appellant company were provided by the settlement dated 14th March, 1971.
The settlement provided for a total number of 18 holidays for office staff and 14 holidays for the factory staff.
There was a dispute between the management and the employees as to whether the International Labour Day (1st May) which was declared as a mandatory holiday under the Bihar Industrial Establishments (National and Festival Holidays and Casual Leave) Act, 1977 should be a paid holi day in addition to the existing holidays.
While the manage ment wanted to declare 1st May as holiday by adjusting the holidays allowed in the settlement, employees wanted it to be given as an additional holiday.
Negotiations having failed and the conciliation officer being unable to bring about settlement, the statutory authorities directed the company to declare 1st May as holiday in addition to the holidays provided for in the settlement.
The appellant company filed a writ Petition before the High Court, chal lenging the direction of the authorities.
Dismissing the Writ Petition, the High Court held that the holiday on 1st May prescribed under the Act being compulsory in nature, must be in addition to the privileges already granted to the workmen under the agreement.
Hence the appeal by the Compa ny.
Allowing the appeal, by special leave, this Court.
HELD: Section 3 of the Bihar Industrial Establishments (National and Festival Holidays and Casual Leave) Act, 1977 provides for three National holidays, one International Labour Day and four 403 festival holidays.
It thus statutorily fixes eight paid holidays; for out of them are left to the choice of the management and employees for festival occasions.
These eight holidays, however, are not in addition to the holidays that are mutually agreed upon in the settlement.
They are the minimum holidays which the employees are entitled to.
If the employees are entitled to more than eight holidays under any contract or usage applicable to the said establishment, or under any other law for the time being in force, those rights and privileges are saved by Section 13.
This is the requirement of the statute.
[407B D] In the present case, the festival holidays have not been identified or specified in the Settlement.
They have to be selected and declared as holidays with notice to employees every year.
It is only three National holidays that have been specified therein in addition to Vishwakarma Puja day for 'the factory staff and factory general staff.
Now, the statute prescribes the same three National holidays, besides International Labour Day and four festival holidays.
But these 8 holidays are not to the exclusion of or in addition to the total number of holidays agreed upon under the set tlement.
The total number of 14 holidays under the settle ment as against 8 holidays under the statute remains undis turbed by section 13 of the Act since it is more favourable to the employees than the rights and privileges conferred by the Act.
That being the position, the management would be entitled to adjust the International Labour Day as a paid holiday within the fourteen days allowed under the settle ment.
The demand of the employees that it should be in addition to fourteen days has no support either under the settlement or by the terminology of the statute.
[468E H; 469A] Tata Oil Mills Co. vs K.V. Gopalan & Ors., , referred to.
|
iminal Appeal No. 29 of 1956.
Appeal from the judgment and order dated August 24, 1955, of the Calcutta High Court, in Criminal Appeal No. 196 of 1954, arising out of the judgment and order dated June 7, 1954, of the Court of the Judge, Special Court, Burdwan, in Special Court case No. 10 of 1952.
section C. Issacs and section N. Mukherjee, for the appellant.
B. Sen and P. K. Bose, for the respondent.
September 11.
The Judgment of the Court was delivered by KAPUR J.
This is an appeal by leave of the High Court of Calcutta against the judgment and order of that Court dismissing the appellant 's appeal against the order of conviction by the Special Court of Burdwan for an offence under section 165 A, Indian Penal Code and six months ' rigorous imprisonment.
The facts leading to this appeal are that one Istipada Ghosh and his son were being tried in the court of an Assistant Sessions Judge, Burdwan, with a jury of five.
During the course of the trial the appellant approached one of the jurors Baidya Nath Mukherjee and offered him illegal gratification as an inducement for giving a verdict favourable to Ghoslies.
On the morning of September 6, 1952, the juror narrated these facts to the police and thereupon the officer in charge sent a Sub Inspector to arrest the appellant if he offered the bribe.
After a little while the appellant came to the appointed place and offered Rs. 40 in four 10 rupee notes to the juror and while he was trying to pass those notes to the juror the Police Officer arrested the appellant.
The First Information Report for an offence under sections 161/116, Indian Penal Code was made soon after.
And after investigation a report 1278 was made by the police officer in charge Burdwan police station which resulted in the case being sent to the Special Judge, Burdwan.
On November 27, 1952, the Government issued the following notification No. 6603J under section 4(2) of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949 (W. B. XXI of 1949): " In exercise of the power conferred by sub section (2) of section 4 of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949 (West Bengal Act XXI of 1949), the Governor is pleased to distribute to the Burdwan Special Court constituted by notification No. 4632J, dated the 22nd August, 1952, under section 2 of the said Act the following cases involving offences specified in the Schedule to the said Act to be tried by the said Special Court: (4) The State versus Bhajhari Mondal, son of Bhuson Chandra Mondal of Katwa Station Bazar Police Station Katwa, district Burdwan tinder sections 161/116 of the Indian Penal Code.
This notification shows that the offence charged against the appellant was one under sections 161/116 of the Indian Penal Code.
The order sheet of the Special Court shows that the records of the case State vs B. C. Mondal under sections 161/116 Indian Penal Code were received by the Special Judge on December 23, 1952, and the Special Court took cognizance of the case, the appellant was summoned for appearance on January 22, 1953, and he did appear on that day.
On December 21, 1953, after several adjournments the hearing of the case was fixed for January 29, 1954, on which date the examination of witnesses commenced.
On February 10, 1954, a charge under section 165A, Indian Penal Code was framed by the Special Judge.
The trial ended on June 7, 1954, and the appellant was convicted under section 165A of the Indian Penal Code and sentenced to six months ' rigorous imprisonment.
Against this order of conviction the appellant took an appeal to the High Court of Calcutta which was dismissed.
It held that the appel 1279 lant had rightly been convicted under section 165,A and that the Special Court had jurisdiction to try the offence under that section from July 28, 1952, to May 9, 1953, under section 7 of the Central Act (XLVI of 1952) and from May 9, 1953, under the West Bengal Act (W. B. XV of 1953).
It also held that any defect in the taking of cognizance was curable under section 529 (e) of the Criminal Procedure Code and that as a matter of fact the Special Judge took cognizance under section 165A and not under sections 161/116, Indian Penal Code.
On December 16, 1955, the High Court granted leave to appeal to this Court.
Counsel for the appellant has not contested the appeal on any question of fact but has confined his arguments to the question of jurisdiction.
He contended that the Special Judge had no jurisdiction to try the case as (1) at the time he took cognizance of the case, section 165A, Indian Penal Code, was not an offence specified in the Schedule of West Bengal Act XXI of 1949; (2) the case distributed to him was one under sections 161/116 an offence which no longer existed in the Indian Penal Code; (3) the Special Judge was exercising jurisdiction under the West Bengal Act (W. B. XXI of 1949) and not under the Central Act (XLVI of 1952) as no Special Judges were appointed by the State Government under that Act; (4) the appellant could not be tried under the West Bengal Act XV of 1953 because there was no distribution of a case against him under section 165A, Indian Penal Code.
In order to decide these matters it is necessary to set out the dates on which the various statutes came into force and to See what provisions were made therein.
On March 11, 1947, Prevention of Corruption Act (Act 11 of 1947) was enacted by the Central Legislature.
The West Bengal Legislature enacted the West Bengal Criminal Law Amendment Act of 1949 (W. B. XXI of 1949) which received the assent of the Governor General on June 23, 1949.
Its preamble shows the objects of the Act to be more speedy trial and more effective punishment of certain offences.
By section 2 of this Act, Special Courts were set up in West Bengal which under section 3 were to be presided over by Special 1280 Judges.
Section 4 provided for allotment of cases for trial to the various Special Judges and also authorised the Provincial Government to transfer any case from one Special Judge to another and to make modifications in the description of cases (whether in the name of the accused or in the charges preferred or in any other manner) as may be considered necessary.
The Special Judge bad jurisdiction to try the cases for the time being allotted to him under section 4 (1) in respect of such of the charges for the offences specified in the Schedule as may be preferred against the accused.
All cases pending before any court or before any other Special Judge were deemed to be transferred to the Special Judge to whom they were allotted.
The Special Judge when trying a case allotted to him could also try any offence whether specified in the Schedule or not with which an accused could be charged at the same trial.
By section 5 the Special Judge could take cognizance of a case without the case being committed and was to follow the procedure of warrant cases and the court of the Special Judge was deemed to be a court of Session trying without a jury.
By section 8 rules of evidence were amended in certain particulars.
Sec tion 9 provided for enhanced punishment.
By section the provisions of the Prevention of Corruption Act were made applicable.
The schedule to the Act enumerates the offences triable by a Special Judge, the relevant items of which were: (1) " An offence punishable under sections 161, 162, 163 or section 165 of the Indian Penal Code. . . . . . . . . . (8) Any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in items 1 to 7 ".
On July 28, 1952, the Central Legislature enacted the Criminal Law Amendment Act (Act XLVI of 1952) by section 3 of which an offence of abetment, section 165A with an enhanced punishment was inserted.
section 165A. " Whoever abets any offence punishable under section 161 or section 165, whether or not that 1281 offence is committed in consequence of the abetment, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine or with both ".
By section 6 the State Government were authorised by notification to appoint Special Judges for various areas to try the following offences: (a) " an offence punishable under section 161, section 165 or section 165A of the Indian Penal Code (Act XLV of 1860) or subsection (2) of section 5 of the Prevention of Corruption Act (II of 1947); (b) any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in clause (a). . . " By section 7 exclusive jurisdiction was conferred on Special Judges.
The effect of this enactment was the insertion in the Penal Code of an offence 165A and the creation of Special Judges to be appointed by the State.
On August 12, 1952, the Central Legislature passed another Act, the Prevention of Corruption (Second Amendment) Act (59 of 1952), section 3 of which changes the rules of evidence in regard to presumption and onus by adding sub section 2 to section 4 of the principal Act by which it was provided: Where in any trial of an offence punishable under section 165A of the Indian Penal Code (Act XLV of 1860) it is proved that any gratification (other than legal remuneration) or any valuable thing has been given or offered to be given or attempted to be given by an accused person, it shall be presumed unless the contrary is proved that he gave or offered to give or attempted to give that gratification or that valuable thing, as the case may be, as a motive or reward such as is mentioned in section 161 of the Indian Penal Code or, as the case may be, without consideration or for a consideration which he knows to be inadequate ".
On July 30, 1952, an Act, to amend the West Bengal Act XXI of 1949, the West Bengal Criminal Law Amendment (Special Court Amending Act) (W. B. XII of 1952) received the assent of the President and came into force.
Section 3 of this Act substituted a new section 2 in place of section 2 of the West Bengal Act (W. B. XXI 1282 of 1949).
This substituted section authorised the State Government to constitute Special Courts and to appoint Special Judges to preside over such courts which had jurisdiction throughout West Bengal.
By section 5, the following was substituted in place of section 4 of the West Bengal Act XXI of 1949: " (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898) or in any other law, the offences specified in the Schedule shall be triable by Special Courts only: Provided that when trying any case, a Special Court may also try any offence other than an offence ,specified in the Schedule, with which the accused may under the Code of Criminal Procedure, 1898, be charged at the same trial.
(2) The distribution amongst Special Courts of cases involving offences specified in the Schedule, to be tried by them shall be made by the State Government ".
The Schedule under the West Bengal Act (W.B. XXI of 1949) was also amended by the insertion of section 164 Indian Penal Code only.
The West Bengal Act XXI of 1949 was further amended by the West Bengal Criminal Law Amendment (Special Courts) Amending Act, 1953 (Act XV of 1953).
It received the assent of the President and came into force on May 9, 1953.
This Act added section 165A, Indian Penal Code in item No. 1 of the Schedule of the 1949 West Bengal Act.
The result of these various enactments, Central as well as State was the creation of Special Courts to try offences which were specified in the case of West Bengal (W. B. XXI of 1949) in the Schedule and in the case of Central Act in the body of the Act itself The West Bengal Act (W. B. XXI of 1949) created Special Judges to try cases involving offences specified in the Schedule and allotted to them by the State Government alone.
Under the Central Act (XLVI of 1952) also the State Government was authorised to appoint Special Judges and the offences specified in the Act were triable by such Judges as stated in section 7(2) of the Act.
The procedure to be followed by the 1283 Special Judges was that prescribed for the trial of warrant cases.
Therefore the jurisdiction of Special Judges appointed under this State enactment to try cases relating to offences specified in the Schedule arose only when they were allotted to them.
By the West Bengal Amending Act of 1952 (W. B. XII of 1952) in place of " Special Judges " the words "Special Courts " were substituted and two conditions necessary for conferring jurisdiction on such Courts were: (1) cases to be tried related to offences specified in the Schedule and (2) the State Government had to make the distribution of such cases to the various Special Courts.
Therefore no Special Court had jurisdiction to try a case unless it was for offences specified in the Schedule and the State Government distributed it to the Special Court.
The notification in the present case specified the name of the accused, the offence for which he was to be tried as one under section 161/116, Indian Penal Code, and the case was distributed to the Special Court, Burdwan for trial.
On the date of the notification section 161 and abetment of section 161 were offences specified in the Schedule but as a result of the amendment by the Criminal law Amendment Act 1952 (XLVL of 1952) section 165A had been inserted in the Code providing for punishment for abetment of offences mentioned in sections 161 or 165.
Section 165A created a distinct and separate offence and therefore abetment of an offence under section 161 was no longer an offence under section 161/ 116 of the Code.
Section 165A was not included in the Schedule to the West Bengal Act (W. B. XXI of 1949).
Counsel for the State contended that this section although not specifically mentioned was all the time specified in and must be deemed to have been specified in the Schedule to the West Bengal Act (W. B. XXI of 1949) because item 8 specifically mentioned abetment of offences in items I to 7 and that section 165A only prescribes punishment for abetment of offences under sections 161 or 165 and cannot be called a new or a different offence.
Section 165A is not merely a restatement of the offence of abetment under section 116 of the Code.
It 163 1284 also comprises abetment under section 109 of the Code and provides an enhanced penalty of three years imprisonment instead of 1/4th of three years imposeable under section 116.
It further attracts the application of section 4 (2) of the Prevention of Corruption Act (11 of 1947) as subsequently amended.
It cannot be, said therefore that merely because the abetment of an offence under section 161 was specified in the Schedule of the West Bengal Act of 1949, section 165A which did not then exist in the Penal Code, must be deemed to have been specified therein.
It is significant that the West Bengal Act was further amended on May 9, 1953, by Act XV of 1953 in order to include section 165A in the Schedule.
It appears therefore that under the notification the case distributed to the Special Court for the appellant 's trial was for a non existing offence because when the Special Judge took cognizance of the case there was no such offence as sections 161/116 of the Indian Penal Code.
The notification did not mention section 165A of the Code and at the time when the Special Judge purported to take cognizance he had no jurisdiction to do so and to try the case as the offence under section 165A was not in the Schedule of the West Bengal Act, 1949, as amended in 1952.
The crucial date for the purpose of determining the jurisdiction of the Court would be the date when the Court received the record and took cognizance of the case and took any step in aid of the progress of the case and not when the evidence of the witnesses began to be recorded.
Under section 4 of West Bengal Act (W.B. XXI of 1949) as amended by the Act of 1952 the jurisdiction of the Court arises when the notification is issued distributing the case to a particular Special Court giving the name of the accused and mentioning the charge or charges against him which must be under one of the offences specified in the Schedule.
In the absence of any of these elements the Special Court would have no Jurisdiction.
The High Court held.
" that the offence under section 165A was always triable by a Special Judge only from 28th July, 1952, to 9th May, 1953, under section 7 of the Central Act 1285 and from 9th May, 1953, under the W. B. Act XV of 1953 ".
As already stated the case which was distributed to the Special Judge was one under section 161/116, Indian Penal Code an offence not then existing in the Code and as section 165A was not in the Schedule as an offence triable by a Special Judge it could not be held that the Special Judge was trying the appellant for an offence under section 165A.
There is nothing to indicate that the appellant was being tried upto May 9, 1953, under section 7 of the Central Act.
No notification of the State Government appointing any Special Judge under section 6 of the Central Act (Act XLVI of 1952) was brought to our notice.
It was on the other hand stated by counsel for the State that there was no such notification.
Nor is there anything to show that the Special Judge of Burdwan was trying the appellants ' case under section 7 of that Act.
We are of the opinion that the trial was not under the Central Act, 1952.
Nor could the trial be under the provisions of West Bengal Act XV of 1953 because no distribution of the appellants ' case was made to the Special Judge by a notification mentioning the charge against him to be one under section 165A, Indian Penal Code.
The High Court also said: " It is true that if the offence under section 165A be regarded as a distinct offence, the Special Judge appointed under the W. B. Act had no jurisdiction in December 1952 to take cognizance of the offence and cognizance could be taken only by a Special Judge appointed under the provisions of the Central Act.
But since in such case the Special Judge must be deemed to have acted erroneously in good faith, the provisions of section 529(e) of the Criminal Procedure Code would apply and the proceedings would not be vitiated. .
It is trial without jurisdiction that vitiates a proceeding (section 530 Cr. P. C.) and not taking of cognizance in good faith without jurisdiction".
But that with respect, is an erroneous application of section 529 of the Code of Criminal Procedure which provides: 1286 " If any Magistrate not empowered by law to do any of the following things, namely: (e) to take cognizance of an offence under section 190,sub section (1), clause (a) or clause (b); erroneously in good faith does that thing, his proceedings shall not be set aside merely on ground of his not being so empowered.
" This section applies to Magistrates and would not apply to a Special Judge whose jurisdiction arises not on his taking cognizance under section 190 of the Code of Criminal Procedure, but on the case for an offence specified in the Schedule being distributed to him by the State Government by notification.
The defect of jurisdiction therefore cannot be cured by section 529(e) of the Code of Criminal Procedure.
The Special Judge war, consequently not a Court of competent jurisdiction and the proceedings before him were null and ineffectual.
We are of the opinion, therefore, that when the case was distributed to the Special Court which is the basis of the jurisdiction of that Court, section 165A was not one of the offences specified in the Schedule and consequently the appellant could not be tried for and convicted of that offence.
The conviction is therefore by a Court which had no jurisdiction to try the case against the appellant and the whole proceedings in this case are null and void.
We would accordingly allow the appeal and set aside the conviction of the appellant under section 165A, I. P. C., and the sentence imposed thereunder.
Appeal allowed.
| IN-Abs | On September 6, 1952, the appellant, who was being tried by an Assistant Sessions Judge and a jury, was caught while giving a bribe to one of the jurors.
By a notification dated November 27, 1952, the Government of West Bengal, acting under section 4(2) Of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949, entrusted the case against the appellant under section 161/116 Indian Penal Code to the Special judge, Burdwan, for trial.
Before this date as a result of the introduction of section 165A in the Indian Penal Code by the Criminal Law Amendment Act, 1952, providing for punishment for abetment of offences under sections 161 and 165, abetment of section 161 had ceased to be an offence under section 161/116 though it was an offence specified in the Schedule to the West Bengal Act.
The records were received by the Special judge on December 23, 1952, and he took cognizance of the case.
On February 10, 1954, a charge under section 165 A Indian Penal Code was framed by the Special judge and on July 7, 1954, the appellant was convicted under section 165 A and sentenced to rigorous imprisonment for six months.
An appeal to the High Court of Calcutta was dismissed.
The appellant obtained special leave and appealed.
Held, that the special judge had no jurisdiction to try and convict the appellant for the offence under section 165A Indian Penal Code as when the case was distributed to the Special judge section 165A was not one of the offences specified in the Schedule of the West Bengal Act.
The case which was distributed to the Special judge was one under section 161/116 Indian Penal Code, an offence which was non existent at that time.
Section 165A cannot be deemed to have been specified in the Schedule merely because abetment of the offences under sections 161, 162 163 and 165 Indian Penal Code was specifically mentioned in the Schedule.
The offence under section 165A is a distinct offence.
It is not merely a restatement of the offence of abetment under section 116 ; it comprises also abetment under section 109 and provides for in enhanced penalty.
This defect of jurisdiction could not be cured by section 529(e) of the Code of Criminal Procedure.
Section 529(e) applied to 1277 Magistrates and would not apply to Special judges whose jurisdiction arose not on their taking cognizance under section 190 of the Code but on the case for offences specified in the Schedule being distributed to them by the State Government by a proper notification.
|
Criminal Appeal No. 104 of 1990.
From the Judgment and Order dated 1.9.
1983 of the Punjab and Haryana High Court in Crl.
A. No. 199 DB/83.
B.S. Malik for the Appellants.
Mahabir Singh for the Respondent.
The Judgment of the Court was delivered by AHMADI, J.
Special leave granted.
The seven appellants before us were convicted by the learned Additional Sessions Judge, Sonepat on three counts and sentenced as under: (a) rigorous imprisonment for one year under Section 148, I.P.C.; (b) rigorous imprisonment for six months under Section 323/ 149, I.P.C.; and (c) imprisonment for life and a fine of Rs.200 under Section 302/149, I.P.C. All the said substantive sentences were directed to run concurrently.
514 The seven appellants preferred an appeal against the order of conviction and sentence passed by the learned Trial Judge.
The High Court while dismissing their appeal clari fied that their convictions were on six counts and altered the fine awarded under Section 302/149, I.P.C. from Rs.200 to Rs.5,000 in respect of each appellant per count, i.e. Rs.30,000 per appellant.
Being aggrieved by this enhancement of fine the appellants have preferred this appeal limited to the question of this enhancement only.
Section 374 of the Code of Criminal Procedure ( 'the Code ' hereinafter) provides for appeals from conviction by a Sessions Judge or an Additional Sessions Judge to the High Court.
Section 377 entitles the State Government to direct the Public Prosecutor to present an appeal to the High Court against the sentence on the ground of its inadequacy.
Sub section 3 of Section 377 says that when an appeal has been filed against the sentence on the ground of its inadequacy, the High Court shall not enhance the sentence except after giving to the accused a reasonable opportunity of showing cause against such enhancement and while showing cause the accused may plead for his acquittal or for the reduction of the sentence.
Admittedly no appeal was preferred by the State Government against the sentence imposed by the High Court on the conviction of the appellants under Section 302/149, I.P.C. Section 378 provides for an appeal against an order of acquittal.
Section 386 enumerates the powers of the appellate court.
The first proviso to that section states that the sentence shall not be enhanced unless the accused has had an opportunity of showing cause against such enhancement.
Section 397 confers revisional powers on the High Court as well as the Sessions Court.
It, inter alia, provides that the High Court may call for and examine the record of any proceeding before any inferior criminal court situate within its jurisdiction for the purposes of satisfy ing itself as to the correctness, legality or propriety of any finding, sentence or order recorded or passed and as to the regularity of any proceedings of any inferior court.
Section 40 1 further provides that in the case of any pro ceedings, the record of which has been called for by itself or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of the powers conferred on a Court of appeal by Sections 386, 389, 390 and 391 of the Code.
Sub section 2 of Section 401 provides that no order under this Section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by Pleader in his own defence.
Sub section 4 next provides that where under this Code an appeal lies and no appeal is brought, no proceeding by way of revision shall be entertained at the 515 instance of the party who could have appealed.
It is clear from a conjoint reading of Section 377, 386, 397 and 401 that if the State Government is aggrieved about the inade quacy of the sentence it can prefer an appeal under Section 377(1) of the Code.
The failure on the part of the State Government to prefer an appeal does not, however, preclude the High Court from exercising suo motu power of revision under Section 397 read with Section 40 1 of the Code since the High Court itself is empowered to call for the record of the proceeding of any court subordinate to it.
Sub section 4 of Section 401 operates as a bar to the party which has a right to prefer an appeal but has failed to do so but that sub section cannot stand in the way of the High Court exer cising revisional jurisdiction suo motu.
But before the High Court exercises its suo motu revisional jurisdiction to enhance the sentence, it is imperative that the convict is put on notice and is given an opportunity of being heard on the question of sentence either in person or through his advocate.
The revisional jurisdiction cannot be exercised to the prejudice of the convict without putting him on guard that it is proposed to enhance the sentence imposed by the Trial Court.
Now, in the present case the appeal was filed under Section 374(2) of the Code by the convicts against the order passed by the Additional Sessions Judge.
No appeal was filed by the State under Section 377( 1) of the Code against the sentence awarded by the trial court for the offence under Section 302/149 I.P.C. on the ground of its inadequacy.
Nor did the High Court exercise suo motu revisional powers under Section 397 read with Section 401 of the Code.
If the High Court was minded to enhance the sentence the proper course was to exercise suo motu powers under Section 397 read with Section 401 of the Code by issuing notice of enhancement and heating the convicts on the question of inadequacy of sen tence.
Without following such procedure it was not open to the High Court in the appeal filed by the convicts to en hance the sentence by enhancing the fine.
The High Court clearly acted without jurisdiction.
For the above reasons we are clearly of the opinion that the appeal must succeed.
In the result we allow this appeal and set aside the order of the High court insofar as it enhances the sentence by enhancing the fine from Rs.200 to Rs.5,000 per count per appellant.
In other words we restore the order of sentence passed by the Trial Court under Section 302/149, I.P.C.
The additional fine, if paid, will be refunded.
N.P.V. Appeal al lowed.
| IN-Abs | The appellants were convicted by the Additional Sessions Judge on three counts and sentenced to various terms of imprisonment and a fine of Rs.200 under Sections 148, 323/149 and 302/149 I.P.C.
The appellants preferred an appeal against the order of conviction and sentence.
Dis missing the appeal, the High Court, clarified that their convictions were on six counts and altered the fine awarded under Section 302/149 I.P.C. from Rs.200 to Rs.5,000 in respect of each appellant per count, i.e. Rs.30,000 per appellant.
Hence the appellants preferred appeal, by special leave, in this Court, limited to the question of enhancement of fine only.
Allowing the appeal, and setting aside the order of High Court enhancing the fine, this Court, HELD: It is clear from a conjoint reading of Sections 377, 386, 397 and 401 of Code of Criminal Procedure, 1973, that if the State Government is aggrieved about the inade quacy of the sentence, it can prefer an appeal under Section 377(1) of the Code.
The failure on the part of the State Government to prefer an appeal does not, however, preclude the High Court from exercising suo motu power of revision under Section 397 read with Section 401 of the Code, since the High Court itself is empowered to call for the record of the proceeding of any court subordinate to it.
But before the High Court can exercise its revisional jurisdiction to enhance the sentence, it is imperative that the convict is put on notice and given an opportunity of being heard on the question of sentence either in person or through his advo cate.
The revisional jurisdiction cannot be exercised to the prejudice of the convict without putting him on guard that it is proposed to enhance the sentence imposed by the Trial Court.
[515A D] 513 In the present case, the appeal was filed under Section 374(2) of the Code by the convicts against the order passed by the Additional Sessions Judge.
No appeal was filed by the State under Section 377(1) of the Code against the sentence awarded by the trial court for the offence under Section 302/149, I.P.C. on the ground of its inadequacy.
Nor did the High Court exercise suo motu revisional powers under Section 397 read with Section 401 of the Code.
If the High Court was minded to enhance the sentence the proper course was to exercise suo motu powers under Section 397 read with Section 401 of the Code by issuing notice of enhancement and hearing the convicts on the question of inadequacy of sentence.
Without following such procedure it was not open to the High Court in the appeal filed by the convicts to enhance the sentence by enhancing the fine.
The High Court clearly acted without jurisdiction.
[515D F]
|
ivil Appeal No, 1191 of 1990.
From the Judgment and Order dated 15.7.1988 of the Madhya Pradesh High Court in M.P. No. 600 of 1985.
A.K. Sen, A.K. Gupta and N.P. Mahendra for the Appellants.
R.B. Datar, Satish K. Agnihotri, Devender Singh, Ashok Singh and R.B. Misra for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The controversy in this Special Leave Petition arises out of the merger, with effect from 1.10.1982, of the staff of the Madhya Pradesh Lift Irriga tion Corporation (hereinafter referred to as 'the Corpora tion ') with that of the Irrigation Department of the State Government consequent on the abolition of the Corporation.
We have heard counsel on both sides and we are of opinion that these matters should be disposed of finally even at this 428 stage.
We therefore grant leave in the Special Leave Peti tion and proceed to dispose of the appeal.
Appellants 2 to 17 and certain other writ petitioners in the High Court were serving as Senior Technical Assistants (S.T.A.) in the Corporation.
The cadres of S.T.As. and the lower cadre of Junior Technical Assistants (J.T.As.) in the Corporation were equivalent respectively to the cadres of Junior Engineer (J.E.) and Sub Engineers (S.E.) in the Irrigation Department of the State.
It is common ground that the qualifications for appointment to the two sets of posts were the same and that their pay scales were also the same.
The appellants claim that they are entitled, after the merger of the Corporation into the Irrigation Department, to be treated as Junior Engineers and considered for promotion as Assistant Engineers on completion of two years of service but that this avenue of promotion is being denied to them by the State.
To appreciate the above contention, it is necessary to set out some historical background of the cadres in the State Department.
Initially the Junior Engineer 's post in the State Government was a non gazetted post, governed by the Madhya Pradesh Irrigation Department (Non Gazetted) Service Recruitment Rules, 1969.
The Junior Engineers, on completion of two years ' minimum service, were entitled to consideration for promotion to the gazetted post of Assist ant Engineer, a post governed by the Madhya Pradesh Irriga tion Engineering Service (Gazetted) Recruitment Rules, 1968.
On March 19, 1973 the posts of Junior Engineers were de clared to be gazetted posts.
75% of the posts of Assistant Engineers could be filled up by promotion from amongst Junior Engineers.
On January 1, 1978 the Junior Engineer 's post was once again converted into a non gazetted post.
The quota for such of those Junior Engineers as were working as gazetted officers immediately before the issue of this order was retained at 75% as before for a period of two years by which time it was expected that all of them would get pro moted as Assistant Engineers.
But for this, the posts of Assistant Engineers were to be filled up equally by promo tion from subordinate cadres and direct recruitment.
The promotion quota was distributed among the subordinate cadres in the following proportion: Junior Engineers (Non Gazetted) 25% Overseers (Sub Engineers) 20% Head Draftsman/Draftsman 5% 429 In July, 1979 the Government decided to abolish the post of Junior Engineers in the State Irrigation Department.
The relevant cabinet order set out the following terms there fore: 1.
The posts of Junior Engineer in the three works depart ments should be abolished.
The Junior Engineers presently working in these departments shall continue to work in their existing payscales under the existing service conditions till their promotion.
(emphasis added) 2.
The quota of recruitment for the post of Assistant Engi neer, which is at present 50% should be raised to 75%.
3. 25% posts in the Sub Engineer cadre be converted into selection grade posts and selection for the selection grade post should be made on the basis of merit cum seniority.
The quota prescribed for promotion of the Draftsmen should be reduced from 5% to 3%.
Promotion quota of 2% should be reserved for those Sub Engineers/Draftsmen who obtain degree while in service.
The posts of Junior Engineer cadre, which presently exists, should be converted into the posts of Assistant Engineers and Sub Engineers with the concurrence of the finance department".
Eventually, the State Government decided on 27th May, 1980 that the 941 posts of Junior Engineers in the Irrigation Department should be abolished by converting 658 of those posts into posts of Assistant Engineers and 233 posts into posts of Sub Engineers (Overseers).It must be, however, pointed out that, though the existing posts of J .Es.
or S.Es. stood abolished from 27.5.
1980, in fact, a number of Junior Engineers appointed earlier continued to function as before, under the memorandum of July 1979, until they re ceived promotions as Assistant Engineers (A.Es. ) in due course.
We now come to the details of the merger between the Corporation and the State Department.
In August, 1982 a decision was taken to abolish the Corporation.
The Govern ment decided on the merger the surplus staff of the Corpora tion in the Irrigation Department and 8.10.82 was decided upon as the effective date of merger for purposes.
We are concerned here with the formula for transition set out in the opening para of a memorandum of the above date regarding the 430 merger of the posts of S.T.As.
and J.T.As.
It read thus: "2.
Senior Technical Sectioned posts Nil Assistants The above employees may be Equivalent Post merged in the posts of Junior Engineer Junior Engineers and an (Rs. 360 650) equivalent number of posts may be deemed to have been 27 posts Civil created in the dying cadre Posts Electrical of Junior Engineers.
(Mechanical) posts Geologists post Geophysist 3.
Junior Technical Sanction 30 posts (reserved).
Assistants Equivalent These may be merged against post: (Sub Engineer the posts of Sub Engineers (Rs.280 480) which have been obtained by conversion of the posts of 62 Posts Civil Junior Engineer.
The posts reserved for Scheduled Castes and Scheduled Tribes may be made unreserved and appointments may be made against them also.
" The memorandum of 8.10.1982 was followed up by a commu nication dated 10.11.1982.
The enclosures to this letter described the absorptions as "ad hoc" but this word was deleted on 29.1.
1983 with reference to the posts with which we are concerned, making it clear that the absorption was to be permanent.
The letter set out three conditions for the merger which admittedly are fulfilled by the appellants: (i) The staff will be absorbed only subject to their ful filling the qualifications prescribed for the posts against which they are to be absorbed; (ii) The inter se seniority of the employees of the Corpora tion shall be in accordance with the seniority list cleared by the Managing Director.
The inter se seniority of the departmental employees and the employees of the Corporation shall be determined in accordance with the orders of the Government; and 431 (iii) It was open to an employee of the Corporation to join the Government department or not to do so, for the employees were to be required to join duties at the place of their posting within 20 days from 10.11.
1982, failing which it was to be deemed that the appointment was not acceptable to them.
The seniority rule was announced much later, on 16.4.1984.
It said: "The regular officers/employees of the Corporation shall, in the event of merger in the Irrigation Department, be consid ered as Junior to the permanent officers/employees of the Department and their seniority in the lists of the temporary officers/employees of the department, shall be fixed on the basis of the dates of assuming office, without affecting the inter se seniority of the Corporation".
The result of all this, according to the appellants, was that the S.T.As. of the Corporation became, w.e.f. 8.10./982, J.Es. of the department but their seniority therein was below the J.Es. of the State Department who had been in office in July 1979 and continued to function as such even thereafter.
It is stated that these Junior Engi neers in the Department were being gradually promoted as A.Es.
and it was only sometime in 1983 that the appellants who were at the bottom of the seniority list became eligible for promotion as A.Es.
Their legitimate claims in this regard, it is alleged, were being stalled by the State and so the appellants filed a writ petition in the High Court in 1985.
Sometime later, the appellants allege, it came to light that the State, far from giving the petitioners their legit imate entitlement, was planning a voiteface to upset the whole scheme of merger as envisaged earlier, to the detri ment of the applicants.
This they did, it is said, by issu ing a memo on 1.3. 1986 which read thus: "1.
The State Government amends point No. 2 of paragraph 1 of the orders issued vide Irrigation Department 's Memo No. 22(C)/43/32/P/37 dated 8.10.1982 as follows: 2, Senior Technical ] [ The above employees Assistants ] [ may be absorbed on equivalent to Junior ] [ the post of Sub Engineer (Rs.350 650) ] [ Engineer protecting 432 the pay which they were drawing 27 posts Civil ] [ previously.
Such 34 posts Electrical ] [ absorbed employees shall be eligible for promotion to the posts of A. Es.
from the quota of Graduate Sub Engineers.
These orders shall come into effect from 8.10. 1982.
" This order vitally affected the interests of the appellants in four respects (a) Having been absorbed into the State Department as J.Es.
in 1982, they were suddenly demoted to the post of S.Es.
retrospectively, with the "saving grace" that their pay was protected; (b) Under the seniority rules of 1984 earlier referred to, they were at the bottom of the list of J.Es.
but above the S.Es.
But now they became juniors to all the Sub Engineers of the Department; (c) While previously a substantial quota for promotion from J.Es.
to A.Es.
was applicable to them, the quota now got reduced (as will be explained later) to 4%; and (d) While previously an experience of 2 years was sufficient for their promotion, now they had to have a minimum experi ence of 8 years (as will be seen later).
The combined effect of all this is, it is alleged, that the appellants will become eligible for consideration for promo tion as A.Es.
in the distant future as follows: Year No. of posts available Graduate Sub Engineers quota 1989 1 1997 3 2004 2 2007 1 2008 1 433 In other words, only 8 persons will become eligible at distant dates whereas all of the appellants should have received promotions gradually since 1983 as and when vacan cies occurred.
The appellants contend that this is a great travesty of justice which should be set right by quashing the decision of 1.3. 1986 and restoring the position as it actually prevailed on 8.10.1982 at the time of the merger.
Sri Datar attempted to counter this what prima facie appeared to be a just and reasonable plea with his usual persuasiveness.
He urged that the contentions of the appel lants overlook four important basic facts and that, if these are kept in mind, it will be seen not merely that no injus tice has been done to the appellants but that, in fact, the State has come to their rescue by providing an avenue of promotion where none existed.
These basic facts are, he says: (1) As from 27.5.1980, there was no cadre of junior engi neers at all in the State service.
That cadre had been abolished by the decision of 1979 and the conversion, on 27.5.1980, of the existing posts of J.Es into those of A.Es/S.Es.
(2) There had been an amendment on 27.7.81 to the relevant recruitment rules which made it clear that, after that date at least, there could be no promotions to the posts of A.Es.
from among J.Es.
(3) When the Corporation was abolished in 1982, the State Government could have dispensed with the services of the appellants.
Instead, they considered the appellants ' cases sympathetically and decided to absorb them into the State service.
In doing so, they purported to absorb them as J.Es.
overlooking that, as on 8.10.1982, there was no cadre of J.E. in the State service.
It is this mistake that was rectified on 1.3.1986 by absorbing the appellants as S.Es.
(instead of as J.Es.) but protecting the pay they were drawing.
(4) The petitioners had an option to join or not to join the State service on 8.10.1982 as J.Es.
When they decided to join, they were aware that, according to the rules prevail ing on that date, there was no avenue of promotion for them as A .Es.
The net result of these considerations is, says Sri Datar, that, instead of completely denying the appellants any promotion altogether (as there was no right, under the rules, to any such promotion), 434 the State has, equitably, decided to confer on these offi cers a right of promotion by treating them as S.Es.
This was a generous gesture on the part of the State.
The appellants should have been happy that an avenue for promotion had been opened out to them, instead of being disgruntled on the assumption that their promotion chances had dwindled by the action of the State.
This was the only reasonable way of resolving the impasse that faced the appellants and the authorities.
Since Sri Datar has referred to the rules, it will be appropriate to pause here and notice the relevant service rules and the amendments made thereto: Taking up the Non Gazetted Service Rules of 1969 first, they provided, in Schedule I read with rule 5 for 269 posts of Civil Engineers and 13 posts of Electrical/Mechani cal Engineers in the cadre of Junior Engineers.
Curiously enough these rules appear to have remained unamended not withstanding the decision of 1979 to abolish these posts and the office order of 1980 converting these posts (these appear to have numbered 941 at the relevant time) into A.Es.
or S.Es.
Turning next to the Gazetted Service Rules, the follow ing provisions thereof are relevant: Rules 7.
Method of recruitment (1) Recruitment to the service, after commencement of the rules, shall be by the following methods, viz.: (a) by direct recruitment by selection; (b) by promotion of substantive/officiating member of the M.P. Irrigation Engineering Service (Gazetted);and (c) by transfer of persons who hold in a substantive capaci ty such posts in such services as may be specified in this behalf.
(2) The number of persons recruited under clause (b) or clause (c) of sub rule (1) shall not at any time exceed the percentage shown in Schedule II of the number of duty posts (as specified in Schedule I).
435 (3) Subject to the provisions of these rules, the method or methods of recruitment to be adopted for the purpose of filling any particular period of recruitment, and the number of persons to be recruited by each method, shall be deter mined on each occasion by the Govt.
in consultation with the Commission.
(4) Notwithstanding anything contained in sub rule (1) if in the opinion of the Govt., the exigencies of the service so require, the Govt.
may, after consulting the General Admin istration Department, adopt such methods of recruitment to the service other than those specified in the said sub rule, as it may by order issued in this behalf, prescribe.
Rule 15.
Conditions of eligibility for promotions(1) Subject to the provisions of sub rule (2), the Committee shall consider the case of all persons who on the 1st day of January of that year had completed the prescribed years of service (whether officiating or substantive) in the post/ service mentioned in column 2 of Schedule IV or any other post or posts declared equivalent thereto by the Govt.
as under and are within the zone of consideration, as per subrule (2) (i) Sub Engineers, Head Draftsman/Draftsman to the posts of Assistant Engineers Minimum service of 12 years as Sub Engineers, Head Draftsman/Draftsman.
Provided that a Sub Engineer and Head Draftsman/ Draftsman who has completed a minimum of 8 years ' service and possesses degree in Civi/Electrical/Mechanical Engineer ing from recognised university or qualification declared equivalent thereto by the State Govt., will also be eligible for promotion to the post of Assistant Engineer and will be considered each time just after the zone of consideration and then final selection just will be made from both the groups on the basis of merit.
For example, if ten posts are vacant in the cadre of Asstt.
Engineer to be filled by promotion of Sub Engineer, then 10x5=50 diploma holder Sub Engineers from working list be considered first and thereaf ter the eligible graduate Sub Engineers be considered in the order of their seniority for promotion.
436 (ii) Junior Engineers to the posts of Assistant Engineers minimum service of 2 years as Junior Engineer.
XXX XXX XXX Rule 18.
Select list (1)The Commission shall consider the list prepared by the Committee along with the other documents received from the Govt.
and unless it con siders any change necessary, approve the list.
(2) If the Commission considers it necessary to make any changes in the list received from the Govt.
the Commission shall inform the Govt.
of the changes proposed and after taking into account the comments, if any, as may in its opinion be just and proper.
(3) The list as finally approved by the Commission shall form the select list for promotion of the members of the cadres of Sub Engineers, Head Draftsman/Draftsmen, Research Assistant and Junior Engineers of the M.P. Irrigation Engi neering Service or its higher cadres, as the case may be.
(4) The selectee list shall ordinarily be enforced until it is reviewed or revised in accordance with sub rule (4) of rule 16, but its validity shall not be extended beyond a total period of 18 months from the date of its preparation: Provided that, in the event of a grave lapse in the conduct of performance of duties on the part of any person included in the select list, a special review of the select list, may be made at the instance of the Govt.
and the Commission, may, if it thinks fit, remove the name of such person from the select list".
(underlining ours) Schedule I to the rules specified the number of posts in each cadre.
So far as Assistant Engineers (Class II) are concerned, the number of posts is put at 329 (253 permanent and 76 temporary) in the Civil Branch and 36 (22 permanent and 14 temporary) in the Electrical & Mechanical Branch.
The description and contents of the relevant columns of Schedule II have to be set out a little more meticulously.
They read: 437 Name Name Total No. M.P. Irrigation Engg.
of of of duty Service (Gazetted) Deptt.
service post P.T.T percentage of the number of duty posts to be filled in By direct By promo By transfer recruitment non of the of persons substantive from other service members of the service [vide [vide [vide rule rule rule 7(a)] 7(b)] 7(c)1 (1) (2) (3) (4) (5) (6) Civil AE, Class 253 76 329 50 50 25% by promotion Irriga II of JEs tion 20% by promotion Deptt. of SEs (previously Overseers) 5% by promotion of Head Draftsman/ Draftsmen Elec do 22 34 36 50 50 As for A.E. trical & Mecha nical Branch (underlining ours) Schedule IV says that J.Es.
(Class III) with minimum experi ence of two years as well as S.Es. and Head Draftsmen/Draftsmen with 12 years ' experience (8 years in the case of degree holders) will be eligible for promotion as A.Es.
(Class II) on selection by a departmental committee constituted as specified therein.
The interesting feature regarding the amendments of 1981 relied upon by Sri Datar is that they left the rules quoted above and Schedules I & IV untouched.
They only amended Schedule II in two respects: (1) In the heading of column 5, the words "By promotion" were 438 substituted for the words "By promotion of substantive members of the service [vide rule 7(b)]".
(2) The figures in columns 4 and 5 were substituted by the following in respect of both the Civil Branch and the Elec trical/ Mechanical Branch: (4) (5) 60 40 33% by SEs.
who are diploma holders; 4% by SEs./Draftsmen who are Engineering Graduates; 3% by Draftsmen/Head Draftsmen who are not Engineering Graduates.
We have considered the submissions of the parties in the light of the above rules and amendments and come to the conclusion that there is force in the contention of the appellants that they are eligible for promotion as AEs.
in the same manner as the erstwhile JEs.
of the Irrigation Department.
The assumption of the respondents that the cadre of JEs.
had ceased to exist long before the absorption of the present appellants into the Department is incorrect.
As pointed out earlier, though the decision to abolish the cadre was taken in 1979 and the existing posts were convert ed into those of AEs./SEs.
on 27.5.
1980, the cadre did not die, for the JEs.
of the Department who were then function ing continued to function as before until they were promoted in due course as AEs.
It is also not correct to say that this crucial "fact" had been overlooked at the time of passing the merger order of 8.10.1982.
On the contrary, the State was fully conscious of its earlier decision and the order of 8.10.1982 specifically mentions that the posts of STAs.
will be merged in the posts of JEs. "and an equivalent number of posts may be deemed to have been created in the dying cadre of Junior Engineers".
These words make it per fectly ,clear that the cadre of YEs.
was "dying" (but not dead) and the strength of the dying cadre was further enliv ened by taking in the STAs.
of the Corporation as JEs.
Thus, the position is that, as on 8.10.82, the cadre of JEs.
continued to subsist and comprised of the old JEs.
of the Irrigation department and the STAs.
engrafted from the Corporation.
This conclusion is reinforced by the interest ing circumstance that the refe 439 rence in Schedule I of the Non Gazetted Service Rules to JEs.
was not omitted despite the decisions of 1979 and 1980.
It is true that the number of these posts was mentioned as 269 in the Civil Branch and 13 in the Electrical & Mechani cal Branch.
But the actual number had far exceeded these without a corresponding amendment in the Schedule.
This, however. is inconsequential.
Rule 6 of these Rules is in the following terms: Rule 6.
Method of recruitment (i) Recruitment to the service, after the commencement of these rules, shall be by the following methods, viz. (a) by direct recruitment, by Selection/by Competitive Examination as shown in Schedule II, (b) by promotion of substantive/officiating members of the service (as shown in the Schedule IV), and (c) by promotion of persons who hold in a substantive capac ity such posts in such services as may be specified in this behalf.
(ii) The number of persons recruited under clauses (b) and (c) of sub rule (1) of the rule 6 shall not at any time exceed the percentage shown in the Schedule II.
(iii) Subject to the provisions of these rules, the method/methods of recruitment to be adopted for the purpose of filling any particular vacancy/vacancies in the Service as may be required to be filled during any particu lar period of recruitment, and the number of persons to be recruited by each method, shall be determined on each occa sion by the appointing Authority.
(iv) Notwithstanding anything contained in sub rule (i) if in the opinion of Engineer in Chief/Chief Engi neer, the exigencies of the service so require, the said Engineering Chief/Chief Engineer, may after consulting the Govt., may adopt such methods of recruitment to the service other than those specified in the said sub rule, as he may, by order issued in this behalf, prescribe.
Rule 6(iv) read with the Schedule I clearly empowered the Govern_ 440 ment, in the exigencies of the situation, to continue the cadre for limited purposes and augment the same by the number of STAs.
absorbed from the Corporation.
We have, therefore, no hesitation in holding that, on the terms of the relevant rules as well as on the language of the order of 8.10.1982, the appellants, viz. STAs.
absorbed from the Corporation were constituted as a part of the cadre of J.Es., placed on complete par with the JEs.
of the depart ment already in service and given the same promotional eligibility and opportunities as the latter.
Counsel for the State contends that this conclusion would directly run contrary to the rules of the Gazetted Service particularly after their amendment in 1981 and that, after the date of said amendment, no AE could be recruited by promotion from among JEs.
The objection on this account is two fold.
The first, not clearly articulated by counsel, is that rule 7(b) permits recruitment by promotion only from among the members of the service and that a Non Gazetted JE is not eligible for promotion.
The second is that, after the 198/amendment, JEs have been excluded as one of the sources of recruitment by promotion.
We shall deal with these two objections one after another.
It is true that rule 7(b) of the Gazetted Service Rules of 1968 provides only for JEs belonging to the said service being promoted as AEs.
However, when the JE 's post became a non Gazetted one in 1978, the relevant Government orders made it clear that AEs will be recruited by promotion from among JEs to the extent of 25% out of the 50% quota avail able for promotion.
The Schedule clearly mentioned this.
As it also mentioned SEs and Head Draftsman as other sources from which promotion could be made, the reference to JEs was also clearly to the non Gazetted JEs.
Promotion of Gazetted JEs had been separately provided for as before.
Thus, under the Schedule, non Gazetted JEs were also clearly eligible for promotion despite the restriction in rule 7(b).
This inconsistency between the Schedule and the rule was appar ently noticed only in 1981 and the heading of Column 5 of Schedule I1 was amended to make it clear that the promotions therein referred to were from the non Gazetted service, although rule (b) was left unamended.
The omission to amend rule 7, however, is not of much significance.
It was open to the State, in view of rule 7(4), to promote members of the non Gazetted Services also to the Gazetted Service to the extent of a prescribed quota.
The restricted language of rule 7 cannot, therefore, be construed in such a way as to render redundant the specific provision in the Schedule entitling several persons from the non Gazetted services to promotion.
441 It is then argued that, at any rate, after the amendment of the relevant columns of Schedule 1I in 1981 there is no right in any J.E. to claim promotion as A.E. At least from that date, the promotional avenue for J.Es.
stands abol ished, claims Sri Datar.
Sri Ashok Sen, for the petitioner, contended that the petitioners having been given a right, at the time of absorption in 1982, that they will be eligible for promotion in the same way as the erstwhile J.Es. of the State Department, this right cannot be taken away by invok ing an earlier amendment of the rule.
He cited some authori ties in support of the proposition and pointed out that the petitioners had amended the original writ petition to in clude a prayer for quashing the amendment purportedly ef fected on 27.7.81.
On the other hand, Sri Datar contends that no employee has a vested right to promotion and that it was in law open to the Government to change the conditions of service so as to take away a right to promotion that may have existed earlier.
But, he pointed out, so far as the petitioners were concerned, there was no taking away of any right to promotion at all because, even as on 8.10.82 when they claim to have become J.Es., the rules provided for no promotional avenue at all and none was promised to them either by the order dated 8.10.82.
We do not think it is necessary for us to express any views on the question whether an amendment taking away the rights of promotion earlier available to a cadre of employ ees is constitutionally valid.
We shall proceed on the assumption, as contended by the State, that this is permis sible and that the effect of the amendment is that, on and from 27.7.81, no A.E. can be recruited, under the amended Schedule, from among the J .Es.
Assuming this to be correct, this rule should apply to all the J.Es.
in the "dying cadre".
It is seen from the records placed before us that such of the J.Es.
belonging to this cadre as had been in service with the State Department have continued to get their promotions even after the 1981 amendment.
This is clear from the gradation list filed by the appellants which shows that three Junior Engineers were promoted as AEs.
on 17.8.83.
Further, the specific averments to this effect in the affidavits filed on behalf of the petitioners at various stages have not been denied.
The petitioners have also placed on record an order dated 18.10.1985 which shows that a J.E. of the State Department in the Electrical & Mechani cal Branch (perhaps the last of that category) was promoted as A.E.
If this be so, then, clearly, the Department cannot discriminate as between officers belonging to the same cadre by promoting some of them and denying promotion to others.
Sri Datar emphasised that the J.Es.
belonging to the State service had a right of promotion earlier and this was coti nued even after 442 the amendment whereas the appellants became J.Es.
at a time when there was no further promotion available to them and that this makes all the difference.
This argument runs somewhat contrary to the earlier argument of counsel that the amendment of 1981 should be treated as applicable to all claims for promotion after 27.7.81 and that the State is at complete liberty to deny promotion after that date even in respect of those who may have earlier had a right to such promotion.
But even assuming that the distinction now sought to be pointed out by him marks a difference between the two categories of J.Es.
on the cadre as on 8.10.82, a discrimi nation between them would be totally arbitrary and contrary to the scheme of absorption envisaged in 1982.
It cannot be presumed that the State, when it absorbed the S.T.As.
into the dying cadre of J.Es., was unaware that (though, since 1981, there were no promotional avenues for J.Es.
as A.Es.
under the rules) the incumbents of that cadre were entitled to such promotion under the cabinet orders dated 5.7.79.
The order of 8.10.82 places the absorbed S.T.As.
into that "dying" cadre by creating fictionally an equal number of_posts to accommodate the persons so absorbed.
The inten tion and effect of the order of 8.10.82 was to grant to all the S.T.As.
so absorbed exactly the same status as was enjoyed by those already in the cadre.
In other words, if the J.Es.
already existing in the cadre has a right of promotion, as on 8.10.82, the new incumbents were also given that right; and if they had none after 27.7.198 1, the new incumbents would have none either.
The State has admittedly proceeded on the footing that, despite the 1981 amendment, the J.Es. from the State Department were eligible for promo tion; in fact, they have been promoted since 1979 as A.Es.
as and when vacancies arose.
This being so, any differential treatment of the absorbed S.T.As. would clearly be discrimi natory and unconstitutional.
In interpreting these rules and Government orders, one should bear in mind that the promo tional stipulations in Schedule II should be read in the light of rule 7(4) which permits a wide latitude to the Government in making recruitments, by way of promotion, even otherwise than in the manner outlined in rule 7(1).
Reading the rules and the Government orders issued from time to time harmoniously, the effect of the cabinet order of July, 1979 was that all J. Es., in position as such, should continue to be promoted until all of :hem became A.Es.
It is no doubt somewhat difficult to see how after 27.7.81, only a part of the pattern of recruitment in vogue earlier could stand side by side with that introduced on that date.
One could have ' understood a stand on the part of the State that, as and from that date, promotions would be limited only to the new feeder categories and would not be available to any J.E. at all.
But if the subsequent variation of 1981 did not over ride this benefit extended to the former State 443 J.Es.
and has not been understood as having done so and the pattern of promotion indicated in the amendment of 1981 was subject to the right of such J.Es.
in the cadre for promo tion as per the cabinet order of 1979, it is difficult to see how a different rule could be applied to the S.T.As.
Who have been absorbed to augment that cadre.
The truth of the matter is that, when abolition of the cadre of J.Es.
was thought of, the State decided that this should not effect the existing J.Es.
and their promotional chances.
Again, when the merger of the Corporation and State services was thought of, the decision was that the S.T.As. should be placed on a par with the J.Es. of the State service and that the J.T.As. should be placed on par with the S.Es.
This was a conscious and equitable decision (for, as is common ground, the post of S.T.A was equivalent to J.E.) and to go back upon it has resulted in arbitrary discrimination against the appellants.
By the decision of 1986, they lose their status as J.E. (and are equated to S.Es.
which is the status also accorded to the JTAs, their subordinates in the erstwhile Corporation), they lose their right to promotion, they lose seniority by being placed at the bottom of the S.Es. of the State service and the promotional quota now allotted to them is illusory.
It is true that they had volunteered for absorption as JEs.
in 1982, a date when there was no promotional avenue to a JE under the rules.
But they did so because they were told that they would be placed on part with the J.Es.
in the State service and never imag ined that they would be denied promotion on the basis of the amended rules while the JEs in the State service continued to get promotions despite the amendment.
The fact that they opted for the, State service does not, therefore, entitle the State to treat them differently from the JEs of the State service.
We have, therefore, no doubt in our minds that gross injustice has been done to the appellants by the subsequent decision of the State Government.
We, therefore, quash the decision of 1.3.86 and direct that the appellants will be entitled to be considered for promotion as A.Es.
in the same manner and to the same extent as the J.Es.
of the State service have been considered and not on the basis of the percentages prescribed for S .Es.
under the amended rules.
In the view taken by us that the rules and the amend ment therein do not override the effect of the orders of 5.7.1979 and 8.10.82, it is not necessary for us to pro nounce any opinion on the validity of the 1981 amendment to the Rules.
The appeals succeed to the extent indicated above.
There will be no order as to costs.
R.S.S. Appeals allowed.
| IN-Abs | In August 1982 the Government of Madhya Pradesh decided to abolish the Madhya Pradesh Lift Irrigation Corporation.
It was also decided to merge the surplus staff of the Corpo ration in the equivalent posts of the Irrigation Department of the State Government.
Accordingly, with effect from 8.10.1982 the appellants, who were serving as Senior Techni cal Assistants (S.T.As.) in the Corporation, became Junior Engineers in the Irrigation Department but their seniority therein was fixed below the erstwhile Junior Engineers of the State Department.
For this purpose, an equivalent number of posts were deemed to have been created in the dying cadre of Junior Engineers.
Similarly, the Junior Technical Assist ants in the Corporation were absorbed in the lower cadre of Sub Engineers.
The Junior Engineers of the State Department on comple tion of two years ' service as Junior Engineers, were enti tled to be considered for promotion to the gazetted post of Assistant Engineers.
Sometime in 1984, the appellants who were at the bottom of the seniority list of Junior Engineers became eligible for promotion as Assistant Engineers.
Their legitimate claims in this regard were being stalled by the State, and so the appellants filed a writ petition in the High Court of Madhya Pradesh in 1986.
Later, the whole scheme of merger, as envisaged in the order dated 8.10.1982, was sought to be upset to the detri ment of the appellants, and towards that end the order issued on 8.10.
1982 was amended on 1.3.1986.
The effect of this amendment was that the Senior Technical Assistants were to be absorbed in the lower posts of Sub Engineers retro spectively with effect from 8.10.82.
The amendment however, provided that they shall be eligible for promotion to the posts of Assistant 425 Engineers from the quota of Graduate Sub Engineers.
This amendment vitally affected the interests of the appellants in so far as their status and chances of promotion were concerned.
Having failed before the High Court, the appellants have come to this Court by way of special leave.
Before this Court it was contended on behalf of the appellants that they having been given the right at the time of absorption in 1982 that they will be eligible for promo tion in the same way as the erstwhile Junior Engineers of the State Department, this right could not be done away by invoking an earlier amendment of the rules.
On behalf of the respondent State it was inter alia contended that (1) the decision of the State Government to absorb the appellants as Junior Engineers had overlooked the fact that on 8.10.1982 there was no cadre of Junior Engi neers because that cadre had been abolished in July 1979, and therefore this mistake was rectified on 1.3.1986 by absorbing the appellants in the lower cadre of Sub Engi neers;.(2) the appellants when they opted to join as Junior Engineers were aware that according to the rules prevailing on that date there was no avenue of promotion for them as Assistant Engineers; (3) after 27.7.81 the relevant recruit ment rules had been amended which made it clear that after that date there could be no promotion to the posts of As sistant Engineers from amongst Junior Engineers; and (4) the Junior Engineers belonging to the State Service had a right of promotion earlier and this was continued even after the amendment whereas the appellants became Junior Engineers at a time when there was no further promotion available to them and this made all the difference.
Allowing the appeal, this Court, HELD: (1) The assumption of the respondents that the cadre of Junior Engineers had ceased to exist long before the absorption of the appellants into the Department is incorrect.
Though the decision to abolish the cadre was taken in 1979 and the existing posts were converted into those of Assistant Engineers/sub Engineers on 27.5.1980, the cadre did not die, for the Junior Engineers of the Depart ment who were then functioning continued to function as before until they were promoted in due course as Assistant Engineers.
[438E F] (2) It is also not correct to say that this crucial fact had been overlooked at the time of passing the merger order of 8.10.82.
On the 426 contrary, the State was fully conscious of its earlier decision and the order of 8.10.82 specifically mentions that the posts of Senior Technical Assistants will be merged in the posts of Junior Engineers and an equivalent number of posts shall be deemed to have been created in the dying cadre of Junior Engineers.
[438F G] (3) Rule 6(iv) of the Non Gazetted Service Rules, read with Schedule I, clearly empowered the Government, in the exigencies of the situation, to continue the cadre for limited purposes and augment the same by the number of Senior Technical Assistants absorbed from the Corporation.
[439H; 440A] (4) On the terms of the relevant rules as on the lan guage of the order of 8.10.1982, the appellants, viz. Senior Technical Assistants absorbed from the Corporation were constituted as a part of the cadre of Junior Engineers, placed on complete par with the Junior Engineers of the department already in service and given the same promotional eligibility and opportunities as the latter.
[440A B] (5) It was open to the State, in view of rule 7(4) of the Gazetted Service Rules of 1968, to promote members of the non gazetted services also to the Gazetted Service to the extent of a prescribed quota.
The restricted language of rule 7, cannot therefore, be construed in such a way as to render redundant the specific provision in the Schedule entitling several persons from the Non Gazetted services to promotion.
[440G H] (6) In interpreting these rules and Government orders one should bear in mind that the promotional stipulations in Schedule II should be read in the light of rule 7(4) which permits a wide latitude to the Government in making recruit ments, by way of promotion, even otherwise than in the manner outlined in rule 7(1).
Reading the rules and the Government orders issued from time to time harmoniously, the effect of the cabinet order of July 1979 was that all J.Es., in position as such, should continue to be promoted until all of them became Assistant Engineers.
[442F G] (7) It is seen from the records that such of the Junior Engineers, belonging to the cadre as had been in service with the State Department have continued to get their promo tions even after the 1981 amendment.
If that be so, then, clearly the Department cannot discriminate as between offi cers belonging to the same cadre by promoting some of them and denying promotion to others.
A discrimination between them would be totally arbitrary and contrary to the scheme of absorption envisaged in 1982.
[441F G; 442B] 427 (8) The truth of the matter is that, when abolition of the cadre of Junior Engineers was thought of, the State decided that this should not affect the existing Junior Engineers and their promotional chances.
Again, when the merger of the Corporation and State services was thought of, the decision was that the Senior Technical Assistants should be placed on par with the Junior Engineers of the State Service.
This was a conscious and equitable decision and to go back upon it has resulted in arbitrary discrimination against the appellants.
By the decision of 1986, they lose their status as Junior Engineers (and are equated to Sub Engineers, which is the status also accorded to the Junior Technical Assistants, their subordinates in the erstwhile Corporation), they lose their right to promotion, they lose seniority by being placed at the bottom of the Sub Engineers of the State services, and the promotional quota now allot ted to them is illusory.
[443B D] (9) Gross injustice has been done to the appellants by the decision of 1.3.1986.
This decision is therefore quashed.
Accordingly, the appellants will be entitled to be considered for promotion as Assistant Engineers in the same manner and to the same extent as the Junior Engineers of the State service have been considered and not on the basis of the percentages prescribed for Sub Engineers under the amended rules.
[443F G]
|
vil Appeal Nos. 1274 to 1278 of 1984.
From the Judgment and Order dated 27.5.81 of the Punjab and Haryana High Court in R.F.A. Nos.
688 to 692 of 1979.
Rajinder Sachar and K.C. Dua for the Appellants.
S.P. Goel, Rana Ranjit Singh and Mahabir Singh for the Respondents.
The Judgment of the Court was delivered by RAY, J.
These appeals on special leave are directed against the judgment .and order dated May 27, 1981 passed in R.F.A. Nos.
688 to 592 of 1979 and 1112 of 1979 by the High Court of Punjab and Haryana at Chandigarh.
The short ques tion raised in these appeals is whether the appellants are entitled to any compensation 'for nursery plants existing on the land at the time of acquisition as well as at the time of notification published under Section 4 of the Land Acqui sition Act, 419 1894.
Secondly, whether the valuation made in respect of the mother plants is low and the same needs to be increased in accordance with the report of the Horticulture Expert.
The facts of these appeals in short, are as follows.
A notification under section 4 of the Land Acquisition Act, 1894 was published on March 24, 1971 for acquisition of the lands in question in village Faridabad, Hadbust No. 123, Tehsil Ballabgarh, District Gurgaon for a public purpose viz. for planned development of residential sector No. 19 by the Haryana Government.
Thereafter, a declaration under Section 6 of the said Act was published vide Notification No. LAC 71/NTLA/376 dated January 18, 1972 in Haryana Gov ernment Extraordinary Gazette.
The Government declared that the Government was satisfied that the said land was needed at public expenses for a public purpose namely for the planned development in the area of this village Faridabad.
Thereafter a notice under Section 9 and 10 was issued call ing upon the owners and other interested persons to file their claims in respect of the interest in the land and also other particulars as regards their claims for compensation for such interest.
The owners of the land and other inter ested persons filed their claims demanding compensation for the land @ Rs.35 per sq.
and also claimed compensation for the nursery plants and potted plants in the land ac quired.
The Land Acquisition Collector awarded compensation in respect of the land acquired @ Rs.900 per Biswa.
The Land Acquisition Collector held that the mother plants and trees were irremovable and as such he assessed the value thereof at Rs.2,41,576.
He also awarded the shifting charges for the shifting of potted plants amounting to Rs. 1,773.20 paise together with compulsory charges @ 15% of the amount award ed.
This award was made by the Land Acquisition Collector on February 22, 1975.
The possession of the acquired land was taken by the Government.
The Land Acquisition Collector also granted six months ' time or any such further period as extended by the Government to enable the appellants to remove the nursery plants as well as the potted plants from the acquired land.
The Collector further stated in the award that the nursery plants can be removed from the land and the same be sold by the owners to the customers.
So no compensa tion was awarded in respect of these plants as well as in respect of the potted plants.
The appellants filed five claim petitions being Petition Nos.
191/85 to 195/85 of 1973/78 in the Court of the Addi tional District Judge, Gurgaon.
The 2nd Additional District Judge, Gurgaon after hearing 420 the parties and also considering the evidences enhanced the rate of compensation of the acquired land (C) Rs. 10 per sq.
It has also been held that the appellants will be enti tled to double the compensation for trees and plants as given by the Land Acquisition Collector.
He also ordered that the appellants shall be entitled to solatium at the rate of 15% on the enhanced amount of compensation on these two items.
In all other respects the impugned order made by the Land Acquisition Collector was upheld.
He further or dered that the appellants will be entitled to recover inter est @ 6% from the date of compensation to the date of reali zation of the enhanced amount to be paid to them and the appellants shall also be entitled to recover the proportion ate costs of the petitions from the Government.
The appellants filed R.F.A. Nos.
688 to 692 of 1979 in the High Court of Punjab and Haryana.
The High Court fixed the value of the acquired land considering the potentiality of the land @ Rs. 16 per sq.
The total area of the land acquired in these appeals being 11.38 acres, at the rate of Rs. 16 per sq.
the value of the land acquired comes to Rs.8.8 lakhs.
The Land Acquisition Collector awarded a sum of Rs.2,41,576 for the trees, which value had been doubled by the Court below.
The High Court held that no case was made out for doubling the value of the trees in the evidence recorded before remand.
It has been further observed by the High Court that the appellants ' own case was that most of their income was from potted plants, flowers and nursery plants, the potted plants gave the maximum income, as was shown by the vouchers produced by the appellants on record.
The potted plants had been taken away by the appellants after acquisition.
Similar was the position of nursery plants.
The High Court, therefore, held that the value awarded by the Land Acquisition Collector would be for the trees and since no justification was made, the Court below was in error in doubling the value of the trees.
The High Court, therefore, valued the acquired land at the enhanced rate of Rs. 16 per sq.
, for the trees the compensation awarded by the Land Acquisition Collector was directed to be paid to the appellants and the enhancement awarded in re spect of trees by the Court below was set aside.
It was further ordered that the appellants would be entitled to solatium at the rate of 15 per cent and interest at the rate of 6% per annum from the date of taking of possession till payment thereof.
The appeals were thus disposed of.
Against this judgment and decree passed in R.F.A. Nos.
688 to 692 of 1979, the appellants filed five Special Leave Petitions before this Court.
On February 27, 1984 this Court granted Special Leave 421 confined only to the compensation for mother plants and nursery plants.
Mr. Rajinder Sacbar, learned counsel appearing on behalf of the appellants has made two fold submissions before this Court.
His first submission is that the Land Acquisition Collector as well as the Courts below were wrong in not granting any compensation for the nursery plants.
Nursery plants were grown in the nursery on the acquired land for the purpose of rearing them for a certain period and there after selling those plants to the customers on taking out the same from the nursery.
There has been an inspection and a list was prepared of the various varieties of fruits and flower plants existing on the acquired land at the time of acquisition.
He further submitted that the value of these various plants has been assessed by Shri Som Dutta Diwan, Deputy Director, Horticulture/Vegetable, Haryana, Chandi garh, who was requested to assess the value of all sorts of trees.
Copies of the assessment made by him had been filed before the Land Acquisition Collector and it will be evident from the said assessment lists that each variety of trees has been assessed separately with reference to the total number of those trees.
It has been submitted by Mr. Sachar in this connection that these nursery plants if taken out of the land will die after two three days.
The appellants have got no other land where they could plant these plants and keep them alive.
It has, therefore, been submitted by him that the High Court was wrong in refusing to assess the value of the nursery plants and to award compensation in respect of the same.
Mr. Sachar next submitted that the compensation awarded with regard to the mother trees by the Land Acquisition Collector has been made arbitrarily without reference to the market price of these trees.
It has been further submitted by referring to the judgment and order of the 2nd Additional District Judge, Gurgaon that the 2nd Additional District Judge held that the.
appellants were entitled to double the compensation under the head 'value of trees and plants ' as assessed by the Land Acquisition Col lector.
The High Court arbitrarily and wrongly rejected this on the mere ground that there was no justification for doubling the compensation as awarded by the Land Acquisition Collector in respect of the mother trees and plants.
It has, therefore, been submitted by Mr. Sachar that the amount of compensation awarded by the Land Acquisition Collector in respect of the mother trees should be doubled and the com pensation for the nursery plants should also be assessed on the basis of the value of the plants as assessed by the Deputy Director of Horticulture.
422 Mr. S.P. Goel appearing for the respondent State has submitted that the land acquired was not treated as an agriculture land in assessing the market value of the same.
It has been taken as urban land and considering its potenti alities, the High Court assessed the value of the land @ Rs. 16 per sq.
In such circumstances, the value of the land being assessed on considering its potentiality, the question of valuation of the mother trees as well as of the nursery plants does not at all arise.
The valuation of the mother trees can at best be assessed at the value assessed by the Land Acquisition Collector.
There is, therefore, no ground for interference with the amount of compensation awarded by the Land Acquisition Collector and upheld by the High Court.
It has been next submitted by the learned counsel for the State that the nursery plants are planted and grown for the purpose of selling the same to the customers after taking them out from the land.
These nursery plants are never planted for the purpose of growing them into big trees or mother plants.
The High Court has rightly held that like the potted plants these nursery plants can easily be removed from the nursery as the purpose of growing these plants is to sell the same to the customers.
These plants can be removed and sufficient time had been granted by the State by permitting the appellants to remove these plants from the acquired land.
It has, therefore, been submitted that the High Court has rightly rejected the claim of the appellants for compensation in respect of the nursery plants.
We have considered in depth the arguments advanced by the learned counsel for both the parties and we have also considered very carefully the weighty reasonings given by the High Court as well as by the Land Acquisition Collector.
It is obvious that the land acquired though agriculture land was taken for assessment of its market value not as agricul ture land but as land with high potentialities i.e. as urban land and, therefore, the market value of these lands has been fixed after considering its potential value @ Rs. 16 per sq.
The appellants did not at all dispute this value and on the other hand they withdrew the entire compensation award for the value of these lands.
In these circumstances, we find that there is much substance in the submissions made on behalf of the State that the mother trees should be valued as wood and the value has been rightly assessed as such by the Land Acquisition Collector in his award and the same has been upheld by the High Court.
Moreover, the find ings of the Collector that the nursery plants can be taken out of the land and sold to the customers like potted plants and as such no compensation can be awarded is in our consid ered opinion quite in accordance with law.
In these cir 423 cumstances, we do not find any infirmity or arbitrariness in the findings arrived at by the High Court and as such there is no merit in the contentions made on behalf of the appel lants in these appeals.
We, therefore, uphold the findings of the High Court and dismiss the appeals without any costs.
P.S.S Appeals dis missed.
| IN-Abs | The appellants ' land was acquired under the Land Acqui sition Act on March 24, 1971 for planned development as residential area.
They were then running a plant nursery on the said land.
A large number of potted plants, mother plants and trees also existed there.
They demanded compensa tion for the land at the rate of Rs.35 per sq.
They also claimed compensation for nursery plants, potted plants mother plants and trees.
The Land Acquisition Collector awarded compensation in respect of the land at the rate of Rs.900 per Biswa.
He held that the mother plants and trees were irremovable and as such assessed the value thereof at Rs.2,41,576.
He also awarded charges for the shifting of potted plants.
In re spect of the nursery plants he took the view that the appel lants were not entitled to any compensation as these could be removed from the land and sold.
The District Judge enhanced the rate of compensation for the acquired land at the rate of Rs. 10 per sq.
and also doubled the compensation for trees and mother plants.
The High Court considering the potentiality of the acquired land fixed its value at the rate of Rs. 16 per sq.
It took the view that the court below was in error in doubling the value of the trees as no case was made out in the evidence recorded and therefore set aside the enhance ment.
In these appeals by special leave it was contended for the appellants that the nursery plants if taken out of the land would die after two three days and the appellants had got no other land where they could plant them and keep them alive.
It was further contended that the compensation with regard to mother trees had been awarded with 418 out reference to their market price and that the High Court had arbitrarily rejected the enhancement in the said compen sation granted by the District Court.
Dismissing the appeals, the Court, HELD: 1.
The finding of the Land Acquisition Collector that the nursery plants could be taken out of the land and sold to the customers like potted plants and as such no compensation could be awarded was quite in accordance with law.
Sufficient time had been granted by the State by per mitting the appellants to remove these plants from the acquired land.
Their claim was, therefore, rightly rejected by the High Court.
[422G H, D E] 2.
The land acquired though agricultural land was taken.
for assessment of its market value @ Rs. 16 per sq.
not as agricultural laud but as laud with high potentialities i.e. as urban laud.
The appellants did not at all dispute this value.
On the other hand they withdrew the entire compensation award for the value of these lands.
In these circumstances, it could not be said that the value of mother trees has been wrongly assessed as wood.
The appellants were, therefore, not entitled to enhancement In the value of trees.
[422F G]
|
ivil Appeal No. 3607 of 1989.
From the Judgment and Order dated 25.4.88 of Central Administrative Tribunal Hyderabad in T.A. No. 1185/86.
R. Venkataramani, V.G. Pragasam and S.M. Garg for the Appellant.
Kapil Sibal, Additional Solicitor General, B. Datta, Mrs. Indra Sawhney, Ms. Sushma Suri, B. Rajeshwar Rao, Vimal Dave and C.V. Subba Rao for the Respondents.
446 The Judgment of the Court was delivered by KANIA, J.
This is an appeal by special leave against a decision of the Central Administrative Tribunal, Hyderabad in Transfer Application No. 1185 of 1986 (W.P. NO. 8226 of 1985).
All the relevant facts have been set out by the Tribunal in its judgment.
As we are in agreement with the reasoning and conclusions of the Tribunal in the impugned judgment, we propose to set out only the brief facts necessary for the disposal Of the appeal.
Under the relevant rules, the recruitment to the post of Superintending Mechanical Engineer was by promotion and failing that by direct recruitment.
It may be mentioned that for direct recruitment to the said post, the qualifications of a degree in Mechanical or Automobile Engineering was prescribed as essential.
For promotion to the post of Direc tor (M.E.) the requisite qualification was five years 01 ' service in the grade of Mechanical Engineer (Senior).
The appellant became eligible for promotion in 1978, but he was not promoted as there were some senior persons in his grade, who were promoted to the said post.
On January 31, 1984, a Notification was issued by respondent No. 1, amending the said Rules and the said Notification was duly published in the Gazette of India.
By the said amendment, the said Rules were amended and it was prescribed that for promotion to the post of Director (M.E.) a degree in Engineering was a requi site qualification.
The appellant challenges the validity of this Notification on the ground that it affected his chances of promotion or alternatively his right to be considered for promotion to the post of Director (M.E.).
The appellant is a Mechanical Engineer (Senior) in the Geological Survey of India, Southern Region, Hyderabad.
The appellant is a diplo ma holder and does not hold any degree in engineering.
On April 27, 1964 he was appointed as Transport Officer (Class I Technical Grade, Gruop 'A ').
This post was redesig nated and merged with the post of Mechanical Engineer (Junior) in March 1968.
On November 28, 1969, the Geological Survey of India (Group 'A ' and Group 'B ' Posts) Recruitment Rules, 1967, made under Article 309 of the Constitution were brought into force.
The appellant was promoted as a Mechani cal Engineer (Senior) with effect from March 17, 1973 and his conditions of service were governed by the aforesaid rules.
These rules have been amended from time to time.
It was submitted by learned counsel for the appellant that the said amendment purported to be carried out by the said Notification was bad in law as it adversely affected a condition of service relating to promotion.
It was submitted 447 by learned counsel for the appellant that if the rule, requiring a degree qualification for promotion to the post of Director (M.E.), was applied as far as the appellant was concerned, it would amount to giving a retrospective effect to the operation of the said rule and no retrospective rule could be framed under Article 309 of the Constitution.
This contention was rejected by the Tribunal which held that it was for the Government to prescribe such qualifications as it considered fit for the post of Director (M.E.) and the Tribunal could not go into the question whether that quali fication was necessary unless the prescribing of the re quirement could be said to be perverse.
The Tribunal further took the view that the appellant had no vested right to promotion but had a mere chance of promotion and he was not entitled to challenge the rule merely on the ground that it affected his chance of promotion.
The said appeal is direct ed against the said decision.
The main argument of learned counsel for the appellant is that the Tribunal was in error in holding that the rule affected merely a chance of promotion which the appellant had.
It was submitted by him that although the appellant could not claim any right to be promoted, he certainly had the right to be considered for promotion and the amendment to the rule carried out by the said Notification depriving of that right was bad in law.
Strong reliance was placed by the learned counsel for the appellant on the decision of this Court in T.R. Kapur and Others vs State of Haryana and Others, [1986] Supl.
SCC 584 at 595 where it was held that right to be considered for promotion is a condition of service.
This decision is, however, of no assistance to the learned counsel in support of his argument because the Bench which rendered the said decision has stated (at paragraph 16, page 595 of the said report) as follows: "It is well settled that the power to frame.
rules to regu late the conditions of service under the proviso to Article 309 of the Constitution carries with it the power to amend or alter the rules with a retrospective effect.
It is equal ly well settled that any rule which affects the right of a person to be considered for promotion is a condition of service although mere chance of promotion may not be.
" It was further held that: "an authority competent to lay down qualifications for 448 promotion, is also competent to change the qualifications.
The rules defining qualifications and suitability for promo tion are conditions of service and they can be changed retrospectively" It was, however, clarified that: "unless it is specifically provided in the rules, the em ployees who are already promoted before the amendment of the rules, cannot be reverted and their promotions cannot be recalled.
" It is only in this sense, that is, as set out in the immediately preceding paragraph that the view has been taken that the rules cannot be retrospective.
The ratio of this decision is not applicable to the case before us as there is no question of reverting the appellant.
Again, it has been held by a Bench comprising three learned Judges of this Court, in State of Maharashtra and Another vs Chandrakant Anant Kulkarni and Others, ; (at paragraph 16, page 141 of the said report), that mere chances of promotion are not conditions of service and the fact that there was reduction in the chances of promotion did not tantamount to a change in the condition of service.
A right to be considered for promotion is a term of service, but mere chances of promotion are not.
It was also held there that mere passing of the departmental examination conferred no right on the concerned S.T. Inspectors of Bombay, to promotion.
They merely became eligible for promotion.
They had to be brought on to a select list, not merely on the length of service but on the basis of merit cum seniority principle.
In our opinion, n0 retrospective effect has been given to the said amended rule.
It is not argued that the appel lant has been reverted from the post which he occupies on the ground of any lack of any qualification.
The only effect is that his chances of promotion or his right to be consid ered for promotion to the higher post is adversely affected.
This cannot be regarded as retrospective effect being given to the amendment of the rules carried out by the impugned Notification and the challenge to the said notification on that ground must fail.
The next argument advanced before us by the learned counsel for the appellant is that employees in the drilling stream who might be diploma holders could move by promotion to the grade of Director (Drilling) which is equivalent to the post of Director (Mechanical Engineering) and would be further eligible to be considered for the 449 next higher post of Deputy Director General (Engineering Service) on the basis of a common seniority of Directors (Mechanical) and Directors (Drilling).
It was submitted that, in this situation, the requirement of a degree for promotion to the post of Director (Mechanical) must be regarded as unreasonable and bad in law.
This argument was rejected by the Tribunal on the ground that the fact that for the higher post of Deputy Director General (Engineering Service), it is not necessary to hold a graduate degree is no reason why a degree requirement for the post of Director (Mechanical) should be regarded as unreasonable or bad in law.
It is for the Government to decide what qualification was required for the promotion to the post of Director (M.E.) and, unless that requirement was totally irrelevant or unreasonable, it could not be said to be bad in law.
In this regard, we agree with the reasoning and conclusions or ' the Tribunal.
In the result, the appeal fails and is dismissed.
There will be no order as to costs.
G.N. Appeal dis missed.
| IN-Abs | The appellant, a diploma holder, was, in 1964, appointed as Transport Officer (Class I Technical Grade, Group A), which post was later redesignated and merged with the post of Mechanical Engineer (Junior) in 1968.
The Geological Survey of India (Group 'A ' and Group 'B ' posts) Recruitment Rules, 1967, framed under Article 309 of the Constitution were brought into force in 1969.
The appellant was promoted as a Mechanical Engineer (Senior) in 1973 and his conditions of service were governed by the said Rules, which had been amended from time to time.
One such amendment made in 1984 prescribed that for promotion to the post of Director (M.E.), a degree in Engineering was a requisite qualifica tion.
The appellant challenged before the Central Adminis trative Tribunal, the validity of the said notification on the ground that it affected his chances of promotion or alternatively his right to be considered for promotion to the post of Director (M.E.).
It was contended that applying the amended Rule, in so far as the appellant was concerned, would amount to giving retrospective effect to the operation of the rule, and no retrospective rule could be framed under Article 309 of the Constitution.
The Tribunal rejected the contention and held that it was for the Government to pre scribe such qualifications as it considered fit, and the Tribunal could not interfere unless it was shown to be perverse.
Aggrieved against the Tribunal 's order, the appellant has preferred this appeal by special leave.
Dismissing the appeal, this Court, HELD: 1.
Mere chance of promotion is not condition of serv ice 445 and the fact that there was reduction in the chances of promotion did not tantamount to a change in the conditions of service.
A right to be considered for promotion is a term of service, but mere chances of promotion are not.
[448D] state of Maharashtra and Anr.
vs Chandrakant Anant Kulkarnt and Others, ; , relied on.
T.R. Kapur and Others vs State of Harvana and Others, [1986] (Suppl.) SCC 584, referred to. 2.
In the instant case, no retrospective effect has been given to the said amended rule.
It is not the case that the appellant has been reverted from the post which he occupies on the ground of lack of any qualification.
The only effect is that his chances of promotion to the higher post is adversely affected.
Alteration of rules of eligibility cannot be invalidated on the ground that an employee 's claim to be eligible for promotion is adversely affected.
This cannot be regarded as retrospective effect being given to the amendment of the rules carried out by the Notification and the challenge to the said notification on that ground must fail.
[448F G] 3.
The fact that for the higher post of Deputy Director General (Engineering Service), it is not necessary to hold a graduate degree is no reason why a degree requirement for the post of Director (Mechanical) should be regarded as unreasonable or bad in law.
It is for the Government to decide what qualification was required for promotion to the post of Director (M.E.) and, unless that requirement was totally irrelevant or unreasonable, it could not be said to be bad in law.
[419B C]
|
Appeal No. 355 of 1981.
From the Judgment and Order dated 27.10.1980 of the Delhi High Court in S.A.O. No. 241 of 1979.
G.L. Sanghi and S.L. Aneja for the Appellant.
K. Parasaran, Gopal Subramanium, Arvind Verma and Mukul Mudgal for the Respondent.
The Judgment of the Court was delivered by PUNCHHI, J.
For the view we take in this appeal by special leave and leaning as we would be on our discretion ary power under Article 136 of the Constitution, no elabo rate details are necessary of the facts involved therein and for its disposal by a brief order.
The appellant, Subhash Mehta, more than two decades ago obtained a residential lease of the first floor in premises bearing No. D 32, South Extension, Part II, New Delhi from Dr. S.P. Choudhary (now dead) the landlord who was himself residing on the ground floor thereof.
The settled rent was Rs.800 per mensem.
The landlord on 508 November 27, 1972 served a notice on the tenant demanding arrears of rent from September 1, 1972 onwards.
The demand having not been met he instituted an eviction petition before the Rent Controller, Delhi on March 13, 1973 on grounds of non payment of rent as also on other grounds.
On June 1, 1973 the Rent Controller passed an order under section 15(1) of the Delhi Rent Control Act, 1958 (hereinaf ter referred to as the 'Act ') directing the tenant to depos it arrears of rent within one month from the date of the order and further to pay month to month rent by the 15th of every calendar month.
The appellant, within the period allowed, deposited Rs. 10,000 to cover arrears of rent as well as to cover future rent uptill September 15, 1973.
Thereafter neither on October 15, 1973 nor on November 15, 1973, did the tenant deposit monthly rent as required by the aforesaid order of the Rent Controller.
He was alleged to have defaulted on that count.
Yet on December 1, 1973 he made a deposit of Rs.2,800 partly covering the default of the previous period.
The landlord took objection to the late deposit and after much debate the Rent Controller struck off the defence of the appellant.
The Rent Appellate Tribunal, Delhi set aside the order of the Rent Controller striking out the defence of the tenant on appeal by the tenant and remitted the case back to the Rent Controller for further proceedings.
Second appeal to the High Court of Delhi by the landlord was dismissed.
The Additional Rent Controller who became seisin of the matter on remand went into all the grounds as originally raised in the eviction petition; the other grounds, besides the tenant being in arrears of rent, being sub letting, conversion of the user of premises from residential to commercial, the tenant having acquired vacant possession of a residential house in M 18, Green Park Extension, New Delhi and for bona fide requirement of the daughter of the land lord who being a student of M.B.B.S, was expected to set up medical practice.
The Additional Rent Controller by his order dated December 12, 1978 ordered eviction of the tenant on the sole ground of non payment of future rent in terms of his order passed under section 15(1) of the Act, granting the tenant two months ' time to vacate the premises.
The other grounds of eviction were rejected.
The tenant 's appeal before the Rent Control Tribunal centered round the sole question of delayed payment of arrears of rent and of the scope and rigour of section 15(1) of the Act.
In assailing the order of the Additional Rent Controller, reliance was placed by the tenant on a judgment of this Court in Hem Chand vs Delhi Cloth Mills, to contend that even if the tenant had not strictly complied 509 the terms of the order made under section 15(1) of the Act in as much as depositing future rent late it was not impera tive in all events of the defence of the tenant being struck off and a fair amount of discretion had been left with the Rent Controller under section 15(7) which should have been exercised in his favour and before his defence was to be struck off the Rent Controller had to come to the view that his conduct was wilful or contumacious in disobeying the order made under section 15(1) of the Act, and which in the instant case he had failed to record.
Even being aware of these principles the Rent Control Tribunal on August 18, 1979 dismissed the appeal observing that no infirmity in the order of the Additional Rent Controller could be found.
On the same lines and reasoning second appeal of the tenant was dismissed by the High Court of Delhi on October 27, 1980 keeping maintained the ejectment of the tenant for non compliance of the order made under section 15(1) of the Act.
This has led to the instant appeal on the grant of special leave.
The landlord Dr. S.P. Choudhary as hinted earlier died in the year 1981 during the pendency of this appeal leaving behind a widow and a daughter; the latter now being a divor cee rearing a minor son.
This is the uncontroversial asser tion of the successor landlords.
The eviction order in their favour has been assailed by Mr. Sanghi, learned counsel for the tenant appellant on the strength of the decision of this Court in Ram Murti vs Bhola Nath and Another, stressing the point that the words 'as required by section 15(1) of the Act ' occurring in sub section (7) of section 15 must be construed in a reasonable manner and that the said provision confers a wide discretion on the Rent Controller not to strike off the defence of the tenant which indicates that defences could still be open to the tenant under the Act to claim plain protection under section 14(2) thereof.
In that case this Court ruled that the Rent Con troller necessarily by legal implication has power to con done the default on the part of the tenant for deposit of future rent or to extend time for such deposit.
On the said plea advanced on behalf of the tenant the result sought to be achieved is that the delay in making deposit of future rent be excused saving him from eviction.
The tenant had before the Rent Controller while explaining cause for late deposit of future rent put up the plea that the counsel present at the time of the passing of the order under sec tion 15(1) in place of his engaged counsel had only intimat ed to him about the payment of arrears of rent and not about the deposit of future rent by the 15th of every calendar month.
On that basis the order of eviction was sought to be upset by accepting such plea of the tenant.
On the other hand, learned counsel for the successor landlords 510 tactically took shelter behind the other grounds of eviction which were rejected by the Additional Rent Controller and besides raising them vehemently before us projected that in the facts and circumstances of this case and the subsequent events which have come by, this Court should refrain from interfering in the matter under Article 136 of the Constitu tion.
On such stance adopted it is plain that the ground on which eviction has been maintained before the Tribunal and the High Court concurrently the successor landlords seeming ly had an uphill task to have it maintained in view of Ram Murti 's case (supra).
Yet, without conceding on that score other grounds of eviction were pressed despite opposition by learned counsel for the tenant that these grounds were neither pressed in the court of the Rent Control Tribunal nor in the High Court while supporting the order of eviction and no cross appeals in these two forums were filed by the landlord, which if serious he legitimately could.
It is true that the Tribunal and the High Court are both silent on the point.
The order of the Additional Rent Controller suggests that the tenant is an industrialist.
His finding is that within the years 1971 to 1974 he was active in incorporating three companies and that he was a proprietor of M/s. Globe Marketing and Management Limited, a Director of M/s. Sports Equipment Private Limited and again a Director in M/s. Indian Consultants Private Limited.
His further finding is that while living in the demised premises he had floated these companies and later taken in other directors.
In so far as the latter two companies were concerned, this act of the tenant was not sub letting, assigning or parting with the possession of the disputed premises as held by the Rent Controller.
Sequelly the finding further recorded was that there was no misuser of the disputed premises inasmuch as the respective offices run by the companies therein had caused no damage to the premises.
With regard to the fact that the tenant had acquired another premises at M 18, Green Park Extension, New Delhi the Rent Controller took the view that factually the father of the tenant had acquired the same and the tenant could not live in that premises with his father as a matter of right.
Lastly with regard to the bona fide requirement of the landlord the Rent Controller took the view that the landlord 's family comprising of himself, his wife and daughter had sufficient accommodation in their possession even though his daughter had to estab lish practice as a doctor.
The additional plea of the suc cessor landlords as given out in their counter affidavits now is that the telephone connections standing in the name of afore referred three companies, with which the tenant is intimately connected, are at the demised premises as per the Mahanagar Telephone Nigam Directory 511 and that the tenant is a rich and well:connected industrial ist deserving no protection of the rent laws, misplacedly sought by him.
We have pondered over the matter and have weighed every aspect of the case.
The facts and circumstances now emerging are that the successor landlords are two ladies; one a widow and the other a divorcee.
If we were to allow the appeal by releasing and relaxing the rigour of the order of eviction relying on Ram Murti 's case, we unhesitatingly then would take the step to have the matter remitted back at an appro priate stage where the successor landlords could convenient ly have the other grounds of eviction adjudicated upon and overrule the objection that the landlord could have filed an appeal before the Rent Appellate Tribunal and the High Court seeking eviction of the tenant on grounds other than the ground on which the eviction was ordered.
This course, however, appears to us to be not only unfair and unreasona ble in the facts and circumstances of this case but time consuming and inequitous as well to the successor landlords who, as said before, are two ladies brought in the fray by operation of law.
Now since almost eighteen years have passed by, we feel there should be an end to the dispute and this course is in the interest of all concerned as well as the State.
Instead of putting the parties to a fresh bout of litigation we would in these circumstances prefer and opt to let remain the order of eviction sustained however on slen der ground, and consequently order dismissal of this appeal but without any order as to costs.
Still we do not wish to dislocate the appellant abruptly, concerned as we are for him also, and for that purpose grant him sufficient time ending on March 31, 1991 for vacating the premises subject to his giving an undertaking before this Court for vacation on or before the said date but on payment of rent to the landlords as has fallen due for the period uptill and by March 31, 1990 and future monthly rent by the tenth of each calendar month.
Let the undertaking be filed by March 10, 1990 in the Registry in the usual manner.
P.S.S. Appeal dismissed.
| IN-Abs | In the proceedings for eviction under the Delhi Rent Control Act, 1958 for arrears of rent, subletting, conver sion of user from residential to commercial and bona fide need, the appellant tenant committed breach of the Control ler 's directions under section 15(1) of the Act in the matter of payment of monthly rent.
Consequently, his defence was struck off and the suit decreed on the sole ground of de layed payment of future rent.
All the other grounds were rejected.
The tenant assailed the order before the Rent Control Tribunal relying on Hem Chand vs Delhi Cloth Mills, on the rigour of section 15(1) of the Act.
The Tribunal found that there was no infirmity in the order.
The High Court maintained the ejectment.
In the appeal by special leave, it was contended for the appellant on the strength of the decision in Ram Murti vs Bhola Nath, that section 15(7) of the Act con fers a discretion on the Rent Controller not to strike off the defence of the tenant and consequently the delay by him in making deposit of future rent should have been excused, and that since no cross appeals were filed by the landlord against the rejection of other grounds in the court of the Rent Control Tribunal or in the High Court nor those grounds were pressed in these two forums by the landlord, those grounds were no more available to him.
The landlord died during the pendency of the appeal and his widow and divorced daughter respondent succeeded to him as landlords.
It was contended for them that the tenant was a rich and well connected industrialist deserving no protection of the rent laws.
Dismissing the appeal, the Court, HELD: 1.
If the appeals were to be allowed by releasing and relaxing the rigour of the order of eviction, the matter then would have to be 507 remitted back at an appropriate stage where the successor landlords could conveniently have the other grounds of eviction adjudicated upon, by overruling the objection that the landlord could have filed an appeal before the Rent Control Tribunal and the High Court seeking eviction of the tenant on grounds other than the ground on which the evic tion was ordered.
[51 lB C] 2.
The successor landlords are two ladies, one a widow and the other a divorcee, brought in the fray by operation of law.
Remitting the case back would not only be unfair and unreasonable but time consuming and inequitous as well to them.
Since almost eighteen years have passed by there should be an end to the dispute.
This course is in the interest of all concerned as well as the State.
Instead of putting the parties to a fresh bout of litigation the order of eviction should, therefore, be sustained. ]51 IC E] 3.
The appellant is granted time ending on March 31, 1991 for vacating the premises subject to his giving an undertaking for vacation on or before the said date and payment of rent to the landlords.
[511E F]
|
ivil Appeal Nos.
4676 & 4793 of 1989.
From the Judgment and Order dated 26.10.89 of the Bombay High Court in W.P. No. 3976 of 1989.
P.C. Jain, S.S. Ray, B.A. Mansodkar, Manoj Swarup, P.H. Parekh, J.H. Parekh, Sunil Dogra.
A.M. Khanwilkar, V.D. Khanna and A.S. Basme, for the appearing parties.
The following Judgments of the Court were delivered: RAY, J. This is an appeal under Article 133 of the Constitution of India against the Judgment and Order dated October 26, 1989 passed by the High Court of Bombay in Writ Petition No. 3976 of 1989 whereby the High Court directed the Registrar of Cooperative Societies to give fresh notice to the elected members as well as to the 3 persons namely 2 nominees of the Financial Institutions and the expert co opted member.
494 The matrix of the case is that the appellants who are the duly elected Directors of the Sanjay Sahakari Sakhar Karkhana Ltd. hereinafter to be termed as "Karkhana" signed a requisition and sent the same to the respondent No. 3, the Joint Director of Sugar and Joint Registrar Co operative Societies, Maharashtra State, Pune requesting him to summon a special meeting of the Committee of the Karkhana to con sider the proposed motion of no confidence against the Chairman of the Committee, Dattatraya Waman Patil, respond ent No. 1.
This requisition was signed by more than 1/3rd of the total members of the committee in accordance with the provision of Clause (2) of Section 73 ID of the Maharashtra Cooperative Societies Act 1960 (Maharashtra Act No. XXIV of 1961).
The above requisition was received in the office of the Joint Director of Sugar and Joint Registrar, Cooperative Societies, Maharashtra State, Pune, the respondent No. 3.
On 6.9.1989 the respondent No. 3 issued a notice dated September 13, 1989 convening a special meeting of the Manag ing Committee of Karkhana i.e. Board of Directors of the Karkhana on 25.9.
This notice was issued as contem plated by Clause (3) of Section 73 ID of the Act.
This notice was sent to all the members of the Committee of the Karkhana who at that time were entitled to sit and vote at any meeting of the Committee i.e. the elected members of the said Committee of Management.
Over and above a copy of the notice was sent to the office of Registrar, Deputy Director of Sugar, Aurangabab (Presiding Officer).
A copy of this notice was also sent to the office of the Managing Director of the Karkhana as by way of this notice, the Managing Director had been directed to produce the minute book of the Committee meeting and hand over possession thereof to the Presiding Officer at the commencement of the special meet ing.
On 18.9.89 the respondent No. 1 filed writ petition No. 3976 of 1989 before the High Court at Bombay challenging the requisition notice dated 5.9.89 signed by the 10 appellants who are elected members of the Managing Committee as well as notice dated 13.9.89 issued by the respondent No. 3 mainly on the ground that under the scheme of the Act read with the Rules and the bye laws of the Karkhana, coopted member and nominees of the Financial Institutions who are members of the Board of Directors of the Karkhana and are entitled to sit and vote at the special meeting when the Committee considers the vote of no confidence under Section 73 ID of the Act are required to be served with the said notices of requisition enabling them to partici 495 pate in the said special meeting.
This writ petition was heard by the Division Bench of Bombay High Court on 26.10.89.
On a consideration of the provisions of Section 73 ID read with Rule 57A and bye law No. 29 of the Bye Laws of the Society the High Court allowed the writ petition holding that the 3 members of the second Category who have got a limited right to vote at a meeting except at a meeting to elect Chairman or Vice Chairman are entitled to be served with notices of the special meeting and to participate in the said meeting and as the two nominees of the Financial Institutions and the expert Coopted members had not been served with the notices of requisition meeting the requisi tion meeting cannot be held.
Instead of quashing the notice issued by the respondent No. 3 convening the meeting, the High Court directed the Registrar, the respondent No. 3 to issue fresh notices to the elected members as well as to the 3 Directors of the Second category gory before holding the meeting and disposed of the writ petition accordingly.
The High Court however restrained the Chairman to enter into new contracts and as well as giving any fresh commitment on behalf of the Karkhana.
The appellants filed a petition under Article 133 of the Constitution of India against the Judgment and order dated October 26, 1989 passed by the High Court, Bombay in Writ Petition No. 3976 of 1989.
The High Court by Order dated 26.10.89 granted certificate for appeal to this Court under Article 134(1) of the Constitution of India on the following questions: "Whether the nominees of the Financial Institutions and the expert co opted by the Committee under Bye law 29 are in cluded within the expression "Committee members who are for the time being entitled to sit and vote at any meeting of the Committee?" In order to decide the above question it is appropriate to consider the relevant provisions of the Maharashtra Cooperative Societies Act 1960 to be hereinafter called the 'Act ' and the rules framed thereunder as well as the rele vant bye laws of the particular Cooperative Society in question.
The Karkhana is a Cooperative Society governed by the Maharashtra Cooperative Societies Act.
Section 2(7) defines Committee as the Committee of Management or Board of Direc tors or other directing body by whatever name called in which the management of the affairs of the society is vested under Section 73 of the said Act.
496 Section 27 which deals with the voting powers of the members provides in Sub section '9 ' that no nominee of the Government or of my Financial Bank on any society shall be entitled to vote at any election of its Committee.
Section 73 states that the management of every society shall vest in a Committee, constituted in accordance with this Act, the rules and bye laws, which shall exercise such powers and perform such duties as may be conferred or imposed respec tively by this Act, Rules and the Bye laws.
Therefore, the management of every Cooperative Society is vested in the Committee of management or for that in the Board of Direc tors of the Society.
Section 73 ID which is relevant for determination of the said question is quoted below: 73 ID "(1) A President, Vice President, Chairman, ViceChair man, Secretary, Treasurer or any other officer by whatever designation called who holds office by virtue of his elec tion to that office shall cease to be such President, Vice President, Chairman, Vice Chairman, Secretary, treasurer or any other officer as the case may be, if a motion of no confidence is passed at a meeting of the committee by two third majority of the total number of Committee members who are for the time being entitled to sit and vote at any meeting of the committee and the office of such President, Vice President, Chairman, Vice Chairman, Secretary, treasur er or any other officer, as the case may be, shall thereupon be deemed to be vacant.
The requisition for such special meeting shall be signed by not less than one third of the total number of members of the committee who are for the time being entitled to sit and vote at any meeting of the committee and shall be delivered to the Registrar.
The requisition shall be made in such form and in such manner as may be prescribed: Provided that, no such requisition for a special meeting shall be made Within a period of six months from the date on which any of the officers referred to in sub section (1) as en tered upon his office.
(3) The Registrar shall, within seven days from the date of receipt of the requisition under sub section (2), convene a special meeting of the committee.
The meeting shall be held on a date not later than fifteen days from the date of issue of the notice of the meeting.
" 497 Rule 57A Motion of no confidence against the officers of the Society (1) The requisition to call the special meeting of the committee of a society to consider a motion of no confidence against the President, Vice President, Chairman, ViceChair man, Secretary, Treasurer, or other officer of the society, by whatever designation called, who holds office by virtue of his elections to that office, shall be made in Form M 18.
The requisition shall be accompanied by (a) the grounds of no confidence, (b) the text of the motion of no confidence to be moved, (c) the name of the committee members who shall move the motion of non confidence, (d) a list of members of the committee specifying their full names, and address who are, for the time being, entitled to sit and vote at any meeting of the committee, (e) signatures of the members of committee who are signing the requisition duly attested by the Chief Executive Officer of the society or Special Executive Magistrate or Executive Magistrate or any Gazetted Officer of the Government.
(2) The requisition referred to in sub rule (1) shall be delivered in person to the Registrar.
Such requisition or requisitions shall be delivered in duplicate in each case.
The Registrar on ascertaining that the requisition or requi sitions, as the case may be, have been signed by not less than 1/3rd members of the Committee who for the time being are entitled to sit and vote in any 'meeting of the commit tee of society.
(a) receive and acknowledge the requisition under his signa ture with date and time, (b) issue notice, within 7 days from the date of receipt of the requisition, convening the special meeting for that purpose specifying therein place, date, time name and desig nation of the officer who shall be presiding over such 498 meeting, to all the members of the Committee, the Presiding Officer and the Managing Director, General Manager, Manager, Paid Secretary, Group Secretary or such employee of the society, to whom the Registrar has directed to produce minute book of Committee meetings of the society.
This notice of no confidence, shall also be issued, to the offi cer or officers against whom the motion of noconfidence is being moved.
and shall be accompanied by the copy of the requisition along with enclosures and agenda.
(5) The time of the meeting shall be between office hours of the authorised officer.
The meeting shall be held either in the office of the Registrar or in the office of the person authorised by the Registrar to preside over the meeting.
(6) No other subject, except the motion or motions of nocon fidence shall be kept on the agenda.
(7d) The Registrar or the officer authorised to preside over the meeting shall not allow any other person to enter the place of meeting except the person or persons appointed to assist him, the officer of the society who has produced the minute book, the officer or officers against whom the motion of no confidence is moved, the members of the committee who are for the time being entitled to sit and vote in any meeting of the committee, who are present at the commence ment of the meeting and police officer or officers if called by him to maintain the law and order.
BYE LAW No. 29.
Board of Directors: A. xxxxxx B. xxxxxx to E. xxxxxx (F) "Managing Director, and representatives in sub clause (d) and (e) (Coopted Technical Director) shall not be enti tled to function as Chairman and Vice Chairman.
The 499 representatives referred to in above sub clause (d) and technical expert coopted as per provisions of sub clause (e and Managing Director, will not be entitled to vote at the meeting for the election for Chairman and Vice Chairman The representative of the State Government shall not be entitled to vote on any subject at any meeting of the Board, But his opinion will be recorded in the minute book.
He will not be responsible for mismanagement and negligence of the Board.
Further no action can be taken against him for any losses sustained to the Karkhana due to the mismanagement and the negligence of the Board.
" It has been contended on behalf of the appellant that Section 27 sub section '9 ' debars the Government nominee or the nominee of any Financing Bank on any society to vote at any election of the Committee of the Society and as such except the elected Directors other Directors can not partic ipate in the election of the Managing Committee of the Society and cannot vote for such election.
It has been also submitted that under section 73 ID Clause (A) in the special meeting convened for consideration of no confidence motion against the Chairman and Vice Chairman of the society and other officers of the society only the members who are for the time being "entitled to sit and vote at any meeting of the Committee may participate and vote in the said meeting.
It has also been provided therein that as soon as vote of no confidence is passed against the Chairman of the managing committee of the society by 2/3rd majority of the total number of committee members who are for the time being entitled to sit and vote the office of Chairman etc.
shall be deemed to be vacant.
Therefore, it has been submitted that the word at any meeting of the committee shall be deemed to refer to all the meetings of the managing commit tee or the Board of Directors.
The nominees of the Financial Institutions and also the coopted expert, coopted Technical Director having been not entitled to function as a Chairman and Vice Chairman and not to vote at the meeting of the election for Chairman and Vice Chairman of the Board of Directors are not entitled to sit and vote in the special meeting convened for the purpose of consideration of the no confidence motion against the Chairman of the Board of Directors.
It has also been contended in this connection that the Chairman of the managing committee or of the Board of Directors is elected by the elected Directors of the managing committee.
It is against the democratic principles that the motion of no confidence against the Chairman for removal from his elected office are to be passed by the 2/3rd majority of the members of the Board of Directors including the Directors who 500 are representatives of the Financial Institutions and expert nominee (co opted), Mr. S.S. Ray, learned counsel appearing on behalf of the respondent No. 1 has on the other hand joined issues and submitted that the right to participate in the special meeting convened for consideration of no confidence motion against the Chairman is a statutory right flowing from the provisions of the statute.
This right has been conferred expressly by the provisions of section 73 ID read with Rule 57A Clause 2(b) read with Clause 7(D) i.e. "members of the committee who are for the time being entitled to sit and vote in any meeting of the Committee." Though Section 27 sub section 9 enjoins that no nominee of the Government or of financing bank or of any society shall be entitled to vote at any election of its committee.
This merely means and signifies that the nominee of the Government as well as of the Financial Institutions are not entitled to participate in the election meeting of the society and from casting their votes in such meeting.
Bye law 29 of the Bye Laws of the Society provides that the Board of Directors of the Karkhana would consist of the following members: section No. Particulars No. of Members.
Members falling under Bye elected producer, 11 law No.29(A) members, 2.
Members failing under Bye elected by society 01 law No.29(B) members 3.
Members falling under Bye Managing Director, 01 law No.29(C) Ex officio.
Members falling under Bye Representative of 01 law No.29(D)(i) the financing agency.
Members falling under Bye Representatives of 01 law No. 29(D)(ii) Indian Finance Corporation of India, LIC, IDBI etc.
(Not more than two) In the present case only. 6.
Members falling under Representative of NIL Bye law No. 29(D)(iii) ICICI (One) In the present case.
Members falling under Bye Nominee of the 01 law NO.29(D)(iv) State Government 501 8.
Members falling under Bye Expert nominee 01 law No. 29(E).
(co opted).
Members falling under elected from SC/ 02 bye law No. 29(G) ST and Weaker r/w section 73B Section.
Total Strength 19 It is also evident from the provisions of Bye law No. 29 that the Representative of the State Government shall not be entitled to vote on any subject at any meeting of the Board, but his opinion may be recorded in the minute book.
So far the representatives referred to in Clause D(i) and (D)(ii) in Bye law No. 29, that is, representative of the financing institutions as well as the expert nominee (co opted) fall ing under Bye law 29(E) are entitled to participate in the special meeting and also cast their votes in such meeting.
This being the position, it is against the provisions of the Act, Rules and Bye laws of the society to hold that the members falling under Bye law 29(D)(i) and (ii) as well as the expert nominee (co opted) under Bye law 29(E) are not entitled to sit and vote in the meeting of the committee convened for consideration of the no confidence motion against the Chairman, Board of Directors or for that of the Managing Committee.
This interpretation will be wholly going against the clear meaning of the expression namely members who are entitled to sit and vote at any meeting of the committee.
The right to participate in the special meeting as well as to vote for such meeting is a statutory right and it flows from the provision of the Act, Rules and Bye laws of the Society.
It has nothing to do with the democracy.
The words "entitled to sit and vote in any meeting o[ the socie ty" refer to member to sit and vote not in every meeting but in any meeting of the society.
The only express bar as provided in section 27 is that the members, that is, the Directors representatives of the Financial institutions as well as the Expert Director (co opted) are not competent to participate only in the election of members of the society.
The said Directors have been conferred the right to partici pate in any meeting including the special meeting of the Board of Directors or of the Managing Committee of the society .
It is appropriate to refer of Jamuna Prasad Mukhariya and Others vs Lachhi Ram and Others, [1955] Vol. 1 S.C.R. 608 at 610.
It has been observed: "The right to stand as a candidate and contest the election is not a common law right.
It is a special right created by statute and can only be exercised on the conditions laid 502 down by the statute.
The Fundamental Rights Chapter has no bearing on a right like this created by statute.
The appel lants have no fundamental right to be elected Members of Parliament.
If they want that they must observe the rules.
" We have gone through the Judgment rendered by our Learned Brother, Hon 'ble Mr. Justice R.M. Sahai, we are however, unable to concur with the views expressed by our Learned Brother and the findings arrived at therein.
We therefore, hold that the requisition meeting that has been convened cannot be held as the representatives of the Finan cial Institutions in the Board of Directors as well as the Expert Director (co opted) under the relevant provisions of Bye law No. 29 have not been served with the requisition notices of special meeting convened by the respondent No. 3 pursuant to the said requisition notice.
The impugned notice convening the special meeting is wholly illegal and unwar ranted.
Furthermore, as we have found hereinbefore that the two Directors representing the Financial Institutions as well as the expert nominee (co opted) are entitled to parti ciapate in the special meeting of the committee and also to vote at the same meeting as regards the no confidence mo tion, the non service of the notic of the said meeting on the aforesaid Directors renders the said special meeting illegal as there has been an infringement of the provisions of the said Act, Rule 57A of the Maharashtra Cooperative Societies Rules, 1961 and Bye Laws 29D(i) and (ii) and 29E of the Bye Laws of the Society.
We, therefore, dismiss the appeal and allow the writ petition filed in the High Court.
The appellants will pay costs quantified at Rs. 5,000 to the respondents.
R.M. SAHAI, J.
The short question of law that arises for consideration in this appeal directed against the order of Bombay High Court, is whether the nominees of financial institutions and co opted Technical Directors who are not entitled under bye law 29 of the Sanjay Sahakari Sakhar Karkhana Ltd. (hereinafter called as 'Society ') framed under Maharashtra Co operative Societies Act, 1960 (for brevity 'Act ') either to function as Chairman or Vice Chairman of the Board of Directors of the Society or to vote at their election are entitled to participate in a special meeting requisitioned for consideration of motion of no confidence under Section 73 ID of the Act.
Resolution to requisition a special meeting to consider motion of no confidence against Chairman of the Board, signed by more than 1/3rd members of the Board, was deliv ered to the Registrar as 503 required by Rule 57 A along with a list of members who were entitled to sit and vote.
Notices on it were issued under Clause (b) of sub rule (2) of rule 57 A to elected members only.
Validity of it and consequent proceedings were chal lenged before the High Court, amongst others, for being violative of rule 57 A as it required the Registrar to issue notices to all members of the Board.
Further nominees of financial institutions being vitally involved in the welfare of the Society, their presence was essential for effective and meaningful discussion even if they were not entitled to sit and vote.
Various other objections were raised.
But the High Court did not find merit in any except the one relating to non issuance of notice to nominees of financial institu tions and the expert co opted by the Board.
Reason for it was wider construction of the expression who are for the time being entitled to sit and vote at any meeting of the committee" used in section 731D of the Act.
The High Court found that even though it would have been more logical to restrict such right to those alone who were entitled to elect yet it widened the ambit of expression because if two meanings were possible then the meaning which extended the right to vote rather than that limited should be accepted.
It also found that right to vote on a resolution of no confidence being an important matter affecting the Society, it should be extended to even nominated members who had a right to vote at some meeting.
Bye law 29 framed by the Society, gives out the Consti tution of the Board of Directors comprising of elected, ex officio, representatives, and co opted members.
But right to be elected as Chairman or Vice Chairman of the Board or even voting at the meeting of such election has been confined to elected members by clause (F) which is extracted below: "Managing Director, and (representatives in sub clauses (d) and (e) (Co opted Technical Director) shall not be entitled to function as Chairman and Vice Chairman.
The representa tives referred to in above sub clause (d) and technical expert director coopted as per provisions of subclause (e) and Managing Director, will not be entitled to vote at the meeting for the election of Chairman and ViceChairman.
The representative of the State Government shall not be entitled to vote on any subject at any meeting of the Board.
But his opinion will be recorded in the minute book.
He will not be responsible for mismanagement and negligence of the board.
Further no action can be taken against him for any losses sustained to the Karkhana 504 due to the mismanagement and the negligence of the board. ' ' The question is how does it reflect on the right to participate in a meeting of no confidence against the Chair man of the Board? For this purpose it is necessary to ex tract sub section (1) of section 731D which reads as under: "A President, Vice President, Chairman, Vice Chairman, Secretary, Treasurer or any other officer by whatever desig nation called who holds office by virtue of his election to that office shall cease to be such President, Vice Presi dent, Chairman, Vice Chairman, Secretary, Treasurer or any other officer, as the case may be, if a motion of noconfi dence is passed at a meeting of the committee by twothird majority of the total number of committee members who are for the time being entitled to sit and vote at any meeting of the committee and the office of such President, Vice President, Chairman, Vice Chairman, Secretary, Treasurer or any other officer, as the case may be, shall thereupon be deemed to be vacant." This sub section provides the manner in which a Chairman or Vice Chairman who holds such office by virtue of his election may cease to hold it.
It also provides the method of such removal by twothird majority of the total members of the committee who are, for the time being, entitled to sit and vote in any meeting of the Committee.
It is thus clear that the right to remove and elect Chairman and ViceChairman has been restricted to only limited class of members.
Who are they? Elections in a democracy have been conceived as an instrument of selecting the best qualitatively superior and politically valuable.
Who should be entitled to reverse the selection? Those who elect or any other numbers increased by any methodology or law adding representatives and nominees not entitled to participate in selection.
If the value of elective process has to have primacy then those worthy of choice should not be permitted to be squeezed out by those who are precluded from leadership or electing the leader.
This basic concept does not stand altered or modified either by any provision in the Act or Rules.
Literal construction of expression 'entitled to sit and vote ' if it results in negation of democratic process or is against logic and is fraught with danger of removal of an elected representative by 505 nominees of financial institutions or government then it has to be avoided.
Reverting to statutory right the scheme of the Act does not warrant the conclusion that such members are entitled to participate in meeting requisitioned under section 73 ID.
Sub section (9) of Section 27 reads as under: "No nominee of the Government or of any financing bank on any society shall be entitled to vote at any election of its committee.
" It clearly and unequivocally debars nominees of finan cial institutions or Government representatives from exer cising any right to vote at any election meeting.
Therefore, the provisions in the bye law debarring such a member from voting at 'election of Chairman or ViceChairman cannot be interpreted to mean as permitting such representatives to vote at other election meeting as that may result in invali dating the bye law.
Even if such 'members have some right to vote in some meetings other than election meetings or they have a right to record their opinion it does not entitle them to participate or even served with notice of vote of confidence as nature of meeting for considering motion of no confidence has all the characteristics both in content and effect of an election meeting.
Voting is sine qua non of election and under clause (i) of sub rule (7) of Rule 57 A, the decision to retain Chairman is arrived at by voting and such right, namely, right to vote in election meeting being non existent in nominees of financial institutions or of Government the expression "entitled to sit and vote" used in section 73 ID has to be read as excluding such members from its ambit.
Such reading of the provision is necessary not only because it is more logical but also that is the outcome of combined reading of sub section (9) of section 27, sec tion 73 ID and bye law 29.
For these reasons, this appeal succeeds and is allowed.
The Writ Petition filed in the High Court is dismissed.
But there shall be no order as to costs.
Y. Lal Appeal dismissed.
| IN-Abs | The appellants, elected Directors of the Sanjay Sahakari Sakhar Karkhana Ltd., signed a requisition and sent the same to the Respondent 3, Joint Director of Sugar and Joint Registrar Cooperative Societies, Maharashtra State, request ing him to summon a special meeting of the Committee of the karkhana to consider the proposed motion of no confidence against the Chairman of the Committee, Respondent No. 1.
The requisition was signed by more than 1/3rd of the total members in accordance with the provisions of Clause (2) of Sec.
731D of the Maharashtra Cooperative Societies Act 1960.
On receipt of the said requisition, Respondent No. 3 issued a notice dated 13.9.1989 convening a special meeting of the Committee of karkhana i.e. Board of Directors on 25.9.1989.
The said notice was issued to the elected members only.
No notice was sent to nominated members of the financial bodies or co opted members.
Respondent No. 1 filed a writ petition before the High Court and challenged the action of the Respondent No. 3 in not issuing the notice to the co opted members and the member nominees of the Financial Institu tions, as according to him, those members are entitled to sit and vote at the special meeting when the committee considers the vote of no confidence under Section 73 ID of the Act.
The High Court on consideration of the provisions of Section 731D read with Rule 57A and bye law No. 29 of the Bye Laws of the Society, allowed the writ petition holding that the three members of the second category who have got a limited right to vote at a meeting except at a meeting to elect Chairman or Vice Chairman are entitled to be served with notices of the special meeting and to participate in the said meeting and as the two nominees of the Financial Institutions and the expert co opted members had not been served with the notice of requisition meeting, the requisi tion meeting could not be held.
The High Court thus directed the Registrar, respondent No. 3, to issue fresh notices to the elected members as well as to the three Directors of the second 492 category before holding the meeting and accordingly disposed of the writ petition.
The appellants thereupon moved the High Court and obtained a certificate of fitness under Article 134(1) of the Constitution and have filed this appeal.
The main contention of the appellants is that the nomi nees of the Financial Institutions and the co opted members are not entitled to notice.
Dismissing the appeal (by majority B.C. Ray and Kuldip Singh, JJ.) this Court, HELD: (Per B.C. Ray, J.) The right to participate in the special meeting as well as to vote for such meeting is a statutory right and it flows from the provision of the Act, Rules and Bye laws of the Society.
It has nothing to do with the democracy.
[501E] The words 'entitled to sit and vote in any meeting of the society ', refer to member to sit and vote not in every meeting but in any meeting of the society.
The only express bar as provided in Section 27 is that the members, that is, the Directors representatives of the Financial Institutions as well as the expert Director (co opted) are 'not competent to participate only in the election of members of the socie ty.
[501E F] The Directors have been conferred the right to partici pate in any meeting including the special meeting of the Board of Directors or of the Managing Committee of the society.
[501G] The requisition meeting that has been convened cannot be held as the representatives of the Financial Institutions in the Board of Directors as well as the Expert Director (co opted) under the relevant provisions of Bye law No. 29 have not been served with the requisition notices of special meeting convened by the respondent No. 3 pursuant to the said requisition notice.
[502B C] (Per R.M. Sahai, J. dissenting) Sub section (i) of Section 73 D provides the manner in which Chairman or Vice Chairman who holds such Office by virtue of his election may cease to hold it.
It also pro vides the method of such removal by two third majority of the total members of the committee 493 who, are, for the time being, entitled to sit and vote in any meeting of the Committee.
It is thus clear that the right to remove and elect Chairman and Vice Chairman has been restricted to only limited class of members.
[504E F] Literal construction of expression 'entitled to sit and vote ' if it results in negation of democratic process or is against logic and is fraught with danger of removal of an elected representative by nominees of financial institutions or government, then it has to be avoided.
[504H; 505A] Voting is sine qua non of election and under clause (i) of sub rule (7) of Rule 57 A, the decision to retain Chair man is arrived at by voting and such right namely, right to vote in election meeting being nonexistent in nominees of 'entitled to sit and vote ' used in section 73 ID has to be read as excluding such members from its ambit.
[505E F] Such reading of the provision is necessary not only because it is more logical but also that is the outcome of combined reading of subsection (9) of Section 27, Section 73 ID and Bye law 29.
[505F] Jamuna Prasad Mukhariya and Ors.
vs Lachhi Ram and Ors., ; at 610 referred to.
|
ivil Appeal No. 1308 of 1990.
From the Judgment and Order dated 9.12.86 of the Madras High Court in A.A.O. No. 421/83.
K. Parasaran, B. Ramamoorthy and V. Balachandran for the Appellant.
M.R. Narayanaswamy and A.T.M. Sampath for the Respond ents.
The Judgment of the Court was delivered by THOMMEN, J.
Special leave is granted.
This appeal arises from the judgment of the Madras High Court in A.A.O. No. 421 of 1983.
The sole question that arises for consideration is as regards the period of limita tion for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside sale of immovable property sold in execution of a decree.
Has the deposit to be made within 30 days from the date of sale as required by sub rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the ? The High Court by the impugned judgment held that Arti cle 127 governed the period of limitation to make a deposit in terms of Rule 89.
In coming to that conclusion the High Court followed its earlier decision in Thangammal & Ors.
vs K. Dhanalakshmi & Anr., AIR 1981 Mad. 254 and the decision of this Court in Basavantappa vs Gangadhar Narayan Dharwad kar & Anr.; , In the latter decision, a Bench of two Judges of this Court held that Thangammal (supra) was correctly decided on the point and the deposit made within 60 days from the date of sale was well within time.
485 We shall read the relevant provisions insofar as they are material.
Rule 89 of Order XXI provides: "89.
Application to set aside sale on deposit. (1) Where immovable property has been sold in execution of a decree, any person claiming an interest in the property sold at the time of the sale or at the time of making the application, or acting for or in the interest of such person, may apply to have the sale set aside on his depositing in Court, (a) for payment to the purchaser, a sum equal to five per cent of the purchase money, and (b) for payment to the decree holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount which may, since the date of such proclamation of sale, have been received by the decree holder, Rule 92(2) of Order XXI reads: (2) . . . . where, in the case of an applica tion under Rule 89, the deposit required by that rule is made within thirty days from the date of sale, [or in cases where the amount deposited under Rule 89 is found to be deficient owing to any clerical or arithmetical mistake on the part of the depositor and such deficiency has been made good within such time as may be fixed by the Court, the Court shall make an order setting aside the sale].
The words shown in bracket in Rule 92(2) were substitut ed by section 72 of the Civil Procedure Code (Amendment) Act, 1976 with effect from 1.2.1977.
The object of the amendment was to afford an opportunity to the applicant to make good any deficiency in the amount deposited under Rule 89 when the deficiency occurred by reason of clerical or arithmetical mistake on his part.
That amendment has no relevance to the point in issue as regards the period of limitation except to emphasise that sub rule (2) of Rule 92 had received the special attention of Parliament in 1976.
Parliament addressed itself particularly to the sub rule, and yet did not, apart from the special 486 contingency provided for by the amendment, think it neces sary to extend the period generally prescribed under Rule 92(2) to make the deposit which is a condition precedent to an application to set aside a sale.
Rule 89 postulates an application on deposit.
It says "may apply to have the sale set aside on his depositing in Court".
These words show that deposit is a condition prece dent to the making of an application to set aside a sale.
That condition must be satisfied within the period pre scribed by sub rule (2) of Rule 92, which undoubtedly is 30 days.
Parliament refused to alter that provision even when a part of the sub rule was substituted.
No doubt on this aspect would probably have arisen had it not been for the longer period prescribed by Article 127 of the (as substituted by the Amending Act 104 of 1976 with effect from 1.2.1977) for making an application under Rule 89.
That Article reads: Description Period of Time from which of suit limitation period begins to run 127.
To set aside Sixty The date of a sale in execution days the sale of a decree includ ing any such applica tion by a judgment debtor.
" Prior to the Amending Act 104 of 1976 the period pre scribed by Article 127 was 30 days.
As a result of the amendment, a period of 60 days is provided for making an application to set aside a sale.
It is important to remember that Article 127 appears in Part I of Third Division of the Schedule to the , dealing exclusively with applications.
Article 127 thus relates solely to the making of an application and not to a deposit.
This Article governs applications made under Rules 90 and 91 as well, but we are not concerned with them.
It is true that prior to the Amending Act 104 of 1976, the period prescribed for the making of an application was identical to that for the 487 making of a deposit.
But as a result of the amendment, different periods are now prescribed for the making of the deposit and the application.
That it was the legislative intent to provide different periods of limitation for these two matters is, from the language used in the two enact ments, clear and explicit.
The reason why the legislature provided for different periods for the two matters which are the necessary steps one following the other to be taken for setting aside the sale of an immovable property sold in execution of a decree is not for the Court to question.
This Court would not assume that the legislature made a mistake in this respect or made an omission in accomplishing what it had set out to achieve.
There is no inconsistency between the two sets of provi sions prescribing different periods of limitation.
Such inconsistency can arise only if obedience of one provision will result in disobedience of the other.
While Rule 92(2) requires a deposit to be made within 30 days from the date of sale, Article 127 requires an application contemplated under Rule 89 to be made within 60 days from the date of sale.
As stated earlier, the deposit must necessarily pre cede the application for no application under Rule 89 can be made except on depositing the amount in Court.
We see no inconsistency in these two sets of provisions.
The words of the statutes being clear, explicit and unambiguous, there is no scope to have recourse to external aid for their construction.
Nevertheless in deference to the arguments of the respondents ' counsel, we would refer to the Statement of Objects and Reasons in respect of clause 102 of the Bill introduced in the Lok Sabha on 8th April, 1974 [Published in the Gazette of India (Extraordinary) Part II, Section 2, dated April 8, 1974] amending Article 127.
It states: "Clause 102 (Amendment of the Schedule to the Limitation Act, 1953) An application to set aside a sale in execution of a decree on deposit under Rule 89 of Order XXI is re quired to be made within thirty days from the date of the sale.
Experience shows that this period is too short and often causes hardship because the judgment debtors usually fail to arrange for moneys within that time.
Banks usually take more than thirty days to sanction loans and advances.
In the circumstances, entry 127 of the Schedule to the is being amended to increase the period of limitation to sixty days in respect of an application to set aside a sale in execution of a decree.
This increase in 488 the period of limitation will not affect the purchaser because five per cent of the purchase money is required to be paid to him.
The advantage of the increased period of limitation will also be available to an application under Rule 90 or Rule 91 of Order XXI to set aside a sale in execution of a decree.
In view of the increase in the period of limitation, confirmation of a sale will have to await the expiry of the increased period of limitation." (emphasis supplied) The legislative intent, as seen from the above state ment, was indeed to extend the period prescribed for making an application and not for any other purpose.
That is the reason why Article 127 was amended enlarging the period for making an application from 30 days to 60 days.
That period has no bearing on the time allowed for making a deposit in respect of which the period is prescribed, not under Article 127, but under Rule 92(2) of Order XXI, and this period has always been, and remains to be, 30 days.
We see no repug nance or inconsistency or lack of clarity in these two sets of provisions.
Appearing for the appellant (the auction purchaser), Mr. Parasaran submits that the High Court was not justified in attempting to correct or supply, what it thought to be, a defect or an omission in the statute.
He rightly contends that even if there was an omission, it was not for the Court to rectify it.
The Court must indeed proceed on the assumption that the legislature did not make a mistake and that it intended to say what it said: See Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; at 545.
Assuming there is a defect or an omission in the words used by the legislature, the Court would not go to its aid to correct or make up the deficiency.
The Court cannot add words to a statute or read words into it which are not there, especially when the literal reading produces an intelligible result.
"No case can be found to authorise any court to alter a word so as to produce a casus omissus": Per Lord Halsbury, Mersey Docks vs Henderson. , 602.
"We cannot aid the legislature 's defective phrasing of an Act, we cannot add and mend, and, by construction, make up deficiencies which are left there": Crawford vs Spooner, ; , 8, 9.
Where the language of the statute leads to manifest contra diction 489 Of the apparent purpose of the enactment, the Court can, of course, adopt a construction which will carry out the obvi ous intention of the legislature.
In doing so "a judge must not alter the material of which the Act is woven, but he can and should iron out the creases.": Per Denning, L.J., as he then was, Seaford Court Estates vs Asher, All E.R. [1949] 2 155 at 164.
See the observation of Sarkar, J. in M. Pentiah & Ors.
vs Muddala Veeramallapa & Ors., ; at 314.
In the construction of the relevant provisions, we see no contradiction or ambiguity or defect or omission.
We see no merit in the argument that Article 127 must override Rule 92(2) of Order XXI in respect of limitation.
We view both the provisions as prescriptive of time for different pur poses, and of equal efficacy and particularity.
The maxim generalia specialibus non derogant has no relevance to their construction.
Nor does the principal in Heydon 's case ; 76 ER 637 offer any help on the point in issue.
The mischief which the legislature had set out to remedy by amendment of Article is what is stated in the objects and reasons clause.
That object was accomplished by prescribing a longer period for filing an application to set aside a sale in execution of a decree.
Further more, as already seen, by amendment of Rule 92(2) of Order XXI an opportunity was accorded to the depositor to make good the deficiency in the deposit made by him due to arithmetical or clerical mistake on his part.
In no other respect did the legislature evince an intention to extend the period prescribed for making the deposit.
It would perhaps have been better, more logical, reasonable and practical, as stated by the Kerala High Court in Dakshayini & Ors.
vs Madhavan, AIR 1982 Kerala 126, to enlarge the period for making the deposit so as to make it identical with that prescribed for making the appli cation, and such extended period would have better served the object of the amendment, namely, ameliorating the plight of the judgment debtor, but such are matters exclusively within the domain of legislation by Parliament and the Court cannot presume deficiency and supply the omission.
The legislature did not do more than what it did.
It has, in our view, accomplished what it had set out to achieve.
No more no less.
In the circumstances, we hold that the correct construc tion of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresistible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the prescrib ing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit.
490 Neither provision has any effect on the other as to time.
All decisions the contrary on the point, we hold, are incorrect.
With the greatest respect, we disagree with the contrary view expressed in Basavantappa vs Gangadhar Narayan Dharwadkar & Anr., ; On the question of limitation the judgment of the High Court is set aside, and the appeal is allowed to that ex tent.
We make no order as to costs.
R.N.J. Appeal allowed.
| IN-Abs | In this appeal by special leave brought by the auction purchaser against the Judgment of the Madras High Court the sole question for consideration is as regards the period of limitation for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside the sale of immovable property sold in execution of a decree.
Whether the deposit is to be made within 30 days from the date of the sale as required by sub rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the ? Following its earlier decision in Thangammal & Ors. vs V.K. Dhanalakshmi & Anr.
and the decision of this Court in Basavantappa vs Gangadhar Narayan Dharwadkar & Anr., the High Court had held that Article 127 governed the period of limitation to make a deposit in terms of Rule 89.
Setting aside the judgment of the High Court on the question of limitation, this Court in allowing the appeal, HELD: The correct construction of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresist ible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the prescribing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit.
Neither provision has any effect on the other as to time.
[489G H; 490A] Basavantappa vs Gandadhar Narayan Dharwadkar & Anr., ; , over ruled.
Nalinakaya Bysack vs Shyam Sunder Haldar & Ors.
, ; at 545; Mersey Docks vs Henderson, [1988] 13 App.
595,602; 484 SUPREME COURT REPORTS [1990] 1 S.C.R. Crawford vs Spooner, [1846] 6 Morre P.C. 1, 8, 9; Seaford Court Estates vs Asher, All E.R., [1949] 2.155 at 164 M. Pentiah & Ors.
vs Muddala Veeramallappa & Ors., ; at 314 Heydon 's case ; 76 ER 637; Dakshayini & Ors.
vs Madhavan, AIR 1982 Kerala 126, referred to.
|
ivil Appeal No. 1012 of 1987.
From the Judgment and Order dated 24.9.86 of the Gujarat High 415 Court in B.I .P.A.
No. 259 of 1986.
B. Datta, P.H. Parekh and Ms. Shalini Soni for the Appel lants.
T.U. Mehta and M.N. Shroff for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The appellants are in the cadre of Talatiscum Mantries (Patwaries) in the Panchayat Service of the State of Gujarat.
In the year 1982/83 they were sent on deputation to the higher cadre of Circle Inspectors in the State service.
The question for consideration is whether in the facts of this case the appellants have a right to be absorbed in the cadre of Circle Inspectors.
The appellants were originally appointed as Talatis in the Revenue Department of the State of Gujarat.
Under the Gujarat Panchayat Act (hereinafter called 'the Act ') which came into force with effect from April 1, 1963, Panchayat Service was constituted and under the Act all the posts of Talatis along with the incumbents stood transferred to the Panchayat Service.
On that date there was a cadre of Circle Inspectors in the State Service which was bifurcated and 50% of the posts continued in the State Service and the remain ing 50% were transferred to the Panchayat Service.
The appellants were sent on deputation as Circle Inspectors in the State Cadre.
In January 1986 qualified officials became available for promotion to the post of Circle Inspectors in the State cadre and as such the appellants were reverted to their parent cadre of Talatis in the Panchayat service.
The appellants challenged the reversion by way of writ petition in the Gujarat High Court primarily on the ground that their options for absorption in the State Service were pending with the State Government which the State was bound to decide in their favour.
The High Court dismissed the writ petition holding that there was nothing on the record to show that the appellants gave any option to be absorbed in the State cadre.
The High Court also found that they, being on deputation, have no legal right to be absorbed in the State Service.
This appeal by special leave is against the judgment of the High Court.
We have heard learned counsel for the parties.
The State by a circular dated February 8, 1965 asked the Talatis among others to give their options as to whether they want to remain in the Panchayat Service or to be re allocated to the State Service.
Section 206A(2) of the Act is as under: 416 "Any officer or servant who is not reallocated under sub section (1) and continues in the Panchayat Service immediately before the expiry of the aforesaid period of four years, shall on such expiry, be deemed to be finally allocated to the Panchayat Service.
" It is clear from the above quoted provision that a Panchayat servant who is not reallocated within a period of four years from.
April 1, 1963 would be deemed to be finally allocated to the Panchayat Service.
The High Court has held that the appellants have not been able to show that they made any such options before March 31, 1967.
Even if it is assumed that the appellants gave some sort of option the same having not been accepted before March 31, 1967, the appellants stood finally allocated to the Panchayat Service.
The appellants being on deputation they could be revert ed to their parent cadre at any time and they do not get any right to be absorbed on the deputation post.
We see no infirmity in the judgment of the High Court and as such we dismiss the appeal.
There shall be no order as to costs.
T.N.A. Appeal dismissed.
| IN-Abs | The appellants belonging to the Revenue Department of Gujarat State were allocated to the Panchayat Service when the Gujarat Panchayats Act, 1961 came into force and their allocation became final under section 206A(2) of the Act.
Thereafter they went on deputation as Circle Inspectors in the State service but were later reverted back to their parent cadre in the Panchayat Service.
The appellants challenged their reversion before the High Court which dismissed the petition.
Hence this appeal.
Dismissing the appeal, this Court, HELD: 1.
It is clear from section 206A(2) of the Gujarat Panchayats Act, 1961 that a Panchayat servant who is not reallocated within a period of four years from the coming into force of the Act would be deemed to be finally allocat ed to the Panchayat Service.
The High Court has held that the appellants have not been able to show that they made any such options before the specified date.
Even if the appel lant gave some sort of option the same having not been accepted before the expiry of specified date, the appellants stood finally allocated to the Panchayat Service.
[416B C] 2.
The appellants being on deputation they could be reverted to their parent cadre at any time and they do not get any right to be absorbed on the deputation post.
There is no infirmity In the judgment of the High Court.
[416D]
|
ivil Appeal No. 653 of 1981.
466 From the Judgment and Order dated 11.8.80 of the Punjab and Haryana High Court in C.W.P. No. 1192 of 1980.
M.K. Ramamurthy and Jitender Sharma for the Appellants.
Rajinder Sachar, Govind Mukhoty Dr. Shankar Ghosh, Mahabir Singh, S.C. Patel, T.C. Sharma, C.V. Subba Rao, C.M. Nayyar, P.P. Singh and S.K. Verma for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of a Division Bench of the Punjab and Haryana High Court dated 11th August, 1980 dismissing the appellants ' writ petition under Article 226 of the Constitution chal lenging validity of the appointment of Bhagwan Das Sardana, respondent No. 3 to the post of Executive Engineer in Public Works Department (Public Health Branch).
The post of Executive Engineer in Public Works Depart ment (Public Health Branch) in the State of Haryana is borne on Class I Engineering Service, recruitment to which is made by direct recruitment and promotion under the provisions of the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules, 1961 (hereinafter referred to as 'the Rules ').
Under Rule 5, 50% of the posts of Executive Engi neers in Class I are required to be filled by direct re cruits while the remaining 50% posts are to be filled by promotion from members belonging to Class II service.
Rule 8 provides for constitution of a Committee for making selec tion for promotion to the post of Executive Engineer.
The list so prepared is forwarded to the State Public Service Commission and on its approval the State Government is required to make the appointments.
Rule 9 lays down that promotion shall be made by selection on the basis of merit and suitability in all respects.
Rule 9(3) lays down that a member shall not be eligible for promotion to the rank of Executive Engineer, unless he has rendered five years ' service as an Assistant Executive Engineer, and has passed the departmental examination as provided in Rule 15.
The first proviso to the Rule lays down that an Assistant Execu tive Engineer found suitable for promotion shall be given preference over an eligible Class II officer.
The second proviso to Rule 9(3) confers power on the Government to reduce the period of five years ' service as an Assistant Executive Engineer.
Rule 11 lays down that an officer ap pointed to the service shall remain on probation for a period of two years in case of direct recruitment.
Rule 15 lays down that officers 467 appointed to the service unless they have already done so, shall pass departmental examination and within such period as may be prescribed by the Government.
Under the proviso to Rule 15(1) the Government is empowered to extend the period within which an officer may pass the departmental examina tion.
Rule 22 confers power on the Government to relax the requirements of Rules if it is satisfied that the operation of any of these Rules causes undue hardship in any particu lar case.
The appellants S/Shri K.K. Khosla and L.C. Goyal were holding the post of Sub Divisional Engineers PWD (Public Health Branch) in the State of Haryana in Class II Service of Engineers.
They were considered for promotion to the post of Executive Engineer, Class I Service.
The Selection Com mittee, on scrutiny of cases of eligible Class II officers prepared a select list for promotion.
The list so prepared contained the names of nine officers including the two appellants but ultimately the appellants were not appointed by promotion to the post of Executive Engineer instead other seven officers belonging to Class II Service were promoted and in addition to that Bhagwan Das Sardana, respondent No. 3 a direct recruit was also appointed on the recommendation or ' the Public Service Commission.
Aggrieved, the appellants filed a writ petition in the High Court challenging the validity of the appointment of respondent No. 3 on the ground that he had not rendered five years ' service as an Assistant Executive Engineer and had not passed the depart mental examination which was the minimum requisite qualifi cation for promotion to the post of Executive Engineer in Class I Service.
On behalf of the State Government, it was pleaded that the State Government had relaxed the require ment of Rule 9(3)(a) with regard to five years ' period of service not only to respondent No. 3 but to other officers also.
The High Court dismissed the writ petition on the finding that there was no infirmity in the Government 's order granting exemption to respondent No. 3 and his promo tion and appointment to the post of Executive Engineer did not suffer from any legal infirmity.
The appellants have challenged the view taken by the High Court in the instant appeal.
On behalf of the appellants it was urged that the promo tion and appointment of respondent No. 3 to the post of Executive Engineer was made in utter disregard of the Rules as he had not rendered five years ' service as an Assistant Executive Engineer as required by Rule 9(3)(a) and he had not passed the departmental examination as contemplated by Rule 15 and lastly he was not eligible for promotion as he had not completed two years ' probationary period as Assist ant Execu 468 tive Engineer on the date of his promotion.
On a careful scrutiny of the Rules and the material on record we do not find any merit in the submission made on behalf of the appellants.
No doubt respondent No. 3 had not rendered five years ' service as an Assistant Executive Engineer but the State Government had granted relaxation to the respondent No. 3 by reducing the period of service under Clause (a) to Rule 9(3) in exercise of its power under the proviso to the said Rule.
This relaxation was granted as the respondent No. 3 was the only officer in the Department who was a direct recruit to Class I Service.
The State Govern ment had power to grant relaxation under the second proviso to Rule 9(3) therefore we find no legal infirmity in the respondent 's promotion.
In addition to that Rule 22 further confers power on the State Government to grant relaxation with regard to the operation of the Rule.
The Government 's order granting relaxation in favour of respondent No. 3 is sustainable under Rule 22 also.
The scope of State Govern ment 's power to relax operation of Rules has been discussed by us in J.C. Yadav & Ors.
vs State of Haryana & Ors.
, On the application of those principles we find no illegality in the order of the Government granting relaxation to respondent No. 3, in respect of operation of Rule 9(3)(a).
As regards the departmental examination is concerned, it is true that the respondent No. 3 did not pass the depart mental examination afresh in the Public Health Branch.
On behalf of the State Government it is pointed out that prior to his recruitment to the post of Assistant Executive Engi neer in the Public Health Branch respondent No. 3 had been working as Sub Divisional Engineer (SDE) in the Public Works Department (Building and Road Branch) for a period of 6 1/2 years and during that period he had passed departmental examination.
In this view the Government did not consider it necessary to require the respondent No. 3 to pass the de partmental examination once again.
The Public Health Branch as well as the Building and Road Branch both belong to the Public Works Department.
The syllabus prescribed for the departmental examination in the Building and Road Branch as well as in the Public Health Branch is almost the same, as except one, all other subjects are common to both the Branches.
The State Government 's opinion that since the respondent No. 3 had already passed a departmental examina tion while working in the Building and Road Branch, it was not necessary for him to have passed the departmental exami nation again was justified though it had at an earlier stage directed the respondent No. 3 to pass the depart 469 mental examination again.
Later on the Government was satis fied that since the respondent had already passed the de partmental examination in Building and Road Branch, there was no necessity for the respondent to pass the examination again.
In these circumstances we hold that respondent 's promotion to the post of Executive Engineer was not rendered illegal merely because he had not undergone departmental examination in the Public Health Branch afresh.
Respondent No. 3 had been appointed as a direct recruit to the post of Assistant Executive Engineer on 7.12.
1977 on probation for a period of two years.
Before the expiry of the probation period he was selected for promotion to the post of Executive Engineer.
The appellants ' contention that unless the respondent had satisfactorily completed the probation period, he could not be promoted to the post of Executive Engineer, is misconceived.
There is no specific provision in the Rules requiring completion of probationary period for the purposes of promotion within the service.
Under Rule 11 an officer is required to be appointed on probation, if during the period of probation his work is not found satisfactory his services are to be dispensed with and in the event of his services being found satisfactory he is entitled to confirmation on the post.
It is thus clear that the completion of the probationary period of respondent was relevant only for the purpose of confirmation in Class I Service and Same was not a precondition for the purpose of promotion within the service.
Moreover, the Government issued an order waiving the probationary period of one year in the respondent 's case.
Non completion of probationary period of two years on the post of Assistant Executive Engineer did not affect the validity of the respondent 's promotion to the post of the Executive Engineer under the Rules.
In view of the above discussion, we find no merit in the appeal and it is accordingly dismissed.
There will be no order as to costs.
P.S.S. Appeal dismissed.
| IN-Abs | Rule 5 of the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules 1961 requires 50 per cent of the posts of Executive Engineers to be filled by promotion from m.tubers of Class II Service.
Rule .9(3) renders a member of service ineligible for promotion to the rank of Executive Engineer unless he renders five years ' service as an Assistant Executive Engineer, and has passed the depart mental examination.
The first proviso thereto grants pre fernce to an Assistant Executive Engineer over an eligible Class II Officer in the matter of promotion.
The second proviso empowers the Government to reduce the period of five years ' service as an Assistant Executive Engineer.
Rule II prescribes two years ' probation case of direct recruits to the Service.
Rule 15 requires officers appointed to the Service to pass departmental examination within such period as may be prescribed unless they have already done so.
Rule 22 empowers Government to relax the requirement of Rules In cases of undue hardship.
Respondent No. 3, a direct recruit to the post of As sistant Executive Engineer in the Public Health Branch, was promoted to the post of Executive Engineer, Class I Service, defeating the claim of the appellants, members of Class II Service of Engineers In the said Department.
They assailed his appointment by means of a writ petition under Article of the Constitution on the ground that the respondent was not eligible for promotion as he had not rendered five years ' service as an Assistant Executive Engineer and further he had not passed the departmental examination which was the minimum requisite qualification for promotion to the post of Executive Engineer.
Before the High Court the State Govern ment 's plea was that it had relaxed the requirement of Rule 9(3)(a) not only to respondent No. 3 but to other officers also.
The High Court dismissed the writ petition on the view that there was no infirmity in the Government 's order grant ing exemption to respondent 465 In appeal, in addition to the pleas raised before the High Court, it was further submitted that respondent No. 3 was not eligible for promotion as he had not completed two years ' probationary period as Assistant Executive Engineer on the date of his promotion.
Dismissing the appeal, the Court, HELD: 1.
There was no legal infirmity in the promotion of respondent No. 3.
The State Government had granted relax ation to him by reducing the period of service under clause (a) to Rule 9(3) in exercise of its power under the second proviso to the said Rule.
This relaxation was granted as he was the only officer in the department who was a direct recruit to Class I Service.
In addition to that, Rule 22 further confers power on the State Government to grant relaxation with regard to the operation of the Rules.
The Government 's order granting relaxation in favour of respond ent No. 3 was sustainable under Rule 22 also.
[468B D] J.C. Yadav & Ors.
vs State of Haryana & Ors.
, [1990] 1 SCR470, referred to. 2.
The respondent 's promotion to the post of Executive Engineer was not rendered illegal merely because he had not undergone departmental examination in the Public Health Branch.
He had been working as Sub Divisional Engineer in the Public Works Department (Buildings and Roads Branch) for a period of 6 1/2 years prior to his recruitment to the post of Assistant Executive Engineer in the Public Health Branch and during that period he had passed departmental examina tion.
The syllabus prescribed for the departmental examina tion in the Buildings and Roads Branch as well as in the Public Health Branch was almost the same.
The Government was satisfied that there was no necessity for him to pass the examination again.
[469B; 468E~G; 469A] 3.
Non completion of probationary period of two years on the post of Assistant Executive Engineer by respondent No. 3 did not affect the validity of his promotion to the post of Executive Engineer under the Rules.
There is no specific provision in the Rules requiring completion of probationary period for the purposes of promotion within the Service.
It was relevant only for the purpose of confirmation in Class I Service.
[469E; C D]
|
N: Civil Appeal Nos. 3321/82 and 3524 of 1983.
From the Judgment and Order dated 2.5.
1980 of the Punjab and Haryana High Court in C.W.P. Nos.
677/79 and 97/79.
P.P. Rao and C.M. Nayar for the Appellants in both the appeals.
N.S. Das Behl for the Respondent in C.A. No. 3524 of 1983.
Awadh Behari Rohtagi, Mahabir Singh, A.G. Prasad and Prem Malhotra for the state of Haryana.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
1.
Since common questions of facts and law arise for decision in these two appeals, they are dis posed of by a common judgment.
Civil Appeal No. 3221/82 and Civil Appeal No. 3524/83 arise out of the common judgment in Civil Writ Petition Nos.
677/79 and 97/79 and a few other petitions dated May 2, 1980, on the file of High Court of Punjab and Haryana at Chandigarh.
The writ petitions were dismissed and the appellants had leave of this court under Article 136 of the Constitution.
The facts lie on a short compass 538 and reference to the facts on record in Civil Writ No. 97 of 1979 are sufficient for disposal of these appeals.
Writ Petition No. 97 of 1979 relates to Punjab service while Civil Writ Petition No. 677/79 relates to Haryana.
The appellants were direct recruits to the ministeri al services in the subordinate offices of the Directorates of Agriculture of the respective states.
Admittedly all are governed by Punjab Subordinate Agricultural Service Rules 1933, for short 'rules '.
The respective state Governments upgraded on February 8, 1979 offices of the Directorates as 'A ' Class and the Subordinate Offices situated elsewhere remained as 'B ' Class.
The appellants and other filed writ petitions on February 26, 1976 seeking a writ of mandamus to direct the respondents to upgrade the Subordinate Offices of the Department of Agriculture as 'A ' Class; to treat the appellants on par with the similar employees working in the office of the Directorates of Agriculture; treat the Direc torate of Agriculture and Subordinate Offices as one depart ment for maintaining common seniority of all of them; to upgrade their scales of pay on the basis of the said senior ity and to quash the order dated February 8, 1979 declaring the Directorate as 'A ' Class as wholly arbitrary and dis criminatory.
Pending appeals, the respective Governments by proceedings dated March 2, 1982 classified the Directorate and Subordinate Offices as 'A ' Class.
The Government have also accorded equal pay to the employees similarly situated.
Therefore, the only question that survives to be resolved is whether the Subordinate Offices and the Directorate would be treated as one unit and common seniority of all the employ ees should be maintained.
Shri P.P. Rao and Shri C.M. Nayyar, learned counsel for the appellants in the respective appeals contended that the appellants were selected along with the persons appoint ed in the office of the respective Directorates.
They pos sessed the same qualifications; their scales of pay are now the same.
Their service conditions are also the same under the rules, and therefore, they are entitled to maintenance of common seniority for the purpose of promotion.
It is seen that the appointments were made somewhere in 1973.
From the list produced before us in Civil Appeal No. 3221/82 relating to the State of Haryana, among the persons selected by the Recruitment Board, though some of the persons are found to have secured higher ranking in the list prepared by the Selection Board, they were appointed to the Subordinate Offices while persons below them, in ranking were appointed in the Directorate.
When we enquired from the counsel for the State Shri Rohtagi, the learned Senior Counsel has produced before us the not 539 ings which show that the Director had taken five of them, one of whom had secured first class in Matriculation, two ex service candidates and two candidates who secured higher percentage of marks at the qualifying matriculation examina tion.
In the view we are taking this solitary circumstances does not militate against the ultimate conclusion that we have reached in the matter.
Admittedly, rule 3 of the rules provides that the service shall consist of seven sections and in each section there shall be such number of posts whether permanent or temporary of each grade specified in the appendix as the Local Government from time to time may determine.
Under rule 4(1) the Director of Agriculture shall make appointment to all the posts in the service except the post of Junior Clerks, other than those sanctioned for Head Office, Mukaddams and the posts shown under Section 7 of the appendix.
All other appointments shall be made by the Head Office concerned, vide rule 4(").
Rule 7 prescribes the method of recruitment.
Rule 7(1)(I) specifies thus: "In the case of Superintendent, Office of the Director (i) by promotion from the amongst the Head Assistants em ployed in the office, or (ii) by selection from amongst Superintendents or Head Assistants with at least five years clerical experience in other Government office.
" Rule 7(i)(J) read thus: "In the case of Head Assistant (i) by promotion from amongst Assistant and Stenographers with clerical experience who have proved their fitness for the appointment, or (ii) by selection from amongst clerks employed in the office of Government other than the office of the Director." Rule 7(1)(K): the case of Superintendent or Head Clerk of a Subordinate Office 540 (i) by promotion from amongst Senior Clerks who have proved their fitness for the post, or (ii) by selection from amongst clerks employed in Government Office other than the office in which the post/office is to be filled.
" Rule 7( 1)(L): "In the case of Assistant (i) by promotion from amongst Senior Clerks in their respec tive offices who have proved their fitness for appointment to the post; or (ii) by selection from amongst clerks employed in Government Offices other than the office in which the post is to be filled; or (iii) by direct recruitment provided that no graduate not already in Government service shall be appointed to be an Assistant unless he has been recommended as fit for appointment by the Punjab University Appointment Board.
" Sub rule (2): "Appointment to any post by the promotion of officials already in service or by the transfer of officials shall be made strictly by selection and no official shall have any claim to such an appointment as of right.
" The candidates have to undergo probation as provided in Rule 9, the details of which are not relevant.
Rule 10 provides seniority of members of the service.
The seniority of the members in the service shall, in each class of ap pointment shown in the appendix, be determined by the dates of their substantive appointment on probation or otherwise to a permanent vacancy in such class.
The other details are not necessary.
Hence omitted.
In the appendix, the office of the Director of Agri culture, Section 6 mentions ministerial posts of Superin tendent, Head Assis 541 tants, Assistants, Stenographers, Senior Clerks, Junior Clerks.
Their varying pay scales have also been mentioned, the details of which are now not material.
In the Subordi nate Offices one Superintendent, seven Head Clerks and two Senior Clerks are the cadres.
A resume of these rules clearly shows that for the appointment of all the posts including Junior Clerks in the Head Office, the appointing authority is the Director.
All appointments to the post of Junior Clerks other than Head Office shall be by the concerned Head Office.
As per the appendix, the staffing pattern in the Office of the Director of Agriculture and the Subordinate Offices is entirely different.
The only common element is the Senior Clerks.
The seniority is to be maintained on the basis of the substan tive appointment to the respective cadres.
The seniority Of the members of the service shall, in each class of appoint ment shown in the appendix be determined by the date of their substantive appointment or promotion or otherwise to permanent vacancies in such a class.
The method of appoint ment has been adumbrated under Rule 7(1)(I) to (L) by promo tion from amongst the persons working in the respective subordinate posts in the respective offices in the first instance, or by selection from amongst persons working in the Government Offices including Subordinate Offices and in some cases by the direct recruitment.
Thereby it is clear that for filling up the vacancies arising in the post of Superintendent, Assistants and Senior Clerks, the persons working in the Subordinate Offices or the Government Offices are the feeder channels, or in some cases by direct recruit ment.
Sub rule (2) of Rule 7 makes the matter clear that they have got right to be considered, but it is strictly by selection and they have no claim to the appointment as of right.
It is open to the Government to constitute different cadres in any particular service as it may choose according to its administrative convenience and expediency.
The office of the Director is the apex office obviously to control and oversee the functioning of the subordinate offices and the other allied departments under his control monitoring the implementation of the Government 's agricultural programmes.
It may not be necessary to maintain a common cadre of the employees of the Directorate and the Subordinate Offices.
Each cadre is a separate service or a part of the service sanctioned for administrative expediency.
Therefore, each may be a separate unit and the posts allocated to the cadre may be permanent or temporary.
It is seen from the appendix that in the office of the Directorate there is one Superin tendent, three Head Assistants, four Assistances, two Ste nographers, seven Senior Clerks and twelve Junior Clerks.
In the Subordinate Offices, there is one Superintendent, seven Head Clerks and two 542 Senior Clerks.
This is obviously on the basis of administra tive need.
No doubt the office of the Directorate and the Subordinate Offices have been compendiously shown in Section 6 of the Appendix.
That does not by itself mean that office of the Directorate and Subordinate Offices are treated under the rules as one unit or at par.
as contended for by Shri P.P. Rao.
As pointed out in the beginning, the Director had committed some irregularities at the time of initial ap pointments in the year 1973 when he picked up five persons out of the select list of the candidates and appointed them in the Directorate of Haryana Government deviating from the order of merit prepared by the Board.
They were selected at a common selection by the Recruitment Board along with other candidates who stood higher in the order of merit prepared by the Selection Board.
But this was done in the year 1973 and the appointments have not been challenged till date of filing of the writ petition in 1979.
Even in the writ peti tion no challenge was made.
This is pressed into service only to show that the appellants are similarly situated with them.
After the appointments were made and the candidates joined in the respective posts for consideration for promo tion the Rules occupy the field and the claims are to be considered according to Rule 7.
Therefore, though we may not agree with the learned counsel for the State that the Direc tor had absolute discretion to pick and choose arbitrarily and make appointment of the posts, yet undoubtedly, he had power to appoint them.
Normally the order of appointment would be in the order of merit of candidates from the list and must be in accordance with rules.
His exercise of power should not be arbitrary.
The absence of arbitrary power is the first postulate of rule of law upon which our whole constitutional edifice is based.
In a system governed by Rule of Law, discretion when conferred upon an executive authority must be confined within clearly defined limits.
The rules provide the guidance for exercise of the discre tion in making appointment from out of selection lists which was prepared on the basis of the performance and position obtained at the selection.
The appointing authority is to make appointment in the order of gradation, subject to any other relevant rules like, rotation or reservation, if any, or any other valid and binding rules or instructions having force of law.
If the discretion is exercised without any principle or without any rule, it is a situation amounting to the anti thesis of Rule of Law.
Discretion means sound discretion guided by law or governed by known principles of rules, not by whim or fancy or caprice of the authority.
We refrain from going into the correctness of the choice made by the Director due to latches in not assailing the correct ness of the appointment for well over six years.
The validi ty of the rules have not been questioned.
The only question is, as stated earlier, whether the 543 employees working in the Head Office and the Subordinate Office are entitled to common seniority.
The rules them selves made a distinction between the persons appointed in the Directorate and the Subordinate Offices as separate cadres and the subordinate cadre in some cases is the feeder cadre for promotion to the post in the Head Office.
In this view, by no stretch of imagination, the appellants can be considered to be equally placed for treating them at par with the Directorate employees for being treated as being in a common cadre.
There is reasonable nexus to differentiate the two cadres.
Therefore, the classification cannot be said to be arbitrary violating Articles 14 and 16 of the Consti tution.
It is not necessary to burden the judgment with the decisions cited by either counsel as they are not directly or nearer to the core in the case.
Accordingly we hold that the appellants are not entitled to be treated at par with the employees working in the respective Directorates for giving direction to the respondents to maintain common seniority between the employees of the Directorate and Subordinate Offices.
The appeals are accordingly dismissed, but without costs.
T.N.A. Appeals dis missed.
| IN-Abs | The appellants belonging to the ministerial service in the subordinate offices of the Directorates of Agriculture of the States of Punjab and Haryana filed writ petitions in the Punjab and Haryana High Court seeking a direction that subordinate offices and the Directorates should be treated as one unit and common seniority of all the employees should be maintained.
The High Court dismissed the petitions.
Hence these appeals by special leave.
In these appeals it was contended that the appellants are entitled to common seniority with their counterparts in the Directorates because their service conditions, pay scales and qualifications were same.
In 536 order to show similarity with their counterparts in the Directorates it was also pointed out that though a common selection was made for Directorates and subordinate offices yet the appointing authority picked up some candidates out of the select list and appointed them in the Directorates thereby deviating from the order of merit prepared by the Selection Board.
Dismissing the appeals, this Court, HELD: 1.
The Punjab Subordinate Agricultural Service Rules 1933 themselves made a distinction between the persons appointed in the Directorate and the Subordinate Offices as separate cadres and the subordinate cadre in some cases is the feeder cadre for promotion to the post in the Head Office.
In this view by no stretch of imagination, the appellants can be considered to be equally placed for treat ing them at par with the Directorate employees for being treated as being in a common cadre.
There is reasonable nexus to differentiate the two cadres.
Therefore, the clas sification can not be said to be arbitrary violating Arti cles 14 and 16 of the Constitution.
[543A B] 1.1 The fact that the office of the Directorate and the subordinate offices have been compendiously shown in section 6 of the Appendix to Rules does not by itself mean that office of the Directorate and Subordinate Offices are treat ed under the rules as one unit or at par.
[542A] 2.
It is open to the Government to constitute different cadres in any particular service as it may choose according to its administrative convenience and expediency.
[541E] 2.1 The office of the Director is the apex office obvi ously to control and oversee the functioning of the subordi nate offices and the other allied departments under his control monitoring the implementation of the Government 's agricultural programmes.
It may not be necessary to maintain a common cadre of the employees of the Directorate and the Subordinate offices.
Each cadre is a separate service or a part of the service sanctioned for administrative expedien cy.
Therefore, each may be a separate unit and the posts allocated to the cadre may be permanent or temporary.
[541F G] 2.2 Accordingly the appellants are not entitled to be treated at par with the employees working in the respective Directorates for giving direction to the respondents to maintain common seniority between the employees of the Directorate and Subordinate Offices.
[543D] 537 3.
Normally the order of appointment would be in the order of merit of candidates from the list and must be in accordance with rules.
The exercise of power should not be arbitrary.
The absence of arbitrary power is the first postulate of rule of law upon which our whole constitutional edifice is based.
In a system governed by Rule of Law, discretion when conferred upon an executive authority must be confined within clearly defined limits.
The rules provide the guidance for exercise of the discretion in making ap pointment from out of selection lists which was prepared on the basis of the performance and position obtained at the selection.
The appointing authority is to make appointment in the order of gradation, subject, to any other relevant rules like, rotation or reservation, if any, or any other valid and binding rules or instructions having force of law.
If the discretion is exercised without any principle or without any rule, it is a situation amounting to the antith esis of Rule of Law.
[542D E, F] 3.1 Discretion means sound discretion guided by law or governed by known principles of rules, not by whim or fancy or caprice of the authority.
1542G]
|
Appeal No. 297 of 1955.
Appeal from the judgment and decree dated April 7, 1954, of the Patna High Court in Misc.
Judicial Case No. 327 of 1951.
A. V. Viswanatha Sastri and B. K. Sinha, for the appellant.
K. N. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the respondent.
October 1.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
This is an appeal with the, certificate issued by the High Court of Judicature at Patna under section 66A(2) of the Income tax Act (hereinafter called the Act) and it raises a, short question of the construction of section 34(1)(b) of the Act.
This 12 question arises in this way.
Proceedings.
taken by the Income tax Officer, Special Circle, Patna, against Maharaja Bahadur Rama Rajaya Prasad Singh, the father of the appellant, to levy income tax for the year 1945 46.
The total income assessed to income tax by the said order was Rs. 1,60,602.
This amount included the sum of Rs. 93,604 received by the assessee on account of interest on arrears of rent due to him after deduction of collection charges.
It was urged before the Income tax Officer by the assessee that this amount was not liable to be taxed in view of the decision of the Patna High Court in Kamakshya Narain Singh vs Commissioner of Income Tax (1).
The Income tax Officer, however, held that, since the department had obtained leave to appeal to the Privy Council against the said decision, the matter was sub judice and so be would not be justified in accepting the assessee 's contention.
In the result, he included the said amount in the total income for the purposes of assessment, but ordered that the realisation of the tax on the &aid amount should be stayed till the decision of the Privy Council or March 31, 1947, whichever was earlier.
This order was passed under section 23(3) of the Act on December 31, 1945.
Against this order the assessee preferred an appeal before the Appellate Assistant Commissioner of Income tax, Patna.
On May 8, 1946, the appellate authority held that the Income tax Officer was bound to follow the decision in the case of Kamakshya Narain Singh (supra) (1) and so, he set aside the order under appeal in regard to the amount of Rs. 93,604 and directed the Income tax Officer to make fresh assessment.
He also observed that it was not clear as to what portion of the said amount was interest on arrears of agricultural rents and what portion related to interest on arrears of non agricultural rents.
The Income Tax Officer was accordingly directed to determine the latter amount and to levy tax on it.
Pursuant to this appellate order the Income tax Officer made a fresh assessment under sections 23(3) and 31 of the Act on August 20, 1946.
By this order the (1) [1946) 13 total amount of income liable to tax was determined after deducting the whole of the amount of Rs. 93,604 from it.
Some other minor reductions were also allowed in compliance with the appellate order.
The department did not challenge either the appellate order or the subsequent order passed by the Income tax Officer in pursuance of the said appellate order.
Subsequently, on July 6, 1948, the appeal preferred by the department to the Privy Council against the decision of the Patna High Court in Kamakshya Narain Singh 's case (1) was allowed and it was held that interest on arrears of rent payable in respect of agricultural land is not agricultural income for it is neither rent nor revenue derived from land.
As a result of this decision, the Income tax Officer issued a notice to the assessee under section 34 of the Act on September 25, 1948.
This notice called upon the assessee to file a fresh return as the Income tax Officer had reason to believe that a part of the assessee 's income assessable to income tax for the year ending March 31, 1946, had escaped assessment.
It appears that this notice was found to be defective, and so under the provisions of section 34, as amended, a fresh notice was issued by the officer to the assessee on March 18, 1949.
The proceedings thus taken by the officer under section 34 ultimately led to a revised assessment order passed under section 23(3) and section 34 of the Act and the amount of Rs. 93,604 was added to the assessment amount as interest on arrears of rent.
This revised assessment order was passed on April 30, 1949.
The assessee appealed against this order but the appellate authority dismissed the assessee 's appeal and confirmed the said order on July 26, 1949.
He held that the subsequent decision of the Privy Council in the case of Kamakshya Narain Singh (supra) (1) was information within the meaning of cls.
(a) and (b) of section 34(1) and that the Income tax Officer bad reason to believe that a part of the assessee 's income had escaped assessment.
The assessee then moved the Income tax Appellate Tribunal; but on August 21, (1) 14 1950, the tribunal confirmed the order passed by the appellate authority and dismissed the assessee 's appeal.
It was held that the provisions of a. 34 as amended in 1948 applied to the case and that the decision of the Privy Council brought it within the purview of sub section
(1)(b) of section 34.
Meanwhile the assessee died and the appellant succeeded to the estate of his deceased father.
He then filed an application under section 66(1) of the Act requiring the tribunal to refer the question of law raised in the case to the Patna High Court for its opinion.
The tribunal rejected this application on February 27, 1951.
Thereupon the appellant moved the Patna High Court under section 66(2) of the Act; his application was allowed and the tribunal was directed by the High Court on December 15, 1951, to state the case and refer the question of law for its opinion.
In compliance with the requisition of the High Court the tribunal by its order passed on July 23, 1952, submitted a statement of the case and referred to the High Court for its opinion the question of law raised by the appellant.
The question thus raised is: " Whether in the circumstances of the case the assessment order under section 34 of the Act of the interest on arrears of rent is legal ?" On April 7, 1954, this reference was heard by V. Ramaswamy and C. P. Sinha JJ.
of the Patna High Court and the question was answered by them in favour of the department.
The appellant then applied for and obtained a certificate from the Patna High Court on September 13, 1954.
The High Court has certified under section 66A, sub section
(2), of the Act that the case raises a question of law of a substantial kind and is otherwise a fit case for appeal to this court.
That is how the present appeal has come before us; and the question which it raises for our decision is about the true construction of section 34(1)(b) of the Act.
Section 34 of the Act has been amended in 1939 and in 1948.
It is conceded by Mr. Viswanatha Sastri, for the appellant, that the present case is governed by the section as it was amended in 1948.
This amended section 34, sub section
(1), deals with cases of income escaping assessment in two clauses.
Clause (a) covers cases 15 where income has escaped assessment by reason of the omission or failure on the part of the assessee to make a return of his income under section 22.
We are not concerned with this clause.
Clause (b) of section 34(1) provides inter alia that " notwithstanding that there has been no omission or failure as mentioned in cl.
(a) on the part of the assessee, if the Income tax Officer has, in consequence of information in his possession, reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, or have been under assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or that excessive loss or depreciation allowance have been computed, he may, at any time within four years of the end of that year serve on the assessee a notice containing all or any of the requirements, which may be included in a notice under sub section
(2) of section 22, and may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section ".
It is clear that two conditions must be satisfied before the Income tax Officer can act under section 34(1)(b).
He must have information in his possession, which, in the context, means that the relevant information must have come into his possession subsequent to the making of the assessment order in question and this information must lead to his belief that income chargeable to income tax has escaped assessment for any year, or that it has been under assessed or assessed at too low a rate or has been made the subject of excessive relief under the Act.
Two questions are raised by Mr. Sastri under this sub section in the present appeal.
He contends that the relevant information means information as to facts and cannot include the decision of the Privy Council on a point of law; and he argues that, where income has been duly returned for assessment and an assessment order has been passed by the Income tax Officer, it cannot be said that any income has escaped assessment within section 34(1)(b).
Thus the appellant 's case is that both the conditions required by section 34(1)(b) 16 have not been satisfied and so the order of revised assessment passed against the appellant is illegal.
It is not disputed that, according to its strict literal ' meaning, the word " information " may include knowledge even about a state of tile law or a decision on a point of law.
The argument, however, is that the context requires that the word " information " should receive a narrower construction limiting it to facts or factual material as distinguished from information as to the true state of the law.
In support of this argument Mr. Sastri referred to the marginal notes of sections 19A and 20A as well as the province, s of section 22(3) and section 28 and urged that the information contemplated by these provisions is information as to facts or parti culars and has no reference to the state of law or to any question of law; and so the said word in section 34(1)(b) should be construed to mean only factual information.
We are not impressed by this arguments If the word " information" used in any other provision of the Act denotes information as to facts or particulars, that would not necessarily determine the meaning of the said word in section 34(1)(b).
The denotation of the said word would naturally depend on the context of the particular provisions in which it is used.
It is then contended that sections 33B and 35 confer ample powers on the specified authorities to revise Income tax Officer 's orders and to rectify mistakes respectively and so it would be legitimate to construe the word "information " in section 34(1)(b) strictly and to confine it to information in regard to facts or particulars.
This argument also is not valid.
If the word "information " in its plain grammatical meaning includes information as to facts as well as information as to the state of the law, it would be unreasonable to limit it to information as to the facts on the extraneous consideration that some cases of assessment which need to be revised or rectified on the ground of mistake of law may conceivably be covered by sections 33B and 35.
Besides, the application of these two sections is subject to the limi tations prescribed by them; and so the fact that the said sections confer powers for revision or rectification would not be relevant and material in construing 17 section 34(1)(b).
The explanation to section 34 also does not assist the appellant.
It is true that under the explanation production before the Income tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income tax Officer would not necessarily amount to disclosures within the meaning of the said section; but we do not see how this can have any bearing oil the construction of cl.
(b) in section 34(1).
On the other hand, one of the cases specifically mentioned in section 34(1)(b) necessarily postulates that the word "information" must have reference to information as to law.
Where, in consequence of information in his possession, the Income tax Officer has reason to believe that income has been assessed at too low a rate, he is empowered to revise the assessment; and there can be no doubt that the belief of the Income tax Officer that any given income has been assessed at too low a rate may in many cases be due to information about the true legal position in the matter of the relevant rates.
If the word " information " in reference to this class of cases must necessarily include information as to law, it is impossible to accept the argument that, in regard to the other cases falling under the same provision, the same word should have a narrower and a more limited meaning.
We would accordingly hold that the word " information " in section 34(1)(b) includes information as to the true and correct state of the law and so would cover information as to relevant judicial decisions.
If that be the true position, the argument that the Income tax Officer was not justified in treating the Privy Council decision in question as information within section 34(1)(b) cannot be accepted.
in regard to the other condition prescribed by section 34(1)(b).
When can income be said to have escaped assessment? Mr. Sastri argued that the word "assessment " does not mean only the order of assessment, but it includes all steps taken for the purpose of levying the tax and during the process of taxation.
That no doubt is true; but the wide denotation of the word 3 18 " assessment" does not really assist the appellant; it only shows that along with the order of assessment which is an important act in the process of taxation, other acts and steps adopted in the course of taxation are also included in the word ; but it is with this " most critical act in the process of taxation " with which we are concerned in the present appeal.
Then it is urged that the word "escaped " according to the Oxford English Dictionary means "to elude (observations, search, etc.); to elude the notice of a person " ; and the contention is that it is only where income has not been returned for assessment that it can be reasonably said that income has escaped assessment.
The dictionary meaning of the word does not support Mr. Sastri 's contention.
According to the same dictionary the word " escape " also means " to get clear away from (pursuit or pursuer); to succeed in avoiding (anything painful or unwelcome)"; so that judging by +,he dictionary meaning alone it would be difficult to ( confine the meaning of the word " escape " only to cases where no return has been submitted by the assessee.
Even if the assessee has submitted a return of his income, cases may well occur where the whole of the income has not been assessed and such part of the income as has not been assessed can well be regarded as having escaped assessment.
In the present case, interest on arrears of rent received by the assessee from his agricultural lands were brought to the notice of the Income tax Officer; the question as to whether the said amount can be assessed in law was considered and it was ultimately held that the relevant decision of the Patna High Court which was binding on the department justified the assessee 's claim that the said income was not liable to be assessed to tax.
There is no doubt that a part of the assessee 's income had not been assessed and, in that sense, it has clearly escaped assessment.
Can it be said that, because the matter was considered and decided on the merits in the light of the binding authority of the decision of the Patna High Court, no income has escaped assessment when the said Patna High Court decision has been subsequently reversed by the Privy Council ? We see no 19 justification for holding that cases of income escaping assessment must always be cases where income has not been assessed owing to inadvertence or oversight or owing to the fact that no return has been submitted.
In our opinion, even in a case where a return has been submitted, if the Income tax Officer erroneously fails to tax a part of assessable income, it is a case where the said part of the income has escaped assessment.
The appellant 's attempt to put a very narrow and artificial limitation on the meaning of the word escape " in section 34(1)(b) cannot therefore succeed.
Mr. Sastri, however, argues that the narrow construction of the expression "has escaped assessment " for which he contends has been approved by the Privy Council in Rajendranath Mukherjee vs Income tax Commissioner (1).
He relies more particularly on the observation made in the judgment in this case that "the fact that section 34 requires a notice to be served calling for a return of income which has escaped assessment ,strongly suggests that income which has already been duly returned for assessment cannot be said to have escaped 'assessment within the statutory meaning".
In order to appreciate the effect of this observation it would be necessary to examine the material facts in the case and the specific points raised for the decision of the Privy Council.
It appears that, in 1930 the Income tax Officer had made an assessment order on Burn & Co., which was an unregistered firm, assessing them ' to income tax and super tax for the year 192728 under the Act.
The individual partners of Burn & Co., who were the appellants before the Board, contended that it was not competent to the officer to make the impugned assessment on the firm after the expiry on March 31, 1928, of the year in respect of which the assessment was made.
The Commissioner of Income tax met this plea by referring to the other relevant facts which explained the delay in making the assessment order.
Towards the end of 1926 27, the partners of the registered firm of Martin & Co., had purchased the business and assets of Burn & Co. This transaction was effected not on behalf of the firm (1) (1933) 61 I.A. IO, 16.
20 of Martin & Co., but by the partners of the firm as individuals.
In April 1927, the Income tax Officer of District I issued a notice to Burn & Co., under section 22(2) calling for a return of their total income for the year ending March 31, 1927, with a view to assessing them for the year 1927 28.
A similar notice was issued by the Income tax Officer of District 11.
When these notices were issued both the officers did not know that the business of Burn & Co., had been bought by the partners of Martin & Co. Subsequently this transaction was brought to the knowledge of the income tax authorities whereupon Burn & Co. 's file was transferred by the officer dealing with District 11, and in February 1928, an assessment order was made on Martin & Co., in respect of the combined incomes returned by Martin & Co., and Burn & Co., on the footing that the business of Burn & Co., had become a branch of Martin & Co. Martin & Co., appealed against this assessment and their appeal was allowed by the High Court in May 1930.
It was held that an income of a registered firm cannot, for the purpose of the Act., be aggregated with the income of an unregistered firm but that the income of each must be separately assessed irrespective of the fact that the persons interested in the profits of both concerns are the same.
In consequence of this decision, the assessment made on Martin & Co., was amended by the elimination therefrom of the income returned by Burn & Co., and in November 1930, an assessment was made on Burn & Co., on their income as returned by them in Janu ary 1928.
It was this assessment which was the subject matter of the appeal before the Privy Council.
It would thus be noticed that the principal question which the appellants raised before the Privy Council was: Whether the assessment made under section 23(1) on the appellants in November 1930 for the year 1927 28 was a legal assessment ? The argument was that, on a true construction of the Income tax Act, it was obligatory on the Income tax Officer to complete the assessment proceedings within the year of assessment, and in the event of such assessment not being so completed the only remedy open to the income tax 21 authorities was to proceed under section 34.
This argument was repelled by the Privy Council.
Their Lordships held that neither section 23 nor any other express provision of the Act limited the time within which an assessment must be made.
They then examined the other argument urged by the appellants that section 34 implied a prohibition against the making of an assessment after the expiry of the tax year.
In dealing with this argument, section 34 was construed and it was observed that the argument sought to put upon the word "assessment " too narrow a meaning, and upon the word " escaped " too wide a meaning.
It was in this connection that their Lordships approved of the observation made by Rankin C. J. in Re: Lachhiram Basantlal (1) that I. . income has not escaped assessment if there are pending at the time proceedings for the assessment of the assessee 's income which have not yet terminated in a final assessment thereof ".
In other words, the conclusion of the Privy Council was that so long as assessment proceedings are pending against an assessee and no final order has been passed thereon, it would be premature to suggest that any income of the assessee has escaped assessment.
It is only after the final order levying the tax has been passed by the Income tax Officer that it would be possible to predicate that any part of the assessee 's income has escaped assessment.
In the result their Lordships held that " since proceedings pursuant to the notice issued against the appellants under section 22(2) had been pending and no order had been passed against the appellants in the said proceedings, it would not be possible to accept their argument that the Income tax Officer should have taken action against them in respect of the income for the relevant year under section 34 of the Act ".
If this decision is considered in the light of the relevant facts and the nature of the argument raised before the Privy Council by the appellants, it would be difficult to accept the contention that, according to the Privy Council, section 34 would be inapplicable wherever notice under section 22(2) has been issued against an assessee, a return has been submitted by him and (1) (1030) I.L.R. , 912.
22 a final order has been passed by the Income tax Officer in the said assessment proceedings.
To say that, so long as the assessment proceedings are pending, it is impossible to assume that any income has escaped assessment is very much different from saying that income cannot be said to have escaped assessment wherever assessment proceedings have been taken and a final order has been passed on them.
We must, therefore, hold that this decision does not support Mr. Sastri 's contention about the inapplicability of section 34 in the present case.
In this connection it may be relevant to refer to the decision of the Calcutta High Court in Be: Lachhiram Basantlal (supra) (1) because, as we have already pointed out, the statement of the law made by Rankin C. J. in regard to the effect of section 34 of the Act in this case has been expressly approved by the Privy Council in the case of Rajendra Nath Mukherjee (supra) (2).
While dealing with the assessees ' argument that the order of assessment was invalid Since it had been passed more than one year after the expiry of the relevant financial year and that the Income tax Officer might have acted under section 34, Rankin C. J. stated that income cannot be said to have escaped assessment except in the case where an assessment has been made which does not include the income.
It is true that this observation is obiter but it is fully consistent with the subsequent statement of the law made by the learned Chief Justice which has received the approval of the Privy Council.
Mr. Sastri has also relied on the decision of this Court in Messrs. Chatturam Horliram Ltd. vs Commissioner of Income tax, Bihar & Orissa (1) in support of his construction of section 34.
In Chatturam 's case (supra) (3) the assessee had been assessed to income tax which was reduced on appeal and was set aside by the Income tax Appellate Tribunal on the ground that the Indian Finance Act of 1939 was not in force during the assessment year in Chota Nagpur.
On a reference the decision of the tribunal was upheld by the High (1) Cal.
909, 912.
(2) (1933) 61 I.A.10, 16.
(3) ; 23 Court.
Subsequently the Governor of Bihar promulgated the Bihar Regulation IV of 1942 and thereby brought into force the Indian Finance Act of 1939 in Chota Nagpur retrospectively as from March 30, 1939.
This ordinance was assented to by the Governor General.
On February 8,1944, the Income tax Officer passed an order in pursuance of which proceedings were taken against the assessee under the provisions of section 34 and they resulted in the assessment of the assessee to income tax.
The contention which was raised by the assessee in his appeal to this Court was that the notice issued against him under section 34 was invalid.
This Court held that the income, profits or gains sought to be assessed were chargeable to income tax and that it was a case of chargeable income escaping assessment within the meaning of section 34 and was not a case of mere non assessment of income tax.
So far as the decision is concerned, it is in substance inconsistent with the argument raised IVY Mr. Sastri.
He, however, relies on the observations made by Jagannadhadas J. that " the contention of the learned counsel for the appellant that the escapement from assessment is not to be equated to non assessment simpliciter is not without force " and he points out that the reason given by the learned judge in support of the final decision was that though earlier assessment proceedings had been taken they had failed to result in a valid assessment owing to some lacuna other than that attributable to the assessing authorities notwithstanding the chargeability of income to the tax.
Mr. Sastri says that it is only in cases where income can be shown to have escaped assessment owing to some lacuna other than that attributable to the assessing authorities that section 34 can be invoked.
We do not think that a fair reading of the judgment can lead to this conclusion.
The observations on which reliance is placed by Mr. Sastri have naturally been made in reference to the facts with which the Court was dealing and they must obviously be read in the context of those facts.
It would be unreasonable to suggest that these observations were intended to confine the application of section 34 only to cases where 24 income escapes assessment owing to reasons other than those attributable to the assessing authorities.
Indeed Jagannadhadas J. has taken the precaution of adding that it was unnecessary to lay down what exactly constitutes escapement from assessment and that it would be sufficient to place their decision on the narrow ground to which we have just, referred.
We are satisfied that this decision is of no assistance to the appellant 's case.
It appears that the construction of section 34 has led to a divergence of judicial opinion in the High Courts of this country, and so it would be necessary to refer briefly to the decisions to which our attention was invited in this appeal.
In Madan Lal vs Commissioner of I. T., Punjab (1), the majority decision of the Full Bench of the Lahore High Court held that section 34 of the Act, as it stood then, was not confined to cases where income had not been returned at all.
It applied also to cases where an item of income is included in the return made by the assessee but is left unassessed by the Income tax Officer, or, if assessed in the first in stance, the assessment is cancelled by any appellate or revisional authority.
Din Mohammad J. who delivered the majority judgment has expressed his agreement with the opinion of Coutts Trotter C. J. in The Commissioner of Income tax vs Raja of Parlakimedi (2) that the words " escaped assessment " apply even " to cases where the Income tax Officer has deliberately adopted an erroneous construction of the Act as much as to a case where an officer has not considered the matter at all, but simply omitted the assessable property from his view and from his assessment ".
The next case which has been cited before us is the decision of the Bombay High Court in The Commissioner of Income tax, Bombay vs Sir Mahomed Yusuf Ismail (3).
In this case Beaumont C. J. construed the word " definite information " in section 34 and held that in order to take action under the said section, there must be some information as to a fact which leads the Income tax Officer to discover that income (1) (2) , 28.
(3) [1944] 12 I.T.R. B. 26 has escaped assessment or has been under assessed.
The learned Chief Justice, however, added that the fact may be as to the state of the law, for instance, that a case has been overruled or that a statute has been passed which has not been brought to the attention of the Income tax Officer.
Chagla J. who delivered a concurring judgment was inclined, to hold that the word " information " in the section must be confined only to information as to facts or particulars and cannot include information as to law.
In his opinion, " a mistake of law or misunderstanding of the provisions of the law is not covered by the language of the section as amended in 1939 ".
It may be pointed out that in coming to this conclusion the learned judge appears to have relied on the observations of Rowlatt J. in Anderton and Halstead Ltd. vs Birrell (1) that "the word I discover ' in section 125 of the English Act does not include a mere change of opinion on the same facts and figures upon the same question of account ancy, being a question of opinion ".
Incidentally, we may observe that this statement of the law by Mr. Justice Rowlatt appears to have been overruled by the Court of Appeal in Commercial Structures Ltd. vs R. A. Briggs (2).
Soon after the decision of the Bombay High Court was reported the same question was raised before the Madras High Court in Raghavalu Naidu & Sons vs Commissioner of Income tax, Madras (3).
Leach C. J. who delivered the judgment of the court agreed with the construction which had been put on the expression "definite information " by the Bombay High Court on the ground that "it is very desirable to avoid conflict on such a question ".
He, however, added that in view of the opening words of the amended section as it was amended in 1939, the word " discovers " means something more than 'has reason to believe ' or ' satisfies himself ' and that consequently it would not be right to regard the English decisions on the meaning of the word " discovers " in section 125 of (1) [1932] I. K. B. 271.
(2) [1949] 117 I.T.R. Supplement 30.
(3) , 197.
4 26 the English Act as being in point.
He also made it clear that in following the Bombay, decision they did not imply that the definite information must relate to a pure question of fact because it was impossible to lay down a rule to cover all cases in which this section can be invoked.
In the Calcutta High Court, conflicting views have been expressed on this point.
In Maharaja Bikram Kishore of Tripura vs Province.
of Assam (1), Harries C. J. and Mukherjea J. had to deal with the construction of section 30 of the Assam Agricultural Income tax Act (Assam IX of 1939) which corresponds to section 34 of the Act.
They held that where a certain income has been included in his return by the assessee but was not assessed on the ground that it was not assessable, it cannot be treated as income which has escaped assessment and reassessed under section 30 of the Assam Agricultural Income tax Act.
In his judgment the learned Chief Justice has mentioned that the earlier decisions of the Calcutta High Court were no doubt against the contentions of the appellant but he took the view that the question was really concluded by the decision of the Privy Council in Rajendra Nath Mukherjee 's case (supra) (2).
The Privy Council decision was read by the learned Chief Justice as supporting the view that section 34 would be inapplicable to cases where income has been returned, assessment proceedings have been taken and a final order of assessment has been passed by the Income tax Officer against the assessee.
We have already pointed out that the decision of the Privy Council does not support this view.
In Raja Benoy Kumar Sahas Roy vs Commissioner of 1.
T., West Bengal(1), Chakravartti C. J. and Lahiri J. have taken a contrary view.
They have held that information as to the true state or meaning of the law derived freshly from an external source of authoritative character is definite information within the meaning of section 34.
It appears that, in construing the scope and effect of the provisions of section 34, the High Courts have had (1) (2) (1933) 61 1,A. 10, 16.
(3) 27 occasion to decide whether it would be open to the Income tax Officer to take action under section 34 on the ground that he thinks that his original decision in making the order of assessment was wrong without any fresh information from an external source or whether the successor of the Income tax Officer can act under section 34 on the ground that the order of assessment passed by his predecessor was erroneous, and divergent views have been expressed on this point.
Mr. Rajagopala Sastri, for the respondent, suggested that under the provisions of section 34 as amended in 1948, it would be open to the Income tax Officer to act under the said section even if he merely changed his mind without any information from an external source and came to the conclusion that, in a particular case, he had erroneously allowed an assessee 's income to escape assessment.
We do not propose to express any opinion on this point in the present appeal.
In the result we hold that the Patna High Court was right in coming to the conclusion that the decision of the Privy Council was information within the meaning of section 34 (1)(b) and that the said decision justified the belief of the Income tax Officer that part of the appellant 's income had escaped assessment for the relevant year.
The appeal accordingly fails and must be dismissed with costs.
Appeal dismissed.
| IN-Abs | In respect of the assessment of the appellant to income tax the Income tax Officer excluded the amount of interest on arrears of rent received by him, in view of the decision of the Patna High Court in Kamakshya Narain Singh vs Commissioner of Income tax, [1946] 14 , that this amount was not liable to be taxed, though an appeal against the said decision to the Privy Council at the instance of the Income tax Department was then pending.
Subsequently on July 6, 1948, the Privy Council allowed the appeal and held that interest on arrears of rent payable in respect of agricultural land was not agricultural income as it was neither rent nor revenue derived from land.
As a result of this decision the Income tax Officer took proceedings under section 34 Of the Indian Income tax Act, 1922, as amended, and revised the assessment order by adding the aforesaid amount, on the footing that the subsequent decision of the Privy Council was information within the meaning of section 34(1)(b) of the Act and that the Income tax Officer had reason to believe that a part Of the assessee 's income, had escaped assessment.
It was contended for the appellant that section 34(1)(b) was not applicable to the case because (1) the information referred to in the section means information as to facts and cannot include the decision of the Privy Council on a point of law, 11 and (2) where income has been duly returned for assessment and an assessment order has been passed by the Income tax Officer, it cannot be said that any income has escaped assessment within section 34(1)(b).
Held, (1) that the word " information " in section 34(1)(b) of the Act includes information as to the true and correct state of the law and so would cover information as to relevant judicial decisions; and, (2) that the expression "has escaped assessment" in to cases where no return has been submitted by the assessee.
The section is applicable not only where income has not been assessed owing to inadvertence or oversight or owing to the fact that no return has been submitted, but also where are turn has been submitted, but the Income tax Officer erroneously fails to tax a part of assessable income.
Rajendra Nath Mukherjee vs Income tax Commissioner, (1933) L.R. 61 I. A. 10 and Messrs. Chatturam Horliram Ltd. vs Commissioner of Income tax, Bihar and Orissa, [1955] 2S.C.R. 290, distinguished.
Raja Benoy Kumar Sahas Roy vs Commissioner of Income tax, West Bengal, , Madan Lal vs Commissioner of Income tax, Punjab, and The Commissioner of Income tax vs Raja of Parlakimedi, Mad. 22, approved.
, Maharaja Bikram Kishore of Tripura vs Province of Assam, , disapproved.
|
nd circumstances of the instant case, admission to medical or dental Institution by conducting examination in Hindi or other regional languages would be appropriate or desirable or not, is a matter on which debate is possible and the acceptance of one view over the other involves a policy decision.
It cannot be appropri ately dealt with by this Court, and order under Article 32 of the Constitution in those circumstances would not be an appropriate remedy.
[592H, 593A] & CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 428 of 1989.
(Under Article 32 of the Constitution of India).
Dr. L.M. Singhvi, N. Wazir and D. Bhandari for the Petition ers.
Rajiv Dutta for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an application under Article 32 of the Constitution of India for issue of a writ of mandamus 590 directing the Central Government to hold pre medical and pre dental entrance examinations in Hindi and other regional languages as, according to the petitioners, mandated by Article 29(2) of the Constitution of India.
The petition is by nine petitioners.
Petitioner No. 1 is Hindi Hitrakshak Samiti which is stated to be a society formed with the aim and object of propagating and ensuring the propagation of the national language Hindi and other regional languages; and to further the cause of the citizens of India who are educated in any one or more of the languages and who face difficulty in competitive examinations in which the medium of examination is English only.
Petitioners Nos.
3 to 10 are the students who allege that they wish to appear in the coming PMT/PDT examinations in Hindi or other regional languages and are being adversely affected and discriminated against, and will be in a disad vantageous position in the forthcoming PMT/PDT examination in comparison to those who have passed the higher secondary or equivalent examination with English as their medium of instruction.
The petition seeks issue of writ directed against the Union of India, Central Board of Secondary Education and Medical Council of India.
It is stated that in the year 1974 there was a survey by National Council for Educational Research & Training (NCERT) which, according to the petitioners, showed that out of the students passing intermediate, about 92.5% take their exami nation in Hindi and other regional languages.
The petition ers allege that Kothari Commission 's report on Civil Serv ices Examination had recommended that the examination papers be set both in English and Hindi and the examinees should have a choice of answering them in English, Hindi or any of the 15 regional languages Constitutionally recognised.
It was stated that it was also noteworthy that the Kothari Commission 's report had recommended that Hindi and other regional languages in Universities would be necessary in order to make use of the best potential available in the country.
In 1986 this Court in the case of Dr. Dinesh Kumar & Ors.
vs Motilal Nehru Medical College, Allahabad & Ors., ; dealt with certain aspects of admission to the Medical College, but not on the present aspect.
Letters and representations to the Ministry of Health & Family Welfare, by the petitioners were made on 23rd September, 1988 requesting the Government to consider conducting the PMT/PTD examinations in Hindi and other regional languages.
It is stated that a letter was issued on both December, 1988 by the Government of India to the effect that the Joint Engineering Examination (JEE) for the five I.I.Ts.
and the 591 Engineering College of Banaras be conducted in Indian lan guages from 1990 onwards.
The petitioners assert that they had received numerous letters and grievances from students with Hindi medium background to press for this instant petition.
When the application was moved before this Court on 17th April, 1989 this Court had issued notice.
We have examined the matter and have heard Mr. L.M. Singhvi.
We are of the opinion that the prayers sought for herein are not such which can be appropriately, properly and legitimately dealt with under Article 32 of the Constitution of India.
The contention of the petitioners is, as mentioned hereinbefore, that pre medical studies in medical and dental examination should be permitted in Hindi and other regional languages and not in English alone, and the admission to the Institutions should not be refused and/or examinations should not be held in English alone if the examinees or the entrants seek to appear in Hindi or other regional language.
Article 32 of the Constitution of India guarantees enforcement of fundamental rights.
It is well settled that the jurisdiction conferred on the Supreme Court under Arti cle 32 is an important and integral part of the Indian Constitution but violation of a fundamental right is the sine qua non for seeking enforcement of those rights by the Supreme Court.
In order to establish the violation of a fundamental right, the Court has to consider the direct and inevitable consequences of the action which is sought to be remedied or the guarantee of which is sought to be enforced.
Mr Singhvi, counsel for the petitioners, contends that under Article 29(2) of the Constitution 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.
He contends that by not holding the test in Hindi or other regional languages, there is breach of Article 29(2).
He also draws our attention to Article 29(1) of the Constitution which enjoins that any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of his own, shall have right to conserve the same.
It is difficult to accept that in not holding entrance examination in any particular language.
be it Hindi or regional language, amounts to denial of admis sion on the ground of language.
Every educational institu tion has right to determine or set out its method of educa tion and conditions of examination and studies provided these do not directly or indirectly have any casual connec tion with violation of the fundamental rights guaranteed by the 592 Constitution.
It may be that Hindi or other regional lan guages are more appropriate medium of imparting education to very many and it may be appropriate and proper to hold the examinations, entrance or otherwise, in any particular regional or Hindi language, or it may be that Hindi or other regional language because of development of that language, is not yet appropriate medium to transmute or test the knowledge or capacity that could be had in medical and dental disciplines.
It is a matter of formulation of policy by the State or educational authorities in charge of any particular situation.
Where the existence of a fundamental right has to be established by acceptance of a particular policy or a course of action for which there is no legal compulsion or statutory imperative, and on which there arc divergent views, the same cannot be sought to be enforced by Article 32 of the Constitution.
Article 32 of the Constitu tion cannot be a means to indicate policy preference.
It is difficult to contend that the actions following from nonacceptance of any policy perspective, amount to direct and causal violation of the fundamental right of the citizens guaranteed under the Constitution of India.
Court is not the forum to adjudicate upon the questions of policy unless such a policy is the direct mandate of the Constitu tion.
It is well settled that judicial review, in order to enforce a fundamental right, is permissible of administra tive, legislative and governmental action or non action, and that the rights of the citizens of this country are to be judged by the judiciary and judicial forums and not by the administrators or executives.
But it is equally true that citizens of India are not to be governed by the Judges or judiciary.
If the governance is illegal or violative of rights and obligations, other questions may arise out wheth er, as mentioned hereinbefore, it has to be a policy deci sion by the Government or the authority and thereafter enforcement of that policy, the Court should not be, and we hope would not be an appropriate forum for decision.
In the background of the facts and the circumstances of the case and the nature of controversy that has arisen, we are of the opinion that proper and appropriate remedy in a situation where enforcement of the right depends upon the acceptance of a policy of examination for admission in any particular language to the Institution on that basis, is a matter of policy.
Whether in particular facts and the cir cumstances of this case admission to medical or dental Institution by conducting examination in Hindi or other regional languages would be appro 593 priate or desirable or not, is a matter on which debate is possible and the acceptance of one view over the other involves a policy decision.
It cannot be appropriately dealt with by this Court, and order under Article 32 of the Con stitution in those circumstances would not be an appropriate remedy.
Counsel for the petitioners drew our attention to the facts that notice had been issued to the respondent.
That is true.
On a closer examination of this matter we are of the opinion that in view of the controversy involved herein, we should not proceed with this application on that basis any further.
Counsel for the petitioners then wanted to withdraw this writ petition.
He is permitted to do so, and the writ peti tion is dismissed as withdrawn but this will not prejudice the rights, if any, of the petitioners, legal or otherwise, to take appropriate steps, if any, as they may be advised, in accordance with law.
N.P.V. Petition dismissed.
| IN-Abs | A Writ Petition was filed in this Court praying for a direction to.the respondents to hold pre medical and pre dental examination in Hindi and other regional languages.
It was contended that pre medical studies in medical and dental examination should be permitted in Hindi and other regional languages and not in English alone, that admission should not be refused and/or examinations should not be held in English alone if the examinees or the entrants sought to appear in Hindi or other regional languages, and that by not holding the examinations in Hindi or other regional lan guages, there was a breach of Article 29(2).
Dismissing the writ petition as withdrawn, the Court, HELD: 1.1 The jurisdiction conferred on the Supreme Court under Article 32 is an important and integral part of the Indian Constitution but violation of a fundamental right is the sine qua non for seeking enforcement of those rights by the Supreme Court.
[591D E] 1.2 Not holding entrance examination in any particular language, be it Hindi or regional language cannot amount to denial of admission on the ground of language.
Every educa tional institution has right to determine or set out its method of education and conditions of examination and stud ies provided these do not directly or indirectly have any casual connection with violation of the fundamental rights guaranteed by the Constitution.
It may be that Hindi or other regional languages are more appropriate medium of imparting education to very many and 589 it may be appropriate and proper to hold the examinations, entrance or otherwise, in any particular regional or Hindi Language, or it may be that Hindi or other regional language because of development of the language, is not yet appropri ate medium to transmute or test the knowledge or capacity that could be had in medical and dental disciplines.
It is a matter of formulation of policy by the State or educational authorities in charge of any particular situation.
[591 E, G 1.3 Where the existence of a fundamental right has to be established by acceptance of a particular policy or a course of action for which there is no legal compulsion or statuto ry imperative, and on which there are divergent views, the same cannot be sought to be enforced by Article 32 of the Constitution.
Article 32 of the Constitution cannot be a means to indicate policy preference.
[592B C] 1.4 The actions following from non acceptance of any policy perspective cannot amount to direct and casual viola tion of the fundamental right of the citizens guaranteed under the Constitution of India.
Court is not the forum to adjudicate upon the questions of policy unless such a policy is the direct mandate of the COnstitution.
[592D]
|
ivil Appeal No. 479 of 1986.
578 From the Judgment and Order dated 18.3.
1985 of the Assam High Court in Civil Rule No. 139 of 1979.
A.K. Ganguli, A. Mariarputham, A.D. Sikri and Dilip Tandon for the Appellant.
Kapil Sibal, Additional Solicitor General, Rajiv Dhawan, Gopal Singh, C.V.S. Rao, Adv.
(NP) and R.B. Misra for the appearing respondents.
Hardev Singh and section Ravindra Bhat for the intervenor.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
This appeal by special leave calls in question the judgment of the Guwahati High Court dated March 18, 1985, dismissing the appellant 's writ petition.
The appellant is a resident of Tripura State.
In his application in a representative capacity before the High court he main tained that he belonged to the Laskar community which had always been treated in the erstwhile State of Tripura as a Scheduled Tribe and on that basis in the State records was included in the Deshi Tripura community long before integra tion of the Ruler 's State of Tripura with the Union of India.
Members of the Laskar community freely enjoyed all the benefits available to members of the Schedule Tribes until in 1976 the State Government decided to treat members of that community as not belonging to the Scheduled Tribes and issued instructions to the State authorities to imple ment the Government decision.
That led to the filing of the petition before the High Court.
In the writ petition appel lant prayed for appropriate directions to continue to treat the appellant and members of his community as belonging to the Scheduled Tribes and for a direction to the State Gov ernment to extend all the benefits admissible to members of the Scheduled Tribes to members of the Laskar community.
Before the High Court the respondents disputed the claim and maintained that the Laskar community was never included in the Scheduled Tribes Order and as such there was no question of exclusion from the list.
A historical study of the claim would show that in the past Tripura/Tripuri/Tippera which have been included in the Presidential Notification never included the Laskar community.
Tripuras were.
a TibetoDurman race akin to the Shan tribe and Tipperas were divided into four groups, namely, (i) Puran or original Tipperas; (ii) Jamatias; (iii) Noatias or Nutan Tripuras and (iv) Riangs.
Respondents relied upon Government records and official publications in support of the aforesaid stand.
579 Before the High Court two circulars of the erstwhile State of Tripura, one being of December, 1930, and the other of February, 1941, as also the census report of the ex State of Tripura were produced in support of the claim advanced by the appellant.
Several authorities of this Court were relied upon for finding out the scope of enquiry in a claim of this type and ultimately by the impugned judgment the High Court dismissed the writ petition but on the basis of a statement made by the Advocate General appearing for the State, it recorded: "We keep on record the statement made by the learned Advo cate General, Tripura, on instruction that as a result of the impugned Memorandum No. 18887 19077/TW/6 4(L D) dated 28.4.
1979 the certificates already issued would be treated as infructuous prospectively and not retrospectively and those who have already enjoyed the benefits by virtue of such Scheduled Tribe certificates they shall not be deprived of the benefits they have already enjoyed and the Memorandum shall be effective from its date prospectively insofar as the future benefits are concerned.
" This appeal had come up for final hearing earlier and by a brief judgment reported in , a two Judge Bench recorded the following order: "The record before us shows that the people of the Laskar community have been treated as members of the Scheduled Tribes and there have been some letters from the Government of India to the State Government in support of that posi tion; it is, however, a fact that there has been no clear inclusion of the community in an appropriate Presidential Order.
The appellant has maintained that even in the absence of such a clear specification in a Presidential Order, as a sub group under one of the notified categories, the appel lant 's community has been enjoying the privileges.
We have been told by the learned counsel for the Union of India that the representation made by the appellant and members of his community for inclusion in the Presidential Order under Article 342 of the Constitution is being looked into and is being placed before the Parliamentary Committee in accord ance with the prescribed procedure for a review of the position.
He has assured us that the Government of India will take steps to finalise the matter at an 580 early date and may in compliance with the procedure as prescribed, take a final decision.
In case the community is not included in the Presidential Order, it would be open to the appellant to take such action as may be available in law.
" The appellant waited for some time and approached the Government of India for quick action but when nothing hap pened, an application for directions was made in this Court.
Several adjournments were taken but Government could not take any decision.
Ultimately, by consent of parties, the order disposing of the appeal was recalled and the appeal was directed to be set down for re hearing.
That is how the appeal is now before us.
Articles 341 and 342 of the Constitution deal with Scheduled Castes and Scheduled Tribes respectively and contain almost identical provision.
We may extract Article 342 dealing with Scheduled Tribes: "342.(1) 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 this Constitution be deemed to be Scheduled Tribes in relation to that State or Union Territory, as the case may be.
(2) parliament may by law include in or exclude from the list of Scheduled Tribes specified in a notification issued under clause (1) any tribe or tribal community or part of or group within any tribe or tribal community, but save as aforesaid a notification issued under the said clause shall not be varied by any subsequent notification.
" Article 366(25) defines 'Scheduled Tribes ' to mean such tribes or tribal communities or parts or groups within such tribal communities as are deemed under article 342 to be Sched uled Tribes for the purposes of this Constitution.
The Constitution (Scheduled Tribes) (Union Territories) Order, 1950 relating to Tripura included 19 tribes within the notification.
Items 15, 16, 17 and 18 are relevant for our purpose and they were: "15.
Tripura or Tripuri, Tippera.
581 16.
Jamatia 17.
Noatia 18.
Riang" Following the Reorganisation Act (37 of 1956), the Ministry of Home Affairs on October 29, 1956, notified the list of Scheduled Castes and Scheduled Tribes.
In respect of the then Union Territory of Tripura the same communities were relisted.
Then came the NorthEastern Area (Reorganisa tion) Act (81 of 1971) which in the Fourth Schedule con tained amendment to the Constitution (Scheduled Tribes) Order, 1950.
Items 15 to 18 in the Scheduled contained the same descriptions.
The Scheduled Castes & Scheduled Tribes Orders (Amendment) Act, (108 of 1976) in relation to Tripura in the Second Scheduled carried the same in Entries 7, 14, 16 and 18.
It is, therefore, clear that in Tripura the scheduled tribes within the meaning of the definition given in article 366 of the Constitution have been the following: 'Jamatia, Noatia, Riang and Tripura/Tripuri/Tippera ' apart from 15 other tribes as specified.
It is not necessary to refer to the 15 others inasmuch as it is the case of the appellant that Laskars are a part of the tribe named as Tripura, Tripuri or Tippera covered by Entry 18.
Before adverting to the evidence upon which the appel lant relies in support of his stand, it is necessary that the scope of enquiry to be conducted in this regard by the Court may be determined.
There are precedents of this Court which have to be first referred to.
A Constitution Bench in the case of B. Basavalingappa vs D. Munichinnappa, ; examined the provisions of article 341 which contained similar provisions for the scheduled castes with reference to an election dispute.
Wanchoo, J. spoke for the Constitu tion Bench thus: "Clause (1) provides that the President may with respect to any State, after consultation with the Governor thereof, by public notification, specify the castes, races or tribes or parts of or groups within castes, races or tribes which shall for the purposes of the Constitution be deemed to be Scheduled Castes in relation to that State.
The object of this provision obviously is to avoid all disputes as to whether a particular caste is a Scheduled Caste or not and only those castes can be Scheduled Castes which are notified in the Order made by the President under article 341 after consultation with the Governor where it relates to 582 such castes in a State.
Clause (2) then provides that Par liament may by law include in or exclude from the list of scheduled castes specified in a notification issued under cl.
(1) any caste, race or tribe or part of or group within any caste, race or tribe.
The power was thus given to Par liament to modify the notification made by the President under cl.
Further cl.
(2) goes on to provide that a notification issued under cl.
(1) shall not be varied by any subsequent notification, thus making the notification by the President final for all times except for modification by law as provided by cl.
Clearly therefore article 341 provides for a notification and for its finality except when altered by Parliament by law . .
Therefore in view of this stringent provision of the Constitution with respect to a notification issued under cl.
(1) it is not open to any one to include any caste as coming within the notification on the basis of evidence Oral or documentary, if the caste in question does not find specific mention in the terms of the notification . .
It may be accepted that it is not open to make any modification in the Order by producing evidence to show (for example) that though caste A alone is mentioned in the Order, caste B is also a part of caste A and there fore must be deemed to be included in caste A.
It may also be accepted that wherever one caste has another name it has been mentioned in brackets after it in Order.
Therefore, generally speaking it would not be open to any person to lead evidence to establish that caste B is part of caste A notified in the Order.
" The factual dispute raised in the case before the Con stitution Bench was whether Voddar caste was included in Bhovi caste which was one of the notified castes.
The Con stitution Bench dealt with the evidence and ultimately said: "In the circumstances therefore we agree with the High Court that respondent No. 1 though Voddar by caste belongs to the scheduled caste of Bhovi mentioned in the Order.
We may again repeat that we have referred to the evidence in this case only because there was undoubtedly no caste known as Bhovi in the Mysore State as it was before 1956 and we had to find out therefore which caste was meant by the word 'Bhovi ' as used in the Order.
But for this fact it would not have been open to any party to 583 give evidence to the effect that caste A mentioned in the Order includes or was the same as caste B where caste A does exist in the area to which the Order applies.
" A similar dispute again came before a Constitution Bench in Bhaiyalal vs Harikishan Singh & Ors., ; with reference to a scheduled tribe in an election dispute.
Gajendragadkar, CJ speaking for the Court said: "It is obvious that in specifying castes, races or tribes, the President has been expressly authorised to limit the notification to parts of or groups within the castes, races or tribes, and that must mean that after examining the educational and social backwardness of a caste, race or tribe, the President may well come to the conclusion that not the whole caste, race or tribe but parts of or groups within them should be specified.
Similarly, the President can specify castes, races or tribes or parts thereof in relation not only to the entire State, but in relation to parts of the State where he is satisfied that the examina tion of the social and educational backwardness of the race, caste or tribe justifies such specification.
In fact, it is well known that before a notification is issued under article 341(1), an elaborate enquiry is made and it is as a result of this enquiry that social justice is sought to be done to the castes, races or tribes as may appear to be necessary, and in doing justice, it would obviously be expedient not only to specify parts or groups of castes, races or tribes, but to make the said specification by reference to different areas in the State.
" What we have extracted above clearly supports the view of the other Constitution Bench, namely, the list is intend ed to be final.
We may now refer to a two Judge Bench decision in the case of Parsram & Anr.
vs Shivchand & Ors.
, ; Here again, the Scheduled Castes Order was in issue in an election dispute and the question for consideration was whether mochi was included in the notified caste of chamar.
The Court referred to both the Constitution Bench judgments and indicated: "These judgments are binding on us and we do not therefore think that it would be of any use to look into the gazeteers and the glossaries on the Punjab castes and tribes 584 to which reference was made at the Bar to find out whether Mochi and Chamar in some parts of the State at least meant the same caste although their might be some difference in the professions followed by their members, the main differ ence being that Chamars skin dead animals which Mochis do not.
However that may be, the question not being open to agitation by evidence and being one the determination of which lies within the exclusive power of the President, it is not for us to examine it and come to a conclusion that if a person was in fact a Mochi, he could still claim to belong to the scheduled caste of Chamars and be allowed to contest an election on that basis.
" In Kishorilal Hans vs Raja Ram Singh & Ors., ; a two Judge Bench was called upon to decide whether jatav caste not mentioned in the scheduled castes of Datia district of Madhya Pradesh in the Order was included in chamar caste.
The Court indicated: "If the matter were res integra we would have felt a good deal of difficulty in reconciling with the constitutional provisions the scheme followed in the state and the Orders concerned by which some caste has been includes in some districts of the same State and excluded in the other dis tricts.
This Court, however, has in Bhaiyalal vs Harikishan Singh & Ors., supra, made observations repelling the conten tion that under article 341 of the Constitution the President was not authorised to limit the notification to parts of a State . .
In Bhaiyalal 's case the appellant 's election had been challenged on the ground that he belonged to the Dohar caste which was not recognised as a scheduled caste for the district in question and so his declaration that he belonged to the Chamar caste which was a Scheduled Caste was improperly and illegally accepted by the Returning Officer.
It was held that the plea that though the appellant was not a Chamar as such he could claim the same status by reason of the fact that he belonged to Dohar caste which is a sub caste of the Chamar caste could not be accepted.
An enquiry of that kind would not be permissible having regard to the provisions contained in article 341 of the Constitution.
" We may now refer to two separate judgments of this Court in the case Dina vs Narayan Singh, and Bhaiya Ram Munda vs 585 Anirudh Patar & Ors., ; Both were rendered by a common Bench of Shah (as he then was) and Bhargava, JJ.
In the first case the question for consideration was inter pretation of Entry 12 in the Scheduled Tribes Order.
The entry read. 'Gond including Mana '.
The Court interpreted that Mana community was a substitute of Gond and on a proper construction of the entry Manas not being Gonds were not intended to be included.
The decision in that case is not relevant for our purpose.
In Bhaiya Ram 's case, the tribe specified in the Sched uled Tribes Order was Munda.
The respondent was a Patar but he maintained that it was included in the notified tribe.
The Bench was of the view that evidence was admissible for the purpose of showing what an entry in the Presidential Order was intended to mean though evidence could not be accepted for modifying the order by including a new tribe.
Since the respondents ' case was that Patars were Mundas, evidence could be given to show that the entry 'Munda ' included 'Patar '.
These authorities clearly indicate, therefore, that the entries in the Presidential Order have to be taken as final and the scope of enquiry and admissibility of evidence is confined within the limitations indicated.
It is, however, not open to the Court to make any addition or subtraction from the Presidential Order.
The evidence in this case on which reliance has been placed in support of the claim that Laskars are included in the tribe described as 'Tripura/Tripuri/Tippera ' mainly consists of two circulars of the erstwhile State of Tripura.
Circular No. 9 is of December, 1930.
There is a narration therein to the following effect: "In this State Tripura Sampradaya means the following five communities ' 1.
Puratan Tripura 2.
Deshi Tripura (related to Laskar Class) 3.
Noatia 4.
Jamatia 5.
Riang" 586 In Circular No. 10 which is of the year 1941, it has been said: "In this State Tripura Kshatriya denotes the following classes: 1.
Puratan Tripura 2.
Deshi Tripura (related to Laskar Class) 3.
Noatia 4.
Jamatia 5.
Riang" The latter document related to census operation in the State.
From these two documents it is clear that Deshi Tripura covered the Laskar class while there was another class called 'Tripura/Tripuri/ Tippera ' which did not relate to Laskar class.
The Presidential Order has admitted the three tribes of Noatia, Jamatia and Riang in terms but while dealing with the two classes of Puratan Tripura and Deshi Tripura covering the Laskar class, it has adopted the de scription of those three terms without referring to Puratan or Deshi.
The two Constitution Bench judgments indicate that enquiry is contemplated before the Presidential Order is made but any amendment to the Presidential Order can only be by legislation.
We do not think we should assume jurisdic tion and enter into an enquiry to determine whether the three terms indicated in the Presidential Order include Deshi Tripura which covers the Laskar community; but we consider it appropriate to commend to the authorities con cerned that as and when the question is reviewed it should be examined whether the claim of the appellant representing the Laskar community to be included in the scheduled tribes is genuine and should, therefore, be entertained.
Reservation has become important in view of the increas ing competition in society and that probably had led to the anxiety of the appellant and the people in his community to claim reservation.
As pointed out by the Constitution Bench judgments which we have referred to above, the basis on which inclusion into or exclusion from the enumerated list made under article 342 is contemplated is the changing econom ic, educational and other situations of the members of any 587 particular tribe.
Keeping that in view the State Government may initiate appropriate proposals for modification in case it is satisfied and after appropriate enquiry if the author ities are satisfied that the claim is genuine and tenable, amendment may be undertaken as provided by the Constitution.
This Court has indicated in some of the judgments re ferred to above that as a result of the detailed enquiry made as to the economic status, the level of education and the necessity of protection, inclusion into or exclusion from the Order is made.
This material relating to the Laskar tribe in 1930 or 1941 may not have been considered suffi cient before the respective Orders were made for including the Laskars, said to have been covered by the description of Deshi Tripura.
Therefore, even if historically this tribe was covered by the general description of Tripura, that by itself may not justify its inclusion in the Order as a scheduled tribe.
That is an additional feature which has weighed with us in taking our decision not to interfere in the matter.
The claim of the appellant is dismissed so far as this Court is concerned but the observations which we have made may be kept in view.
There shall be no order for costs through out.
Y. Lal Appeal dismissed.
| IN-Abs | The appellant is a resident of Tripura State.
He assert ed that he belonged to the Laskar community which was in cluded in State records in the Deshi Tripura community and in the former State of Tripura this community had always been treated as Scheduled Tribes, and the members of the community freely enjoyed all the benefits available to members of the Scheduled Tribes until 1976 when the State Government decided to treat members of this community as not belonging to the Scheduled Tribes and issued instructions to the state authorities to implement the Government decision.
Being aggrieved the appellant filed a writ petition before the High Court in a representative capacity praying for appropriate directions directing the State Government to continue to treat the appellant and members of Laskar commu nity as belonging to Scheduled Tribes and extend all the benefits available to Scheduled Tribes to this community.
In support of his claim the appellant relied upon the two circulars of the erstwhile State of Tripura dated December 1930 and February 1941 as also the census report of the ex state of Tripura, besides the authorities of this Court.
The respondent took the plea that Laskar community was never included in the Scheduled Tribes Order and as such there was no question of excluding it from the List.
After considering the rival contentions of the parties coupled with the his torical background bearing on the subject, the statement made by the Advocate General that the Memos will be given prospective operation, the High Court dismissed the Writ Petition.
Hence this appeal by Special Leave.
This appeal initially came up before a two judges Bench for final hear ing when on a statement made by the Counsel for the Union of India that a representation made by the appellant and mem bers of his community for inclusion their caste Laskar, in the Presidential order under Article 342 is being looked into and is being placed before the Parliamentary Committee for review of the position, the Court disposed of the appeal in terms of the assurance 577 given on behalf of the Union.
It was specifically stated in the Court 's order that in case the community is not included in the Presidential Order, it would be open to the appellant to take such action as may be available to him in law.
Nothing having happened at governmental level, with the consent of the parties, the order disposing of the appeal was recalled and the appeal has thus now come up for hear ing.
Dismissing the appeal, this Court, HELD: Reservation has become important in view of the increasing competition in society and that probably had led to the anxiety of the appellant and the people in his commu nity to claim reservation.
[586G] In Tripura the Scheduled Tribes within the meaning of the definition given in Article 366 of the Constitution have been 'Jamatia, Noatia, Riang and Tripura/Tripuri/Tippera ' apart from 15 other tribes.
It is the case of the appellant that Laskars are a part of the tribe named as 'Tripura, Tripuri and Tippera ' covered by Entry 18.
[581D] This Court should not assume jurisdiction and enter into an enquiry to determine whether the three terms indicated in the Presidential Order include Deshi Tripura which covers the Laskar community; but it is appropriate to commend to the authorities concerned that as and when the question is reviewed it should be examined whether the claim of the appellant representing the Laskar community to be included in the scheduled tribes is genuine and should, therefore, be entertained.
[586F G] Even if historically this tribe was covered by the general description of Tripura, that by itself may not justify its inclusion in the Order as a Scheduled Tribe.
That is an additional feature which has weighed with us in taking our decision not to interfere in the matter.
[587C] B. Basavalingappa vs D. Munichinnappa, ; Bhaiyalal vs Harikishan Singh and Ors., ; ; Parsram and Anr.
vs Shivchand and Ors.
, ; ; Kishorilal Hans vs Raja Ram Singh and Ors., ; ; Dina vs Narayan Singh, and Bhaiya Ram Munda vs Anirudh Patarand Ors., ; , referred to.
|
ivil Appeal No. 1259 of 1990.
From the Judgment and Order dated 6.10.1989 of the Andhra Pradesh Administrative Tribunal in R.P. No. 2403 of 1987.
Dr. L.M. Singhvi and Y.P.Rao for the Appellants.
P.P. Rao, K. Madhava Reddy, Ms. Rani Chhabra, T.V.S.N. Chari and B. Rajeshwar Rao for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
1.
Special leave granted.
This appeal under Article 136 is against the order dated October 6, 1989 made in R.P. No. 2403 of 1987.
The facts are as under: 2.
The respondents Nos. 4 & 5, B. Kumara Swamy and G. Amarender, in this appeal filed R.P. No. 1615 of 1984 before the Andhra Pradesh Administrative Tribunal, Hyderabad, contending for promotion from Senior Assistant to Assistant Commercial Taxes Officer, zonal seniority of Warangal local area comprising of Warangal, Khammam, Karimnagar and Adila bad is the criteria.
The Adilabad division consisting of Adilabad and Karimnagar Districts of the Commercial Taxes Division cannot be treated to be a zone and the divisional seniority prepared by the department is bad in law.
It was held by the Tribunal by order dated February 18, 1986, that the zonal seniority is the criteria.
Though, for the admin istrative convenience a division consisting of the revenue districts of Adilabad and Karimnagar may be treated as one division and Warangal and Khammam as Warangal division may be carved out, for the purpose of promotion zonal seniority has to be maintained.
Accordingly, the Tribunal allowed the Representation Petition.
The Government of Andhra Pradesh in exercising its power under cl.
(5) of article 371 D annulled that order which had given rise to filing of W.P. No. 998 of 1986 in this Court under article 32 of the Constitution.
This Court declared cl.
(5) of article 371 D of the Constitution as ultra vires violating the basic structure.
The State Govern ment filed S.L.P. No. 8868 of 1987 against order in R.P. No. 1615 of 1984 which was dismissed by this Court on December 7, 1987.
Subsequently, the petitioners impleading the 566 respondents Nos. 4 and 5 and the 6th respondent, G. Satya Rao, filed R.P. No. 2403 of 1987, which was dismissed by the Tribunal.
The appellants filed Civil Appeal No. 3203 of 1989 which was allowed by this Court and remitted to the Tribunal and directed, "to examine the legal effect of the Government order in G.O.Ms.
No. 1648 dated November 20, 1982 after again hearing the parties.
" Thereafter, the Tribunal after considering the effects of the G.O. held that in the im pugned order that G.O.Ms.
No. 1648 was issued under Para 5(2)(c) of the Andhra Pradesh Public Employment (Organisa tion of Local Cadres and Regulation of Direct Recruitment) Order 1975 for that "the 'order ' no allotment of cadre in terms of para 4 of the order was issued.
The G.O.Ms.
No. 1648 and G.O.Ms.
No. 1900 do not mention the constitution of new local cadre for Adilabad Division and no order was issued constituting a separate cadre in terms of 'the or der '.
Accordingly, it reiterated the original order dated April 29, 1988.
The Constitution (Thirtysecond Amendment) Act, 1973 through section 3 thereof brought into the Constitution article 371 D with effect from July 1, 1974.
This is a special provision in respect of the State of Andhra Pradesh empower ing the President, having regard to the requirements of the State as a whole for equitable opportunities and facilities for the people belonging to different parts of the State, in the matter of public employment and in the matter of educa tion, and different provisions may be made for various parts of the State to make an order, in particular (a) require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot in accord ance with such principles and procedure as may be specified in the order the persons holding such posts to the local cadres so organised; (b) specify any part or parts of the State which shall be regarded as the local area (i) for direct recruitment to posts in any local cadre (whether organised in pursuance of an order under this article or constituted otherwise) under the State Government . . (Other clauses are not relevant for the purpose of this case, Hence omitted.) 567 4.
In exercise of the power under cl.
(1) & cl.
(2) of article 371 D the President issued 'the order ' in G.S.R. No. 524 E dated October 18, 1975 which was notified through G.O.Ms.
No. 674 dated October 20, 1975.
Para 2(1)(c) inter pretation clause defines 'local area ' in relation to local cadre thus: " 'local area ', in relation to any local cadre, means the local area specified in paragraph 6 for direct recruitment to posts in such local cadre, and includes, in respect of posts belonging to the category of Civil Assistant Surgeons, the local area specified in sub paragraph (5) of paragraph 8 of this Order.
" Para 2(1)(e) defines 'local cadre ': " 'local cadre ' means any local cadre of posts under the State Government organised in pursuance of paragraph 3, or constituted otherwise, for any part of the State.
" Para 2(1)(m) defines 'zone ': " 'zone ' means a zone specified in the Second Schedule com prising the territories mentioned therein.
" Para 3(1) provides organisation of local cadres: "The State Government shall, within a period of twelve months from the commencement of this Order, organise classes of posts in the civil services of, and classes of civil posts under, the State into different local cadres for different parts of the State to the extent, and in the manner, hereinafter provided.
" The proviso thereto was added and was published through G.O.Ms.
No. 34G.A.(SPF.
A.) Deptt.
dated January 24, 1981, which reads thus: "Provided that, notwithstanding the expiration of the said period, the President may by order, require the State Gov ernment, whenever he considers it expedient so to do, to organise any classes of posts in the civil services of, and classes of civil posts under, the State into different local cadres for different parts of the State.
" (emphasis supplied) 568 Sub paragraph (2) provides that the posts belonging to the category of lower division clerk, (now redesignated as Junior Assistant), and to each of the other categories equivalent to, or lower than that of a lower division clerk, in each department in each district shall be organised into a separate cadre.
Sub paragraph (3) provides the posts belonging to each non gazetted category, other than those referred to in sub paragraph (2), in each zone shall be organised into a separate cadre.
Sub paragraph (4) provides, the post belonging to each specified gazetted category in each department in each zone shall be organised into a separate cadre.
Paragraph 3(5) with a non obstanti clause provides that: "Notwithstanding anything contained in sub paragraphs (3) and (4), the State Government may where it considers it expedient so to do and with the approval of the Central Government organise the posts belonging to any of the cate gories referred to therein, in any department, or any estab lishment thereof, in two or more contiguous zones into a single cadre.
" Sub paragraph (6) is not material.
Hence omitted.
Sub paragraph (7) provides: "In organising a separate cadre in respect of any category of posts in any department for any part of the State, noth ing in this Order shall be deemed to prevent the State Government from organising or continuing more than one cadre in respect of such category in such department for such part of the State." Paragraph 3(8) is also not necessary.
Hence omitted.
(emphas is supplied) Paragraph 4 provides mode of allotment of persons, holding posts required to be organised into local cadres in accordance with the principles and procedure laid down therein, the details of which are not material.
Hence omit ted.
Paragraph 5 declares that: "(1) Each part of the State, for which a local cadre has been organised, in respect of any category of posts, shall be 569 a separate unit for purposes of recruitment, appointment, discharge, seniority, promotion and transfer, and such other matters as may be specified by the State Government, in respect of that category of posts." (Other sub paragraphs relate to transfer of persons and are not relevant for the purpose of this case.
Hence omitted.).
Paragraph 6 deals with local areas: (1) Each district shall be regarded as a local area (i) for direct recruitment to posts in any local cadre under the State Government comprising all or any of the posts in any department in that district belonging to the category of a lower division clerk or to any other category equivalent to or lower than that of a lower division clerk (Junior Assistant): (ii) for direct recruitment to posts in any local authority within that district, carrying a scale of pay, the minimum of which does not exceed the minimum of the scale of pay of a lower division clerk or a fixed pay not exceeding that amount.
(2) Each zone shall be regarded as a local area the details of which are not material.
Hence omitted.
(emphasis supplied) In the Table 'Local area and the ratio ' in the Schedule, the State of Andhra Pradesh was divided into seven zones and zone V consists of the revenue districts of Adilabad, Karim nagar, Warangal and Khammam.
Instructions have been issued for implementation of the order through G.O.Ms.
No. 728 dated November 1, 1975, in organising the local cadres.
Para 3 thereof postulates, after quoting paragraph 3(1) of the order referred to hereinbefore, thus: "A local cadre is a cadre comprising the posts belonging to a category in a Department and located within a specified part of the State.
The concept of the local cadre is thus related to the concept of the unit of appointment under the service rules; the part of the State for which a local cadre is organised in respect of any category will serve as a unit of appointment etc., for that category.
The scheme of organ isation of local cadres under,the Presidential Order applies generally to all non gazetted categories, other than those 570 specifically exempted under Government of India Notification G.S.R. No. 529, (E), dated 18th October, 1975 issued under paragraph 3(8) of the Order, as also to the specified gazet ted categories, i.e., the gazetted categories listed in the Third Schedule to the Order and those that may be notified in pursuance of paragraph 2(i)(j) of the Order by the Cen tral Government.
Instruction 4(a) says that the lower division clerks or equivalent categories or lower than that were designated as a District Cadre.
Posts belonging to other non gazetted categories were designated as zonal cadre and specified gazetted cadres were also designated as zonal cadres.
In struction7 provides thus: "More than one Local Cadre permissible within Local Area It should be borne in mind that where the State Government is required to organise a local cadre for any part of the State, there is no objection to organising or continuing more than one local cadre for such part of the State (vide paragraph 3(7) of the order).
There is, therefore, no objec tion to having more than one cadre in Revenue District in respect of a post belonging to the category of Lower Divi sion Clerk (Junior Assistant) or below or to having more than one cadre in a zone in respect of a higher category." (emphasis supplied) Instruction 9(e) provides re adjustment of territorial jurisdiction, thus: "In several departments, the unit of appointment in respect of non gazetted categories is linked to the territorial jurisdiction of an authority or officer subordinate to the Head of Department.
For instance, the unit of appointment of Upper Division Clerks (Senior Assistants) in the Commercial Taxes Department is the division in charge of Dy.
Commis sioner.
In the case of such departments if it becomes neces sary to alter the units of appointment in order to bring them into conformity with the Presidential Order, a corre sponding adjustment in the territorial jurisdiction of the departmental authority may also become necessary and will have to be made . " 571 6.
Thus, it is seen that pursuant to the power given under cls.
(1) & (2) of article 371 D the President had issued the order organising local cadres and zone V consists of Adilabad, Warangal, Karimnagar and Khammam revenue dis tricts.
It is the local area for the local cadres.
The post of the Junior Assistant is the district cadre post and the post of Senior Assistant and Assistant Commercial Taxes Officers, etc.
are the zonal posts.
The State Government is empowered under the Presidential Order to organise the local cadres within a period of twelve months from October 20, 1975.
In pursuance thereof the State Government in Commer cial Taxes Department issued order G.O.Ms.
No. 581 dated May 24, 1976 organising zones for the purpose of Commercial Taxes Department, namely, Visakhapatnam, Kakinada, Krishna, Guntur, Triputhi, Karnool, Warangal, Hyderabad 1 and Hydera bad II.
Warangal zone consists of revenue districts of Adilabad, Karimnagar, Warangal and .Khammam.
Thus, the Warangal zone of Commercial Taxes Department for the purpose of recruitment, seniority, promotion, transfer, etc.
of local cadres is co terminus with the zone V of the Presiden tial Order.
The Junior Assistant in each revenue district in Warangal zone is a separate district post, .but for the purpose of promotion to the post of Senior Assistants and Assistant Commercial Taxes Officers, which are zonal posts common seniority of the Junior Assistants, Senior Assistants working in all the four revenue districts shall have to be maintained and promotions made in accordance with Ministeri al Service Rules or the Commercial Taxes Subordinate Service Rules issued under proviso to article 309 of the Constitution as the case may be.
It would be subject to rule of reserva tion for local candidates as adumbrated in para 8 of the Order and the general rule of reservation made in Rule 22 in Andhra Pradesh State and Subrodinate Service Rules.
It would appear from the record that the Government intended to reorganise, for the purpose of efficient admin istration of the Commercial Taxes Department and create separate divisions within the zones and issued through G.O.Ms.
No. 1900 dated December 22, 1981 carving out Adila bad and Karimnagar as Adilabad division and Warangal and Khammam as Warangal division with the administrative control of the concerned Dy.
Commissioner of Commercial Taxes at Adilabad and Warangal.
As a follow up action options have been called for from the employees and they have been allot ted in G.O.Ms.
No. 1648 dated November 22, 1982 to the respective divisions.
It is not disputed that the allotment and transfer were not made in terms of Para 4 of the Order.
As stated earlier this action had given rise to the above Representation Petitions and the orders passed by the Tribu nal and the results ensued thereunder.
572 8.
Dr. L.M. Singhvi, the learned Senior Counsel for the appellants, contends that paragraph 3(7) of the Order empow ers the State Government to create a zone within the Waran gal zone for the purpose of recruitment, seniority and promotion.
The State Government has inherent power in that regard.
There is no express prohibition in that regard in the order.
The phrase 'or constituted otherwise ' engrafted in the definition of local cadre in paragraph 2(e) read with paragraph 3(7) gives ample power to the State Government to organise any local cadre within the zone for the Commercial Taxes Department.
The action thus, taken by the State Gov ernment is clearly within its power.
The contra finding recorded by the Tribunal is illegal.
He placed strong reli ance on a decision of a single member Tribunal made in R.P. No. 101 of 1982 and batch dated April 1, 1982.
He further contended that in maintaining harmony in Centre State rela tionship, the State Government shall continue to have its inherent power to organise its local cadre to meet the exigencies of its administrative needs.
The prior approval or concurrence of the Central Government is redundant.
We find no force in these contentions.
It is already seen that in exercise of the power under paragraph 3(1) of the Order the State Government shall, within a period of twelve months from the date of the commencement of the Order, organise class or classes of posts in the civil services of, and class or classes of civil posts, under the State into dif ferent local cadres for different parts of the State in the manner therein provided.
It is already seen that through G.O.Ms.
No. 581, the State Government in fact had organised the Commercial Taxes Departments by constituting different local cadres and Warangal zone comprised of the four revenue districts, namely, Adilabad, Karimnagar, Khammam and Waran gal was declared as local area for local cadres of the Department.
Having done so, the question emerged whether the State Government has further power to reorganise the local cadre within the zone.
In our considered view, we have no hesitation to hold that once the State Government has orga nised the class or classes of posts in the civil services of and class or classes of civil posts, under the State as local cadres, it ceases to have any power to bifurcate or reorganise a zone within a zone, cadre or cadres therein.
In exercise of the power under proviso to paragraph 3(1), it is for the President notwithstanding the expiry of the period of twelve months prescribed in sub paragraph (1) of para graph 3, by an order require the State Government whenever he considers it expedient so to do to have the power under paragraph 3(1) exercised.
Thereby, it is clear that the State Government shall have to place necessary material before the President; the President shall consider that it is expedient to organise any class or classes of 573 posts in the civil services of and class or classes of civil posts, under the State into a further local cadre within the local cadre in the zone already prescribed and to pass an order in that regard requiring the State Government to so organise it.
It is made clear that for the purpose of effi cient administration or convenience, the State Government may create division/divisions within the local area or local cadre.
But for the purpose of recruitment, seniority, promo tion, discharge, etc.
the local cadre once organised under para 3(1) shall be final and continue to be operative until action is taken under proviso to subparagraph (1) of para graph 3 of the Order.
When we enquired the learned counsel for the State, Shri Madhava Reddy candidly conceded that no order of the President, as provided under the proviso, was made.
Therefore, the action taken by the State Government in issuing G.O.Ms.
No. 1648 dated November 20, 1982 is clearly illegal and invalid contravening the proviso to sub para graph (1) of paragraph 3, undoubtedly it contravened para 4 of the Order.
It is seen that the order was made pursuant to the power given to the President under article 371 D, which is a special provision made under the Constitution (Thirty second Amendment) Act, 1973 peculiar to the State of Andhra Pradesh due to historical background.
Therefore, the State Govern ment have no inherent power in creating a zone or organising local cadre within the zones except in accordance with the provisions made in the Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation for Direct Recruitment) Order.
It is true that the clause 'or consti tuted otherwise ' defined in paragraph 2(e) is of wide im port, but is only relatable to the power given by the Presi dent to the State Government to organise local cadre.
Para graph 3(1) is the source of that power, but the exercise thereof is hedged with a limitation of twelve months from the date of the commencement of the Order.
Therefore, the power to organise class or classes of posts of civil serv ices of, and class or classes of civil posts, under the State into different local cadres should be exercised by the State Government in accordance with para 3(1) before the expiry of the twelve months from October 20, 1975.
If the .exercise of the power is not circumscribed within limitation, certainly under General Clauses Act the power could be exercised from time to time in organising local cadres to meet the administrative exigencies.
The prescrip tion of limitation is a fetter put on the exercise of power by the State Government.
Obviously, realising this reality and the need to organise local cadres, subsequent thereto the amendment was made and was published in G.O.Ms.
No. 34 G.A. dated January 24, 1981 introducing proviso to Paragraph 3(1).
Thereunder, notwithstanding the expiry of the said period, the President alone has been given power 574 to organise local cadres in respect of class or classes of posts in civil services of and class or classes of civil posts, under the State.
That too subject to the conditions precedent laid therein.
Thus, it is the President and the President alone has been given power under proviso by an order to require the State Government to organise the local cadres in relation to any class or classes of posts in the civil services of and class or classes of civil posts under the State into different local cadres.
It could be consid ered in yet another perspective.
Para 2(e) indicates that President himself may create a local cadre instead of re quiring the State Government to organise local cadre.
For instance, Para 3(6) empowered the President to create local cadre for the city of Hyderabad.
Similarly, under proviso to para 3(1) the President may require the State Government to create a local cadre within a zone.
So the phrase 'or con stituted otherwise ' cannot be understood dehorse the scheme of the Presidential order.
No doubt in common parlence, the word 'otherwise ' is of 'wide ' amplitude.
This Court in Kochuni vs States of Madras & Kerala, ; , Subba Rao, J., as he then was, speaking per majority in paragraph 50 while construing the word 'otherwise ' held that it must be confined to things analogous to right or contract such as lost grant, immemorial user etc.
The Word 'other wise ' in the context only means whatever may be the origin of the receipt of maintenance.
The ratio thereunder cannot be extended in the contextual circumstances obtainable on the facts in this case.
Similarly, in Lilavati Bai vs The State of Bombay, ; at 735, Sinha J., as he then was, speaking for the Constitution Bench interpreting Expla nation (a) to section 6 of Bombay Land Requisition Act, 1948, as amended in 1950 and repelling the application of ejusdem generis doctrine laid the law thus: "The legislature has been cautious and thorough going enough to bar all avenues of escape by using the words 'or other wise '.
These words are not words of limitation but of exten sion so as to cover all possible ways in which a vacancy may occur.
Generally speaking a tenancy is terminated by acts of parties or by operation of law or by eviction by the land lord or by assignment or transfer of the tenant 's interest.
But the legislature, when it used the words 'or otherwise ', apparently intended to cover other cases which may not come within the meaning of the preceding clauses, for example a case where the tenant 's occupation has ceased as a result of trespass by a third party.
The legislature, in our opinion, intended to cover all possible cases of vacancy occurring due, to any reasons whatsoever.
" 575 Thus, contextual interpretation to the word 'or otherwise ' was given by this Court.
Therefore, the phrase 'constituted otherwise ' is to be understood in that context and purpose which article 371 D and the Presidential Order seek to achieve.
If the interpretation given by the appellants is given acceptance it amounts to giving blanket power to the State Government to create local cadres at its will tending to defeat the object of article 37 I D and the Presidential Order.
Accordingly, we have no hesitation to reject the interpreta tion of wider connotation.
The ratio in these decisions does not render any assistance to the appellants.
Similarly, the power given to the State Government in subparagraph (7) of paragraph 3 of the Order is only to organise a separate cadre in respect of any category of posts in any department when more than one cadre in respect of such category exists in each department; so that State Government may organise one cadre when more than one cadre in respect of different categories of posts exist in a zone under para 3(1) of the Order.
It is clear when we see the language in para 3(7) which says that: "nothing in this order shall be deemed to prevent the State from organising".
Take for instance while creating local cadre co terminus with the administrative control of the Dy.
Commissioner, Commercial Taxes, local cadre for Senior Assistants may be created.
It is also made manifest by Instruction No. 7 and 9(e) of the instructions contained in G.O.Ms.
No. 728 G.A.D. dated November 1, 1975.
But, as stated earlier, it is only for the purpose of administrative convenience, not for the purpose of recruitment, seniority or promotion etc., as the case may be.
Thus, we have no hesitation to hold that the creation of a division and maintaining separate seniority of Junior Assistants and Senior Assistants for Adilabad and Warangal Divisions are illegal, contrary to order issued in G.O.Ms.
No. 581 and the Andhra Pradesh Employment (Organisa tion of Local Cadre and Regulation of Direct Recruitment) Order, 1975.
The single member of the Tribunal in R.P. No. 101/82 dated April 1, 1982 did not consider the effect of the order in proper perspective and is illegal.
Accordingly, the impugned order of the Administra tive Tribunal is not vitiated by any manifest error of law warranting interference.
The appeal is accordingly dismissed, but without costs.
P.S. S Appeal dismissed.
| IN-Abs | Article 371 D brought into the Constitution by Thirty second Amendment Act, 1973, with effect from July 1, 1974 empowered the President in respect of the State of Andhra Pradesh by an Order (1) to require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot the persons holding such posts to the local cadres, and (2) to specify any part or parts of the State which shall be regarded as the local area for direct re cruitment to posts in any local cadre.
In exercise of the power so conferred the President issued the Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation of Direct Recruitment) Order, 1975 on October 18, 1975.
Para 3(1) of the Order empowered the State Government to organise the local cadre within a period of twelve months.
The term 'local cadre ' was defined in para 2(1)(e) to mean any local cadre of posts under the State Government organised in pursuance of para 3, or con stituted otherwise, for any part of the State.
The proviso added to para 3(1) subsequently and published through G.O. Ms. No. 34 dated January 24, 1981, empowered the President, notwithstanding the expiration of the period of twelve months, to require the State Government, whenever he consid ered it expedient so to do, to organise local cadres for different parts of the State.
Para 3(7) permitted the State Government to organise or to continue more than one cadre in respect of any category of posts in any department for any part of the State.
Para 4 provided mode of allotment of employees to local cadres.
Para 562 5(1) declared that each part of the State for which a local cadre has been organised, in respect of any category of posts, shall be a separate unit for purposes of recruitment, appointment, discharge, seniority, promotion and transfer.
In the table in the schedule thereto the State was divided into seven zones and zone V consisted of the revenue dis tricts of Adilabad, Karimnagar, Warangal and Khammam.
In structions were issued for implementation of the Presiden tial Order through G.O.Ms.
No. 728 dated November 1, 1975 in organising the local cadres.
In pursuance of para 3(1) of the Order the State Govern ment in Commercial Taxes Department issued order G.O.Ms.
No. 581 dated May 24, 1976 organising zones and the Warangal Zone consisted of revenue districts of Adilabad, Karimnagar, Warangal and Khammam, which was co terminus with zone V of the Presidential Order.
The Junior Assistant in each revenue district in Warangal zone was a separate district post, but for the purpose of promotion to the post of Senior Assist ants and Assistant Commercial Taxes Officers, which were zonal posts, common seniority of the Junior Assistants and Senior Assistants working in all the four revenue districts was being maintained and promotion made in accordance with the rules.
Subsequently, however, the State Government created separate divisions within the zones in the Commercial Taxes Department through G.O.Ms.
No. 1900 dated December 22, 1981 carving out Adilabad and Karimnagar as Adilabad Division and Warangal and Khammam as Warangal Division.
Options were called for and the employees allotted in G.O.Ms.
No. 1648 dated November 22, 1982 to the respective divisions.
Agrieved by the said order respondent Nos. 4 and 5 filed a petition before the State Administrative Tribunal contend ing that for promotion from Senior Assistant to Assistant Commercial Taxes Officer zonal seniority of Warangal local area comprising of Warangal, Khammam, Karimnagar and Adila bad was the criteria, that the Adilabad division consisting of Adilabad and Karimnagar districts of Commercial Taxes Department could not be treated to be a zone, and that the divisional seniority prepared by the department was bad in law.
The Tribunal held that the zonal seniority was the criteria for purposes of promotion, and allowed the peti tion.
The State Government in exercise of its power under cl.
(5) of article 371 D annulled that order.
Thereupon, respondent Nos. 4 and 5 filed a writ petition under article 32 of the Constitution wherein this Court 563 declared cl.
(5) of article 371 D as ultra vires.
Left with no alternative the State filed special leave petition against the original order of the Tribunal, which was dismissed.
Subsequently, the appellants beneficiaries of G.O.Ms. No. 1648 of 1982, filed representative petition before the Tribunal, which was dismissed.
In the appeal by special leave it was contended for them that the State Government continues to have its inherent power to organise local cadres to meet the exigencies of administrative needs, as there was no prohibition in that regard in the Order, and that the phrase 'or constituted otherwise ' engrafted in the definition of 'local cadre ' in para 2(1)(e) read with para 3(7) gave ample power to the State Government to create a zone within the Warangal zone for the purpose of recruitment, seniority and promotion in the Commercial Taxes Department.
Dismissing the appeal, the Court, HELD: 1.
The action taken by the State Government in issuing G.O.Ms.
No. 1648 dated November 20, 1982 was illegal and invalid contravening the proviso to para 3(1) and para 4 of the Presidential Order.
[573C] 2.1 Once the State Government had organised the Commer cial Taxes Department by constituting different local cadres and Warangal zone comprising of the four revenue districts, namely, Adilabad, Karimnagar, Khammam and Warangal was declared as local area for local cadres of the Department through G.O.Ms.
No. 581 dated May 24, 1976 in exercise of the powers under para 3(1), it ceased to have any power to bifurcate or reorganise a zone within a zone, cadre or cadres therein.
[572E G] 2.2 In exercise of the power under the proviso to para 3(1), it is for the President and President alone notwith standing the expiry of the period of twelve months pre scribed in para 3(1), by an order require the State Govern ment whenever he considers it expedient so to do to have the power under para 3(1) exercised.
Therefore, the State Gov ernment shall have to place necessary material before the President; the President shall consider that it is expedient to organise any class or classes of posts in the civil services of and class or classes of civil posts under, the State into a further local cadre within the local cadre in the zone already prescribed and to pass an order in that regard requiring the State Government to so organise it.
[572G; 573A] 564 2.3 However, for the purpose of efficient administration or convenience, the State Government may create division/divisions within the local area or local cadre.
But for the purpose of recruitment, seniority, promotion, dis charge, etc.
the local cadre once organised under para 3(1) shall be final and continue to be operative until action is taken under the proviso to para 3(1) of the Order.
In the instant case, no order of the President, as provided under the proviso, was made.
[573A B] 3.
The Presidential Order was made pursuant to the power given under article 371 D, which is a special provision made under the Constitution (Thirtysecond Amendment) Act, 1973 peculiar to the State of Andhra Pradesh.
Therefore, the State Government had no inherent power in creating a zone or organising local cadres within the zones except in accord ance with the provisions of the said Order.
[573D] 4.
The phrase 'or constituted otherwise ' defined in para 2(1)(e) is only related to the power given by the President to the State Government to organise local cadre.
Para 3(1) is the source of that power.
The said phrase is, therefore, to be understood in the context and purpose which article 371 D and the President Order seek to achieve.
The State Govern ment cannot create local cadres at its will.
[573E; 575A] Kochuni vs States of Madras & Kerala, ; and Lilavati Bai vs The State of Bombay, ; at 735, distinguished.
The power given to the State Government in para 3(7) of the Order is only to organise a separate cadre in respect of any category of posts in any department when more than one cadre in respect of such category exists in each depart ment.
So, the State Government may organise one cadre when more than one cadre in respect of different categories of posts exist in a zone under para 3(1) of the Order.
For instance, while creating local cadre co terminus with the administrative control of the Dy.
Commissioner, Commercial Taxes, local cadre for Senior Assistants may be created.
It is also made manifest in Instruction No. 7 and 9(e) of the instructions contained in G.O.Ms.
No. 728 dated November 1, 1975.
But it is only for the purpose of administrative convenience, not for the purpose of recruitment, seniority or promotion etc., as the case may be.
[575C E] Thus, the creation of a division and maintaining sepa rate seniority of Junior Assistants and Senior Assistants in the Commercial Taxes Department for adilabad and Warangal Divisions were illegal, contrary 565 to order issued in G.O.Ms.
No. 581 and the Presidential Order.
[575F]
|
ivil Appeal Nos.
912 to 20 of 1988 Etc.
From the Judgment and Order dated 23.10.
1987 of the Kerala High Court in O.P. Nos.
7976, 8543, 8385, 7712, 7761, 8058, 7461, 7709 & 7460/87.
WITH Civil Appeal Nos. 4460 to 4480 of 1985.
(From the Judgment and Order of the Madras High Court dated 31.1.
1985 in W.P. Nos. 7, 1586, 1591, 1636, 2079, 2702, 5510, 5718, 5782, 5834, 6035, 6036, 6384, 6497, 7038, 7067, 7079/1981 and 6479/82, 2348/83, 8196/83 and 256 1985.) AND Writ Petition No. 281 of 1988.
(Under Article 32 of the Constitution of India).
T.S. Krishnamurthy lyer, P.S. Poti, A.S. Nambiar, C.N. Sree Kumar, Rajendra Chowdhry, V. Krishna Murthy, section Thana Jayan, K.R. Nambiar, R.F. Nariman, K.J. John and Thomas Joseph for the appearing parties.
The Judgment of the Court was delivered by VERMA, J.
These civil appeals and the connected writ petition involve decision of the substantially common ques tion arising out of the conflicting decisions of the High Courts of Kerala and Madras regarding constitutional validi ty of similar provisions in the States of Kerala and Tamil Nadu which result in imposition of sales tax in the two States on cooked food sold to the affluent in the luxury hotels while exempting the same from sales tax in the modest eating houses patronised by the lesser mortals.
In both these States the eligibility to sales tax of cooked food sold only in luxury hotels was challenged on 519 the ground that it amounted to hostile discrimination.
The Kerala High Court rejected the challenge while the Madras High Court has upheld it.
This has led to filing of Civil Appeal Nos.
912 20 of 1988 against the Kerala High Court 's decision and Writ Petition (Civil) No. 281 of 1988 under Article 32 of the Constitution by the unsuccessful hoteliers of Kerala while Civil Appeal Nos. 4460 80 of 1985 are by the State of Tamil Nadu against the Madras High Court 's deci sion.
These conflicting decisions of the two High Courts giving rise to these matters are: Sangu Chakra Hotels Pvt.
Ltd. vs State of Tamil Nadu, [1985] 60 STC 125 (Madras) and Hotel Elite vs State of Kerala, [1988] 69 STC 119 (Kerala).
Shorn of rhetoric and bereft of the legal embroidery which invariably constitute bulk of the armoury of constitu tional attack on such a statutory provision and removing the gloss of hypertechnicality from the arguments, the real question is: Whether imposition of sales tax on the sale of cooked food in the more costly eating places alone violates the guarantee of equality enshrined in the Constitution of our 'Socialist ' Republic in view of the fact that cooked food sold in the modest eating places catering to the need of the common man is not similarly taxed? The challenge is that this can be done only by taxing them equally but not otherwise.
In other words, the contention is that this tax burden which is ultimately borne by the consumers of cooked food must be shared equally by all consumers and it cannot be placed only on the more affluent in the society who obviously are the ones frequenting the costlier eating houses, sale of cooked food wherein is taxed, the tax not being on the income or status of the consumer but on the sale of food for consumption.
In substance the question is: Is this the kind of equality envisaged and guaranteed in our Constitution? It is well settled that in order to tax some thing it is not necessary to tax everything.
So long as those within the tax net can be legitimately classified together indicating an intelligible differentia vis a vis those left out and the classification so made bears a rational nexus with the object sought to be achieved, the classification is clearly permissible and it does not violate Article 14 of the Con stitution.
There being obviously no controversy with this settled principle, the contention of Shri T.S. Krishnamurthy Iyer who led the attack to this imposition supported by other learned counsel appearing in these matters is, that the cooked food sold in all eating houses, be it the luxury hotels catering to the affluent or the wayside dhabas fre quented by the commoner, has the common characteristic of appeasing the hunger of the consumer, the requirement of the affluent as well as the commoner to appease the hunger being common.
On this basis, the main theme of 520 the argument was that the common purpose of sale of cooked food in all eating houses being to appease the hunger of the consumer, there can be no reasonable basis for its classifi cation with reference to the eating house in which it was sold to the customers and, therefore, for exigibility to sales tax the cooked food could not be classified with reference to the place of its sale.
Is this the correct approach to examine the reasonableness and validity of the classification made in the present case? In case such an argument is valid, it logically follows that in order to tax sale of cooked food the States must levy the sales tax on cooked food sold in all eating places whether it be a luxury hotel or a roadside dhaba; or not tax it at all, if it wishes to relieve the common man who is in eternal pursuit of adequate means of sustenance, of this additional burden.
We must frankly admit that unless it be the clear mandate of the Constitution we would not hesitate to reject this argument which, if accepted, may lead to the disastrous consequence of equating for taxation the haves with the have nots even in the matter of sustenance of the latter.
Moreover, such a view may even tempt the legislature to tax all cooked food sold anywhere and we certainly do not wish to make any contribution to a move in that direction.
Fortunately, as we read the constitutional provisions and the mandate of equality enshrined therein, such a view is not envisaged and the indication indeed is to the contrary.
The preamble to the Constitution contains the solemn resolve to secure to all its citizens, inter alia, economic and social justice along with equality of status and oppor tunity.
The expression 'socialist ' was intentionally intro duced in the preamble by the Constitution (FortySecond Amendment) Act, 1976 with the principal aim of eliminating inequality in income and status and standards of life.
The emphasis on economic equality in our socialist welfare society has to pervade all interpretations made in the context of any challenge based on hostile discrimination.
It is on the altar of this vibrant concept in our dynamic Constitution that the attack based on hostile discrimination in the present case must be tested when the legislature intended to rest content with placing the tax burden only on the haves excluding the havenots from the tax net for satis fying the tax need from this source.
The reasonableness of classification must be examined on this basis when the object of the taxing provision is not to tax sale of all cooked food and thereby tax everyone but to be satisfied with the revenue raised by taxing only the sale of costlier food consumed by those who can bear the tax burden.
521 The extent to which the revenue is required from a particular source is a matter of fiscal policy and if the legislature chooses to be satisfied with the raising of that amount alone which can be recovered from the affluent, it cannot be faulted for not dragging the impecunious also in the tax net.
Even otherwise the play at the joints permitted to the legislature for making classification in a taxing provision is greater and unless the classification made cannot satisfy the test of reasonableness in the context of economic equality envisaged in our society, a legislative enactment which undoubtedly benefits the common man cannot be held discriminatory or arbitrary.
The Directive Princi ples of State Policy also enjoin the State to temper the legislation towards securing a social order conducive to the promotion of social and economic equality, eliminating as far as may be the existing inequalities between different strata in the society.
This too is a pointer in the same direction.
We are here concerned with the constitutional validity of a legislative provision which has the effect of making the cooked food sold in the posh eating houses alone exigi ble to sales tax while exempting from that levy the cooked food sold in the moderate eating houses.
Reasonableness to the classification has to be decided with reference to the realities of life and not in the abstract.
A discernible dissimilarity between those grouped together and those excluded is a pragmatic test, if there be a rational nexus of such classification with the object to be achieved.
in the abstract all cooked food may be the same since its efficacy is to appease the hunger of the consumer.
But when the object is to raise only limited revenue by taxing only some category of cooked food sold in eating houses and not all cooked food sold anywhere, it is undoubtedly reasonable to tax only the more costly cooked food.
The taxed cooked food being the more costly variety constitutes a distinct class with a discernible difference from the remaining tax free cooked food.
A blinkered perception of stark reality alone can equate caviar served with champagne in a luxury hotel with the gruel and buttermilk in a village hamlet on the unrealistic abstract hypothesis that both the meals have the equal efficacy to appease the hunger and quench the thirst of the consumer.
Validity of a classification under our Constitution does not require such a blurred perception.
The cost of meal in these two distinct classes of eating houses varies considerably, the cost in a modest eating house quite often being a mere pittance of that in a posh eating house.
Not only that, the incidence of sales tax on the cost of food served in a posh eating house 522 quite often would not even be noticed by the customer and it may even exceed the total cost of the meal served in a modest eating house.
How can the two meals be then equated and classified together by application of the unreal test that the efficacy of both meals is to appease the consumers ' hunger? It is the substance and not form alone which must be seen.
The difference in the cooked food classified differ ently, taxed and tax free, is as intelligible and real as the two types of customers to whom they are served at these different eating houses.
This difference must also be avail able to support the difference in the incidence of the impugned sales tax.
This classification does bear a rational nexus with the object sought to be achieved.
The object clearly is to raise the needed revenue from this source, determined by the fiscal policy, which can be achieved by taxing sale of costly food alone and thereby placing the burden only on the affluent in the society.
The classifica tion is made by grouping together only those places where costly food is sold leaving out the comparatively modest ones.
The classification is, therefore, rounded on intelli gible differentia and has a rational nexus with the object to be achieved.
Having mentioned this broad feature of the case, we now advert to the specific provisions challenged and the various facets of the attack to their constitutional validity.
The provisions of the Kerala Act may first be stated.
The Kerala General Sales Tax Act, 1963 has been amended from time to time both by the Kerala General Sales Tax (Amend ment) Acts and also by the Kerala Finance Acts.
Section 5 of the Kerala General Sales Tax Act is the charging section and the first Schedule specifies goods subject to single point tax thereunder.
Section 9 of the Act provides for exemption from tax and the goods so exempted are specified in the third schedule to the Act.
Item 12 in the third schedule as it stood prior to 1.4.1976, read: "Item 12 Cooked food including coffee, tea and like arti cles served in a hotel, restaurant or any other place by a dealer whose total turnover in respect of such food is less than thirty five thousand rupees in a year.
" The above provision was amended by Act 45 of 1976 from 1.4.1976.
After the said amendment, the provision read: "Cooked food including coffee, tea and like articles served in a hotel, restaurant or any other place." 523 As a result of the above amendment, cooked food speci fied in Item 12 mentioned above was exempt from sales tax by virtue of Section 9 of the Act.
This was the position until 1987 when the Kerala Finance Act, 1987 was passed, which was brought into force retro spectively with effect from 1.7.1987.
However, we are not concerned with its retrospective operation since an under taking was given in the High Court on behalf of the State Government that retrospective effect would not be given to this provision.
Item 57 in the First Schedule reads: "57.
Cooked food including beverages At the point of not falling in any entry in the first sale in the fifth schedule in bar attached State by a dealer hotels of restaurants and/or who is liable to hotels above the grade of two tax under section stars.
" Item 12 in the Third Schedule was amended by the above Finance Act to read as follows: "12.
Cooked food including coffee, tea and like articles served in a hotel or a restaurant or any other place not falling under Entry 57 of the First Schedule.
" In the Fifth Schedule dealing with goods in respect of which tax is leviable on two points under sub section (1) or sub section (2) of Section 5 is included foreign liquor as Item 2.
As a result of the Kerala Finance Act, 1987, Writ Peti tions were filed in the Kerala High Court challenging the constitutional validity of the sales tax levied on the cooked food included under Item 57 of the First Schedule of the Act on the ground of discrimination because of Item 12 in the Third Schedule of the Act whereby cooked food includ ing coffee, tea and the like articles served in a hotel, a restaurant or any other place not falling under Item 57 of the First Schedule was exempted.
The Kerala High Court dismissed the writ petitions.
That decision reported in Hotel Elite & Ors.
vs State of Kerala & Ors.
, [1988] 69 STC 119 is challenged in one batch of Civil Appeals before us.
524 During the pendency of these civil appeals, Kerala Finance Act,1988 was passed amending Entry 57 of the Kerala General Sales Tax Act, 1963, as under: "For the entry in column (2) against Serial No. 57, the following entry shall be substituted, namely, "Cooked Food" including beverages not falling under entry 76A of this Schedule sold or served in, (i) hotels and/or restaurants, the turnover in respect of which is twenty lakhs rupees and above; and (ii) bar attached hotels and/or restaurants." As a result of the above amendment, the category of star hotels has been removed and in its place hotels or restau rants with turnover of rupees twenty lakhs and above and bar attached hotels, etc. are substituted.
The validity of the above provision was challenged by filing an application for amendment in this Court to incor porate additional grounds mentioned in Civil Miscellaneous Petition Nos.
7569 77 of 1988 in Civil Appeal Nos 912 20 of 1988.
The application for amendment was allowed by this Court and it is, therefore, necessary to also consider the validity of the said amendment introduced by Act 17 of 1988.
In addition, Civil Writ Petition No. 281 of 1988 has been filed directly in this Court under Article 32 of the Consti tution, challenging the constitutional validity of these amendments in the Kerala Act.
The relevant provisions of the Tamil Nadu Act may also be noticed.
It is the constitutional validity of Item 150 in the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 which is challenged.
By an amendment with effect from 4.10.
1980 Item 150 reads as under: "Articles of food and drinks sold to customers in three star, four star and five star hotels, as recognised by Tourism Department, Government of India whether such arti cles are meant to be consumed in the premises or outside.
" The effect thereof was to tax sales of food and drinks covered by the above item while exempting those outside the item.
Thereafter Item 525 150 was substituted with effect from 12.6.1981 as under: "Articles of food and drinks other than those specified elsewhere in this schedule, sold to customers in hotels classified or approved by the Government of India, Depart ment of Tourism.
" The challenge to levy of sales tax on the sales covered by these items is substantially on the same grounds as in the Kerala case.
We shall now mention the arguments advanced by learned counsel challenging this imposition in the two States.
The power of the State Legislature to levy sales tax by virtue of Entry 54 in list II of the 7th Schedule to the Constitution and the availability of that power in the present case to impose sales tax on food and drinks by virtue of Clause (29A) inserted in Article 366 of the Con stitution by the Constitution (Forty sixth Amendment) Act, 1982, is rightly not disputed.
However, it is contended that the classification made of the food and drinks taxed and those exempted is discriminatory and arbitrary.
It was urged that the classification is not based on the goods taxed but on the status of the consumers which is not permissible.
It was urged that the commodity taxed being the same as that exempted, the difference being only in the place of their sale, differentiation for taxation on the basis of place of sale is impermissible.
It was argued that Article 366(29A) permits imposition of tax on sale of food and drinks in any form but it does not permit.a differentiation with reference only to the place of sale.
It was also urged that the clas sification in such cases based only on turnover may be permissible for administrative and some other reasons but not on the place of sale, the status ' of the customer or difference in the impact of such tax on the customer.
It was also contended that the classification made with reference to the status of hotel has no nexus with the object of imposition of sales tax because the approval for the star status is for a different purpose relating to tourism and the other amenities provided in the hotel.
An attempt was also made to contend that the quality of food need not necessarily be superior in a hotel of higher star status as compared to an ordinary eating house and the charges for food served in the luxury hotels also include the service charges and not merely the cost of food.
Similarly, it was urged that a distinction made on the basis of a bar being attached to this hotel has no relevance or justification for the classification made in this context.
In reply, it was contended by Shri P.S. Poti and Shri K. Rajendra Choudhary on behalf of the two State Governments that such classifica tion being permissible the mode to be 526 adopted is the legislature 's choice which has chosen a pragmatic mode based on an existing classification instead of undertaking the exercise of a new classification to identify the two categories of eating houses, the sales wherein should be taxed or exempted.
It was urged that unless the classification so made is found to be arbitrary, there is no ground to reject the same and substitute it with another method simply because another method may be more desirable.
It was also contended that the object being to raise only limited revenue from this source, it was decided to tax only the sale of costlier food and thereby confine the burden only to fewer people on whom the burden would be light with the added advantage of greater administrative convenience.
A catena of decisions was cited at the bar on the point relating to valid classification and the test to be applied when hostile discrimination is alleged.
It is not necessary to refer to all those decisions which state the settled principles not in dispute even before us.
The difficulty really is in the application of settled principles to the facts of each case.
It is settled that classification round ed on intelligible differentia is permitted provided the classification made has a rational nexus with the object sought to be achieved.
In other words, those grouped togeth er must possess a common characteristic justifying their inclusion in the group, but distinguishing them from those excluded; and performance of this exercise must bear a rational nexus with the reason for the exercise.
The scope for classification permitted in taxation is greater and unless the classification made can be termed to be palpably arbitrary, it must be left to the legislative wisdom to choose the yardstick for classification, in the background of the fiscal policy of the State to promote economic equality as well.
It cannot be doubted that if the classification is made with the object of taxing only the economically stronger while leaving out the economically weaker sections of society, that would be a good reason to uphold the classification if it does not otherwise offend any of the accepted norms of valid classification under the equality clause.
Broadly stated the points involved in the constitutional attack to the validity of this classification are, in sub stance, only two: (1) Is the classification of sales of cooked food made with reference to the eating houses wherein the sales are made, rounded on an intelligible differentia? and 527 (2) If so, does the classification have a rational nexus with the object sought to be achieved? It would be useful at this stage to refer to some decisions of this Court indicating the settled principles for determining validity of classification in a taxing statute.
In Ganga Sugar Corporation Limited vs State of Uttar Pradesh and Ors., ; , Krishna lyer, J. speaking for the Constitution Bench held that a classifica tion based, inter alia, on "profits of business and ability to pay tax" is constitutionally valid.
Classification per missible in a taxing statute of dealers on the basis of different turnovers for levying varying rates of sales tax was considered by the Constitution Bench in M/s section Kodar vs State of Kerala; , , and Mathew, J. therein indicated the true perspective as under: "As we said, a large dealer occupies a posi tion of economic superiority by reason of his volume of business and to make the tax heavier on him both absolutely and relatively is not arbitrary discrimination but an at tempt to proportion the payment to capacity to pay and thus arrive in the end at more genuine equality.
The capacity of a dealer, in particular circumstances, to pay tax is not an irrelevant factor in fixing the rate of tax and one index of capacity is the quantum of turnover.
The argument that while a dealer beyond certain limit is obliged to pay higher tax, when others bear a less tax, and it is consequently discrim inatory really misses the point namely that the former kind of dealers are in a position of economic superiority by reason of their volume of business and form a class by themselves.
They cannot be treated as on a part with compar atively small dealers.
An attempt to proportion the payment to capacity to pay and thus bring about a real and factual equality cannot be ruled out as irrelevant in levy of tax on the sale or purchase of goods.
The object of a tax is not only to raise revenue but also to regulate the economic life of the society." (emphasis supplied) A recent decision of this Court in P.H. Ashwathana rayana Setty and Ors.
vs State of Karnataka and Ors.
, [1989] Supp. 1 SCC 696 gives a fresh look to the extent of classi fication held valid in a taxing statute; and the scope of judicial review permitted while considering its validity on the ground of equality under Article 14.
The true position has been 528 succinctly summarised by Venkatachaliah, J. speaking for the Court, as under: "The problem is, indeed, a complex one not free from its own peculiar difficulties.
Though other legislative measures dealing with economic regulation are not outside Article 14, it is well recognised that the State enjoys the widest latitude where measures of economic regulation are con cerned.
These measures for fiscal and economic regulation involve an evaluation of diverse and quite often conflicting economic criteria and adjustment and balancing of various conflicting social and economic values and interests.
It is for the State to decide what economic and social policy it should pursue and what discriminations advance those social and economic policies.
In view of the inherent complexity of these fiscal adjustments, courts give a larger discretion to the legislature in the matter of its preferences of economic and social policies and effectuate the chosen system in all possible and reasonable ways.
If two or more methods of adjustments of an economic measure are available, the legis lative preference in favour of one of them cannot be ques tioned on the ground of lack of legislative wisdom or that the method adopted is not the best or that there were better ways of adjusting the competing interests and claims.
The legislature possesses the greatest freedom in such areas . . " "The legislature has to reckon with practical difficulties of adjustments of conflicting interests.
It has to bring to bear a pragmatic approach to the resolution of these con flicts and evolve a fiscal policy it thinks is best suited to the felt needs.
The complexity of economic matters and the pragmatic solutions to be found for them defy and go beyond conceptual mental models.
Social and economic prob lems of a policy do not accord with preconceived stereotypes so as to be amenable to predetermined solutions . . " The lack of perfection in a legislative measure does not necessarily imply its unconstitutionality.
It is rightly said that no economic measure has yet been devised which is free from all discriminatory impact and that in such a complex arena in which no perfect alternatives exist, the Court does well not to impose too rigorous a standard of criti 529 cism, under the equal protection clause, reviewing fiscal services.
In G.K. Krishnan vs State of Tamil Nadu this Court referred to, with approval, the majority view in San Antonio Independent School District vs Rodriguez speaking through Justice Stewart: 'No Scheme of taxation, whether the tax is imposed on property, income or purchases of goods and services, has yet been devised which is free of all discriminatory impact.
In such a complex arena in which no perfect alternatives exist, the Court does well not to impose too rigorous a standard of scrutiny lest all local fiscal schemes become subjects of criticism under the Equal Protection clause ' and also to the dissent of Marshall, J. who summed up his conclusion that: 'In summary, it seems to me inescapably clear that this Court has consistently adjusted the care with which it will review State discrimination in light of the constitutional significance of the interests affected and the invidiousness of the particular classification.
In the context of economic interests, we find that discriminatory State action is almost always sustained, for such interests are generally far removed from constitutional guarantees.
Moreover, "(t)he extremes to which the court has gone in dreaming up rational basis for State regulation in that area may in many in stances be ascribed to a healthy revulsion from the court 's earlier excesses in using the Constitution to protect inter ests that have more than enough power to protect themselves in the legislative halls." "The observations of this Court in ITO vs K.N. Takim Roy Rymbai made in the context of taxation laws are worth re calling.
(T)he mere fact that a tax falls more heavily on some in the same category, is not by itself a ground to render the law invalid.
It is only when within the range of its selection.
the law operates unequally and cannot be justified on the basis of a valid classification, that there would be a violation of Article 14." (emphasis supplied) 530 In Federation of Hotel and Restaurant Association of India and others vs Union of India and others, Venkatachaliah, J., delivering the majority opinion of the Constitution Bench while dealing with a similar objection to classification in a taxing statute, held as under: "The State, in the exercise of its Governmental power, has, of necessity, to make laws operating differently in relation to different groups or class of persons to attain certain ends and must, therefore, possess the power to distinguish and classify persons or things.
It is also recognised that no precise or set formula or doctrinaire tests or precise scientific principles of exclusion or inclusion are to be applied.
The test could only be one of palpable arbitrari ness applied in the context of the felt needs 10 the times and societal exigencies informed by experience.
Classifications based on differences in the value of articles or the economic superiority of the persons of incidence are well recognised.
A reasonable classification is one which includes all who are similarly situated and none who are not.
In order 10 ascertain whether persons are similarly placed, one must look beyond the classification and to the purposes of the law." (emphasis supplied) Thus, it is clear that the test applicable for striking down a taxing provision on this ground is one of 'palpable arbitrariness applied in the context of the felt needs of the times and societal exigencies informed by experience '; and the courts should not interfere with the legislative wisdom of making the classification unless the classifica tion is found to be invalid by this test.
In the present case, to assail the constitutional valid ity of the impugned provisions reliance is placed on a decision of the Madras High Court in A.R. Krishna lyer and Ors.
vs State of Madras, [1956] 7 STC 346.
However, contrary view was taken by the A.P. High Court of the same provision in the Madras General Sales Tax Act, 1939 in Kadiyala Chan drayya vs The State of Andhra Pradesh, [1957] 8 STC 33.
Subba Rao, C J, as his lordship then was, upheld the classi fication in the Andhra decision on the ground that it was made as a genuine attempt to adjust the, burden with a fair and reasonable degree of equality and to harmonise the doctrine of equality with differences 531 inherent in the categories of persons assessed.
After refer ring to the principle of classification authoritatively restated by this Court in Budban Chowdhary vs State of Bihar, ; and quoting the of quoted passage from Willis on Constitutional Law on this point, Subba Rao, CJ., as his Lordship then was, proceeded to hold as under: "The object of the Act, as set out in the preamble.
is to provide for the levy of a general tax on the sale of goods in the State of Andhra.
But every taxing legislation makes a genuine attempt to adjust the burden with a fair and reason able degree of equality.
It also aims to apportion the burden equitably on different categories of properties or persons with distinct economic characteristics.
It is impos sible in the nature of things to aim at absolute equality in the matter of taxation.
The State resorts to the principle of classification in an attempt to harmonise the doctrine of equality with differences inherent in the categories of properties or persons assessed.
In the present case, the object to provide for the levy of a general tax and to apportion the burden equitably between different categories of persons has a reasonable nexus with the classification adopted by the legislature.
The question can be considered from the stand point of the citizen as well as from the stand point of the State.
From the stand point of the State, the classification can be justified on the ground of equita ble apportionment of the burden and easy realisation of the tax.
Articles of food and drink are more in demand than other articles.
Even in the case of the former, there will be a larger demand in restaurants, boarding houses and hotels than in other places like way side shops.
There may be small or big dealers even in such commodities, who run hotels or keep boarding houses.
The State also can reasona bly recover taxes at higher rates from prosperous dealers than from impecunious ones.
From the stand point of the dealer also, there is justification for the varied rates.
The articles sold, the place where the business is carried on and the expectation of large profits are the characteris tics of dealers who are distinct from dealers not covered by the proviso.
Learned counsel relied upon the decision of the Madras High Court in Krishna lyer vs The State of Madras, wherein the learned Judges took a different view from what we have taken.
After pointing out that three lines of clas 532 sification run through the impugned provision, the learned judges considered only the second classification, namely, the distinction between dealers in articles of food and drinks sold in hotels, boarding houses and restaurants and other dealers in such articles and held that it was suffi cient to deny the validity of the impugned provision.
With great respect we cannot agree.
In our view, the characteris tics of the dealer covered by the proviso should be cumula tively considered and, if so looked at, the said character istics will afford a reasonable basis of classification which has a rational nexus with the object sought to be achieved.
We, therefore, hold that the classification is rounded on intelligible differentia distinguishing dealers like the assessee and that it has a rational relation to the object sought to be achieved." (emphasis supplied) The vision of Subba Rao, C J, as his Lordship then was, portrayed in the Andhra decision more than three decades earlier, a forerunner in the field, is fully realised being consistent with the picture emerging from the decisions of this Court already noticed and promotes the principle of economic equality governing formulation of the country 's fiscal policy.
With great respect, we fully concur with the above view taken by Subba Rao, C J, as his Lordship then was, even prior to introduction of the word 'socialist ' in the Preamble of the Constitution, which further reinforces its correctness.
The obvious reason for making the classification in the present case is to group together those eating houses alone wherein costlier cooked food is sold for the purpose of imposition of sales tax to raise the needed revenue from this source.
The object apparently is to raise the needed revenue from this source by taxing the sale of cooked food only to the extent necessary and, therefore, tO confine the levy only to the costlier food.
The predominant object is to tax sale of cooked food to the minimum extent possible, since it is a vital need for sustenance.
Those who can afford the costlier cooked food, being more affluent, would find the burden lighter.
This object cannot be faulted on principle and is, indeed, laudable.
In addition, the course adopted has the result of taxing fewer people who are more affluent in the society for raising the needed revenue with the added advantage of greater administrative convenience since it involves dealing with fewer eating houses which are easier to locate.
This accords with the principle of promot ing economic equality in the society which must, undoubted ly, govern formulation of the fiscal policy of the State.
533 The trend of the up to date decisions of this Court, already noticed does indicate that a classification made whereby the tax net covers only the sale of costlier cooked food in the posh eating houses while exempting the cooked food sold in the modest eating houses at lesser prices, thereby confining the burden to the more affluent in the society, satisfies the requirements of a valid classifica tion.
Moreover, the classification so made cannot be termed as arbitrary, being within the limits upto which the legis lature is given a free hand for making classification in a taxing statute.
It has not been shown that any eating house similar to those grouped together for purpose of taxation has been excluded from the group.
The classification made is to group together all eating houses wherein costlier cooked food is sold.
It has not been shown that the tariff of cooked food sold in any of the exempted eating houses is the same or higher than that of those taxed.
The tax is applied equally to all those within the tax net.
It was urged that eating houses serving cooked food of the same quality but not recognised with the higher star status to bring it within the tax net enjoyed an undue advantage not available to those within the tax net.
It was also urged that recognition of a hotel for conferment of the star status was made for a different purpose, namely, promo tion of tourism and the other facilities available therein which have no relevance to the quality of food served there in.
Admittedly, such recognition entails several benefits and seeking recognition depends on volition.
In our opinion, such an enquiry is unwarranted for the purpose of classification in the present context.
It is well known that the tariff in hotels depends on its star status, it being higher for the higher star hotels.
The object being to tax cooked food sold at a higher tariff, the status of the hotel where it is sold is certainly relevant.
The classification is made in the present case to bring within the tax net hotels or eating houses of the higher status excluding therefrom the more modest ones.
A rational nexus exists of this classification with the object for which it is made and the classification is rounded on intelligible differentia.
This being a relevant basis of classification related to the avowed object, the legislature having chosen an existing classification instead of resorting to a fresh method of classification, it cannot be a ground of invalidity even assuming there are other better modes of permissible classification.
That is clearly within the domain of legislative wisdom intrusion into which of judicial review is unwarranted.
There is no material placed before us to indicate that with reference to the purpose for which the classification has ' been made in 534 the present case, there is a grouping together of dissimilar eating houses or that similar eating houses have been ex cluded from the class subject to the tax burden.
This discussion clearly shows that the attack to the constitutional validity of the impugned provisions in both States has no merit since the classification made is neither discriminatory nor arbitrary.
We have no hesitation in rejecting the challenge on the aforesaid grounds on the material produced.
The writ petitions filed in both High Courts as also in this Court challenging the levy in the States of Kerala and Tamil Nadu must fail.
Consequently, Civil Appeal Nos 912 20 of 1988 against the judgment of the Kerala High Court as well as the con nected Civil Writ Petition No. 281 of 1988 challenging the validity of the impugned provisions in the Kerala Act are dismissed while Civil Appeal Nos.
4460 80 of 1985 against the Madras High Court decision are allowed resulting in dismissal of those writ petitions also.
In the circumstances of the case, the parties shall bear their own costs.
| IN-Abs | The Constitutional validity of similar provisions in the States of Kerala and Tamil Nadu which result in imposition of Sales Tax on cooked food sold only in luxury hotels while exempting the same from sales tax in modest eating houses was challenged by some hoteliers in both States on the ground that this amounted to hostile discrimination and therefore violative of Article 14 of the Constitution.
While the Kerala High Court rejected the challenge, the High Court of Madras upheld it.
Consequently one set of appeals and a Writ Petition under Article 32 of the Constitution have been preferred by the unsuccessful hoteliers of Kerala and the other set of appeals by the State of Tamil Nadu against the decision of the Madras High Court allowing the Writ Peti tions filed before it by the hoteliers.
Upholding the constitutional validity of the impugned provisions in both States, while dismissing the appeals and Writ Petition filed by the hoteliers and allowing the ap peals by the State of Tamil Nadu, this Court, HELD: It is the substance and not form alone which must be seen.
The difference in the cooked food classified dif ferently, taxed and taxfree, is as intelligible and real as the two types of customers to whom they are served at these different eating houses.
This difference must also be avail able to support the difference in the incidence of the impugned sales tax.
This classification does bear rational nexus with the 517 object sought to be achieved.
The object clearly is to raise the needed revenue from this source, determined by the fiscal policy, which can be achieved by taxing sale of costly food on the affluent alone in the society.
The clas sification is made by grouping together only those places where costly food is sold leaving out the comparatively modest ones.
The classification is, therefore, rounded on intelligible differentia and has a rational nexus with the object sought to be achieved.
In other words, those grouped together possess a common characteristic justifying their inclusion in the group, but distinguishing them from those excluded; and performance of this exercise bears a rational nexus with the reason for the exercise.
[526B D] The scope for classification permitted in taxation is greater and unless the classification made can be termed to be palpably arbitrary, it must be left to the legislative wisdom to choose the yardstick for classification, in the background of the fiscal policy of the State to promote economic equality as well.
It cannot be doubted that if the classification is made with the object of taxing only the economically stronger while leaving out the economically weaker sections of society, that would be a good reason to uphold the classification if it does not otherwise offend any of the accepted norms of valid classification under the equality clause.
[526F G] The predominant object is to tax sale of cooked food to the minimum extent possible, since it is a vital need for sustenance.
Those who can afford the costlier cooked food, being more affluent, would find the burden lighter.
This object cannot be faulted on principle and is, indeed, laud able.
In addition, the course adopted has the result of taxing fewer people who are more affluent in the society for raising the needed revenue with the added advantage of greater administrative convenience since it involves dealing with fewer eating houses which are easier to locate.
This accords with the principle of promoting economic equality in the society which must, undoubtedly, govern formulation of the fiscal policy of the State.
[532G H] The classification is made in the present case to bring within the tax next hotels or eating houses of the higher status excluding therefrom the more modest ones.
A rational nexus exists of this classification with the object for which it is made ,and the classification is rounded on intelligible differentia.
This being a relevant basis of classification related to the avowed object, the legislature having chosen an existing classification instead of resort ing to a fresh method of classification, it cannot be a ground of invalidity even assuming there are other better 518 modes of permissible classification.
The classification made under the impugned provisions is neither discriminatory nor arbitrary.
[533F G; 534B] Ganga Sugar Corporation Limited vs State of Uttar Pra desh & Ors.
; , ; M/s section Kodar vs State of Kerala, ; ; P.H. Ashwathanarayana Setty & Ors.
vs State of Karnataka & Ors.
, [1989] Suppl.
1 SCC 696; ITO vs K.N. Takim Roy Rymbai; Federation of Hotel and Res taurant Association of India & Ors.
vs Union of India & Ors.
, ; A.R. Krishna lyer & Ors.
vs State of Madras, [1956] 7 STC 346; Kadiyala Chandrayya vs The State of Andhra, [1957] 8 STC 33 and Budhan Chowdhary vs State of Bihar; , , referred to.
|
tition Nos.
8307 11 of 1983 etc.
(Under Article 32 of the Constitution of India) WITH Special Leave Petition No. 6823 of 1988.
546 From the Judgment and Order dated 22.1.1988 of the Karnataka High Court in Application No. 3392 of 1987 N.S. Hegde, Additional Solicitor General, R.K. Garg, M.C. Bhandare, Mrs. Indra Jaisingh, P.S. Poti (NP), Govind Mukhoty, TS.
Krishnamurthy Iyer (NP), Miss Rani Jethmalani, R.M. Tiwari, L.P. Gour, Mohan Katarki, D.K. Garg, V. Laxmi Narayan, P.R. Ramasheesh, M. Veerappa (NP), section Ravindra Bhatt and C.S. Vaidyanathan for the appearing parties.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
These are five writ petitions under Article 32 of the Constitution by two trade unions, a socie ty formed by Law students of the University College and two individuals asking for quashing of the Karnataka Govern ment 's Notification of 12th March, 1982, and for directions to confirm the daily rated and monthly rated employees as regular government servants and for payment of normal salary at the rates prescribed for the appropriate categories of the Government servants and other service benefits.
It has been pleaded that about 50,000 such workers are employed in the different Government establishments and though many of them have put in 15 to 20 years of continuous service which is proof of the fact that there is permanent need for the jobs they perform they have not been regularised in their service and are not being paid equal pay for equal work as has been mandated by this Court by way of implementation of the Directive Principles of State Policy.
A two Judge Bench of this Court dealing with these writ petitions on 14th July, 1988, directed: "We have heard learned counsel for both the parties, only on one of the questions involved in this case viz. whether the monthly rated Gangmen who are referred to in Paragraph 1 of the Government 's order No. PWD 100 PWC 83, Bangalore dated 12th January, 1984 and the monthly rated Sowdies etc.
re ferred to in the Government 's order No, PWD 120 PWC 84 dated 4th December, 1984 should be paid the same salary as the salary paid to Gangmen and Sowdies respectively who are employed regularly by the State Government.
As we are of the view that the principle enunciated by this Court in Para graph 3 of the judgment of this Court in Daily Rated Casual Labour Employed under 547 P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India & Ors., is applicable to this case also, we direct the Government of Karnataka to pay salary to such workmen at the rates equivalent to the mini mum pay in the pay scales of the regularly employed Gangmen or Sowdies, as the case may be, but without any increment with effect from 1.7. 1988.
The question whether they are entitled to any arrears for the period between the date on which their services were regularised under the State Gov ernment 's Orders and 1.7.
1988 will be considered along with the other questions involved in this case at the final hearing.
This case shall stand adjourned by three months.
In the meanwhile we permit the State Government to frame a more rational scheme for absorbing as many casual workers and monthly rated Gangmen and Sowdies as possible in regular cadres.
The case need not be treated as part heard.
" Pursuant to the aforesaid directions, the State of Karnataka has filed a draft scheme, copies of which have been served on the parties, their response to the draft scheme has been received and the matter has been heard at length.
A three Judge Bench in Randhir Singh vs Union of India & Ors., ; observed: "It is true that the principle of 'equal pay for equal work ' is not expressly declared by our Constitution to be a funda mental right.
But it certainly is a constitutional goal.
Article 39(d) of the Constitution proclaims 'equal pay for equal work for both men and women ' as a Directive Principle of State Policy. 'Equal pay for equal work for both men and women ' means equal pay for equal work for everyone and as between the sexes.
Directive Principles, as has been pointed out in some of the judgments of this Court have to be read into the fundamental rights as a matter of interpretation.
Article 14 of the Constitution enjoins the State not to deny any person equality before the law or the equal protection of the laws and Article 16 declares that there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
These equality clauses of the Constitution must mean some thing to everyone.
To the vast majority of the 548 people the equality clauses of the Constitution would mean nothing if they are unconcerned with the work they do and the pay they get.
To them the equality clauses will have some substance if equal work means equal pay.
Whether the special procedure prescribed by a statute for trying alleged robber barons and smuggler kings or for dealing with tax evaders is discriminatory; whether a particular governmental policy in the matter of grant of licences or permits confers unfettered discretion on the Executive, whether the take over of the empires of industrial tycoons is arbitrary and unconstitutional and other questions of like nature, leave the millions to people of this country untouched.
Questions concerning wages and the like, mundane they may be, are yet matters of vital concern to them and it is there, if at all that the equality clauses of the Constitution have any significance to them . .
Construing Articles 14 and 16 of the Constitution in the light of the Preamble and Article 39(d), we are of the view that the principle 'equal pay for equal work ' is deducible from those Articles and may be properly applied to cases of unequal scales of pay based on no classification or irrational classification though those drawing the different scales of pay do identical work under the same employer.
" That was the case of Delhi Police drivers.
In the case of Dhirendra Charnoli & Anr.
vs State of U.P., , the claim for equal pay for equal work arose for con sideration on the complaint of persons who were engaged by the Nehru Yuvak Kendra as casual workers on daily wage basis.
While dealing with the problem a two Judge Bench took note of the fact that casual employment was being continued for too long a period and directed: "the Central Government to accord to these persons who are employed by the Nehru Yuvak Kendras and who are concededly performing the same duties as Class IV employees, the same salary and conditions of service as are being .received by Class IV employees, except regularisation which cannot be done since there are no sanctioned posts.
But we hope and trust that posts will be sanctioned by the Central Govern ment in the different Nehru Yuvak Kendras, so that these persons can be regularised.
It is not at all desirable that any management and particularly the Central Government should continue to employ persons on 549 casual basis in organisations which have been in existence for over 12 years.
" Both these aspects, namely, 'equal pay for equal work ' and continuing casual employment for too long came for consideration of another two Judges Bench of this Court in Surinder Singh & Anr.
vs Engineer in Chief, C.P.W.D. & Ors., Chinnappa Reddy, J. speaking for the Court began his judgment by saying: "In these two writ petitions, the petitioners who are em ployed by the Central Public Works Department on a daily wage basis and who have been so working for several years, demand that they should be paid the same wages as permanent employees employed to do identical work.
They state that even if it is not possible to employ them on regular and permanent basis for want of a suitable number of posts, there is no reason whatsoever why they should be denied 'equal pay for equal work '.
Continuing to deal with the matter the learned Judge pointed out: "One would have thought that the judgment in the Nehru Yuvak Kendras case concluded further argument on the question.
However, Shri V.C. Mahajan, learned counsel for the Central Government reiterated the same argument and also contended that the doctrine of 'equal pay for equal work ' was a mere abstract doctrine and that it was not capable of being enforced in a court of law.
He referred us to the observa tions of this Court in Kishori Mohanlal Bakshi vs Union of India, AIR 1962 SC 1139.
We are not a little surprised that such an argument should be advanced on behalf of the Central Government 36 years after the passing of the Constitution and 11 years after the Fortysecond Amendment proclaiming India as a socialist republic.
The Central Government like all organs of the State is committed to the Directive Prin ciples of State Policy and Article 39 enshrines the princi ple of equal pay for equal work.
In Randhir Singh vs Union of India, supra, this Court has occasion to explain the observations in Kishori Mohanlal Bakshi vs Union of India, and to point out how the principle of equal pay for equal work is not an abstract doctrine and how it is a vital and vigorous doctrine 550 accepted throughout the world, particularly by all socialist countries.
For the benefit of those who do not seem to be aware of it, we may point out that the decision in Randhir Singh, case has been followed in any number of cases by this Court and has been affirmed by a Constitution Bench of this Court in D.S. Nakara vs Union of India, ; The Central Government, the State Governments and likewise, all public sector undertakings are expected to function like model and enlightened employers and arguments such as those which were advanced before us that the principle of equal pay for equal work is an abstract doctrine which cannot be enforced in a court of law should ill come from the mouths of the State and the State Undertakings . . " A little later came the case of R.D. Gupta & Ors.
vs Lt. Governor, Delhi Admn.
& Ors., ; raising the problem of inequality of pay in a situation where equal work was being rendered.
In paragraph 18 of the judgment the ratio of the decision already referred to was reaffirmed.
In the case of Bhagwan Dass & Ors.
vs State of Haryana & Ors.
, [1987] 4 SCC 634, the same principles were reiterated in the case of Teachers and Supervisors in the education service.
Another Division Bench in Jaipal & Ors.
vs State of Haryana & Ors.
, [1988] 3 SCC 354 was dealing with the disparity in the conditions of service of Instructors under the Adult and Non formal Education Scheme and regular employees of the State of Haryana.
This court stated: "There is no doubt that instructors and squad teachers are employees of the same employer doing work of similar nature in the same department; therefore, the appointment on a temporary basis or on regular basis does not affect the doctrine of equal pay for equal work.
Article 39(d) con tained in Part IV of the Constitution ordains the State to direct its policy towards securing equal pay for equal work for both men and women.
Though Article 39 is included in the chapter on Directive Principles of State Policy, but it is fundamental in nature.
The purpose of the Article is to fix certain social and economic goals for avoiding any discrimi nation amongst the people doing similar work in matters relating to pay.
The doctrine of equal pay for equal work has been implemented by this Court in Randhir Singh vs Union of India, Dhirendra Chamoli vs State of U.P. and 551 Surinder Singh vs Engineer in Chief, CPWD.
In view of these authorities it is too late in the day to disregard the doctrine of equal pay for equal work on the ground of the employment being temporary and the other being permanent in nature.
A temporary or casual employee performing the same duties and functions is entitled to the same pay as paid to a permanent employee.
" In the case of Daily Rated Casual Labour employed under P & T Department vs Union of India & Ors., , the twin aspects for consideration before us had arisen for determination.
This Court then indicated: "It may be true that the petitioners have not been regularly recruited but many of them have been working continuously for more than a year in the department and some of them have been engaged as casual labourers for nearly ten years.
They are rendering the same kind of service which is being ren dered by the regular employees doing the same type of work.
Clause (2) of Article 38 of the Constitution of India which contains one of the Directive Principles of State Policy provides that 'the State shall, in particular, strive to minimise the inequalities in income and endeavour to elimi nate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations '.
Even though the above directive principle may not be enforceable as such by virtue of Article 37 of the Constitution of India, it may be relied upon by the peti tioners to show that in the instant case they have been subjected to hostile discrimination.
It is urged that the State cannot deny at least the minimum pay in the pay scales of regularly employed workmen even though the government may not be compelled to extend all the benefits enjoyed by regularly recruited employees.
We are of the view that such denial amounts to exploitation of labour.
The government cannot take advantage of its dominant position, and compel any worker to work even as a casual labourer on starvation wages.
It may be that the casual labourer has agreed to work on such low wages.
That he has done because he has no other choice.
It is poverty that has driven him to that state.
The government should be a model employer.
We are 552 of the view that on the facts and in the circumstances of this case the classification of employees into regularly recruited employees and casual employees for the purpose of paying less than the minimum pay payable to employees in the corresponding regular cadres particularly in the lowest rungs of the department where the pay scales are the lowest is not tenable . .
India is a socialist republic.
It implies the existence of certain important obligations which the State has to discharge.
The right to work, the right to free choice of employment, the right to just and favourable conditions of work, the right to protection against unem ployment.
the right of everyone who works to just and fa vourable remuneration ensuring a decent living for himself and his family, the right of everyone without discrimination of any kind to equal pay for equal work, the right to rest, leisure, reasonable limitation on working hours and periodic holidays with pay, the right to form trade unions and the right to join trade unions of one 's choice and the right to security of work are some of the rights which have to be ensured by appropriate legislative and executive measures.
It is true that all these rights cannot be extended simulta neously.
But they do indicate the socialist goal.
The degree of achievement in this direction depends upon the economic resources, willingness of the people to produce and more than all the existence of industrial peace throughout the country.
Of those rights the question of security of work is of utmost importance.
If a person does not have the feeling that he belongs to an organisation engaged in production he will not put forward his best effort to produce more.
That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management.
It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contribute to the maximisation of produc tion.
It is again for this reason that managements and the governmental agencies in particular should not allow workers to remain as casual labourers or temporary employees for an unreasonably long period of time . ' ' Keeping these principles in view this Court in the case of H.P. Income 553 Tax Department Contingent Paid Staff Welfare Association vs Union of India & Ors., ; indicated with emphasis: "We accordingly allow this writ petition and direct the respondents to pay wages to the workmen who are employed as the contingent paidstaff of the Income Tax Department throughout India, doing the work of Class IV employees at the rates equivalent to the minimum pay in the pay scale of the regularly employed workers in the corresponding cadres . . " Then came the case of State of U.P. & Ors.
vs J.P. Chau rasia & Ors.; , where a Division Bench of this Court reiterated: "Equal pay for equal work for both men and women has been accepted as a constitutional goal capable of being achieved through constitutional remedies.
" On this occasion the authority of the larger Bench in Kesa vananda Bharati vs State of Kerala, [1973] 4 SCC 225 where the Court said 'the dominant objective in view was to amel iorate and improve the lot of the common man and to bring about a socio economic justice ' was called in aid for the conclusion of the Court.
Reference may also be made to another Division Bench judgment of this Court in the case of Bhagwan Sahai Carpen ter & Ors.
vs Union of India & Anr.
, ; where the ratio of the decisions referred to above was given effect to.
We have referred to several precedents all rendered within the current decade to emphasise upon the feature that equal pay for equal work and providing security for service by regularising casual employment within a reasona ble period have been unanimously accepted by this Court as a constitutional goal to our socialistic polity.
Article 141 of the Constitution provides how the decisions of this Court are to be treated and we do not think there is any need to remind the instrumentalities of the State be it of the Centre or the State, or the public sector that the Consti tution makers wanted them to be bound by what this Court said by way of interpreting the law.
The question that arises in these matters is indeed not one that has been left wholly to the realm of interpretation and to be described 554 as Judge made law.
Parliament has stepped in as early as 1976 by enacting the Equal Remuneration Act (25 of 1976) to take over a part of the question which arises here.
That Act is a legislation providing equality to pay for equal work between men and women which certainly is a part of the principle which we are considering.
President Roosevelt, the American Chief Executive, in one of his annual reports about the state of the Nation to the Congress once pointed out: "The chief law makers in our country may be, and often are, the Judges because they are the final seat of authority.
Every time they interpret contract, property vested rights, due process of law, liberty, they necessarily enact into law part of a system of social philosophy; and as such interpre tation is fundamental, they give direction to all law mak ing.
The decisions of the Courts on economic and social questions depend upon their economic and social philosophy; and for the peaceful progress of our people during the twentieth century, we shall owe most of those Judges to hold to a twentieth century economic and social philosophy and not to a long overgrown philosophy which was itself a product of primitive economic conditions.
" We would like to point out that the philosophy of this Court as evolved in the cases we have referred to above is not that of the Court but is ingrained in the Constitution as one of the basic aspects and if there was any doubt on this there is no room for that after the Preamble has been amended and the Forty Second Amendment has declared the Republic to be a socialistic one.
The judgments, therefore, do nothing more than highlight one aspect of the constitu tional philosophy and make an attempt to give the philosophy a reality of flesh and blood.
Jawaharlal Nehru, the first Prime Minister of this Republic while dreaming of elevating the lot of the common man of this country once stated: "Our final aim can only be a classless society with equal economic justice and opportunity to all, a society organised on a planned basis for the raising of mankind to higher material and cultural level.
Everything that comes in the way will have to be removed gently if possible; forcibly if 555 necessary, and there seems to be little doubt that coercion wilt often be necessary.
" These were his prophetic words about three decades back.
More than a quarter of century has run out since he left us but there has yet been no percolation in adequate dose of the benefits the constitutional philosophy stands for to the lower strata of society.
Tolstoy wrote: "The abolition of slavery has gone on for a long time.
Rome abolished slavery.
America abolished it and we did but only the words were abolished, not the thing.
" Perhaps what Tolstoy wrote about abolition of slavery in a large sense applies to what we have done to the constitutional etches.
It has still remained on paper and is contained in the book.
The benefits have not yet reached the common man.
What Swami Vivekananda wrote in a different context may perhaps help a quicker implementation of the goal to bring about the overdue changes for transforming India in a positive way and in fulfilling the dreams of the Constitution fathers.
These were the words of the Swami: "It is imperative that all this various yogas should be carried out in practice.
Mere theories about them wilt not do any good.
First we have to hear about them; then we have to think about them.
We have to reason the thoughts out, impress them on our minds and meditate on them; realise them, until at last they become our whole life.
No longer will religion remain a bundle of ideas or theories or an intellectual assent; it will enter into our very self.
By means of intellectual assent, we may today subscribe to many foolish things, and change our minds altogether tomorrow.
But true religion never changes.
Religion is realisation; not talk, nor doctrine, nor theories, however beautiful they may be.
It is being and becoming, not hearing or acknowledg ing.
It is the whole soul 's becoming changed into what it believes.
That is religion.
" The relevant constitutional philosophy should be the substitute for religion and it must be allowed to become a part of every man in this country; then only would the Constitution reach every one and he or she would be nearer the goals set by it.
That perhaps can happen in every field.
556 The precedents referred to above have, therefore, obliged the State of Karnataka, respondent before us, to regularise the services of the casual employees who are in these cases called daily rated and monthly rated employees and the State of Karnataka is obliged to make them the same payment as regular employees are getting.
Mr. Hegde appear ing for the State has, however, pointed out that while on principle it is difficult to play a different tune, in reality and as a matter of state craft, implementation thereof forthwith is an economic impossibility.
He has, therefore, placed the scheme drawn up by the State for our consideration and has pleaded for balancing the philosophy and the economic constraints of the State for the purpose of resolution of the dispute.
We have already pointed out that there are about 50,000 employees covered by the classifications who await regulari sation.
On 3rd of April, 1986, the question of regularisa tion of services of persons working on daily wages in the local bodies under the administrative control of the Urban Wing of the Housing and Urban Development Department came for consideration on the basis of the report of the Commit tee set up on 26.11.
In the meantime, this Court 's order dated 17th of January, 1986 in a group of writ peti tions laying down the principle of equal pay for equal work had been pronounced.
Keeping that in view the State Govern ment on 3.4.1986 made the following order: "Having regard to the recommendations of the Com mittee and after duly taking into account the observation made by the Supreme Court in the case referred to above, Government of Karnataka hereby direct that all the employees working on daily wage basis or NMR basis in the local bodies which come under the administrative control of Urban Wing of Housing and Urban Development Department, be granted the same pay and allowances as are allowed to regular employees of the respective cadres with effect from 1.1.1986, subject to the following conditions: 1.
No financial assistance shall be available from Government.
The additional resources on this account should be raised by the local bodies concerned; and 557 3.
The local bodies should freeze the recruitment for the next 4 to 5 years or alternatively study the work load and prune the expenditure accordingly.
On 2nd of July, 1986, a set of rules known as the Karna taka State Civil Services (Special Recruitment of the Candi date) Rules, 1986 came into force.
We have been told that ambit of the present dispute before us is in no manner affected by the said decision of the Government nor the Rules that have been referred to above.
We do not propose to examine the correctness of this statement while dealing with the scheme of the State Government.
The scheme furnished by the State contemplates that all casual/ daily rated employees appointed on or before 2.7.
1974 shall be treated as monthly rated establishment employ ees on a fixed pay of Rs.780 per month without any allowance from 1.1.
They would be eligible for an annual incre ment at the rate of Rs. 10 till their services are regula rised.
On regularisation they shall be adjusted at the basic payscale applicable to the lowest Group D cadre but would be entitled to all other benefits available to regular employ ees of their class.
From amongst the casual and daily rated employees who have completed ten years of service as on 31.12.1989, 18,600 would be immediately regularised on seniority cum suitability basis with effect from 1.1. 1990.
The State Government shall also regularise the serv ices of the remaining casual or daily rated workers who have already completed ten years of service as on 31.12.1989 but could not be included in the limit of 18,600 in a phased manner on the basis of seniority cumsuitability on or before 31st of December, 1990.
The remaining casual or daily rated employees will be absorbed and/or regularised in a phased manner on seniority cum suitability basis on or before 31st of December, 1997.
This revised scheme filed by Mr. Hegde for the State has, however, not been accepted by Mr. Bhandare and other counsel appearing on the side of the petitioners in these petitions though on certain aspects there is unanimity.
Mr. Bhandare in his note by way of response to the scheme of Mr. Hegde has emphasised upon the need of regularising all the employees who have completed ten years of service with effect from 1.1. 1990.
He has further claimed that all the casual and daily rated workmen who have completed five years of service as on 31.12.
1989 should be put on monthly rated pay and the balance of casual or daily rated workmen who are not covered by the above two classes should be continued in that capacity and put on the monthly 558 rated establishments as and when they complete five years of service and be regularised on completion of ten years of service from the initial employment as daily rated workmen.
It has been contended that a lot of these casual and daily rated workmen have been retrenched in violation of this Court 's interim order dated 25.7.1983 and there should be a direction for their reinstatement with the benefit of no break in service.
It has been further maintained that some of these employees belong to higher classifications like Groups B and C and, therefore, they should be given the benefit of the corresponding scales of pay on regularisa tion.
One of the further claims in the written note of Mr. Bhandare is that when the daily rated workmen are absorbed into monthly rated employment, they should be entitled to the minimum basic wage in the corresponding scale of the group of the permanent employees.
The response points out that the casual and daily rated workmen to be covered by the scheme should include casual employees and NMR employees, progressive farmers, gram sahai and anganwadi workers.
There is claim for weightage for past service, namely, for every unit of five years exceeding ten years of service on the date of regularisation, an additional increment should be admissible and added to the basic salary and the advantages of the scheme extended to all the employees under the State prior to formation of the Zila Parishads in the Karnataka State and transfer of some of them to the Zila Parishads and Mandal Panchayats.
Finally, it has been contended that no one who is in employment on casual or daily rated basis on the date of our judgment should be retrenched.
We can well realise the anxiety of the petitioners who have waited too long to share the equal benefits mandated by Part IV of the Constitution in respect of their employment.
At the same time, we cannot overlook the contraints arising out of or connected with availability of State resources.
Keeping both in view and reposing our trust in the relevant instrumentalities of the State that may be connected with the implementation of the scheme to act with a sense of fairness, anxiety to meet the demands of the human require ments and also anxious to fulfil the constitutional obliga tions of the State, the directions which we give below will give a final shape to the scheme thus: 1.
The casual/daily rated ' employees appointed on or before 1.7.1984 shall be treated as monthly rated establishment employees at the fixed pay of Rs.780 per month without any allowances with effect from 1.1.
They would be enti tled to 559 an annual increment of Rs. 15 till their services are regu larised.
On regularisation they shall be put in the minimum of the time scale of pay applicable to the lowest Group D cadre under the Government but would be entitled to all other benefits available to regular government servants of the corresponding grade.
Those belonging to the B or C Groups upon regularisa tion shall similarly be placed at the minimum of the time scale of pay applicable to their respective groups under government service, and shall be entitled to all other benefits available to regular government servants of these grades.
From amongst the casual and daily rated employees who have completed ten years of service by 31.12.1989, 18,600 shall immediately be regularised with effect from 1.1.
1990 on the basis of seniority cum suitability.
There shall be no examination but physical infirmity shall mainly be the test of suitability.
The remaining monthly rated employees covered by the paragraph 1 who have completed ten years of service as on 3 ist December, 1989, shall be regularised before 31st Decem ber, 1990, in a phased manner on the basis of seniority cum suitability, suitability being understood in the same way as above.
The balance of casual or daily rated employees who become entitled to absorption on the basis of completing ten years of service shall be absorbed/regularised in a phased manner on the same principle as above on or before December 31, 1997.
At the point of regularisation, credit shall be given for every unit of five years of service in excess of ten years and one additional increment in the time scale of pay shall be allowed by way of weightage.
There was a direction that the claims on other heads would be considered at the time of .final disposal.
We have come to the conclusion that apart from these reliefs no other would be admissible.
We are alive to the position that the scheme which we have finalised is 'not the ideal one but as we have already stated, it is the obligation of the Court to individualise justice to suit a given situation 560 in a set of facts that are placed before it.
Under the scheme of the Constitution the purse remains in the hands of the Executive.
The Legislature of the State controls the Consolidated Fund out of which the expenditure to be in curred in giving effect to the scheme will have to be met.
The flow into the Consolidated Fund depends upon the policy of taxation depending perhaps on the capacity of the payer.
Therefore, unduly burdening the State for implementing the constitutional obligation forthwith would create problems which the State may not be able to stand.
We have, there fore, made our directions with judicious.
restraint with the hope and trust that both parties would appreciate and under stand the situation.
The instrumentality of the State must realise that it is charged with a big trust.
The money that flows into the Consolidated Fund and constitutes the re sources of the State comes from the people and the welfare expenditure that is meted out goes from the same Fund back to the people.
May be that in every situation the same tax payer is not the beneficiary.
That is an incident of taxa tion and a necessary concomitant of living within a welfare society.
Since this is not an adversarial litigation, we make no order as to costs.
R.N.J. Petitions allowed.
| IN-Abs | These are Writ Petitions under Article 32 of the Consti tution of India and a Special Leave Petition against the Judgment of the Karnataka High Court filed by two trade unions and a Society formed by law students of the Universi ty College and two individuals asking for quashing the Karnataka Government 's Notification dated 12th March, 1982 and for directions to confirm the daily rated and monthly rated employees as regular government servants and for payment of normal salary and service benefits as applicable to the appropriate categories of the government servants.
Nearly 50,000 such persons are employed in different Government establishments though many of them have put in 15 to 20 years of continuous service.
They have not been regu larised in their service and are not being paid equal pay for equal work as has been mandated by this Court by way of implementation of the Directive Principles of State Policy.
Pursuant to the directions of this Court, the State of Karnataka filed a draft Scheme.
The Court considering both the aspects of 'equal pay for equal work ' and continuing casual employment for too long re affirmed the view that the principle of 'equal pay for equal work ' is not an abstract doctrine instead it is vital and vigorous doctrine accepted throughout the world.
While accepting the petitions, the Court, HELD: That 'equal pay for equal work ' and providing security for service by regularising casual employment within a reasonable period have been unanimously accepted by this Court as a constitutional goal of our socialist polity.
While giving directions to the State for giving final shape to the Scheme, the Court further held that under the 545 scheme of the Constitution the purse remains in the hands of the Executive.
The Legislature of the State controls the consolidated Fund out of which the expenditure to be in curred, in giving effect to the scheme will have to be met.
[553F; 559H; 560A] The flow into the Consolidated Fund depends upon the policy of taxation depending perhaps on the capacity of the payer.
Therefore unduly burdening the State for implementing the constitutional obligation would create problems which the State may not be able to stand.
Directions have there fore been made with judicious restraint with the hope and trust that both parties would appreciate and understand the situation.
The instrumentality of the State must realise that it is charged with a big trust.
[560B C] The casual/daily rated employees appointed on or before 1.7.1984 shall be treated as monthly rated establishment employees at the fixed pay of Rs.780 p.m. without any allow ances with effect from 1.1.
[558H] The scheme which has been finalised is not the ideal one.
It is the obligation of the Court to individualise justice to suit a given situation in a set of facts that are placed before it.
[559H] Randhir Singh vs Union of India & Ors.
, ; ; Dhirendra Chamoli & Anr.
vs State of U.P., ; Surinder Singh & Ant.
vs Engineer in Chief, C.P.W.D. & Ors.
, ; Kishori Mohanlal Bakshi vs Union of India, AIR 1962 SC 1139; D.S. Nakara vs Union of India, ; ; R.C. Gupta & Ors.
vs Lt. Governor, Delhi Admn.
& Ors.
, ; ; Bhagwan Dass & Ors.
vs State of Haryana & Ors.
, ; Jaipal & Ors.
vs State of Haryana & Ors.
, [1988] 3 SCC 354; Daily Rated Casual Labour employed under P & T Department Contingent Paid Staff Welfare Association vs Union of India & Ors., [1987] Suppl.
SCC 658; State of U. P. & Ors.
vs J.P. Chaurasia & Ors., ; ; Kesavananda Bharati vs State of Kerala, [1973] 4 SCC 225 and Bhagwan Sahai Carpenter & Ors.
vs Union of India & Anr.
, ; , referred to.
|
it Petition No. 1389 of 1987.
(Under Article 32 of the Constitution of India).
G. Ramaswamy, Additional Solicitor General, M.K. Rama murthy, Mrs. Shyamala Pappu, K.K. Venugopal, Gobind Mukhoty, M.A. Krishnamurthy, Ms. Chandan Ramamurthy, Dalveer Bhand ari, C. Ramesh, G.D. Gupta, L.K. Gupta, G. Venkatesh Rao, Ms. A Subhashini, Ms. Susma Suri, C.V.S. Rao, P. Parmeshwa ran, Mrs. Urmila Kapoor, Krishna Prasad, Indra Makwana and S.K. Jain, for the Appearing Parties.
The Judgment of the Court was delivered by SAWANT, J.
This petition is filed as stated in the petition by an Association of about 2,000 employees working in 500 Railway Institutes and Clubs in various parts of the country.
Their grievance, as in the case of the petitioners in the matters pertaining the Railway Canteens, is that they are not treated as railway employees.
It is their case that although the Institutes/Clubs in which they work are non statutory, they are on par with the employees in the statu tory canteens run in the Railway establishments proper.
According to them, the Railway Institutes and Clubs were set up to provide recreational facilities to the railway employ ees.
They are managed by Committees consisting of represen tatives of all the members of the Institutes/Clubs elected periodically.
The Institutes/Clubs have the following cate gory of employees: (1) Manager (2) Accountant (3) Clerk (4) Librarian in 596 charge (5) Librarian (6) Watchman (7) Daftry (8) Watermen (9) Canteen employees (10) Billiards Marker etc.
These employees are appointed by the Committee and their salaries are paid out of the contributions received from the members of the respective Institutes/ Clubs and the grants in aid given by the Railway Board to the Institutes/Clubs.
The Committees of management is presided over by a president who is the concerned Divisional Railway Manager or his nominee.
The Railway Administration has the right to dissolve or to from an ad hoc Committee.
According to the petitioners further, the Railway Board has always treated the Institutes and Clubs as an integral part of the Railways, since they not only receive grants in aid but also other facilities from .the
Govern ment.
Section B of Chapter XXVIII of the Railway Establish ment Manual makes a special provision for the Institutes and Clubs.
Paragraph 2808 of the Manual states that a Railway Institute should be looked upon as a club provided by the Railway, rent free for the benefit of its employees and therefore, the Railway should provide everything which a landlord ordinarily would, and the Institute should pay for all that a tenant would usually be liable to pay.
Paragraph 2809 states that the Railway Administration will bear (a) the first cost of the building including the cost of elec tric installations with necessary furniture, roads, fences, tennis courts and other play grounds.
Wherever possible a garden will also be provided; (b) the cost of maintenance and alterations.
In the case of tennis courts and play grounds the Rail way Administration will bear only the cost of ordinary engineering repairs.
The said paragraph however requires that the Institute funds should bear (a) the cost of roll ing, watering, grass cutting and other maintenance charges of play grounds, other than engineering repairs; (b) the cost of maintenance of its gardens and ornamental grounds; (c) the cost of maintenance and renewal, whether partial or complete, of electric installations (which include electric fans) payable at a flat rate of 5 per cent per annum on the capital cost of the installations; (d) the cost of electric current consumed and hire of meter; (e) the occupier 's share of municipal taxes for specific direct services rendered to an Institute by a municipality such as conservancy, water and the like taxes as distinct from taxes of a general nature; (f) water charges calculated at so much per tap, each Railway Administration fixing its own scale of charges.
In cases where large quantities of water are supplied by the Railway Administration, as in the case of swimming baths, the actual cost of water supplied should be recovered.
Para 597 graph 2810 provide that: (i) no rent is recoverable in the case of Railway buildings used as officers ' club provided conditions stipulated para 1942 E are fulfilled; (ii) no rent is recoverable in the case officers ' clubs if the buildings are specially constructed against amounts specifi cally sanctioned by the Railway Board (iii) no rent is recoverable in the case of clubs, if additional expenditure is incurred in converting an existing building into a club or providing anciliaries to make it suitable as a club.
if the expenditure is incurred with the specific approval of the Railway Board and (iv) no rent is recoverable in the case of clubs where the building is erected by the club at its costs on Railway land.
Paragraph 28 11 further provides that: Class IV staff employed in Railway Institutes may be given residential accommodation free of rent provided such accommodation is either part and parcel of the Institute building and its recognised out houses, or is not required for any other railway purpose, or cannot be rented to out siders and would otherwise lie vacant.
According to para graph 28 13 the membership of the Institute/Club is option al.
Paragraph 28 17 gives powers to the respective General Managers to frame rules to suit local requirements of the Railway Administrations and other circumstances of the place.
The employees of the Institutes/Clubs are entitled to free passes, and to get medical facilities provided by the Railway Hospitals.
The employees belonging to Class IV are eligible for absorption in the Railways and for that purpose they are given relaxation in age.
The petitioners, therefore, claim that they should be treated on the same par as the employees in statutory can teens and non statutory canteens there being no difference in their status.
The petition is resisted on behalf of the respondent Union of India.
According to the respondents, the Institutes and Clubs have their origin in the rules regarding Staff Benefit Fund which is provided for in Chapter VIII of Rail way Establishment Code Vol. 1 (1985 edition).
According to the rules contained in this Chapter as clarified/ modified by the administrative instructions from time to time.
the main objectives of the Fund are to provide additional ameni ties to the railway servants and their families in the sphere of education, recreation, relief to the distressed, financial assistance during sickness and development of sports and scouting activities.
The Fund consists of contri bution from Railway revenues at the rate of Rs. 14 per capita of the sanctioned strength of non gazetted employees as on 3last March of each year.
The contribution of Rs. 14 is broadly apportioned amongst 598 various spheres of activities as under: (i) (a) Education 2.50 (b) Recreation other than sports 2.00 (c) Relief of distress, sickness etc.
3.50 (d) Miscellaneous items 0.50 (ii) Sports activities 2.50 (iii) Scouts activities 1.00 (iv) Recreational facilities to officers 2.00 and supervisory staff According to the respondents further, as per the provi sions of the Railway Establishment Code and the Establish ment Manual, the Institutes and Clubs are managed by a committee representing its membership.
It is the Managing Committee which engages such staff as is required and meets the cost of their wages and allowances.
The conditions of service including the scales of pay of the staff are decided upon by the respective Managing Committees and hence they vary from Institute to Institute and Club to Club.
The cost of the staff running the institute including the pay bill of the staff is met by the Managing Committee from membership fees and from grants received from the Staff Benefit Fund.
As will be evident from the apportionment of the per capita grant among the various activities, only a sum of Rs.4 per capita comes to the share of the recreational facilities.
The funds available for recreational facilities are further limited because the membership of the Institutes/Clubs is optional.
These facilities further, in the nature of things, are availed of by the members for a few hours beyond working hours.
The Managing Committees therefore, engage only part time staff.
They engage full time staff only when it is considered absolutely necessary.
There are about 449 Insti tutes and 332 Clubs and they have engaged about 1741 employ ees of whom about 887 are on full time basis, the rest being engaged on part time basis.
The whole time employees are allowed passes and Privilege Ticket Orders on a restricted scale in terms of para 1526 of the Railway Establishment Manual.
It is, therefore, contended on behalf of the respond ents, that the Railways are not the principal employers of the staff engaged in the Institutes/Clubs and they have no control whatsoever on it.
The staff is not paid directly from the Consolidated Fund of India.
Whatever facilities are provided to the whole time staff are provided only as a 599 special case, and not on account of any obligation under any law.
It is also contended that in fact it is the Managing Committees who have engaged the staff and they ought to have been joined as parties to the petition.
The respondent Union of India having no relationship with the employees, the petition is liable to be dismissed on account of non join der/mis joinder of parties.
The respondent have also ques tioned the locus standi of the present Association to file the petition since according to them no such Association exists.
The respondent further point out that the Managing Committees of the Institutes/Clubs do not receive any subsi dy or loan from the Railways for meeting specifically the wage bill of the employees as do the Managing Committees of the statutory/non statutory recognised canteens and, there fore, the present employees stand on a different footing than that of the employees in the statutory/non statutory recognised canteens.
In reply to the contention of the petitioners that the rules framed for the constitution of Managing Committees of the Institutes/Clubs give power to the Railway Administration to dissolve the Managing Commit tees or to appoint ad hoc Committees, it is pointed out that these rules are framed locally by General Managers of Zonal Railways, Production Units etc.
in terms of the provisions contained in para 2817 of the Establishment Manual.
They are not uniform and not all rules so framed provide for either the dissolution of the Managing Committee or appointment of ad hoc Committee by the Railway Administration.
The respond ents also deny that the Railway Board has treated Insti tutes/Clubs as an integral part of the Railways.
It is also pointed out that the Railway free passes and privilege ticket orders are given only to the full time employees as a special case.
But even they are given on a restricted scale.
As regards the medical facilities, again, it is pointed out that it is given to the employees and not to their family members or dependent relatives.
As regards the facilities of absorption in the Railways by relaxing the age limit, the respondent points out that it is not only this staff but also the staff of cooperative societies, canteen commission bearers, vendors of departmental canteen who are eliteble for such relaxation in age limit to the extent of the serv ice rendered in such organisation whichever is less, for appointment in Group D categories.
But they have to appear before Railway Service Commissions/Railway Recruitment Board alongwith casual labourors and substitutes, and they are considered only after the eligible casual labourers and substitutes are considered.
It is lastly submitted on behalf of the respondents that although there is no obligation on the Railways, the Railways have issued administrative in structions to the Zonal Railways etc.
that whenever it is found 600 absolutely necessary by the Managing Committees of the Institutes/ Clubs to employ staff on full time basis they should be paid remuneration keeping in view the local market conditions.
It is also the contention of the respondents that the Railways are providing financial assistance/grants in aid for various non welfare activities and to non railway agen cies such as private schools run in the railway colonies, cooperative societies/banks etc.
Since the employees engaged in these activities/non railway organisations do not ipso facto become railway servants, the employees of these Insti tutes/Clubs can also not become the railway employees for the same reason.
The service in the railway Institutes/Clubs is purely in the nature of private employment.
On the other hand, the railway employees are recruited according to the rules of recruitment.
They are subjected to rigorous stand ards with regard to age limit, educational qualifications, medical fitness, interviews, character verification etc.
as well as to stiff competition.
To treat the employees in Railway Institutes/Clubs as railway employees would amount to a back door entry of these employees to Government serv ice without following the regular procedure.
It is also contended by them that the letters of appointment offered to these employees by the respective Managing Committees make it clear that they are not to be treated as railway serv ants.
For all these reasons, these employees form a separate class and they are not comparable with any other category of staff of the Railways.
It is also submitted on behalf of the respondents that the analogy of the employees in railway canteens is not applicable to these employees because the status of the canteen employees is itself being contested by the respondents.
It is lastly contended that if this Court deems it proper to treat the full time employees of the Institutes/Clubs as railway servants it will have to be left open to the Respondents to frame such rules as it considered necessary for the efficient running of the Institutes/Clubs and for engaging such staff as are considered necessary.
If the employees concerned are then directed to be absorbed only subject to the requisite standards of age, educational qualifications etc.
and only such of them as are found suitable, many of the present employees may be faced with unemployment which will not be in the interests of the employees themselves.
After considering the respective contentions of the parties and the documents on record, we are of the view that there is a material difference between the canteens run in the Railway establishments, and the Railway Institutes and Clubs.
In the first instance, the canteens are invariably a part of the establishments concerned.
They 601 are run to render services during the hours of work since the services, by their very nature are expected directly to assist the staff in discharging their duties efficiently.
The lack of canteen facilities is ordinarily bound to hamper and interfere with, the normal working of the staff and affect their efficiency.
The importance of the services rendered by the canteens to the staff in the day to day discharge of their work therefore needs no further emphasis.
Suffice it to say that the canteen services are today re garded as a part and parcel of every establishment.
So much so that they have been made statutorily mandatory under the in establishments governed by the said Act where more than 250 workers are employed.
The canteen services are thus no longer looked upon as a mere welfare activity but as an essential requirement where sizable number of employees work.
That is why even the Railway Administration has, by its Establishment Manual made a provision for canteens even where the does not apply, and has laid down procedure for their registration and approval and for extending to them almost the same facilities and monetary assistance as in the case of the statutory canteens.
However, the same cannot be said of the Institutes and Clubs.
Although for them also the Railway Establishment Manual makes provisions in the same Chapter XXVIII dealing with Staff Welfare, the provisions are of a materially different nature and pattern.
In the first in stance, there is no provision either for subsidy or loan directly from the funds of the Railway Administration.
The Institutes/Clubs have to run on the membership fees and fixed grants received from the Staff Benefit Fund.
The Fund consists of receipts from the forfeited provident fund and bonus, and of fines.
The grant is made as pointed out by the Respondents, to each Institute/Clubs at the rate of Rs. 14 per capita of the non gazetted staff employed at the rele vant establishment.
Out of this contribution, only Rs.4 per capita are spent on the activities of the Institutes and Clubs, the rest of the amount being spent on education, relief in case of distress and sickness, sports, scouts activities and for other miscellaneous purposes.
There is further no dispute that the wages and allowances of the staff of the Institutes/Clubs are paid by the Institutes/Clubs themselves and they are not subsidised by the Railway Administration as in the case of the statutory and nonstatutory recognised canteens.
By their very nature further the services of the Institutes/ Clubs are availed of beyond working hours only.
It is common knowledge that not all members of the Railway staff avail of them.
One has to be a member to do so by paying fees.
The membership is also optional.
That is why most of the staff employed in the Institutes/ 602 Clubs is part time.
As has been stated by the respondents, out of about 1741 employees engaged in 449 Institutes and 332 Clubs nearly half are part time employees.
The services rendered by the employees are not of a uniform nature.
They are engaged for different services with different, service conditions according to the requirement.
The Institutes/Clubs further do not engage in uniform activi ties, the activities conducted by them varying depending upon the infrastructure and the facilities available at the respective places.
What is more importance as far as the issue involved in this petition is concerned, is that the provision of the Institutes/Clubs is not mandatory.
They are established as a part of the welfare measure for the Railway staff and the kind of activities they conduct depend, among other things, on the funds available to them.
The activities have to be tailored to the budgets since by their very nature the funds are not only limited but keep on fluctuating.
If the costs of the activities go beyond the means, they have to be curtailed.
So also, while starting a new activity, it is necessary to take into account its financial implications and the capacity of the Institute/Club to raise the neces sary funds.
The only varying component of the funds is the membership fee which is uncertain.
If as contended by the petitioner Association the workers engaged in these Institutes/Clubs are treated as Railway employees, the danger is that these welfare activi ties which are otherwise encouraged by the Railway Adminis tration may in course ' of time shrink and cease altogether for want of funds.
This will not be in the interests of the workers themselves.
One cannot lose sight of the fact that today the emoluments of government servants including those of the Railway employees, may they belong to Class IV or to a higher category, are substantial and inhibit fresh re cruitment.
The services rendered by a government agency, therefore, become costly and uneconomical.
Compared to the services which are rendered by the Institutes/Clubs and the benefits which flow from them, an increase in their adminis trative expenditure which may result from granting the status of the railway employees to their workers.
will be disproportionately high and forbidding.
This will also have a snow bailing effect on other welfare activities carried on by the Railways and similar activities carried on by all other organisations.
We also cannot lose sight .of fact that the workers engaged in the welfare activities today are drawn from the respective localities without restrictions of the qualifications of education, age etc.
Whatever little scope for employment is available to the local population at the respective places may 603 also vanish with the cessation of these activities.
After all, the number of employees who may benefit by becoming railway employees does not today exceed 887 who are the full time employees scattered all over the country.
But, they may deprive many of their bread in the presenti and in the future.
For, as pointed out by the Respondents, if the Railway Service Rules are made applicable, many of the present employees will also have to face immediate unemploy ment.
This is of course yet a larger related socio economic consideration.
On the facts placed before us which we have discussed above, we are also not persuaded to hold that there is a relationship o[ employer employee between the Railway Admin istration and the employees engaged in the Institutes and Clubs.
Neither law nor facts spell out such relationship.
If the present service conditions of these employees are unsat isfactory, the remedy lies elsewhere.
lO. Since we are disposing of the petition on merits, it is not necessary to deal with the legal contentions raised on behalf of the Respondents that the petitioner Association has no locus standi and that the petition is not maintain able for non~joinder and/or misjoinder of the parties.
In the result, we dismiss the Writ Petition and discharge the rule with no order as to costs.
R. N.J. Petition dismissed.
| IN-Abs | This petition under Article 32 of the Constitution of India has been filed by an Association of about 2,000 em ployees working in 500 Railway Institutes and Clubs in various parts of the country claiming that they should be treated on the same par as the employees in the Statutory Canteens run by the Railway Administration.
In support of their claim the petitioners while enumerating the range of activities handled by them, they have attempted to draw a parallel with the regular employees contending inter alia that not only they receive grants in aid and a number of facilities from the Govt.
, the Railway Board has always treated these institutes and clubs as an integral part of the Railways.
The Respondents resisted the petition stoutly and con tended that the Institutes and Clubs are managed by a Com mittee representing its membership which engages such staff as is required and meets the cost of their wages and allow ances etc., that the Railways are not the principal employ ers of their staff, that they are not paid directly from the Consolidated Fund of India and whatever facilities are provided to them they are confined to the wholetime staff as a special case and not on account of any obligation under any law.
On consideration of respective contentions and documents on record while dismissing the petition, this Court.
HELD: There is a material difference between the can teens run in the Railway establishments and the Institutes and Clubs.
The Institutes/ Clubs have to run on the member ship fees and fixed grants received from the Staff Benefit Fund.
The fund consists of receipts from the forfeited provident fund and bonus, and of fines.
The grant is made as pointed out by the Respondents, to each Institute/Club at the rate of 595 Rs. 14 per capita of the non gazetted staff employed at the relevant establishment.
Out of this contribution, only Rs.4 per capita are spent on the activities of the education.
relief in case of distress and sickness, sports, scouts activities and for other miscellaneous purposes.
There is further no dispute that the wages and allowances of the Staff of the Institutes/Clubs are paid by the Institutes/Clubs themselves and they are not subsidised by the Railway Administration as in the case of the statutory and non statutory recognised canteens.
[600H] 160 [E F & G] On the facts, it cannot be held that there is a rela tionship of employer employee between the Railway Adminis tration and the employees engaged in the Institutes and Clubs.
Neither law nor facts spell out such relationship.
If the present service conditions of these employees are unsat isfactory, the remedy lies elsewhere.
[603B C]
|
ition (Civil) No. 11704 of 1985 etc.
(Under Article 32 of the Constitution of India).
R.P. Gupta for the Petitioners.
V.C. Mahajan, Ms. A. Subhashini, B.K. Prasad, C. Ramesh and Hemant Sharma for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
These two writ petitions were filed as 452 early as 1985 but they are still at the admission stage.
However notices have been issued to the respondents and we have heard counsel on both sides.
As both the writ petitions relate to the same subject matter, it will be convenient to dispose of them by a common order and we proceed to do so.
The controversy in these writ petitions is as to the proper principle for determination of seniority in the Transportation (Traffic) Department of the Indian Railways.
Though the petitioners in Writ Petition No. 11704 of 1985 belong to the Central Railways, the principle to be deter mined will have application over all nine Railways in the country and is being agitated in Writ Petition No. 12802 of 1985 by the All India Train Controller 's Association.
The officials with whom we are concerned in these writ petitions occupy Group C (Class III) posts in the above department.
The question of their inter se seniority has become material for their promotion to Group B (Class II) posts which really form the lowest rung of the management cadre.
75% of the vacancies arising in Group B (Class II) posts in each de partment are filled in by promotion on selection from among Group C (Class III) employees of the department on the basis of seniority cum merit.
The difficulty in determination of the inter se seniority arises because there are different streams of eligible Group C (Class III) employees, occupying posts with different scales of pay, who have to be consid ered for selection to Group B posts.
As only those employees from the different streams can be considered as fail within the zone of consideration as per seniority and as the zone of consideration is determined with reference to the number of vacancies in Group B for which the selection is held at any point of time, the position of an employee in the com bined seniority list of all the streams assumes great impor tance.
We are concerned with the selections for appointment to three Group B posts in the Operating Branch of the Traffic and Transportation Department.
These are: Assistant Operat ing Superintendent, Assistant Traffic Superintendent and Station Superintendent.
The four Group C streams which have the avenue of promotion to the above group B posts are: (1) The Control Stream, which consists of the Chief Controller, the Deputy Chief Controller and the Section Controller; (2) The Traffic Stream, which comprises of the Station Master, the Yard Master, Traffic Inspector and Signaller; (3) The Ministerial Stream, consisting of office staff and (4) The Running Stream, consisting of Guards.
We are here concerned only with the question of inter se seniority between the employees in the Control 453 Stream and those in the Traffic Stream.
As mentioned earlier, there are several grades and scales of pay prevailing in each of these streams.
It will be helpful to tabulate them here for convenient reference: Control Stream Post Scale of Pay Pre 1931 I Pay II Pay III Pay Commission Commission Commission Chief Controller360 500 450 575 450 575 8501040/1200 Deputy Chief 400 500 300 400 370 475 700 900 Controller Section Con troller Grade I 300 350 260 350 335 425 ) ) 470 750 Grade II 200 300 200 300 270 380 ) Traffic Stream Post Scale of Pay Pre 1931 I Pay II Pay III Pay Commission Commission Commission Station Supdt./120 165/) Jn.
S.M./CYM/80 160/) 300 400 450 575 700 900 TI (Higher) 200 300 ) Stn.
Master (Higher) Dy.
Supdt.
80 160 300 400 370 475 550 750 /YM/TI (Lower) SM (Lower) 60 65 80 170 130 225 330 560 Grade and others 80 120 100 185 205 330 425 640 150 225 200 300 250 380 455 700 260 350 335 425 550 750 The zone of consideration of the employees for promotion is fixed in the order of the combined seniority of the employees from the 454 different streams.
In each of the streams, seniority depends on the grade.
Normally, employees working in a higher grade on a regular basis are senior to those working in the lower grade.
To illustrate, the highest Group C grade was Rs.450 575 followed by the grades Rs.370475, Rs.335 485, Rs.335 425 and so on.
(We are referring here to the old pay scales which have since been revised).
The employees working in the grade Rs.450 575 were therefore placed on the top followed by those in the grades of Rs.370 475, Rs.335 485 and Rs.335 425.
This principle for determination of inter se seniority worked very well till 31.12.72 as the higher scales of pay in both the streams was the same.
According to the department, it became difficult to follow this principle when, consequent on the acceptation and implementation of the recommendations of the Third Pay Commission with effect from 1.1.
1973, higher or lower scales of pay came to be fixed in respect of certain posts which were having the same scale of pay upto 31.12.1972.
For example, the scale of pay of Rs.450 575 held by Station Masters and Traffic Inspectors in the Traffic Stream upto 31.12.72 was upgraded to the scale Rs.700 900 with effect from 1.1.73.
On the other hand, in the case of Chief Controllers of the Control Stream, the same scale of Rs.450 575 was replaced by a scale of Rs.840 1040/1200.
Similarly, in the case of Station Masters and Inspectors in the grade of Rs.370 475 in the Traffic Stream, the replacement was by the scale of RS.550 750 while in the case of Deputy Chief Controllers on the scale Rs.370 475, the replacement scale was Rs.700 900.
Thus the Control Stream gained an upper hand in the matter of seniority and, consequently, of promotions.
In an attempt to restore some balance and parity between the employees of the different streams, the Railway Board issued certain instructions on 26th October, 1976.
As per these instructions, the inter se seniority of the staff working in the grade of Rs.700 900 and the grades,above it in the different streams was to be based on the total length of service rendered by an employee in all the grades.
This did not satisfy all sections of the staff and difficulties were also experienced in applying the instructions.
For example, a Deputy Chief Controller, who had been in the grade of Rs.370 475 upto 31.12.72 and was placed on Rs.700 900 from 1.1.73, gained an advantage over his collegues in the other stream viz. the Station Masters and Traffic In spectors.
The matter was therefore reconsidered and modified instructions were issued on 11.7.77.
According to these instructions, for purposes of drawing out the combined seniority of Group C employees from different streams, the services rendered in the top most scale in one stream would be considered equivalent to the service rendered in the 455 top most scale in the other streams, even though the top most scale in the two streams might be different.
This rule also produced anomalies.
For example, if in one stream, the top most scale was Rs.700 900, in another Rs.550 750 and in yet another Rs.840 1040, the length of service rendered in all these grades by the employees was stated to be the basis to determine the combined seniority.
Thus an employee having ten years of service in the top most scale of Rs.550 750 in one stream would rank senior to another having slightly less than ten years of service in the top most scale of Rs.700 900 in another stream.
The Department, therefore, issued revised instructions in August '78/ February '79.
As per these instructions, where the top most scale prior to 1.1.1973 has been replaced by two different scales after 1.1.73, one higher and the other lower, service rendered in the lower scale will be notionally stepped up as if the service had been rendered in the higher scale.
For example, the grade of Rs.450 575 was replaced by Rs.8401040 for the Controllers and Rs.700 900 for Station Masters and Traffic Inspectors.
While drawing up the combined seniority, the service ren dered in the grade of Rs.700 900 by the Station Masters and Traffic Inspectors was to be treated as service rendered in the grade Rs.840 1040.
Similarly, the pre revised grade of Rs.370 475 had given rise to two scales, namely, Rs.700 900 and Rs.550 750, and, in that case, the service rendered in the grade Rs.550 750 was notionally treated as rendered in grade Rs.700 900 for drawing up the combined seniority.
This principle did not work well either.
It seems the circulars of 11.7.77 and August '78 were quashed by the Bombay High Court in W.P. No. 55 of 1980 by its order dated 14.12.83.
In the meantime, detailed consideration of the issues was undertaken in consultation with the federations of organised labour and it was finally decided that the combined seniori ty for purposes of Group B selection should be determined on the basis of the total length of service rendered by employ ees in any or in all the grades commencing from Rs.700 900 and above and these instructions were issued on 5.3.83.
In January 1984.
further instructions were issued which, while maintaining the principles laid down on 5.3.83, provided protection to senior employees, who got superseded in a stream for promotion to the higher nongazetted grade in that stream.
For example, if an employee in grade of Rs.700 900 supersedes one of his seniors in promotion to the grade of Rs.840 1040 within the stream, he would control the seniori ty of the employee whom he had superseded.
Such a superseded employee would be put to hardship when the combined seniori ty is drawn up along with employees from the other streams for purposes of selection to Group B.
In order to avoid the situation of a senior employee being subjected to such disability, instructions were issued on 6.1.
1984 that 456 an employee who supersedes his senior will be credited with the service of the senior whom he had superseded.
Aggrieved by these experiments which, according to them, only resulted in chaos and confusion, 45 employees of the Control Stream filed WP 11704/85 when, on the issue of a list published by the administration on the basis of these instructions on 15.6.85, they found themselves excluded from the panel of staff to be taken into consideration for promotion to Group B. They prayed that the circular of 6. 1.84 and the follow up action culminating in the Selection List be also set aside.
The petitioners are also aggrieved by a different set of steps initiated by the Railway Board.
A further discrimina tion against the control stream, it is alleged, has resulted from two circulars issued by the Board, one on 29.7.83 and the other on 26.12.83.
These circulars envisaged, what the petitioners call, "mass upgradations" and what the circulars call a "restructuring of the cadres".
The earlier of the two circulars applied to the traffic stream.
In so far as is relevant for our present purposes, the "upgradation" was on the following lines: Name of Existing Revised Revised Percentage Rema post scale Designation Scale of posts marks Yard Masters 455/700 Dy.
Chief 700 900 20% /Asst.
Yard Yard Masters Masters Yard Masters 550 750 Chief Yard 840 1040 10% of Masters post in scale of 700 900 Station 455 750 Station 700 900 10% Master Supdt.
Station 350 750 Station 840 1040 10% of Supdt./ Supdt.
posts in Station scale of Master Rs.700 900 2 Separate 700 900 43.5% This we Cadre of (10% of told, has Station these 'll not been 457 Masters/ carry scale given Asstt.
of Rs.840 effect Station 1040 to.
Superin tendants The circular stated that this restructuring will be with reference to the sanctioned strength as on 1.8.83.
The staff, who will be placed in the revised grade in terms of these orders will be eligible to draw pay on the higher grades from 1.8.83 with benefit of proforma promotion from 1.8.82.
It was made clear that the benefit of proforma fixation will be admissible only to the staff who are placed in the vacancies arising directly as a result of these restructuring orders.
The date of proforma fixation has later been shifted, from 1.8.82 to 1.8.83 by a circular dated 13.7.
The second circular, dated 20.12.1983 pertained to the control stream.
The restructuring was on the basis of the cadre strength as on 1.1.84 and the revision of scales was also to be effective from 1.1.84.
The pattern of restruc ture, in so far as it is relevant for our present purposes, is set out thus in the schedule: Existing Grade & Posts Existing Revised percentage percentage (i) 470 750 Not laid 15 (Section Controllers) down (ii) 700 900 " 58 ] (Dy.
Chief Controllers) ] ] ] ] (iii) 340 1040 " 23 ] 85 (Chief Controller ] Gr. II) ] ] ] (iv) 840 1200 " 4 ] (Chief Controller Gr.
II) 458 It was made clear that the cadre has been restructured keeping in view additional duties, responsibilities and heavier workload in some of the charges and that the revised grades were to be given to employees eligible therefore on such considerations in their existing positions.
Reference must be made to two more circumstances before we deal with the contentions urged before us.
The first is that the circular of 6.1.84 referred to above which, accord ing to the counsel for the petitioner introduced the princi ple of "chance seniority" was quashed by the Central Admin istrative Tribunal by its order dated 5.2.1988.
A copy of this order has not been made available to us.
Secondly, consequent on the said decision of the Tribunal, the Railway Board issued certain instructions on 22.12.88 which reads thus: "Consequent upon the judgment given by the Central Adminis trative Tribunal in connection with the above, matter has been reviewed in consultation with the representatives of the recognised organised federations and it has been decided in partial modification of the orders contained in Railway Board 's letters . . dated 28.5.83 and 6.11.84 that the integrated seniority of group C employees for promotion to group B posts should be determined on the basis of con solidated length of non fortuitous service rendered in the grade of Rs.700 900/2000 3200 and above ignoring promotions to the grade of Rs.840 1040/23753500 . " It may be mentioned that the petitioners were fully satisfied with the circular of 5.3.83 which according to them, gave effect to rule 321 of the Indian Railway Estab lishment Manual.
According to them, this equilibrium was unjustifiably disturbed by the circulars issued subsequent ly.
The principal grievance urged before us by learned counsel for the petitioner was that, as a result of the restructuring orders read with the order reckoning all persons working in salary grades of Rs.700 900 and above as one group for determining seniority, the control stream staff has been adversely affected to a considerable extent.
He points out that persons in the Traffic Stream who entered the supervisory grade of Rs.470 750 were placed in the grade of Rs.700 900 much later than the dates when those in the control stream entered the corresponding scale of Rs.455 700 will gain seniority over the latter.
He asks us to compare for this purpose the positions of officers in the control stream with seniority positions Nos. 90 to 190 with those occupying seniority positions Nos.
61 to 208 in the traffic 459 stream.
He contends that the staff employed in the control stream lose both monetarily as well as in terms of seniority by being placed in the scale of Rs.700 900 only w.e.f. 1.1.84 as compared to those of the traffic stream who re ceive such promotions and pay scales w.e.f. 1.8.83.
Leaving aside the question of monetary benefits for the time being, the submissions are: (i) that seniority should be determined on the total length of service as envisaged in rules 202 and 321 of the Indian Railways ' Establishment Manual, which read thus: "202 For selection to class II posts or Civil Engg.
Trans portation (power) and Mechanical Branch, Transportation (traffic) and Commercial, Signal and Telecommunication, Electric and Stores Department.
(i) Only permanent staff will be eligible (ii) all staff in grade Rs.335 425 and above provided they have rendered a minimum of 3 years non fortuitous service after reaching the stage of Rs.335 either in those grades or in a lower grade.
321 Relative Seniority of employees in an intermediate grade belonging to different seniority units appearing for a selection/non selection post in higher grade. 'When a post (selection as well as non selection) is filled by considering staff of different seniority units, the total length of continuous service in the same or equivalent grade held by the employee shall be determining factor for assign ing inter seniority irrespective of the date of confirmation of an employee with lesser length of continuous service as compared to another unconfirmed employees with longer length of continuous service.
This is subject to the proviso that only non fortuitous service should be taken in account for this purpose." (ii) that if all the grades in the eligible groups are to be clubbed together, the seniority should be reckoned as and from the date of entry into the lowest of the grades in Group 'C ' (class III) viz. Rs.470 750/455 700; 460 (iii) that even if the mass upgradations are to be upheld on principle, they must be directed to be made effective from the same date (whether it be 1.8.83 or 1.1.84) in respect of both the streams and should not be on different dates.
(iv) that the whole object and purpose of these circulars is to obliterate the effect of the recommendations of the Third (and even the Fourth) Pay Commissions, after assessing the duties and responsibilities of the staff in both streams, that the staff on the control stream deserve higher scales although these recommendations have been duly accepted and implemented by the Government.
According to the learned counsel, the traffic stream has a huge strength and a powerful union and, pressurised by their numbers, the Railway Board is attempting to take away, indirectly, the benefits given to the control stream by the Pay Commission 's recommendations and that too at a point of time when a fresh Pay Commission was in the process of being constituted.
Counsel also alleged that the All India Con trollers ' Association (which has filed writ petition No. 12802 on similar lines) has not been consulted at any stage and these circulars are being issued at the behest of the unions of the traffic staff and despite the representations and protests of the comparatively weaker union of the con trol staff.
On the other hand, Sri V.C. Mahajan, learned counsel for the Union of India, submitted that the petitioners have not placed any data before the Court to make out a case of discrimination.
He submits that after the Writ Petitions were filed in 1985 the Department has issued a circular dated 27.12.88 and a combined seniority list in March 1989.
The petitioners have not taken any steps to amend the Writ Petition to challenge this circular or this list or to show in what respect and to what extent the rights of the peti tioners have been prejudiced by the restructuring orders.
Turning to the "restructuring" circulars, counsel points out that in this case the Government has been hard put to evolve an equitable formula for fair promotional chances to the two sets of people in question.
Various attempts had been made earlier but they were not successful.
Finally the present formula has been evolved after consulting all the concerned unions.
It is not correct, he says, to say that the deci sions have been taken without consulting the representatives of the Controlling Stream.
It is submitted that, having regard to the few posts at the top of the scale, the Traffic Stream had been complaining of inadequate promotional oppor tunities.
The 461 Government has tried to solve the problem as best as it could and counsel refers to the following basic features behind the restructuring: (i) The date of entry into grades Rs.700 900 above will be taken as the starting point to reckon seniority.
This is the effect of the circular of 22.22.88 the validity of which has not been challenged in the petition.
(ii) Considering the large strength of employees in the Traffic Stream, viz. 4430, about 10% of the posts have been upgraded which will mean that about 443 persons will be in the above grades.
So far as the Control Stream is concerned, the percentage of posts in the above zone has been increased to about 35% of the 270 posts available with the result that about 211 people will be in the above grades.
As a result of the mass upgradation, a large percentage of people in the Control Stream immediately derive monetary benefits.
They have accepted these benefits and have been occupying the upgraded position since 1984 onwards.
(iii) The date of the upgradation in both the streams cannot be the same for the result of it would be that all the upgraded personnel will have seniority reckonable from the same date.
This being the position, their seniority will have to be based on the length of their services in the immediately lower scales or reckoned as from the date of their entry into the lowest of the Group C grades and this would, have revived the same problem which the Government was trying to solve.
That is why the Government fixed dif ferent dates for the two streams separated only by a short span of five months and this was neither unreasonable nor discriminatory.
Counsel submits that the Government was trying to forge out a solution that will be fair 'to both the streams and that the attempt of the petitioners to accept the upgrada tions of the scales in their stream but objecting to the other part regarding date of fixation should not be allowed to succeed.
He submits that if the petitioners were prepared to accept the same percentage of upgradation as the Traffic Stream persOnnel and give up the extra benefits received, the Government could reconsider the whole question afresh.
After hearing both counsel, we have reached the conclu sion that the materials before us are totally inadequate to come to any conclusion on the true impact of the circulars, In fact, to start with, we were 462 of the view that, in a matter like this, the proper remedy of the petitioners is to approach the Central Administrative Tribunal which has been set up for that very purpose.
But since counsel for the petitioners pleaded that the writ petitions have been pending here since 1985 and it would not be fair to the petitioners to sent them now to pursue that remedy, we heard the petitioners and the opposite parties at some length but, as will emerge from the above discussion, the exact position and impact of the circulars is very nebulous.
As pointed out by Sri Mahajan, the Department is trying to cope with the problem of giving fair promotional opportunities to two different streams which become eligible for promotion to Group B posts.
Since the counsel for the petitioner has stated that he has no quarrel with the circu lars of 5.3.83 and 22.12.88 and since the circular of 6.1.84 already stands quashed by the Central Administrative Tribu nal, the only grievance of the petitioners that survives is against the upgradation circulars.
Apart from the merits, there are three difficulties in considering the plea of the petitioners that the part of the two circulars fixing dif ferent dates of upgradation should alone be set aside: (a) The plea of the petitioners, if accepted, will affect a large number of persons in the traffic stream and even result in a number of reversions in all the Railways.
Though the petitioners have made some persons in the traffic stream working in the Central Railway parties, neither the persons likely to be affected in other parts of the country nor their union have been made parties.
(b) As discussed above, the circular of 20.12.83.
confers substantial benefits on members of the control stream.
A large number of them have been able to secure an upgradation to the scale of Rs.700 900 which, otherwise, may not have come to them for sometime, and they may or may not all be affected adversely by the date of upgradation.
It is also pointed out that upgradation in the traffic stream are subject to selection on the basis of a written test and viva voce, while the upgradations in the control stream are automatic based on seniority cum suitability.
It is, there fore, not clear even whether the All India Controller 's Union is speaking in one voice for all its members either for or against the circular of 20.12.83.
(c) As pointed out by Sri Mahajan, the Department has issued a seniority list in pursuance of its circular.
No attempt has been made to substantiate the grievances of the peti tioners by pointed factual references to that list.
463 Coming to the merits again, the inequity is not appar ant.
Having to deal with two different streams, differently placed, the Government has to find out an equitable solution and it has been groping towards it.
One method would perhaps have been to have fixed quotas for promotion from each of the streams but that is not necessarily the only method.
An alternative method is being attempted here and the princi ple that grades of Rs.700 900 and above should be considered together being conceded the Department is trying to give some weightage by granting upgradation to each stream based on its total strength in order to balance the promotional chances in both the streams.
It is possible that some indi vidual cases may be affected but no answer to the question whether any class discrimination has resuited can be given unless fuller details are available and the practical impact of the latest position is placed before us.
If a good number of persons in the control stream are benefitted monetarily despite the disadvantage to a few, in the matter of promo tion, it may be a question how far the Association of the Controllers will be able to make out a case of class dis crimination.
Even if we assume that the entire control stream would be adversely affected, the question will still remain whether the basis of differentiation is justified in the circumstances or amounts to arbitrary discrimination.
We express no opinion on these questions at this stage.
We would only say that, in the absence of adequate material before us, we are unable to reach any conclusion on the plea of discrimination.
We, therefore, dismiss the writ petition but we will leave it to the petitioners, if so advised, to move the Central Administrative Tribunal, with fuller facts and in the light of the latest developments, for appropriate relief after impleading all affected parties or their repre sentatives so that the entire picture may emerge and a just conclusion arrived at.
Y. Lal Petition dis missed.
| IN-Abs | These writ petitions have been fried by Group 'C ' (class III) employees of the Railways working in its Transportation (Traffic) Department.
The said Department has different streams e.g. 'Control Stream ' and 'Traffic Stream ' and the employees working therein have different scales of pay.
For purposes of their promotion to Group B posts, it was neces sary to fix their inter se seniority, as only those employ ees from the different streams could be considered for promotion as would fall within the zone of consideration as per seniority list.
As the zone of consideration is deter mined with reference to the number of vacancies in Group B for which selection is held, at any point of time, the position of the employee in the combined seniority list of all the streams is important.
The zone of consideration of the employees for promotion Is fixed in the order of the combined seniority of the employees from the different streams.
The Department prior to the implementation of the recommendations of the Third Pay Commission fixed the inter se seniority of the employees of Group C employees on the basis of the grade i.e. employees working In a higher grade on a regular basis were treated senior to those working in the lower grade and the said principle worked well until the enforcement of the recommendations of the Third Pay Commis sion w.e.f.
1.1.1973, when higher or lower scales of pay came to be fixed in respect of certain posts which were having the same scale of pay upto 31.12.1972.
This presented difficulty in fixing the inter se seniority of the employees and the Railway Board in order to resolve the difficulty issued circulars from time to time indicating how their seniority should be fixed but for some reason or the other, the dissatisfaction amongst the employees in the matter of seniority continued.
Being aggrieved by the experiments which according to the petitioners only resulted in chaos and confusion, employees of the Control Stream have flied the writ petition on the Issue of a combined seniority list published by the administration on the basis 451 of instructions on 15.6.85, as they found themselves exclud ed from the panel of staff to be taken into consideration for promotion to Group B. They pray that the circular dt. 6.1.84 and the follow up action taken culminating in the Selection List be set aside.
The petitioner challenge the validity of two circulars issued by the Board, one on 29.7.83 and the other on 26.1.2.1983, restructuring the cadres as discriminatory as according to them they envisage 'mass upgradation ' to their detriment.
The question for determination is whether the principle adopted on the strength of these circulars for fixing the inter se seniori ty of these employees is proper.
Dismissing the writ petitions with liberty to the Peti tioners to move the Central Administrative Tribunal, if so advised with fuller facts, this Court, HELD: The inequity is not apparent.
Having to deal with two different streams, differently placed, the Government has to find out an equitable solution and it has been grop ing towards it.
One method would perhaps have been to have fixed quotas for promotion from each of the streams but that is not necessarily the only method.
An alternative method is being attempted here and the principle that grades of Rs.700 900 and above should be considered together being conceded the Department is trying to give some weightage by granting upgradation to each stream based on its total strength in order to balance the promotional chances in both the streams.
It is possible that some individual cases may be affected but no answer to the question whether any class discrimination has resulted can be given unless fuller details are available and the practical impact of the latest position is placed before the Court.
[463A C]
|
ivil Appeal No. 1009 of 1980.
From the Judgment and Order dated 15.1.80 of the Punjab and Haryana High Court in L.P.A. No. 592 of 1975.
P.P. Rao and Jitender Sharma for the appellants.
Rajinder Sachhar, Govind Mukhoty, Dr. Shankar Ghosh, S.C. 474 Mohanta, Mahabir Singh, T.C. Sharma, P.P. Singh, S.K. Verma, C.M. Nayyar and C.V.S. Rao for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This appeal by special leave is directed against the order of the High Court of Punjab and Haryana dated 15th January, 1980 quashing the Notification dated 3rd May, 1973 issued by the State Government of Haryana promot ing the appellants to the Haryana Service of Engineers Class I post (Public Health Branch).
The facts giving rise to this appeal are that the appel lants S/Sh.
J.C. Yadav, B.R. Batra, O.P. Juneja, S.L. Cho pra, M.S. Miglani, C.P. Taneja, Surjit Singh and V.P. Gulati and respondents Vyas Dev were members of the Haryana Service of Engineers Class II in the Public Health Branch.
Members of the Class II service are eligible for promotion of Class I posts in accordance with the provisions of the Haryana Service of Engineers Class 1 Public Works Department (Public Health Branch) Rules 1961 (hereinafter referred to as 'the Rules ').
In 1971 the appellants were promoted to the post of Executive Engineers in the cadre of Class 1 on ad hoc basis while Vyas Dev respondent was not considered for promotion.
He made representation but nothing came out in his favour.
Later a Committee was constituted under Rule 8 for selecting suitable members of Class 12 service promotion to Class I post.
The Committee considered the case of appellants and Vyas Dev respondent, but it did not find the respondent suitable for promotion, his name was not included in the select list prepared by the Committee while the names of the appellants were included therein.
The Selection Committee 's recommendation was approved by the Public Service Commission and it was forwarded to the State Government.
Since the appellants did not possess the requisite minimum period of service of eight years ' in Class II service as required by Rule 6(b) and as no other suitable candidates were avail able, the Selection Committee made recommendation to the State Government for granting relaxation to the appellants.
The Committee 's recommendation was reiterated by the Public Service Commission.
The State Government accepted the recom mendations and appointed the appellants to Class I service by the Notification dated May 3, 1973.
Vyas Dev, respondent challenged validity of the appel lants ' promotion by means for a writ petition under Article 226 of the Constitution before the High Court of Punjab and Haryana on the ground that the appellants did not possess requisite qualification for promo 475 tion to Class I service, therefore their promotions were contrary to Rules.
His further grievance was that he was not considered along with the appellants for promotion and he was not afforded opportunity of hearing before he was super seded.
A learned single Judge of the High Court dismissed the petition on the finding that the Selection Committee had considered the case of Vyas Dev along with the appellants for promotion but he was not found suitable.
As regards the appellants ' promotions the learned Judge held that since the State Government had relaxed Rule 6(b) in their favour their promotions were sustainable in law.
The learned Judge fur ther held that no personal hearing was necessary to be afforded to Ved Vyas before his supersession.
On appeal by the respondent a Division Bench of the High Court set aside the order of the single Judge and quashed the appellants promotions on the sole ground that the State Government had no authority in law to grant relaxation to the appellants under Rule 22 in a general manner, as the power of relaxa tion could be exercised only in individual cases to mitigate hardship caused to an individual.
On these findings the Division Bench set aside the appellants ' promotions.
The appointment and promotion to Class I Engineering Service in the State of Haryana are regulated by the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules 1961.
Initially these Rules had been framed by the Governor of Punjab before the formation of the Haryana State.
There is no dispute that subsequently the State of Haryana had adopted these Rules and the recruitment to Class I service of Engineers in PWD (Public Health Branch) is regulated by the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules, 1961 as amended from time to time.
Rule 5 provides for appointment to Class I service by direct appointment, by transfer of an officer already in service of the State Government or of the Union Government, or by promotion from Class II Service.
Rule 6 prescribes qualifications for appointment to Class I service.
The relevant provisions of the Rule are as under: "6.
Qualifications: No person shall be appointed to the service, unless he: (a) possesses one of the University Degree or other qualifi cations prescribed in Appendix 8 of these rules: Provided that Government may waive this qualification in the case of particular officer belonging to Class II Service: 476 (b) in the case of an appointment by promotion from Class II Service, has eight years completed Class II and has passed the professional examination of the department Rule 8 provides for constitution of the Committee for making selection for appointment to Class I service by promotion.
The Committee is required to prepare a list of officers suitable for promotion on the basis of the criteria of merit and suitability with due regard to seniority.
Rule 9 lays down, field of eligibility as well as criteria for promotion to the post of Executive Engineer, Superintending Engineer and Chief Engineer.
Rule 15 provides for departmental exami nations, according to this Rule the officers appointed to the Service, Unless they have already done so, shall pass such departmental examination and within such period as may be prescribed by the Government.
The Rule confers power on the Government to prescribe for any other test in addition to the departmental examination for promotion or appointment to any rank in the service.
Rule 22 confers power on the Government to relax any of the Rules as it may consider necessary.
There is no dispute that none of the appellants had completed eight years ' service in Class II service as required by Rule 6(b) and as such they were not eligible for promotion to the post of Executive Engineer.
On the recom mendation of the Selection Committee and with the approval of the Public Service Commission the State Government re laxed the requirement of eight years ' service so far as the appellants were concerned.
Consequently, the appellants were promoted and appointed as Executive Engineers under the Notification dated 3rd May, 1973.
The sole question for consideration is whether the relaxation granted by the State Government in favour of the appellants is valid.
Rule 22 which confers power on the Government to relax requirement of Rules, is as under: "Rule 22.
Power to relax . .
Where Government is satisfied that the operation of any of these Rules causes undue hardship to any particular case, it may by order dispense with or relax the requirements of that Rule to such extent, and subject to such conditions, as it may consider necessary for dealing with the case in a just and equitable manner.
477 The Rule confers power on the Government to dispense with or to relax the requirement of any of the Rules to the extent and with such conditions as it may consider necessary for dealing with the case in a just and equitable manner.
The object and purpose of conferring this power on the Government is to mitigate undue hardship in any particular case, and to deal with a case in a just and equitable man ner.
If the Rules cause undue hardship or Rules operate in an inequitable manner in that event the State Government has power to dispense with or to relax the requirement of Rules.
The Rule does not restrict the exercise of power to individ ual cases.
The Government may in certain circumstances relax the requirement of Rules to meet a particular situation.
The expression "in any particular case" does not mean that the relaxation should be confined only to an individual case.
One of the meanings of the expression "particular" means "peculiar or pertaining to a specified person thing time or place not common or general".
The meaning of the word particular in relation to law means separate or special, limited or specific.
The word 'case ' in ordinary usage means 'event ', 'happening ', 'situation ', 'circumstances '.
The expression 'case ' in legal sense means 'a case ', 'suit ' or 'proceeding in Court or Tribunal '.
Having regard to these meanings the expression 'in any particular case ' would mean; in a particular or pertaining to an event, situation or circumstance.
Rule 22 postulates relaxation of Rules to meet a particular event or situation, if the operation of the Rules causes hardship.
The relaxation of the Rules may be to the extent the State Government may consider necessary for dealing with a particular situation in a just and equitable manner.
The scope of Rule is wide enough to confer power on the State Government to relax the requirement of Rules in respect of an individual or class of individuals to the extent it may consider necessary for dealing with the case in a just and equitable manner.
The power of relaxation is generally contained in the Rules with a view to mitigate undue hardship or to meet a particular situation.
Many a times strict application of service rules create a situation where a particular individual or a set of individuals may suffer undue hardship and further there may be a situation where requisite qualified persons may not be available for appointment to the service.
In such a situation the Govern ment has power to relax requirement of Rules.
The State Government may in exercise of its powers issue a general order relaxing any particular Rule with a view to avail the services of requisite officers.
The relaxation even if granted in a general manner would enure to the benefit of individual officers.
The State of Haryana was formed in March, 1966 prior to that it was part of the State of Punjab.
The service rules relating to Public 478 Works Department as applicable to the State of Punjab were made applicable to Haryana.
Rule 6(b) which prescribed qualification for appointment to Class I service lays down that no person shall be appointed to the service by promo tion from Class II service unless he has completed eight years ' service in Class II and has passed departmental examination prescribed under Rule 15.
None of the appellants had completed eight years ' service in Class II.
In fact no other member of Class II service possessing the requisite qualifications was available for selection to Class I post.
The respondent no doubt possessed the requisite qualifica tion with regard to the eight years length of service in Class II but he did not possess requisite educational quali fication.
Thus no qualified officer of Class II service was available for promotion to Class I service although a number of vacancies were existing in Class I service.
Having regard to these facts the Selection Committee made recommendation for the relaxation of Rule 6(b) in favour of the appellants, who were found otherwise suitable.
The Public Service Com mission also agreed with the recommendation made by the Selection Committee.
The non availability of suitable Class II officers in Engineering Department possessing the neces sary and prescribed qualifications for promotion to Class I posed a problem for the State Government, as on account of the large scale expansion of Engineering Department a number of posts in Class I service were lying vacant.
A similar situation prevailed in the Building and Road Branch of Public Works Department.
In the circumstances, the State Government with a view to meet the particular situation decided to relax the qualifying length of service to such officers who had completed four years of service in Class II, it therefore relaxed the requirement of Rule 6(b) to the extent that a member of Class II service having four years ' service was qualified for being considered for promotion to Class I service.
These facts would clearly show that the relaxation had been granted to particular individuals with a view to meet the situation, which was in public interest.
We find no legal infirmity in the order of relaxation.
In B.S. Bansal vs State of Punjab and Ors., a Bench of the Punjab and Haryana High Court held that if the power of relaxation could be exercised in order to meet a general situation, then the whole purpose of the Rule would be frustrated and the Government would be armed with an arbitrary power which could cause great hardship to some officers.
We have already referred to the relevant facts which show that in the instant case, power of relaxation was exercised by the State Government to meet a particular situation, it did not result into any injustice or cause hardship to any one.
If power of 479 relaxation is exercised on extraneous consideration for oblique purposes or mala fide, the court has power to strike down the same but exercise of power of relaxation to meet a particular situation cannot be held to be arbitrary or illegal.
In B.S. Jain vs State of Haryana, the High Court set aside the promotions made in pursuance of the relaxation granted under Rule 22 placing reliance on the decision of the Division Bench in B.S. Bansal 's case.
On appeal, this Court in Ashok Gulati vs B.S. Jain, ; observed that the findings of the High Court that the State Government could not have relaxed the condition of passing the departmental professional examination by taking recourse to Rule 22 which conferred power of relaxation on the State Government could hardly be sustained.
In Jit Singh & Ors.
vs State of Pubjab & Ors.
, ; the State Government 's order granting relaxation under Rule 14 of the Punjab Police Service Rules 1959 in respect of the period of service, was questioned.
Rule 14 was almost identical in terms as Rule 22 of the instant case.
In Jit Singh 's case (supra) promotion of Inspectors to the post of Deputy Superintendent of Police was involved.
Under the Police Service Rules 1959 a Police Inspector having six years ' continuous service was eligible for promo tion to the post of Deputy Superintendent of Police.
The State Government in exercise of its power under Rule 14 granting relaxation to Inspectors who had been found fit for promotion, as a large number of vacancies had occurred in the cadre of Deputy Superintendent of Police and no suitable persons having the requisite period of service were avail able.
Promotions made pursuant to the relaxation were chal lenged before the High Court.
The High Court dismissed the writ petition on the ground that the petitioners before it were not qualified for promotion.
On appeal before this Court, the High Court 's judgment was upheld.
This Court took the view that since the appellants before it were not eligi ble for promotion as their names were not included in the Select List prepared by the Public Service Commission and further as they had not completed six years ' of continuous service prior to the respondents, they were not entitled to any relief.
The appeal was accordingly dismissed by this Court.
While considering the question of validity of relaxa tion, the Court made observation that Rule 14 did not permit any general relaxation of the nature ordered by the State Government.
The Court, however, did not examine the matter in detail as it was of the view that since the appellants in that case were not eligible for promotion they could not question the validity of the appointment of those who had been promoted on the basis of relaxation being granted by the State Government.
The Court upheld the promotions in view of the extra 480 ordinary situation in which the State Government made ap pointments iv derogation of requirement of Rules.
On a careful scrutiny of the Rules in its various as pects we do not agree with the observations made in Jit Singh 's case (supra).
Though Rule 22 is not happily worded, as apparently it gives an impression that no general relaxa tion can be granted by the State Government, out on a close scrutiny of the scope of the power we find that a narrow construction of the Rules would nullify the Government 's power of relaxing Rules to meet a particular situation.
Rule 22 is beneficial in nature it must be construed in a liberal manner and it should not be interpreted in a manner to defeat the very object and purpose of such power.
Power to grant relaxation may be exercised in case of an individual to remove hardship being caused to him or to a number of individuals who all may be similarly placed.
This power may also be exercised to meet a particular situation where on account of the operation of the Rules hardship is being caused to a set of individual officers.
In the instant case the appellants were found suitable for promotion by the screening committee, the Commission and the State Govern ment, and the contesting respondent Yvas Dev was not found suitable even otherwise for promotion, the State Government granted relaxation of Rule 6(b) in favour of the appellants.
In such a situation, it is beyond comprehension that the power of relaxation under Rule 22 was exercised arbitrarily or that it caused hardship or injustice to any one.
On the formation of the new State of Haryana no promotion from Class II officers could be made to Class I service without granting any relaxation since 1966 to 1978.
In 1971 72 eleven vacancies in the post of Executive Engineers were filled by promotion from Class II officers although none of them had completed requisite period of service prescribed by the Rules for promotion.
In 1976 77 and 1977 78 sixteen and nine vacancies respectively in the post of Executive Engi neers were filled by promotion by granting relaxation as no officer of Class II service possessing requisite number of years of service was available for promotion.
In 1978 79 seven officers of Class II service were promoted to the post of Executive Engineer but only one of them possessed the requisite period of service and all others were granted relaxation.
These facts clearly show that in the absence of relaxation there could be no promotion to the post of Execu tive Engineer and the officers who were found suitable would have suffered great hardship.
In 1973 also the State Govern ment with a view to meet the particular situation exercised its power of relaxation in appellants ' favour.
Having regard to these facts and circumstances, we find no illegality in the appellants ' promotions, pursuant to the relaxation granted by the State Government.
481 In Bansal 's case (supra) the High Court, and even in Jit Singh 's case (supra) this Court did not set aside the promo tions made by the Government pursuant to relaxation of Rules on the ground that the petitioner who challenged the promo tions was himself not qualified, and he had no legal right to hold the post in dispute, although in both these cases Government 's order granting general relaxation was held to be outside the scope of Rule 22 and Rule 14 of the Punjab Police Service Rules 1959.
In the instant case the High Court has set aside the appellants ' promotions following Bansal 's case interpreting Rule 22 but it failed to notice that in that case the High Court did not set aside the promotions instead it dismissed the petition on the ground that the petitioner therein was not qualified and none of his rights were affected.
The High Court failed to notice that Vyas Dev respondent was considered for promotion but he was not found suitable, therefore he was not entitled to any relief.
Since no legal right of the respondent was adversely affected the High Court should not have quashed the appel lants ' promotions.
On behalf of the appellants an alternative submission was made that since the appellants had already completed eight years ' of service in Class H service during the pend ency of the writ petition their appointment stood regula rised.
To support this submission reliance was placed on the decision of this Court in Ram Sarup vs State of Punjab, [1979] 1 SCC 168.
In that case appointment to the post of Labour cum Conciliation Officer was made in breach of Rule 4 Clause (I) of the Punjab Labour Service Class I and II Rules 1955 as Ram Sarup did not possess five years ' experience, required by sub clause (I) of Rule 4, In spite of that he had been appointed to the post of Labour cum Conciliation Officer.
Subsequently, Ram Sarup was reverted on the ground that he was not qualified to be appointed as a Labour cum Conciliation Officer as he did not possess the minimum qualification of length of service.
This Court held that the appointment of Ram Sarup made in breach of Rules was irregu lar, but not wholly void and since Ram Sarup had completed five years of experience of working of labour laws before his reversion, his appointment to the post of Labour cum Conciliation Officer stood regularised with effect from the date he completed five years of service.
On these findings order of reversion was set aside by this Court.
Undisputa bly, the appellants completed eight years of service before January 15, 1980, the date on which the Division Bench of the High Court set aside their promotions.
In view of the principles laid down in Ram Sarup 's case (supra) the appel lants ' appointment, even if irregular, stood regularised on the 482 date they completed eight years of their service and there after their promotions could not be set aside.
We accordingly allow the appeal, set aside the judgment and order of the Division Bench dated 15.1.1980 and restore the order of the learned single Judge dismissing the re spondents ' writ petition.
There will be no order as to costs.
N.P.V. Appeal al lowed.
| IN-Abs | The appointment and promotion to Class I Engineering Service in the State of Haryana are regulated by the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules, 1961.
Rule 5 provides for appointment to Class I Service, inter alia, by promotion from Class II Service.
Rule 6(b) prescribed that no person shall be promoted unless he has completed eight years service in Class II and has passed professional examination to the department.
Rule 22 confers power on the Government to relax any of the Rules it may consider necessary.
The appellants and the contesting respondent were mem bers of the Haryana Service of Engineers Class II in the Public Health Branch.
In 1971 the appellants were promoted to the post of Executive Engineers in the cadre of Class I service on ad hoc basis while the respondent was not consid ered for promotion.
Later, a Committee constituted under Rule 8 for selecting suitable candidates for promotion to Class I post, considered the names of the appellants and the respondent but did not find the respondent suitable.
Hence it included the appellant 's|ant 's names only in the select list.
The appellants did not possess the requisite minimum period of service of 8 years in Class II service but since no other suitable candidates were available, the Committee recommended to the Govt.
for granting relaxation to the appellants.
The State Public Service Commission approved the recommendations.
The State Government accepted the recommendations and appointed the appellants to Class I service by a Notification dated May 3, 1973.
471 The contesting respondent filed a Writ Petition before the High Court challenging the validity of the appellants ' promotion on the ground that since the appellants did not possess the requisite qualification for promotion to Class I Service their promotions were contrary to rules.
A Single Judge of the High Court dismissed the petition holding that since the Government had relaxed Rule 6(b) in appellants ' favour, their promotions were sustainable in law.
On appeal, the Division Bench quashed the appellants ' promotion on the ground that the State Government had no authority in law to grant relaxation to the appellants under Rule 22 in a general manner as the power of relaxation could be exercised only in individual cases to mitigate hardship caused to an individual.
Hence the appeal by special leave.
Allowing the Appeal, this Court, HELD: 1. Power to grant relaxation may be exercised in case of an individual to remove hardship being caused to him or to a number of individuals who all may be similarly placed.
This power may also be exercised to meet a particu lar situation where on account of the operation of the rules hardship is being caused to a set of individual officers.
[477G H] 2.
I Rule 22 of the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules 1961 confers power on the Government to dispense with or to relax the requirement of any of the Rules to the extent and with such conditions as it may consider necessary for dealing with the case in just and equitable manner.
The object and purpose of conferring this power on the Government is to mitigate undue hardship in any particular case.
If the Rules cause undue hardship or operate in an inequitable manner, the State Government has power to dispense with or to relax the requirement of Rules.
The Rule does not restrict the exercise of power to individ ual cases.
The Government may in certain circumstances relax the requirement of Rules to meet a particular situation.
[477A B] 2.2.
The expression "in any particular case" does not mean that the relaxation should be confined only to an individual case.
One of the meanings of the expression "particular" means "peculiar or pertaining to a specified person thing time or place not common or general".
The meaning of the word 'particular ' in relation to law means separate or special, limited or specific.
The word 'case ' in ordinary usage means 472 'event ', 'happenings ', 'situation ', 'circumstances '.
The expression 'case ' in legal sense means 'a case '. 'suit ' or 'proceeding in Court or Tribunal '.
Having regard to these meanings the expression 'in any particular case ' would mean in a particular or pertaining to an event, situation or circumstance.
[477C D] 2.3.
Rule 22 postulates relaxation of Rules to meet a particular event or situation, if the operation of the Rules causes hardship. '[he Scope of the said Rule is wide enough to confer power on the State Government to relax the re quirement of Rules in respect of an individual or class of individuals to the extent it may consider necessary dealing with the case in a just and equitable manner.
[477E F] 2.4 The power of relaxation is generally contained in the rules with a view to mitigate undue hardship or to meet a particular situation.
Many a time strict application of service rules create a situation where a particular individ ual or a set of individuals may suffer undue hardship and further there may be a situation where requisite qualified persons may not be available for appointment to the service.
In such a situation, the Government has power to relax requirement of rules.
The state Government may in exercise of its powers issue a general order relaxing any particular rule with a view to avail the service of requisite officers.
The relaxation even if granted in a general manner would enure to the benefit of individual officers.
[477F G] 2.5 Rule 22 is a beneficial one.
It must be construed in a liberal manner and should not be interpreted in a manner to defeat the very object and purpose of such power.
A narrow construction would nullify Government 's power of relaxing rules of meet a particular situation.
[480C] Jit Singh & Ors.
vs State of Punjab & Ors.
, ; differed; Ashok Gulati vs B.S. Jain, ; referred to.
In the instant case, the non availability of Class II officers in Engineering Department possessing the necessary and prescribed qualifications for promotion to Class I posed a problem for the State Government, as on account of the large scale expansion of Engineering Department a number of posts in Class I service were lying vacant.
A similar situa tion prevailed in the Building and Road Branch of Public Works Department.
In the circumstances, the State Government with a 473 view to meet the particular situation decided to relax the qualifying length of service to such officers who had com pleted four years of service in Class 1I.
It, therefore, relaxed the requirement of Rule (b) to the extent that a member of Class II service having four years service was qualified for being considered for promotion in Class I service.
These facts would clearly show that the relaxation had been granted to particular individuals with a view to meet the situation which was in public interest.
There is no legal infirmity in the order of ' relaxation.
[478D F] 3.
I If power of relaxation is exercised on extraneous consideration for oblique purposes or mala fide, the Court has power to strike down the same, but bona fide exercise of power of relaxation to meet a particular situation cannot be held to be arbitrary or illegal.
[479A] 3.2 Since the appellants were found suitable for promo tion by the screening committee, the Commission and the State Government, and as the contesting respondent was not found suitable even otherwise for promotion, the State Government granted relaxation of Rule (b) in favour of the appellants.
In such a situation, it cannot be said that the power of relaxation under Rule 22 was exercised arbitrarily or that it caused hardship to any one.
In the absence of relaxation, there could be no promotion to the post of Executive Engineer and the officers who were found suitable would have suffered great hardship.
Therefore, the State Government with a view to meet the particular situation exercised its power of relaxation in appellants ' favour.
Having regard to the facts and circumstances of the case, there is no illegality in the appellants ' promotion, pursu ant to the relaxation granted by the State Government.
[480D E; G H] Ashok Gulati vs B.S. Jain, AIR 1987 424; Jit Singh & Ors.
vs State of Punjab & Ors.
, ; and Ram Sarup vs State of Punjab, [1979] 1 SCC 168 referred to.
|
ivil Appeal No. 3693 of 1989.
734 From the Judgment and Order dated 23.2.
1989 of Delhi High Court in R.S.A. No. 31 of 1989.
K.S. Bindra, R.K. Maheshwari and G.S. Gujananip for the Appellant.
Prem Sunder Jha for the Respondent.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave arises out of a suit filed by the respondent company against the appellant, Municipal Corporation of Delhi, for a mandatory injunction to restore the supply of electricity discontinued during the pendency of the suit.
Initially the suit was filed for a prohibitory injunction from disconnecting the electric connection.
The plaint was amended following stoppage of the supply of energy.
According to the plaintiff 's case, the suit had to be filed as the Delhi Electricity Supply Undertaking was threatening disconnection without disclosing any reason.
Subsequently, some officers of the Undertaking made an inspection of the meters and alleged theft of electricity after tampering with the seals affixed on the meters.
A First Information Report was lodged with the police.
Admittedly no notice was served by the Delhi Elec tricity Supply Undertaking on the plaintiff before severing the electric connection.
The learned trial court, however, dismissed the suit and the plaintiff appealed.
The First Additional District Judge, Delhi, who heard the appeal decreed the suit on the sole ground of nonservice of notice as required under condition No. 36 in regard to supply of electricity by the appellant.
The Delhi High Court dismissed the appellant 's second appeal at the admission stage by a reasoned judgment.
The learned counsel for the appellant has contended that in view of the conduct of the plaintiff in stealing electricity, the Court should in its discretion refuse to issue a direction for restoration of the electric supply.
We are afraid, it is not possible to agree with the appellant for more reasons than one.
The plaintiff is seriously deny ing the allegation of theft and it is not possible to assume the accusation as correct without a full fledged trial on this issue.
The case of Jagarnath Singh vs
B.S. Ramaswamy; , ; relied upon on behalf of 735 the appellant is clearly distinguishable inasmuch as the consumer in that case was convicted under the Indian Penal Code, and the conviction was being maintained in appeal.
Besides, the service of notice is a prerequisite for discon nection, and the appellant can not be allowed to go back upon its words and refuse the consumer the benefit of notice as contemplated by the agreement.
The learned counsel for the appellant urged that the Delhi Electric Supply Undertak ing will seriously suffer if this view is upheld.
We do not understand as to what is the difficulty in the way of the appellant to serve a notice on the consumer before discon tinuing the supply.
It has to be appreciated that the licen see Undertaking is performing a public duty and is governed by a special statute and the law also contemplates service of a notice before disconnection of supply of electricity.
The courts below have made it clear that they have not examined the case on merits.
The question whether, the allegations of theft are true or not has to be examined and decided in an appropriate proceeding, and the appellant will not, therefore, be prejudiced by the present judgment in its claim.
In the result, the appeal is dismissed but, without costs.
P.S.S. Appeal dismissed.
| IN-Abs | The Delhi Electricity Supply Undertaking disconnected the supply of electricity to the respondent company during the pendency of the suit for a prohibitory injunction with out serving notice on the consumer.
The trial court dis missed the amended suit for mandatory injunction to restore the supply.
The First Appellate Court decreed the suit on the sole ground of non service of notice as required under condition No. 36 in regard to supply of electricity by the appellant.
It did not go into the allegation of theft of electricity by the plaintiff.
The High Court dismissed the appeal.
Dismissing the appeal by special leave, this Court, HELD: 1.
The licensee undertaking is performing a public duty and is governed by a special statute.
The law also contemplates service of a notice before disconnection of supply of electricity.
The appellant cannot also be allowed to go back upon its words and refuse the consumer the bene fit of notice as contemplated by the agreement.
The suit was, therefore, rightly decreed by the First Appellate Court.
[735B C, A B] 2.
The plaintiff is seriously denying the allegation of theft.
It is not possible to assume the accusation as cor rect without a full fledged trial on this issue.
The courts below have not examined the case on merits.
The question whether the allegations are true or not has to be examined and decided in an appropriate proceeding.
The appellant will not, therefore, be prejudiced in its claim by dismissal of the appeal.
[734G H, 735C] Jagarnath Singh vs
B.S. Ramaswamy; , , distinguished.
|
No. 58 of 1983.
(Under Article 32 of the Constitution of India) R.K. Garg and D.K. Garg for the Petitioner.
V.C. Mahajan and L.K. Gupta for the Respondents.
RANGANATH MISRA, J.
In this application under article 32 of the Constitution, petitioner assails the order dated 5th September, 1975, of his compulsory retirement from service with effect from 5th of December, 1975, made under rule 56(j)(i) of the Fundamental Rules.
The impugned order ran thus: "WHEREAS the Director of Audit, Defence Services, New Delhi (appropriate authority) is of the opinion that it is in the public interest to do so, NOW, THEREFORE, in exercise of the powers con ferred by clause (j)(i) of rule 56 of the Fundamental Rules, the Director of Defence Services (appropriate authority) hereby gives notice to Shri C.D. Ailawadi, Audit Officer, Defence Services that he, having already attained the age of 50 years on the 22nd November, 1969, shall retire from service with effect from the forenoon of the 4th of Decem ber, 1975, or from the date of expiry of three months com puted from the date of the service of this notice on him, whichever is later." The petitioner has pleaded that he was efficient and had risen 785 from the rank of a Clerk to the post of Audit Officer in which he was confirmed with effect from 3.12.
Accord ing to him, he had clear and unblemished record of service.
He had held independent charge of the senior post of Deputy Director of Audit and had been paid an additional amount of Rs. 100 per month for the period.
He also alleged that his character roll entries were excellent.
According to him, it was the obligation of the appropriate authority to review the petitioner 's case six months before he attained the age of 50 or completed thirty years of service.
Since no such review had been made or on the basis of review petitioner had not been retired, he was entitled to continue upto the age of 58, which is the normal age of retirement.
According to him, all cases of premature compulsory retirement made during the emergency were reviewed in terms of the Govern ment circular of lOth of August, 1978, but the representa tions made by the petitioner for the benefit of review in terms of the said circular were not heeded to and the peti tioner was, therefore, obliged to file the present petition.
In the return to the rule nisi by the Director of Audit, Defence Services, it has been contended that the order of retirement was made in public interest after review of the petitioner 's case.
It has been stated in the said affidavit: "In the case of Shri Ailawadi the Committee after review of his complete record of service observed that his earlier services were of a very marginal nature and he earned some adverse reports later.
The Committee, therefore, considering the quality of his work on the whole, concluded that Shri Ailawadi was not fit to be retained in the public interest.
The Appropriate Authority felt that his reports for the last few years were poor, colourless and indicative of steady deterioration attributed to family problems and to his state of health.
The Appropriate Authority also took into account his latest report for the year 1974 75 which assessed him as 'barely competent to hold an officer 's post '.
" The character roll entries have also been placed before the Court at the time of heating of this writ petition.
We have checked the same and in particular those for five years prior to the date of the impugned order.
In 1969 70, his ability was considered to be average.
His thought and ex pression were said to be vague and rambling.
Deterioration of his physical health was taken note of and the general assessment was that he was an average officer.
In the fol lowing year the reviewing 786 authority after treating him to be an average officer en dorsed the following direction: "I am inclined to think that the entire report may be commu nicated to him and he must be told so to exert himself that he earns a more commendable report next year. ' ' This appears to have been shown to him and his signature had been taken on 3.8.1971.
During the years 1972 73, 1973 74 and 1974 75, he was branded as an average officer.
In the last year it was indicated that his intelligence was of low order and though he was physically fit, he was not mentally alert.
It was also indicated that he was barely competent to hold an officer 's post.
In the report for a part of 1974 75 he was branded as poor and against the column of 'general assess ment ', it was shown that 'he was not sure of himself.
We have extracted entries from the character roll to meet the petitioner 's contention that he had an excellent record of service.
Mr. D.K. Garg, appearing for the petitioner has supple mented the arguments by a written note which has also been looked into.
Petitioner does not challenge the validity of the rule; nor does he allege that the order of compulsory retirement is the outcome of mala fides.
An aggrieved civil servant can challenge an order of compulsory retirement on any of the following grounds as settled by several decisions of this Court: (i) that the requisite opinion has not been formed; or (ii) that the decision is based on collateral grounds; or (iii) that it is an arbitrary decision.
In Union of India vs Col. J.N. Sinha & Anr., [1971] 1 SCR 791 this Court held that if the civil servant is able to establish that the order of compulsory retirement suffered from any of the above infirmities, the Court has jurisdiction to quash the same.
It is not disputed that compulsory retirement under rule 56(j) is not a punish ment as it does not take away any of the past benefits.
Chopping off the dead wood is one of the important consider ations for invoking rule 56(j) of the Fundamental Rules.
1n the instant case, on the basis of the service record, the Committee formed the requisite opinion that the petitioner had ceased to be useful and, therefore, should be retired prematurely.
We do not think petitioner has been able to place 787 any satisfactory material for the contention that the deci sion was on collateral grounds.
Once the opinion is reached on the basis of materials on record, the order cannot be treated to be arbitrary.
The service record of more than five years which we have perused shows that the higher officers under whom the petitioner had worked were different and different sets of reviewing officers had also made the entries.
Therefore, the reports must be taken to have re flected a appropriate and objective assessment of the per formance of the petitioner.
The writ petition must accordingly fail and is, there fore, dismissed.
There shall be no order as to costs.
N.P.V. Petition dismissed.
| IN-Abs | In a Writ Petition flied before this Court, the peti tioner assailed the order of his compulsory retirement from service made under rule 56(j)(i) of the Fundamental Rules.
The petitioner contended that he was efficient, had clear and unblemished record of service and his character roll entries were excellent, and since no review has been made six months before he attained the age of 50 or completed thirty years of service nor he had been retired on the basis of review, he was entitled to continue upto the normal retirement age of 58.
On behalf of the respondents, it was contended that the order of retirement was made in public interest after review and that the Committee had concluded after reviewing com plete record of service and considering the quality of work on the whole, that the petitioner was not fit to be retained in public interest.
Dismissing the Writ Petition, this Court, HELD: 1.1 Compulsory retirement under rule 56(j)(i) is not a punishment as it does not take away any of the past benefits.
Chopping off the dead wood is one of the important considerations for invoking rule 56(j)(i) of the Fundamental Rules.
[786G] 1.2 An aggrieved civil servant can challenge an order of compulsory retirement on the ground (i) that the requisite opinion has not been formed; or (ii) that the decision is based on collateral grounds; or (iii) that it is an arbi trary decision.
If the civil servant is able to establish that the order suffered from any of these infirmities, the Court has jurisdiction to quash the same.
[786F G] Union of India vs Col. J.N. Sinha & Anr., [1971] 1 SCR 791, referred to.
784 In the instant case, on the basis of the service record, the Committee formed the requisite opinion that the peti tioner had ceased to be useful and, therefore, should be retired prematurely.
The petitioner has not placed any satisfactory material to prove that the decision was based on collateral grounds.
Once the opinion is reached on the basis of materials on record, the order cannot be treated to be arbitrary.
The service record of more than five years shows that the higher officers under whom the petitioner had worked were different and different sets of reviewing offi cers had also made the entries.
Therefore, the reports must be taken to have reflected an appropriate and objective assessment of the performance of the petitioner.
[786H; 787A B]
|
Appeal No. 108 of 1954.
Appeal from the judgment and decree dated March 21, 1952, of the Calcutta High Court in Appeal from Appellate Decree No. 971 of 1950, arising out of the judgment and decree dated August 29, 1950, of the Court of District Judge of Zillah Burdwan in Title Appeal No. 247/16 of 1948 against judgment and decree dated September 25, 1948, of the Court of Additional Sub Judge, 1st Court, Burdwan, in Title Suit No. 7 of 1946/27 of 1947.
1311 N. C. Chatterjee and Sukumar Ghose, for the appellant.
J. N. Banerjee and P. K. Ghose, for the respondents.
September 18.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J.
This is an appeal by the plaintiff against the judgment of the High Court of Calcutta in a second appeal which, in reversal of the judgments of the Courts below dismissed his suit, which was one in ejectment.
The suit property is a Mahal of the extent of 84 Bighas 18 Cottas situated within lot Ahiyapur village, which is one of the villages forming part of the permanently settled estate of Burdwan Zamindari.
This village was granted by the Maharaja of Burdwan in Patni settlement to the predecessors in title of defendants I to 7.
The exact date of this grant does not appear, but it is stated that it was sometime prior to the enactment of the Bengal Patni Taluks Regulation, 1819 (Bengal Regulation VIII of 1819), hereinafter referred to as the Regulation, and nothing turns on it.
The Mahal with which this litigation is concerned, had been at or prior to the permanent settlement set apart as Chaukidari Chakaran lands; that is to say, they were to be held by the Chaukidars for rendering service in the village as watchmen.
In 1870, the Village Chaukidari Act, 1870 (Ben.
VI of 1870), hereinafter referred to as the Act, was passed, and section 48 of that Act provides that all Chaukidari Chakaran lands assigned for the benefit of any village shall be transferred to the zamindar of the estate in the manner and subject to the provisions contained in the Act.
Under section 50, the Collector is authorized to make an order transferring those lands to the Zamindar after determining the assessment payable thereon, and section 51 enacts that: " Such order shall operate to transfer to such zamindar the land therein mentioned subject to the amount of assessment therein mentioned, and subject 1312 to all contracts theretofore made, in respect of, under, or by virtue of, which any person other than the zamindar may have any right to any land, portion of his estate, or tenure, in the place in which such land may be situate.
" In accordance with the provisions aforesaid, the suit properties were transferred to the Maharaja of Burdwan, and on June 3,1899, he granted the same to the predecessors in title of defendants I to 7, who at that time held the Patni interest in respect of lot Ahiyapur.
Under the grant which has been marked as exhibit B, the yearly rental for the area was fixed at Rs. 126 8 as., out of which Rs. 84 4 as., had to be paid to the Panchayat within the 7th of Baisakh for being credited to the Chaukidari Fund and the balance of Rs. 42 4 as., was to be paid to the Zamindar within the month of Chaitra.
Exhibit B also provides that in default of payment of kist the lands are liable to be sold in proceedings taken under the Bengal Regulation VIII of 1819.
Acting under this clause, the Maharaja applied under section 8 of the Regulation to bring the suit lands to sale for realisation of arrears, and at the auction held on May 15, 1937, himself became the purchaser.
On February 13, 1941, he granted the lands again on Patni to the appellant, who filed the suit, out of which the present appeal arises, in the Court of the Subordinate Judge, Burdwan, to recover possession thereof from the defendants alleging that they had trespassed thereon.
The respondents contested the suit on the ground that, in fact, there were no arrears of rent due under Exhibit B, and that the sale was therefore void.
The Subordinate Judge held that there were arrears of rent due from the respondents, and that further as they had not sued to set aside the sale under section 14 of the Regulation within the time limited by law, they could not set up its invalidity as a defence to the action in ejectment.
The defendants preferred an appeal against this judgment to the District Court of Burdwan, and there raised a new contention that under the grant, Exhibit B, the suit lands became part of lot Ahiyapur, and that a sale of those lands was 1313 illegal as being a sale of a portion of the Patni.
The District Judge after observing that the point was taken for the first time, held on a construction of Exhibit B that it created a new Patni, and that it could therefore be brought to sale, and he also held that section 14 of the Regulation operated as a bar to the validity of the sale being questioned on the ground that the rent claimed was not, in fact, due.
He accordingly dismissed the appeal.
The respondents took the matter in second appeal to the High Court, and that was heard by a Bench consisting of Das Gupta and Lahiri JJ.
who differed from the District Judge both on the construction of Exhibit B and on the bar of limitation based on section 14 of the Regulation.
They held that the effect of Exhibit B was merely to make the suit lands part and parcel of the Patni lot Ahiyapur, and that, therefore, the sale of those lands only was bad, as being a sale of a part of the Patni.
They further held that as such a sale was void, section 14 of the Regulation had no application.
They accordingly allowed the appeal, and dismissed the suit.
It is against this judgment that the present appeal has been brought on a certificate granted by the High Court under article 133(1)(a).
Mr. N. C. Chatterjee for the appellant urged the following contentions in support of the appeal: (1) The defendants did not raise either in the written statement or during the trial, the plea that under the sanad, Exhibit B, the Chaukidari Chakaran lands comprised therein became part of the Patni settlement of lot Ahiyapur, and, in consequence, their sale was bad as being of a part of the Patni, and the learned Judges should not have allowed that point to be raised in appeal.
(2) Exhibit B properly construed must be held to create a new Patni distinct from lot Ahiyapur, and its sale is therefore valid.
(3) Assuming that the sale is invalid as being of a part of a tenure, the only right of the defendants was to sue to have it set aside, as provided in section 14 of the Regulation, and that not having been done, it is not open to them to attack it collaterally in these proceedings.
We see no substance in the first contention.
It is 1314 true that the defendants did not put forward in the trial Court the plea that the effect of Exhibit B was to incorporate the suit lands in lot Ahiyapur Patni, and that, in consequence, the sale was illegal as being of a part of the Patni.
On the other hand, the written statement proceeds on the view that Exhibit B created a new Patni unconnected with lot Ahiyapur, and the only defence raised on that basis was that no arrears of rent were due under Exhibit B, and that the sale was therefore invalid.
But the true nature of the grant under Exhibit B is a matter to be decided on a construction of the terms of the document, and that is a question of law.
It is argued for the appellant that it would be proper in determining the true character of the grant under Exhibit B to take into account surrounding circumstances, that to ascertain what those circumstances are, it will be necessary to take evidence, and that, in consequence, a question of that kind could not be permitted to be agitated for the first time in appeal.
But it is well settled that no evidence is admissible on a question of construction of a contract or grant, which must be based solely on the terms of the document, there being no suggestion before us that there is any dispute as to how the contents of the document are related to existing facts.
Vide Balkishen Das vs Legge (1) and Maung Kyin vs Ma Shwe La (2).
It should, moreover, be mentioned that when the defendants sought to raise this contention in their appeal in the District Court, no objection was taken by the plaintiff thereto.
Under the circumstances, the learned Judges were right in allowing this point to be taken.
This contention must therefore be rejected.
The next point for determination is as to the true character of the grant under Exhibit B, whether it amounts to a new Patni with reference to the Chaukidari Chakaran lands as contended for by the appellant, or whether it incorporates those lands in the Patni of lot Ahiyapur, so as to make them part and parcel of the lands comprised therein, as is maintained by the respondents.
To appreciate the (1) (1899) L.R. 27 I.A. 58, 65.
(2) (1917) L.R 44 I.A. 236, 243.
1315 true position, it is necessary to examine what the rights of the Zamindar and of the Patnidar were with respect to Chaukidari Chakardan lands at the time of the grant, Exhibit B.
These lands had been originally set apart as remuneration for the performance of services by the village chaukidars as watchmen, and for that reason when the village was granted to the Zamindar in permanent settlement, the income therefrom was not taken into account in fixing the jama payable by him, though they passed to him under the permanent settlement.
Then came the Village Chaukidari Act, and under that Act the Government put an end to the services of the Chaukidars as village watchmen, resumed the lands and imposed assessment thereon, and, subject to it, transferred them to the Zamindar; and where the Zamindar had already parted with the village in which the lands were situate, by granting Patni, it became necessary to define the rights of the Zamindar and the Patnidar with reference to those lands.
Dealing with this matter, section 51 of the Act provides that the title of the Zamindar on resumption and transfer by the Government shall be subject to " all contracts theretofore made ".
Under this section, the Patnidar would be entitled to the Chaukidari Chakaran lands in the same right and on the same terms on which lie held the village in which they are situate.
The nature of this right has been the subject of consideration in numerous authorities, and the law on the subject is well settled.
In Ranjit Singh vs Maharaj Bahadur Singh (1), it was held by the Privy Council that though the reservation under section 51 is of rights under contracts made by the Zamindar and the word " contract " primarily means a transaction which creates personal obligations, it might also refer to transactions which create real rights, and that it was in that sense the word was used in section 51, and that accordingly the Patnidar was entitled to institute a suit against the Zamindar for possession of those lands and was not obliged to suit for specific performance.
But this does not mean that the Patnidar is (1) (1918) L.R. 45 I.A. 162.
167 1316 entitled to hold the lands free of all obligations.
He is under a liability to pay to the Zamindar the assessment due thereon, when it is fixed under section 50, and also a share of profits.
Vide Bhupendra Narayan Singh vs Narapat Singh (1), where it was held by the Privy Council that when Chaukidari Chakaran lands included in a Patni settlement had been resumed and transferred to the Zamindar under section 51 of the Act, he is entitled to the payment of a fair and equitable rent in respect thereof, and that the fixing of the rent is a condition to the Patnidar being put in possession.
Vide also Rajendra Nath Mukherjee vs Hiralal Mukherjee (2) and Gopendra Chandra vs Taraprasanna (3).
These being the rights and obligations of the Zamindar and the Patnidar under section 51 of the Act, a grant of the Chaukidari Chakaran lands by the former to the latter serves, in fact, two purposes.
It recognises that the grantee is entitled to hold those lands by virtue of his title as Patnidar of the village of which they form part, and it fixes the amount payable by him on account of assessment and share of profits.
The question then arises as to what the exact relationship is in which the new grant stands to the original Patni grant.
Now, when section 51 of the Act recognises and saves rights which had been acquired under contract with the Zamindar, its reasonable implication is that the rights so recognised are the same as under the contract, and that, in consequence, the settlement of the Chaukidari Chakaran lands in Patni must be taken to be a continuance of the Patni of the village in which they are included.
But it is open to the parties to agree that the Chaukidari Chakaran lands should form a new and distinct Patni, and the result of such an agreement will be that while the grantee will hold those lands in Patni right, that is to say, the tenure will be permanent, heritable and alienable so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there is any default in the (1) (1925) L.R. 52 I.A. 355.
(2) (3) Cal.
1317 payment thereof are concerned, the now grant will be an entity by itself independent of the original Patni.
That that could be done by agreement of parties is well settled, and is not disputed before us.
If that is the true position, then the real question to be considered is, what is the agreement of parties with reference to the Chaukidari Chakaran lands, whether they are to be constituted as an independent Patni or whether they should be treated as a continuation of the original Patni or an accretion thereto, and the answer to it must depend on the interpretation to be put on the grant.
It is now necessary to refer to the material terms of Exhibit B under which the Chaukidari Chakaran lands were granted to the predecessors of respondents I to 7.
It begins by stating that the Patnidars of lot Ahiyapur appeared before the Zamindar and ,prayed for taking Patni settlement of the said 84 Bighas 18 Cottas of land at a yearly rental of Rs. 126/8 as.", and then provides how the amount is to be paid.
Then there is the following clause, which is important: "You will pay the rent etc., Kist after Kist according to the Kistbandi in accordance with law, and if you do not pay the same, I will realise the arrears together with interest and costs by causing the aforesaid lands to be sold by auction by instituting proceedings under Regulation VIII of 1819 and other laws which are in force or will come into force. " Then follow provisions relating to the transfer by the Patnidars of " the aforesaid lands ", succession by inheritance or by will to " the aforesaid lands " and the registration of the name of the transferee or successor in the Sherista, and it is expressly stated that "so long as the name of the new Patnidar is not recorded in the Sherista, the former Patnidar whose name is recorded in the Sherista will remain liable for the rent, and on a sale of the Mahal by auction on institution of proceedings against him under Regulation VIII of 1819 or any other law that will be in force for realisation of arrears of rent, no objection thereto on the Part of the new Patnidar can be entertained." 1318 Then ,there are two clause on which on the respondents rely, and they are in these terms: " If in future it transpires that any other persons besides yourselves have Patni rights in the Patni interest of the, said lot Ahiyapur, such persons shall have Patni rights in these Chakaran lands also to the same extent and in the same manner as they will be found to have interests in the Patni of the aforesaid lot, and if for the said reason any person puts forward any claim against the Raj Estate and the Raj Estate has to suffer any loss therefor, you will make good the said claim and the loss without any objection.
If in future the Patni interest in the said lot Ahiyapur be transferred for liability for arrears of rent or if the same comes to an end for any reason, then your Patni interest in these Chakaran lands also will be transferred or will come to an end alongwith the original Patni ,simultaneously.
" It is on these two clauses that the learned Judges in the Court below have based their decision that the intention of the par ties was to treat the suit lands as part of the Patni of lot Ahiyapur.
Now, it cannot be disputed that the two clauses aforesaid afford considerable support to the conclusion to which the learned Judges have come.
The first clause provides that if besides the grantee under Exhibit B there were other persons entitled to Patni rights in lot Ahiyapur, those persons also shall have Patni rights in Chaukidari Chakaran lands to the same extent as in Patni Ahiyapur.
That clearly means that the rights conferred on the grantees under Exhibit B have their roots in the Patni lot of Ahiyapur.
Likewise, the provision in the last clause that the grantees will lose their rights to the Chaukidari Chakaran lands if their interest in Ahiyapur Patni was sold clearly suggests that the grant under Exhibit B is to be an annexe to the grant of Ahiyapur.
As against this, the appellant argues that the other clauses in Exhibit B quoted above strongly support his contention, and that when the document is read as a whole, it unmistakably reveals an intention to treat the suit lands as a distinct Patni.
We must now 1319 refer to these clauses.
Exhibit B begins by reciting that the grantees desired to take a Patni settlement of 84 Bighas 18 Cottas, which is some indication, though not very strong, that it is to be held as a distinct entity.
We have then the clause which provides that when there is default in the payment of kist, the lands are liable to be sold in proceedings instituted under the Regulation.
Now, the law had long been settled that a sale of a portion of a Patni is bad, but that if by agreement of all the parties interested different portions thereof are held under different sadads, which provide for sale of those portions for default in pay ment of kist payable respectively thereon, then each of those sanads might be held to have created a separate Patni in respect of the portion comprised therein.
Vide Mohadeb Mundul vs Mr. H. Cowell(1) and Monomothonath Dev and another vs Mr. G. Glascott (2).
When, therefore, the Zamindar and the Patnidar agreed under Exhibit B that the lands comprised therein could be sold under the Regulation when there was default in payment of kist fixed therefor, they must clearly have intended that those lands should be constituted into a distinct Patni.
Otherwise, the clause will be inoperative and void, and indeed, the learned Judges in the Court below have, on that ground, declined to give any effect to it.
Now, it is a settled rule of interpretation that if there be admissible two constructions of a document, one of which will give effect to all the clauses therein while the other will render one or more of them nugatory, it is the former that should be adopted on the principle expressed in the maxim " ut res magis valeat quam per eat ".
What has to be considered therefore is whether it is possible to give effect to the clause in question, which can only be by construing Exhibit B as creating a separate Patni, and at the same time reconcile the last two clauses with that construction.
Taking first the provision that if there be other persons entitled to the Patni of lot Ahiyapur they are to have the same rights in the land comprised in Exhibit B, (2) (1873) 20 Weekly Reporter 275.
1320 that no doubt posits the continuance in those persons of the title under the original Patni.
But the true purpose of this clause is, in our opinion, not so much to declare the rights of those other persons which rest on statutory recognition, but to provide that the grantees tinder the document should take subject to those rights.
That that is the purpose of the clause is clear from the provision for indemnity which is contained therein.
Moreover, if on an interpretation of the other clauses in the grant, the correct conclusion to come to is that it creates a new Patni in favour of the grantees thereunder, it is difficult to see how the reservation of the rights of the other Patnidars of lot Ahiyapur, should such there be, affects that conclusion.
We are unable to see anything in the clause under discussion, which militates against the conclusion that Exhibit B creates a new Patni.
Then there is the clause as to the cesser of interest of the grantees in the Chaukidari Chakaran lands when their title to lot Ahiyapur comes to an end, and according to the respondents, this shows that under Exhibit B the Chaukidari Chakaran lands are treated as part and parcel of the Ahiyapur Patni.
If that were so, a sale of lot Ahiyapur must carry with it the Chaukidari Chakaran lands, they being ex hypothesi, part and parcel thereof, and there was no need for a provision such is is made in the last clause.
But that clause would serve a real purpose if the Patni under Exhibit B is construed as separate from that of lot Ahiyapur.
In that view, when the major Patni of lot Ahiyapur is sold, the intention obviously is that the minor Patni under Exhibit B, should not stand out but be extinguished, a result which could be achieved only by a special provision.
We should finally refer to the clauses in Exhibit B providing for transfer of or succession to the Chaukidari Chakaran lands and for the recognition of such transferee or successor as a Patnidar of those lands.
It is clear from these provision,s that such a transferee or successor is to hold the lands as a Patnidar, different from the Patnidar of lot Ahiyapur.
Reading these clauses along with the last clause, it seems clear that the intention of the parties 1321 was that while a transfer of the Ahiyapur Patni by sale should extinguish the title of the holders of the Chaukidari Chakaran lands a transfer of these lands would have no effect on the title to the lot Ahiyapur Patni.
Construing Exhibit B, as a whole, we are of opinion that the intention of the parties as expressed therein was that the Chaukidari Chakaran lands should be held as a distinct Patni.
We must now refer to the decision on which the learned Judges in the Court below have relied in support of their conclusion.
In Kanchan Barani Debi vs Umesh Chandra (1), the facts were that the Maharaja of Burdwan had created a Patni of lot Kooly in 1820.
The Chaukidari Chakaran lands situated within that village were resumed under the Act and transferred to the Zamindar who granted them in 1899 to one Syamlal Chatterjee in Patni on terms similar to those in Exhibit B.
In 1914 the Patni lot Kooly was sold under the Regulation, and purchased by Sint.
Kanchan Barani Debi.
She then sued as such purchaser to recover possession of the Chaukidari Chakaran lands.
The defendants who represented the grantees under the Patni settlement of 1899 resisted the suit on the ground that the sale of Patni Kooly did not operate to vest in the purchaser the title in the Chaukidari Chakaran lands, as they formed a distinct Patni.
Dealing with this contention, B. B. Ghose J. who delivered the judgment of the Court, observed : concerned to alter the terms of the original patni if they chose to do so; and what we have to see is whether that was done.
In order to do that, we have to examine the terms of the pattah by which the Chaukidari Chakaran lands were granted to Syamlal Chatterjee." The learned Judge then refers to the two clauses cor responding to the last two clauses in Exhibit B, and comes to the conclusion that their effect was merely to, restore the position as it was when the original Patni was created, and that, in consequence, the purchaser was entitled to the Patni as it was created in 1820, (1) A.I.R. 1925 Cal.
807, 1322 and that the plaintiff was entitled to the possession of the Chaukidari Chakaran lands as being part of the Patni.
Now, it is to be observed that in deciding that the Chaukidari Chakaran lands granted in 1899 became merged is lot Kooly, as it was in 1820, the learned Judge did not consider the effect of the clause providing for sale of those lands as a distinct entity under the provisions of the Regulation when there was default in the payment of ret payable thereon under the deed, and that, in our opinion, deprives the deci sion of much of its value.
In the result, we are unable to hold that the two clauses on which the learned Judges base their conclusion are really inconsistent with the earlier clauses which support the view that the grant under Exhibit B is of a distinct Patni.
Nor do we agree with them that the earlier clause providing for the sale of the Chaukidari Chakaran lands in default of the payment of jama, should be construed so as not to override the later clauses.
If, in fact, there is a conflict between the earlier clause and the later clauses and it is not possible to give effect to all of them, then the rule of construction is well established that it is the earlier clause that must override the later clauses and not vice versa.
In Forbes vs Git (1), Lord Wrenbury stated the rule in the following terms : " If in a deed an earlier clause is followed by a later clause which destroys altogether the obligation created by the earlier clause, the later clause is to be rejected as repugnant and the earlier clause prevails.
In this case the two clauses cannot be reconciled and the earlier provision in the deed prevails over the later.
" We accordingly hold that Exhibit B created a new Patni and that the sale of the lands comprised therein is not bad as of a portion of a, Patni.
We are conscious that we are differing from the learned Judges of the Court below on a question relating to a local tenure on which their opinion is, by reason of the special knowledge and experience which they have of it, entitled to the greatest weight.
It is also true that the decision in Kanchan Barani Debi vs (1) ,259.
1323 Umesh.
Chandra (1) has stood now for over three decades, though it is pertinent to add that its correctness does not appear to have come up for consideration in any subsequent decision of the Calcutta High Court, prior to this litigation.
But then, the question is one of construction of a deed, and our decision that the effect of an agreement of the kind in Exhibit B was to constitute the Chaukidari Chakaran lands into a distinct Patni will not result in any injustice to the parties.
On the other hand, the rule that a portion of a Patni should not be sold being one intended for the benefit of the Patnidars, there is no reason why an agreement entered into by them with the Zamindars providing for the sale of a portion, thereof which is really to their advantage, should not be given effect to.
Having anxiously considered the matter, we have come to the conclusion that Exhibit B creates a distinct Patni, that the sale thereof on May 15, 1937, is valid, and that the plaintiff has therefore acquired a good title to the suit lands under the grant dated February 13, 1941.
In this view, it is unnecessary to express any opinion on the point that was the subject of considerable argument before us as to whether it is open to the defendants to raise the invalidity of the sale held on May 15, 1937, in answer to this action, they not having taken steps to have set it aside, as provided in section 14 of the Regulation.
In the result, the appeal is allowed, the judgment of the lower Court reversed and that of the District Judge restored, with costs throughout.
Appeal allowed.
(1) A.I.R. 1925 Cal.
| IN-Abs | The lands in question are situate in lot Ahiyapur which is one of the villages forming part of the permanently settled estate of Burdwan and had been set apart as Chaukidari Chakaran lands to be held by the Chaukidars for rendering service in the village as watchmen.
At the time of the permanent settlement the income from these lands was not taken into account in fixing the jama payable on the estate.
Some time before the enactment of the Bengal Patni Taluks Regulation, 1819, the entire village of Ahiyapur was granted by the then 1310 Zamindar of Burdwan, to the predecessors in title of the defendants on Patni settlement.
In 1870 the Village Chaukidari Act came into force and acting under the provisions of that Act the Government put an end to the services of the Chaukidars resumed the lands and imposed an assessment thereon, and, subject to it, transferred the lands to the Zamindar.
On June 3, 899, the Zamindar granted the suit lands on Patni to the predecessors in title of the defendants who were the then holders of the village in Patni.
In proceedings taken by the Zamindar under the provisions of the Bengal Patni Taluks Regulation, 1819, the suit lands were brought to sale for arrears of rent and purchased by him.
On February I3, 1941, the Zamindar sold the lands to the appellant who sued to recover possession thereof from the defendants.
The defendants resisted the suit on the ground, inter alia, that the effect of the grant of the Chaukidari Chakaran lands on June 3, 1899, was to make them part and parcel of the Patni settlement of the village of Ahiyapur and that, in consequence, the sale of those lands, apart from the village of Ahiyapur, was bad as being a sale of a portion of the Patni.
Held, that when the Zamindar made a grant of the Chaukidari Chakaran lands which formed part of a village which had previously been settled in Patni, it was open to the parties to agree that those lands should form a new and distinct Patni and the result of such an agreement would be that while the grantee would hold those lands in Patni right, that is to say, that the tenure would be permanent, heritable and alienable, so far as his liability to pay jama and the corresponding right of the Zamindar to sell it under the Regulation if there was a default in the payment thereof were concerned, the new grant would be a distinct Patni, independent of the original Patni.
Held, further, that construing the grant dated June 3, 899, as a whole, the intention of the parties as expressed therein was that the Chaukidari Chakaran lands were to be treated as a distinct Patni and that, therefore, the sale of the lands for arrears of rent was valid.
|
s (C) Nos.
2275 86 of 1982 Etc.
(Under Article 32 of the Constitution of India) WITH Special Leave Petition (C) No. 4090 of 1985.
From the Judgment and Order dated 4.12.
1984 of the Madras High Court in W.A. No. 414/78.
B. Datta, Additional Solicitor General, G. Ramaswamy, Additional Solicitor General, M.K. Ramamurthy, V.M. Tar kunde, Gobind Mukhoty, S.C. Manchanda, G.B. Pai, K.K. Venug opal, Mrs. Shyamala Pappu, M.A. Krishnamurthy, Ms. Chandan Ramamurthy, J.D. Jain, MS.
Kanwaljit Kochhar, K.B. Rohtagi, B.R. Agarwala, Ms. Sushma Manchanda, R.B. Hathikhanwala, Ms. Sunita Sharma, P.H. Parekh, S.S. Khanduja, Y.P. Dhingra, B.K. Saluja, H.S. Parihar, Vipin Chandra, R.K. Maheshwari, Pramod Dayal, R.P. Saxena, D.K. Garg, A.D. Sanger, Pramod Swarup, Krishna Prasad, P.C. Kapur, A.N. Badriyar, M.P. Jha, V.N. Sharma Petitioner inperson, B.B. Sahoo, section Srinivasan, Vineet Kumar, Ms. Urmila Kapoor, Ms. section Janani, Dalveer Bhandari, C. Ramesh, G.D. Gupta, L.K. Gupta, G. Venkatesh Rao, Ms. A. Subhashini, Ms. Sushma Suri, C.V. Subba Rao, P. Parmeshwaran, J.R. Das, S.K. Patri, Ms. Lira 692 Goswami, D.N. Mishra, V.J. Francis, N.M. PopIi, S.K. Dhin gra, K.J. John, Y.P. Rao, Mahabir Singh, Ms. Bharti Anand, Indra Makwana and S.K. Jain for the appearing parties.
The Judgment of the Court was delivered by SAWANT, J.
This group of petitions concerns the workers in canteens run in the different railway establishments.
The relief claimed in all the petitions is that the workers concerned should be treated as railway employees and should be extended all service conditions which are available to the railway employees.
For our purpose, these canteens have to be classified into three categories, viz. (i) Statutory Canteens These are canteens required to be provided compulsorily in view of the provisions of Section 46 of the (hereinafter referred to as the Act) since the Act admitted ly applies to the establishments concerned and the employees working in the said establishments exceed 250; (ii) Non Statutory Recognised Canteens These canteens are run in the establishments which may or may not be governed by the Act but which admittedly employ 250 or less than 250 employees, and hence, it is not obligatory on the railways to maintain them.
However, they have been set up as a staff welfare measure where the employees exceed 100 in number.
These canteens are established with the prior approval and recog nition of the Railway Board as per the procedure detailed in the Railway Establishment Manual; and (iii) Non Statutory Non Recognised Canteens These canteens are run at estab lishments in category (ii) above but employ 100 or less than 100 employees, and are established without the prior approv al or recognition of the Railway Board 3.
The present petitions concern employees in all the three types of canteens.
It will be convenient to deal separately with the employees in the three types of can teens, because, the history of litigation and the arguments advanced in respect of each of the categories are different.
4.(i) Statutory Canteens: Section 46 of the Act which makes it obligatory on an occupier of a factory as defined under the Act, to provide a canteen or canteens where more than 250 workers are ordinarily employed runs as follows: "Canteens: (1) The State Government may make rules 693 requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for (a) the date by which such canteen shall be provided; (b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen; (c) the foodstuffs to be served therein and the charges which may be made therefore; (d) the constitution of a managing committee for the canteen and representation of the workers in the management of the canteen; (dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuff and which shall be borne by the employer; (e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed, of the power to make rules under clause (c).
" It is evident from the aforesaid provision that the occupier of a factory (a railway establishment for the purposes of the said provisions is a factory within the meaning of the Act) is not only obliged to run a canteen where more than 250 workers are employed but is also obliged to abide by the rules which the concerned Government may make, including the rules for constitution of a managing committee for running the canteen and for representation of the workers in the management of the canteen.
The occupier may also be required to bear a part of the expenses of running the canteen and to comply with the rules prescribing standards in respect of construction, accommodation, furniture and other equipment of the canteen the foodstuffs to be served and the prices to be charged for them.
In other words, the whole paraphernalia of the canteen has to conform to the statutory rules made in that behalf.
As is pointed out on behalf of the Railways, it appears that there are 89 such statutory canteens function ing in the railway premises.
694 5.
It appears that the workers working in the statutory canteen at Loco Carriages and Electrical Workshops of the South Eastern Railways Workshop, Kharagpur had preferred a writ petition in the Calcutta High Court praying for a direction to the Union of India to recognise them as railway employees and grant them a11 service conditions available to the railway employees.
A learned Single Judge by his deci sion dated 7.8.
1973 dismissed the said petition holding that the workers were not entitled to the reliefs claimed by them.
Against the said decision, the workers preferred an appeal before the Division Bench of the said Court and the Division Bench by its decision of July 16, 1974, allowed the same and directed the respondent Union of India to recognise the workers as employees of the Railway Administration under the , but rejected the demand to pay salary and allowances to them as if they were railway employees.
On the other hand, the High Court held that the employment of the workers must be deemed to be on the basis of appointment letters and that they had no statutory or legal right and the Railway Administration had no corresponding statutory or legal obligation to pay salaries etc.
above the minimum wages, or dearness allowances as claimed by them.
The court held that their service conditions were in the realm of contract or depending on a policy followed by the Railway Administration, at its discretion.
Being aggrieved, the Union of India had come in appeal to this Court being Civil Appeal No. 368 of 1978.This Court by its order of October 22, 1980 disposed of the appeal as follows: "The benefits accruing to the workers under the decision of the Calcutta High Court do not require to be interfered with in this appeal.
Prima facie we are inclined to agree that the High Court decision is right.
Moreover, the learned Attorney General agrees to apply the Act as if it were applicable to canteen employees.
In this view, a final pronouncement on this question by this Court need not be given in the present case.
We leave it open to Union of India in an appropriate case to raise the point and seek a pronouncement.
" The Act referred to in the aforesaid order obviously means the .
Therefore, what was confirmed by this Court was the declaration given by the Calcutta High Court that the employees of the Statutory Canteens were railway.employees for the purposes of the and that their service conditions were determined by the con tract as incorporated in their appointment letters or by the policy decision of the Railway Administration which was discretionary.
It is 695 necessary to note this fact at the very outset.
It has further to be remembered that the Calcutta High Court had given the aforesaid declaration in favour of the statutory canteen workers notwithstanding the fact that the canteens were managed by the Committee of Management nomi nated by the Railway Administration or by a managing commit tee elected or nominated by the employees or by the Corpera tive Society relying on the express provision contained in Chapter XXVIII` Of 'the Railway Establishment Manual.
It may, however, be mentioned that the High Court had taken into consideration Note 2 of Para 2834(2) of the Manual which had declared that in cases where the canteens were being run on cooperative basis either by the Co operative Society or the managing committee of the staff, the canteen staff shall not be treated as railway servants because in that case master and servant relationship existed between the Co operative Society (through its managing committee) and the concerned employees.
The High Court had relied upon the fact that even in such cases the entire cost of the staff was reimbursed by the Railway Administration to the Co operative Society managing committee and that over all control over the canteen and the staff, vested in the Rail way Administration.
In fact, the direction under para 2832 of the Railway Establishment Manual was that where even a Co operative Society was running the canteen, the bye laws of the Society should be suitably amended to provide for such overall control by the Railway Administration since the legal responsibility for the proper management of the can teen vested not with the agent like the Co operative Soceity but solely with the Railway Administration.
6. 1t is undoubtedly true, however, that this Court in its Order dated October 22, 1980 had reserved the right to the Union of India to raise the question as to whether the employees of the Statutory canteens were the employees of the Railway Establishment, finder the and get a pronouncement on the same.
It appears that after the said order of this Court, the Railway Board had issued a letter dated May 22, 1981 to the General Manager, South Eastern Railway, Calcutta Conveying the decision of the Ministry of the Railways that the employees of Kharagpur Workshop Statu tory Canteen, (which employees were a party to the said decision) should be deemed to be railway servants with effect from October 22, 1980 and till Government decided otherwise, the said workers would continue to be governed by the conditions of service and emoluments as existed on October 21, 1980.
It was also stated there that what was stated in the letter had the sanction of the President and the letter was issued/with 696 the concurrence of the Finance Directorate of the Ministry of Railways.
Subsequently, the Board issued another circular letter of June 8, 1981 addressed to the General Managers of all Indian Railways stating therein that it was decided that employees of all other statutory canteens on the railways irrespective of the type and management of the canteens should also be deemed to be railway servants w.e.f. October 22, 1980 and that till Government decided otherwise, the staff of the statutory canteens would continue to be gov erned by the conditions of service and emoluments as existed on October 21, 1980.
On March 11, 1982, the Railway Board issued a letter and referred to its earlier communication of June 8, 1981 and September 18, 1981.
In this, letter, it was stated that pursuant to the said two earlier communications (where it was stated that the question of pay scale and retirement benefits were under consideration and that a separate commu nication would follow), a Schedule showing revised pay scale applicable to the employees of the statutory canteens of the railways was enclosed for necessary action.
The letter stated that the existing employees of these canteens would be entitled to exercise an option under Rule 2019 (F.R. 23) and Rule II either to retain their existing pay scale as presently applicable to them or opt for the revised pay scale.
However, on promotion such employees would be compul sorily brought on to the revised pay scales.
It was made clear that those who opt for the revised scales would not be eligible to other facilities/perquisites admissible to them in their existing pay scale such as free food, snacks, commission etc.
A period of three months was given for exercising the option and it was stated that if no option was exercised it would be assumed that the employees con cerned had elected to be governed by the revised pay scales w.e.f. October 22, 1980.
The Schedule annexed to the letter mentioned, among other things, that the canteen employees will be entitled to the dearness allowance, house rent allowance and city compensatory allowance as per the in structions issued by the Railway Ministry; that the age of retirement of employees would be 58 years as in the case of other railway employees; and that the employees of the canteen would be entitled to the benefit of productivity linked bonus on the principles applicable to the stall of the office/establishment to which they were attached from the date of their being declared as railway servants.
In a decision of this Court reported in ; , this Court directed that for the purpose of calculating pensionary benefits, the service rendered by the said em ployees prior to October 22, 1980 should also be computed.
By its letterr dated May 13, 1983 addressed to 697 all the General Managers, the Ministry of Railways placed on record the fact that pursuant to the Order of this Court dated October 22, 1980 the employees of all the statutory and 11 Delhi based nonstatutory canteens had been treated as railway servants w.e.f. October 22, 1980, and the revised pay scale applicable to the employees had been communicated vide the Railway Board 's letter dated March 11, 1982.
On December 4, 1984, a Division Bench of the Madras High Court delivered a Judgment in Writ Appeal No. 414 of 1978, Railway Board & Anr.
vs Parthasarthy and Anr., and in Writ Appeal No. 415 of 1978 relying upon the order dated October 22, 1980, passed by this Court and held that can teen employees will have to be treated as railway employees for the purposes of the , in view of th, con cession made by the Railways before this Court and also the con cession made by the counsel appearing for the Railways before the High Court.
We have then on record an Office Order dated July 27, 1983 issued to an employee of a statutory canteen con veying to him appointment as a TY/Cleaner in a scale of pay plus usual allowances w.e.f.
January 12, 1983.
In this order, it is stated that the employee would be eligible for house rent allowance under the Rules in force from time to time, that he will be on probation for a period of one year and that the appointment would be terminated with 14 days ' notice on either side.
It is, however, added that no such notice would be required, for the termination of service as and by way of removal or dismissal as a disciplinary measure effected after compliance with the provisions of clause (2) of Article 311 of the Constitution of India.
It is also stated that the employee should take oath of allegiance to the Union of India and that he should apply for allotment of quarters within 7 days from the date of his appointment and then alone should apply for house rent allowance.
It is now necessary to refer to the relevant provi sions of the Railway Establishment Manual which deal with the canteens.
Paragraph 2829 of Chapter XXVIII of the Manual refers to the provisions of Section 46 of the and underwrites the fact that under these provisions, there is a statutory obligation on the Railway Administra tion to set up canteens in Railway establishments which are governed by the said Act and which employ more than 250 persons.
The paragraph further mentions that Railway Admin istration should strictly abide by the rules which are framed by the respective State 698 Governments under sub section 2 of the Act regarding the constitution of the Managing Committees of such canteens.
Paragraph 2832 then ordains that the staff served by the said canteens should be actively associated in their manage ment, and for this purpose a Committee of management of the staff should be formed in accordance with the rules framed by the concerned State Government.
The paragraph further states that although the Administration can employ as agent a Staff Committee or a Co operative Society for management, the legal responsibility for proper management rests not with the agency but solely with the Railway Administration.
In case the management is entrusted to a consumer co opera tive society the bye laws of the society are directed by the said paragraph to be amended suitably to provide for an overall control by the Railway Administration.
Paragraph 2834 deals with the incidence of cost of the canteens.
As regards the statutory canteens, the paragraph directs that in addition to the facilities which are given to the non statutory canteens, the Administration will have also to bear the expenditure on the entire paraphernalia including the furniture as well as the salaries of the cook and the canteen staff.
Note 2 of the said paragraph then states that where the canteens are being run on co operative basis either by co operative society or by Managing Committee of the staff and there subsists a relationship of master and servants between the society/ managing committee and the workers, i.e. where the canteen staff has been employed by the society/managing committee and not by the Administration as such, the canteen staff are not to be treated as railway servant even though the cost of this staff is reimbursed by the Administration.
We have also on record the second edition (1988) of "ADMINISTRATIVE INSTRUCTIONS ON DEPARTMENTAL CANTEENS IN OFFICES AND INDUSTRIAL ESTABLISHMENTS OF THE GOVERNMENT" issued by the the Deptt.
of Personnel & Training, Ministry of Personnel, Public Grievances & Pensions of the Govt.
of India, first published in 1980 (hereinafter briefly called as the Instructions).
They are applicable to: (a) Canteens/Tiffin Rooms set up on departmental basis and run as per scheme issued by the Deptt.
of Personnel and Training; (b) Canteens/Tiffin Rooms set up on Co operative basis by a Society of Government employees with the Head of the Deptt./ Office/Establishment or his nominee as Chairman; and (c) Canteens/Tiffin Rooms set up in Industrial Establish ments 699 (other than those covered under Section 46 of the ) of the Government and which have not been exempted from following the rules in the said Instructions due to the availability of a separate and distinct set of rules and guidelines framed by the controlling Ministries/Departments.
(para 1.3) It is made clear in these Instructions that the orders issued under the said Instructions are applicable to all Canteens/Tiffin Rooms functioning or to be set up in any Ministry, Department, Establishment, Office, Installation of the Government of India (industrial or nonindustrial) which should be centrally registered with the office of the Direc tor of Canteens, Deptt.
of Personnel & Training, New Delhi including those functioning under the Ministries of Defence, P & T and Railways, unless these three Ministries had previ ously decided to exempt any of their Canteens/Tiffin Rooms from the purview of the said Instructions due to specific reasons, and they had framed or they propose to frame a separate set of instructions for the exempted canteens.
(para 1.4).
The Instructions further state that the policy matters and coordination on canteen matters will be central ly done by the Deptt.
of Personnel and Training (Director of Canteens) (para 1.14).
To be entitled to subsidy all the departmental canteens have to get themselves registered centrally with the Director of Canteens and Training (Para 1.15).
The canteens are entitled to subsidy on wages and gratuity payable to the workers employed in the canteens and for their uniforms as well as to capital and replacement grants for equipment including utensils, crockeries, cutt lery and furniture and also to interest free loans.
In addition to subsidy for equipment, the canteens are also entitled to other facilities such as accommodation on nomi nal rent of Rs. 1 electricity, water etc.
The Instructions in terms state that since the canteens are run departmental ly as a measure of staff welfare, the beverages, snacks and meals etc.
have to be made available to the staff at econom ic rates and for this purpose the Government has to provide necessary accommodation at the nominal rent and provide the necessary grants, subsidy and loans.
(Para 1.2).
In, addi tion, the concerned Department/Office has to bear the elec tricity and water bills.
In chapter V which deals with the personnel in the canteens, the Instructions lay down the entitlement of Canteens/Tiffin Rooms to the number and categories of employees according to the grades of Canteens/Tiffin Rooms.
With regard to the recruitment rules, conditions of service, status and the scales of pay of the canteen workers, the procedure for taking disciplinary action against them as well as for giving training to them, the chapter makes it clear that since the canteen workers have acquired the status of the holders of civil posts 700 w.e.f. October 1, 1979, their recruitment and conditions of service etc.
would be governed by the rules framed under proviso to Article 309 of the Constitution contained in GSR 54 issued under Government of India, Department of Personnel and Training Notification dated 23rd December, 1980.
It is made clear that the said rules also apply to the employees of the Canteens run by the Co operative Societies in con junction with the bye laws of the Society and local co operative laws in force.
It is further made clear that the workers in the non statutory departmental and co operative Canteens/Tiffin Rooms will be paid the pay and allowances at the same rate and on the same basis w.e.f. 26.9.
83 on which the employees of the statutory canteens are paid the same.
The chapter also mentions that before taking any disci plinary action against any canteen worker procedure as set out in chapter IV (Conduct and Discipline) of GSR of 1954 dated 23rd December, 1980 published in the Gazette of India Part II Section 3, sub Section (1) dated 17th January, 1981 will be followed.
The chapter further directs periodical training programmes to be arranged by the Director of Can teens for managerial, personnel and other canteen staff.
Chapter VI contains guidelines for constituting the Managing Committees of the canteens.
This chapter ordains that the Chairman of the managing committee should prefera bly be the Head of the Department/Office himself or his Deputy, and that the Honorary Secretary of the managing committee should normally be the Welfare Officer or the Administrative Officer of the Department/ Office of the minimum rank of a Section Officer or a Major or equivalent in services, who shall be nominated by the Office/Establish ment, and in the case of Co operative Canteens may be elect ed as per the bye laws of the Society.
One of the officials who should be of the rank of Section Officer/Major or above is to be nominated on the managing Committee by the Chair man.
Paragraph 6.11 defines the Legal Status of the Managing Committee.
It says that the Committee functions in the Deptt./Office/establishment of the Government of India for the welfare of the Govt.
employees, under the orders of the Government of India and its functions are connected with the affairs of the Union.
The Committee, therefore does not enjoy an autonomous status.
With respect to the contractual obligations, it functions "for and on behalf of the the President of India".
The proceedings of the Committee will not be conducted or decided on resolutions or voting system, but the official decision will rest with the Chairman of the Managing Commitsee or the Head of the Department/Office.
In the case of canteens run by the co operative societies, this provision is to apply as per the 701 bye laws of the society and the co operative law in force.
The presence of the Chairman and the Hony.
Secretary is necessary to constitute the quorum for holding the meeting of the Managing Committee.
The Head of the Department/Office is given power to depute a Government servant of the rank of Section Officer/equivalent or below if he can be spared, for part time or whole time assistance to the Managing Commit tee.
The Department/Office concerned is required to provide stationery, stencils, cyclostyling facilities, postage stamps, office assistance etc.
to enable the Managing Com mittee to conduct its business.
The annual accounts of the Canteens have to be submitted to the Financial Advisers of the Department/Office concerned with copies thereof to the Director of the can teens, and the audit of the accounts of the Canteens/Tiffin Rooms is to be carried out by the Departmentalised Accounts Organisations of the concerned Ministries/Departments/Of fices.
Out of the surplus of net profits of the Canteens, 1/3 amount is required to be remitted to the Director of Canteens Funds for welfare of the canteen employees in general.
All the aforesaid provisions apply to all types of Tiffin Rooms classified into Type B and A where the strength of the Department/Office is between 25 49 and 50 99 respec tively and to the Canteens classified in Types D, C, B and A where the strength is between 100 249, 250 499, 500 699 and 700 1200 respectively.
Where the strength is above 1200 a further higher classification is given to the Canteens.
These provisions contained in the Instructions, therefore, show that the Government has a complete control over the canteens and the workers employed therein are holders of civil posts within the meaning of Article 311 of the Constitution.
Their recruitment and service conditions are governed by the rules applicable to the employees of the Government Deptt./Office/Establishment to which the canteens are attached.
It is against this background that we have to con sider the question as to whether the staff employed in the statutory canteens m ' the Railway Establishment, industrial or non industrial, are railway employees or not.
According to the workers, in view of the aforesaid documents on record there is no reason why the employees in the canteens con cerned should not be given the status of the railway employ ees with all consequential benefits.
On the other hand, the 702 contention advanced on behalf of the Railways is that the documents in question show that the employees of the statu tory canteens are to be deemed railway employees only for the purpose of the and for no other purpose.
In no case, they can be deemed as holders of civil posts either for Article 309 or for Article 311 or for any other purpose.
On behalf of the employees, a preliminary objection was raised, namely, that in view of the order of this Court dated October 22, 1980 in Civil Appeal No. 368 of 1978 and another, it is not open to the Railways to agitate the question whether the employees in the statutory canteens are railway employees or not, and further whether they are railway employees for the purposes of the .
We are not inclined to entertain this objection for it is clear from the said order that the Court had left open even the question as to whether the employees of the statutory can teens were railway employees for the purposes of the said Act.
Hence, the question whether they are employees of the railways for all purposes necessarily remains res integra.
We may reproduce here the said order which is clear enough on the subject: "The benefits accruing to the workers under the decision of the Calcutta High Court do not require to be interfered with in this appeal.
Prima facie we are inclined to agree that the High Court decision is right.
Moreover, the learned Attorney General agrees to apply the Act as if it were applicable to canteen employees.
In this view a final pronouncement on this question by this Court need not be given in the present case.
We leave it open to the Union of India in an appropriate case to raise the point and seek a pronouncement.
Leave granted in the petition flied by Railway Canteen Karmachari Association.
We have in C.A. No. 368 of 1978 passed an order and the point raised by the workmen in this appeal closely resembles the one raised in the sister case just referred to.
We apply the same principle as has been decided by the Calcutta High Court to this case also and the workmen will be given the same benefits.
We, however, make it clear here also that the Union of India will be free in an appopriate case to challenge the correctness of the legal point 703 decided by the Calcutta High Court.
It will be equaly open to the workmen to challenge the decision of the Delhi High Court if it becomes necessary.
With these observations we dispose of both the appeals.
The appellants in C.A. No. 368/1978 will pay the costs of the respondents.
" It must be remembered in this connection that both the Calcutta and the Madras High Courts had taken the view that the employees in the statutory canteens were the employees of the Railways for the purposes of the said Act.
The Delhi High Court had distinguished the decision of the Calcutta High Court on the ground that, that decision did not apply to the employees in the non statutory canteens with which it was concerned, and had held that the employees of the non statutory canteens were not railway employees for any pur pose.
It is in this circumstance that this Court had given liberty to the Railway Administration as well as the employ ees to challenge the respective decisions of the Calcutta and Delhi High Courts.
It will not, therefore, be correct to say that this Court had pronounced its final opinion on the said issue by the said order.
It has also to be remembered in this connection that the issue before this Court in those matters was whether the employees either of the statutory or non statutory canteens were the railway employees for the purposes of the .
The larger issue whether they were railway employees for all purposes was neither dis cussed nor even tentatively decided in those proceedings.
We are, therefore, of the view that both the said issues are at large in the case of the employees of the statutory as well as of the non statutory canteens.
Before us therefore two issues arise for considera tion, viz. (a) whether the employees of the statutory can teens are railway employes for the purposes of the said Act? and (b) whether they are railway employees for all other purposes as well? 20.
As regards the first contention, namely, whether the said employees are the employees of the Railway Administra tion for the purposes of the said Act, according to us the view taken by the Calcutta High Court in that behalf is correct.
Section 2(1) of the defines "worker" as follows: "Worker" means a person employed, directly or through any agency (including a contractor) with or without the knowl edge of the principal employer, whether for remuneration or not in any manufacturing process or in 704 cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work inciden tal to, or connected with, the manufacturing process, or the subject of the manufacturing process but does not include any member of the armed forces of the Union;" Since in terms of the Rules made by the State Govern ments under Section 46 of the Act, it is obligatory on the Railway Administration to provide a canteen, and the can teens in question have been established pursuant to the said provision there is no difficulty in holding that the can teens are incidental to or connected with the manufacturing process or the subject of the manufacturing process.
The provision of the canteen is deemed by the statute as a necessary concomitant of the manufacturing activity.
Para graph 2829 of the Railway Establishment Manual recognises the obligation on the Railway Administration created by the Act and as pointed out earlier paragraph 2834 makes provi sion for meeting the cost of the canteens.
Paragraph 2832 acknowledges that although the Railway Administration may employ anyone such as a Staff Committee or a Co operative Society for the management of the canteens, the legal re sponsibility for the proper management rests not with such agency but solely with the Railway Administration.
If the management of the canteen is handed over to a consumer cooperative society the bye laws of such society have to be amended suitably to provide for an overall control by the Railway Administration.
In fact as has been pointed out earlier the Adminis trative Instructions on departmental canteens in terms state that even those canteens which are not governed by the said Act have to be under a complete administrative control of the concerned Department and the recruitment, service condi tions and the disciplinary proceedings to be taken against the employees have to be taken according to the rules made in that behalf by the said Department.
In the circumstances, even where the employees are appointed by the Staff Commit tee/ Cooperative Society it will have to be held that their appointment is made by the Department through the agency of the Committee/ Society as the case may be.
In addition, as stated earlier, the Railway Board by its circular dated June 8, 1981 had communicated that it was decided to treat the employees of all statutory canteens, as railway servants irrespective of the type and management of the canteens, and to extend to them the conditions of service and emoluments of the railway servants as existed on October 21, 1980, w.e.f.
22nd October 1980.
No doubt it was stated in this letter that the said decision would 705 prevail till Government decided otherwise.
Subsequently on March 11, 1982, the Board also prescribed the pay scales, dearness allowance, house rent allowance, city compensatory allowance and productivity bonus, and fixed the age of their superannuation.
As also pointed out earlier, this court in its decision reported in ; , subsequently directed that for the purpose of calculating pensionary benefits the service rendered by the said employees prior to October 22, 1980 would be computed.
What is further, the Ministry of Railways by its letter of May 13, 1983 placed on record the fact that not only the employees of all the statutory canteens but the employees of eleven Delhi based non statutory canteens had been treated as railway servants with effect from October 22, 1980.
It must be remembered in this connection that neither the Railway Ministry nor the Railway Board had stated in their letters/orders that the employees of the statutory canteens and of the eleven Delhi based non statutory canteens were being treated as railway servants only for the purposes of the or that they were to be so treated till further decision of this Court.
It is possible to place a liberal construction on these letters/ orders and interprete the relevant direction name ly, "till further directions from the Government" as being the directions after the decision of this Court in the present matters, and for the sake of argument we may proceed on that basis while dealing with the present contention.
The admitted facts, however, are that these canteens have been in existence at their respective places continuously for a number of years.
The premises as well as the entire para phernalia for the canteens is provided by the Railway Admin istration and belong to it.
The employees engaged in the canteens have also been in service uninterruptedly for many years.
Their wages are reimbursed in full by the Rly.
Admin istration.
The entire running of the canteens including the work of the employees is subject to the supervision and control of the agency of the Railway Admn.
whether the Agency is the staff committee or the society.
In fact, as stated by the Rly.
Administration in its Establishment Manual the legal responsibility for running the canteen ultimately rests with it, whatever the agency that may intervene.
The number and the category of the staff engaged in the canteen is strictly controlled by the Administration.
As has been pointed out earlier, much before the order of this Court dated October 22, 1980, the employees of the departmental canteens/tiffin rooms were declared as holders of civil posts under the Government of India Notification No. 6(2)/23/77 Welfare dated December 11, 1979 which notifi cation is an annexure 4 to the Administrative Instructions 706 referred to above.
That notification stated that all posts in the said canteens/tiffin rooms are to be treated as posts in connection with the affairs of the Union, and according ly, present and future incumbents of such posts would quali fy as holders of civil posts under the Central Government.
The notification further stated that necessary rules govern ing the conditions of service of the employees would be framed under proviso to Article 309 of the Constitution to have retrospective effect from October 1, 1979.
Accordingly the service rules were framed under Article 309 as per the Notification No. GSR 54 issued by the Govt.
of India, Deptt.
of Personnel & Training on December 23, 1980.
These rules contained both the recruitment rules and conditions of service of the said employees including the procedure for disciplinary action to be taken against them.
As stated earlier the Administrative Instructions are applicable to the canteens/tiffin rooms run by all the Ministries includ ing the Railway Ministry unless they had previously decided to be exempt from them and had framed their own rules in that behalf.
On behalf of the respondents, one Shri Sud, Joint Director of Establishment, Ministry of Railways has filed an affidavit contending that Section F of Chapter XXVIII of the Railway Establishment Manual (to the relevant paragraphs of which we have made a reference earlier) con tains the necessary instructions for running the canteens and hence the Railway Administration should be deemed to have been exempted from the operation of the said Adminis trative Instructions.
Although there is nothing expressly on record to show that the railway canteens are exempted from the said Instructions, we will proceed on the assumption that they are so exempted by virtue of the relevant provi sions of the Railway Manual.
But the fact remains that there are as yet no notifications on the lines of December 11, 1979 and December 23, 1980 issued for the benefit of the employees in the railway canteens.
Whatever the differences in the nature of work performed by the order staff in the different Ministries, it cannot be argued that there is any difference in the work performed by the employees in the canteens run in the establishments of the Ministries.
Hence, we are of the view that if the said two notifications are applicable to the employees in the canteens run by the other departments of the Government of India, there is no reason why the same should not apply also to the employees in the canteens run by the Railways.
On behalf of the Railway Admn.
no material has been placed before us to treat the employees in their canteens as a class separate from the employees in the canteens run by the other departments of the Government.
In the circumstances, it would be highly discriminatory not to apply the said two notification to the employees in the Railway canteens.
It would be violative of Articles 14 and 16 of 707 the Constitution.
We are, therefore, of the view that the employees in the statutory canteens of the Railways will have to be treated as Railway servants.
Thus the relationship of employer and employee stands created between the Railway Administration and the canteen employees from the very inception.
Hence, it cannot be gainsaid that for the purposes of the the employees in the statutory canteens are the employees of the Railways.
The decision of the Calcutta and Madras High Courts (supra) on the point, therefore, are both proper and valid.
The next question is whether the said employees are railway employees for all purposes.
Mr. Ramaswamy, the learned counsel appearing for the Railways contended that the Railways undertake varied welfare activities in the nature of handicrafts centres, cooperative stores, banks, housing societies, credit societies, educational institu tions etc.
and the Railways spend about a hundred crores annually on these activities.
He submitted that if it is decided to treat the employees engaged in the canteens as railway employees it will be difficult to resist the claim from employees of these other institutions numbering over 27,500 for a similar status.
He also submitted that the Railways provide financial assistance to various non Railway institutions such as non Railway schools.
But teachers and other employees working in these schools are the employees of the respective organisations and cannot be treated as railway servants.
Since, according to him, the canteens are run for the benefit of the staff, the Government has only a general responsibility to see that the labour laws are properly followed and not infringed.
He further submitted that an indentical responsibility also devolves on the Railways in regard to contractors who execute works for the Railways with their own labour.
In addition, the Railways have nearly 2.3 lakh casual labourers who are normally employed on works which are of seasonal nature, intermitant or extending over short periods.
These employees are engaged by the contractor to whom the execution of work is entrust ed.
In case the employees of the canteens are to be treated as Railway servants, similar demands will be made from such casual labourers.
His next contention in this behalf was that the Railways have a primary objective of carrying goods and passengers, and the welfare activities are ancillary to the main objective.
Hence, the canteens continue at the discretion of the Railway Administration where there have provided 70% subsidy to the management of the statutory canteens.
If at any stage the Government so decides, it can change the form of this welfare measure 708 and may choose to have another set up which in their view may prove more convenient and financially workable such as engaging a contractor or an established agency like Tea Boad, Coffee Board, Women 's Organisation, etc.
to run the canteens.
For all these reasons, he submitted the employees in the statutory canteens should not be treated as the Railway employees.
While discussing above the contention that the employees in the statutory canteens cannot be treated as Railway employees even for the purposes of the said Act, we have referred to the various developments, and documents on record including the court decisions.
It is not necessary to repeat them here.
In view of the same, the contention ad vanced by Mr. Ramaswamy that the Railway Admn.
is engaged in varied welfare activities, and the employees engaged in these activities will also have to be treated as Railway employees, in case, the canteen employees are recognised as Railway employees does not appeal to us.
We express no opinion on the subject as to whether the employees engaged in other welfare activities will or will not be entitled to the status of the Railway employees, since neither they nor the facts pertaining to them are before us.
Our conclusion that the employees in the statutory canteens are entitled to succeed in their claim is based purely on facts peculiar to them as discussed above.
If by virtue of all these facts that they are entitled to the status of Railway employees and they cannot be deprived of that status merely because some other employees similarly or dis similarly situated may also claim the same status.
The argument to say the least can only be discribed as one in terroram, and as any other argument of the kind has to be disregarded.
(ii) Non Statutory Recognised Canteens: Paragraph 2830 of the Railway Established Manual enjoins upon the Rly.
Administration to take steps to develop their canteen organ isation to the maximum possible extent as a measure of staff welfare preferably by encouraging the development of can teens for staff on co operative basis.
This injunction is for provision of canteens in addition to the canteens as required by the for which provision is made in paragraph 2829 of the said Manual.
Paragraph 2831 lays down the principles governing the setting up of the canteens which apply also to the nonstatutory canteens provided for under paragraph 2830.
It says, among others things, that a regular canteen should be provided where the strength of the staff is 100 or more and a scheme for provision of a new canteen should be submitted to the Railway Board for approv al indicating financial implications duly vetted by the F.A.C.O. Paragraph 709 2833 contains provisions for the management of such non statutory canteens.
Among other things, it states that such canteens can be run either by a Committee of Management to be formed for the purpose or by a Consumer Cooperative Society.
The Committee of Management should consist of the duly elected representatives of the staff and where it is run by a Cooperative Society, it should consist of the representatives of the share holders of the Society.
Howev er, in either of the cases, a representative of the Railway Administration is to be nominated either as a Chairman or a Secretary or as a Member of the Committee.
This nominee of the Railway Administration is under an obligation to bring to the notice of the Administration any decision of the Managing Commttee which is likely to affect the interests of the Railway Admn.
in its capacity as an owner of the prem ises and of the furniture, equipment, etc., or if the deci sion is likely to be of considerable harm to the staff.
In such cases, the Management Committee cannot take action on the particular decision till the General Manager of the Railway has recorded his decision thereon.
The paragraph further ordains that where the canteens are managed by a co operative society, the society should make a suitable provisions in its bye laws for supervision of the canteen by the Committee of Management.
The paragraph also makes provi sion for granting loans to such canteens as initial capital from the Staff Benefit Fund.
Paragraph 2834 then details various facilities which are extended to such canteens which include the necessary accommodation, sanitary and 'electric installations, furniture and cooking utensils.
The Railway Admn.
is also required to bear rent on sanitary and electric installations, service taxes and charges for the electricity and water consumed.
These canteens are also entitled to subsidies at present to the extent of 70% of the wages of the employees engaged therein.
It is further an admitted position that for the purposes of giving subsidy for wages, the rates of pay and allowances as obtaining in July 1963 were adopted as a basis.
In September 1967, on account of a representation received from the canteen employees, the Railway Board left the question of revision of the scales of pay and dearness allowance to the Managing Committees.
However to ensure that the canteen employees functioning at the Metropolitan Cities were not affected adversely, the Board prescribed a minimum dearness allowance relief to the said employees.
In May 1970, the Board reviewed the question of scales of pay, and decided to enhance the dearness allowance relief in respect of employees working in the Metropolitan Cities, and also fixed the scales of pay of the employees working in all non statutory canteens (vide a Railway Board 's letter No. E(W) 69 710 C.N. 1 12 dated 29 5 1970).
These scales of pay were again revised in December 1979, including dearness allowance for employees working in the Metropolitan cities as well as for those working in cities other than Metropolitan cities with effect from 1 10 1979 (Railway Board 's letter No. E (W)/79 C.N. 1 12 dated 14 12 79).
A. further revision of pay scales was elfcoted by the Board in May 1983 (Railway Board 's letter No. E(W)/83/C.N. 1 8 dated 13 5 1983 to ensure com pliance with the interim directions given by this Court on April 22, 1983.
The direction of this Court was to the effect that the salary and allowances of the employees of the non statutory canteens (recognised) should be at the same rate and on the same basis as applicable to the employ ees of the statutory canteens deemed as railway servants with effect from October 22, 1980.
This direction was on the basis of the decision of this Court given on October 22, 1989 (supra).
It is further an admitted fact that the Board has made applicable to these employees the scales of pay as recommended by the Fourth Pay Commission with effect from January 1, 1986.
The employees in these canteens are also entitled to free medical treatment as out door patients in railway hospitals, to railway passes/PTO 's, one increment as an incentive for adoption of a small family.
They are also governed by the provisions of the Employees ' Provident Fund Act.
The Board has also framed recruitment rules for these employees vide its letter dated June 7, 1978.
These rules, among other things, lay down minimum qualifying age for recruitment, and superannuation age, minimum educational qualifications, the mode of recruitment and eligibility for promotion for various posts.
The nominee of the Railway Administration on the Managing Committee of the canteen is to be the Appointing Authority.
At present there are about 173 non statutory recognised canteens employing about 2145 workers.
As pointed out earlier, from the decision dated March 7, 1980 of the Delhi High Court in Writ Petition No. 269 of 1980 filed on behalf of the employees of eleven Delhi based non statutory recognised canteens, the Railway Canteen Karamchari Association had filed a special leave petition before this Court being SLP No. 4132 of 1980 which was disposed of by this Court by its decision of October 22, 1980 (supra).
By that decision, this Court had disposed of the said appeal in terms of the order which was passed in another similar Civil Appeal No. 368 of 1978, and the em ployees were given the same benefits by accepting the prin ciple laid down by the Calcutta High Court.
Thus by the said decision, the employees of the non statutory 711 canteens were directed to be treated on par with the employ ees of the statutory canteens, although by giving liberty to the Railway Administration to agitate the point that neither the employees of the statutory nor of the non statutory recognised canteens were railway employees either for the purposes of the or for any other purpose.
Shri Ramaswamy advanced the same contentions in the case of these employees as he advanced in the case of the employees of the statutory canteens.
He submitted that these employees are appointed by the Staff Managing Committee or Co operative Societies and not by the Rly.
Administration, that their service in the canteen is purely in the nature of a private employment as in a private sector undertaking and that the recruitment procedures differ widely from canteen to canteen and they are not akin to the procedure followed by the Railways.
The Managing Committee which appoints the employees, supervises and controls the canteens is a non Government body.
The said Committee functions as a separate entity independent of the Railway Administration and the control when exercised by the Railway Administration is only to ensure that the canteen is run in conformity with certain requirements.
There is no relationship of master and servant between the Rly.
Administration and the canteen employees.
The letters of appointment issued to the employees make it expressly clear that the employment is non Governmental and purely temporary and does not carry any pensionary or gratu ity benefits.
The employees recruited further are not sub jected to rigorous standards as to age limit, educational qualifications, medical fitness, character verification etc.
He further submitted that the order dated October 22, 1980 passed by this Court in the case of the employees of the eleven Delhi based non statutory canteens is expressly subject to the liberty given to the Railway Administration to contend in a future appropriate case that they are not railway employees and hence it cannot act as a precedent.
He also contended as he did in the case of the statutory can teen employees, that if the employees engaged in these canteens are treated as Railway servants, the employees engaged in other welfare activities, casual labourers etc.
may have also to be treated as such. 29.
These arguments can be dealt with together.
In the first instance, there is hardly any difference between the statutory canteens and non statutory recognised canteens.
The statutory canteens are established wherever the railway establishments employ more than 250 persons as is mandatory under the provisions of Section 46 of the Act while non statutory canteens are required to be established under 712 paragraph 2831 of the Railway Estb.
Manual where the strength of the staff is 100 or more.
In terms of the said paragraph, the non statutory canteens to be recognised have to be approved of by the Railway Board in advance.
Every Rly.
Administration seeking to set up such canteens is required to approach the Railway Board for their prior approval/recognition indicating financial implications involved duly vetted by the Financial Advisor and Chief Accounts Officer of the Railway concerned.
It is only when the approval is accorded by the Railway Board that the canteen is treated as a recognised non statutory canteen.
By the sanction, the details in regard to the number of staff to be employed in the canteen, recurring and non recurring expenditure etc. are regulated.
The only material difference between the statutory canteen and non statutory recognised canteen is that while one is obligatory under the said Act the other is not.
However, there is no difference in the management of the two types of canteens as is evident from the provisions of paragraphs 2832 and 2833 which respective ly provide for their management.
Regarding the incidence of cost to be borne by the Railways again, as far as the Manual is concerned, the only additional obligation cast on the Administration, in the case of the statutory canteens is that in addition to the facilities given to the non statuto ry canteens, the Administration has also to meet the statu tory obligations in respect of the expenditure for providing and maintaining canteens arising from the said Act and the rules framed thereunder.
A perusal of the relevant provi sions shows that the said Act and the rules made thereunder do not make demands on the Administration for more expendi ture than what is provided for in the Railway Manual for the non statutory canteens.
We have already referred to the service conditions applicable to the employees of the statu tory and non statutory canteens.
Besides, while discussing the case of the employees in statutory canteens we have pointed out the relevant provisions of the Administrative Instructions on Departmental Canteens in Government Officers and Govt.
Industrial Establishments.
These Instructions are applicable to both statutory and nonstatutory recognised canteens.
The Instructions do not make any difference be tween the two so far as their applicability is concerned.
In fact these Instructions require that the canteens run by engaging solely part time daily wage workers may be convert ed to departmental canteens (para 1.3).
Hence we donot see why any distinction be made between the employees of the two types of canteens so far as their service conditions are concerned.
For this very reason, the two notifications of December 11, 1979 and December 23, 1980 (supra) should also be equally applicable to the employees of these canteens.
If this is so, then these employees would also be entitled to be treated as rail 713 way servants.
A classification made between the employees of the two types of canteens would be unreasonable and will have no rational nexus with the purpose of the classifica tion.
Surely it cannot be argued that the employees who otherwise do the same work and work under the same condi tions and under a similar management have to be treated differently merely because the canteen happens to be run at an establishment which employs 250 or less than 250 members of the staff.
The smaller strength of the staff may justify a smaller number of the canteen workers to serve them.
But that does not make any difference to the working conditions of such workers.
We have already dealt with the other arguments advanced by Shri Ramaswamy while dealing with the cases of employees in statutory canteens.
It is not necessary to repeat the said discussion here.
We are, therefore, of the view that the case of these employees should be treated on par with that of the employees in the statutory canteens and they should also be treated for all purposes as railway servants.
This is apart from the fact that by an order of this Court the employees of eleven Delhi based non statutory recognised canteens have already been directed to be treated as railway servants for all purposes.
(iii)Non Statutory Non Recognised Canteens: The difference between the non statutory recognised and non statutory nonrcognised canteen is that these canteens are not started with the approval of the Railway Board as re quired under paragraph 2831 of the Railway Establishment Manual.
Though, they are started in the premises belonging to the Railways they are so started with the permission of the local officers.
They are not required to be managed either as per the provisions of the Railway Establishment Manual or the Administrative Instructions (Supra).
There is no obligation on the Railway Administration to provide them with any facilities including the furniture, utensils, electricity and water.
These canteens are further not enti tled to nor are they given any subsidies or loans.
They are run by private contractors and there is no continuity either of the contractors or the workers engaged by them.
Very often than not the workers go out with the contractors.
There is further no obligation cast even on the local of fices to supervise the working of these canteens.
No rules whatsoever are applicable to the recruitment of the workers and their service conditions.
The canteens are run more or less on ad hoc basis, the Railway Administration having no control on their working neither is there a record of these canteens or of the contractors who run them who keep on changing, much less of the workers engaged in these can teens.
In the circumstances we are of the view of 714 that the workers engaged in these canteens are not entitled to claim the status of the railway servants.
The result, therefore, is that the workers engaged in the statutory canteens as well as those engaged in non statutory recognised canteens in the Railway Establishments are railway employees and they are entitled to be treated as such.
The Railway Board has already treated the employees of all statutory and eleven Delhi based non statutory recog nised canteens as railway employees w.e.f. October 22, 1980.
The employees of the other non statutory recognised canteens will, however, be treated as railway employees w.e.f. April 1, 1990.
They would, therefore, be entitled to all benefits as such railway employees with effect from the said date, according to the service conditions prescribed for them under the relevant rules/orders.
The Writ Petitions and appeals of these employees are allowed to the above extent accordingly with no order as to costs.
As far as the employees in non statutory non recog nised canteens are concerned their petitions are dismissed.
There will, however, be no order as to costs.
R.S.S. Petitions and Appeals allowed.
| IN-Abs | The petitioners in this group of Writ Petitions are workers in canteens run in different railway establishments.
The relief claimed in all the petitions is that the workers concerned should be treated as railway employees and should be extended all service conditions which are available to the railway employees.
For convenience sake, the canteens have been classified into three categories, viz., (i) Statutory canteens; (ii) Non statutory Recognised Canteens, and (iii) Non Statutory Non Recognised canteens.
Chapter XXVIII of the Railway Establishment Manual contains the necessary instructions for running the can teens.
Paragraph 2829 of Chapter XXVIII of the Manual refers to the provisions of Section 46 of the and under writes the fact that under these provisions, there is a statutory obligation on the Railway Administration to set up canteens in Railway establishments which are governed by the said Act and which employ more than 250 persons.
Paragraph 2831 lays down the principles governing the set ting up of the canteens which apply also to the non statuto ry canteens provided for under paragraph 2830.
Paragraph 2832 inter alia states that although the Administration can employ as agent a Staff Committee or a Co operative Society for management, the legal responsibility for proper manage ment rests not with the agency but solely with the Railway Administration.
The Department of Personnel & Training, Ministry of Personnel, Government of India, had issued Administrative Instructions on Departmental Canteens in Offices and Indus trial Establishments of the Government.
It is made clear in these instructions that the orders issued under the said Instructions are applicable to all Canteens/Tiffin Rooms functioning or to be set up in any Ministry, Department, Establish 688 ment, Office, or Installation of the government of India (Industrial or non industrial), including those functioning under the Ministries of Defence, P & T and Railways unless these three Ministries had previously decided to exempt any of the said Instructions due to specific reasons.
It was contended on behalf of the petitioner workers that, in view of the documents on record there is no reason why the employees in the canteens concerned should not be given the status of the railway employees with all conse quential benefits.
On the other hand, it was contended on behalf of the Railways that (i) the canteen employees are appointed by the Staff Managing Committees or Co operative Societies and not by the Railway Administration and as such there is no rela tionship of master and servant between the Railwasy Adminis tration and the Canteen employees, and in no case can they be deemed as holders of civil posts, either for Article 309 or for Article 311 of the Constitution; (ii) the control exercised by the Railway administration is only to ensure that the canteens are run in conformity with certain re quirements; (iii) the Railways have a primary objective of carrying goods and passengers and the welfare activities are ancillary to the main objective; (iv) the canteens continue at the discretion of the Railway Administration, and at any stage the Government can change the form of this welfare measure and choose to have another set up; (v) the Railways undertake varied welfare activities, and if it is decided to treat the employees engaged in the canteens as railway employees, it will be difficult to resist the claim from employees of these other institutions for a similar status; and (vi) the Railway Establishment Manual contains the necessary instructions for running the canteens, and hence the Railway Administration should be deemed to have been exempted from the operation of the Administrative Instruc tions on Departmental Canteens in Offices and Industrial Establishments of the Government, issued by the Department of Personnel & Training.
Allowing the petitions filed by the employees of the statutory canteens and non statutory (recognised) canteens.
and dismissing those of the non statutory (non recognised) canteens.
this Court.
HELD: Statutory Canteens (1) In terms of the Rules made by the State Governments under Section 46 of the it is obligatory on the Railway Administration to provide a canteen in an establishment which employs 689 more than 250 persons.
The provision of the canteen is therefore, deemed by the statute as a necessary concomitant of the manufacturing activity.
[692C; G] The employees of the departmental canteens/tiffin rooms were declared as holders of civil posts under the Government of India Notification dated December 11, 1979 which is annexed to the Administrative Instructions on Departmental Canteens in Offices and Industrial Establish ments of the Government.
That Notification states that all posts in the said canteens/tiffin rooms are to be treated as posts in connection with the affairs of the Union, and hence the incumbents would qualify as holders of civil posts.
Accordingly, service rules were framed under Article 309 as per the notification issued by the Government of India, Department of Personnel & Training on December 23, 1980.
[705H; 706A B] (3) The provisions contained in the Administrative Instructions, show that the Government has a complete con trol over the canteens and the workers employed therein 'are holders of civil posts within the meaning of Article 311 of the Constitution.
There recruitment and service conditions are governed by the rules applicable to the employees of the Department/Office/Establishment to which the canteens are attached.
[701E] (4) Although there is nothing expressly on record to show that the railway canteens are exempted from the said Administrative Instructions, but even assuming that the railway canteens are exempted by virtue of the relevant provisions of the Railway Manual, the fact remains that there are as yet no notifications on the lines of December 11, 1979 and December 23, 1980 issued for the benefit of the employees in the railway canteens.
[706E F] (5) It cannot be argued that there is any difference in the work performed by the employees in the canteens run in the establishments of the Ministries.
If the said two noti fications are applicable to the employees in the canteens run by the other departments of the Government of India, there is no reason why the same should not apply also to the employees in the canteens run by the Railways.
In the cir cumstances, it would be highly discriminatory not to apply the said two notifications to the employees in the Railway canteens.
It would be violative of Articles 14 and 16 of the Constitution.
The employees in the Statutory canteens of the Railways will therefore have to be treated as Railway serv ants.
[706F H; 707A] 690 (6) Thus the relationship of employer and employee stands created between the Railway Administration and the canteen employees from the very inception.
Hence, it cannot be gainsaid that for the purposes of the the employees in the statutory canteens are the employees of the Railways.
[707B] Order dated 22.10.1980 in Civil Appeal No. 368 of 1978 (Supreme Court); Madras High Court; Writ Appeals Nos.
414 415 of 1978.
referred to.
(7) If by virtue of all these facts the employees are entitled to the status of Railway employees they cannot be deprived of that status merely because some other employees similarly or dis similarly situated may also claim the same status.
The argument to say the least can only be described as one in terroram.
and as any other argument of the kind has to be disregarded.
[708E] Non Statutory Recognised Canteen (8) These canteens are run in the establishments which employ 250 or less than 2.50 employees; and are established with the prior approval and recognition of the Railway Board.
There is hardly any difference between the statutory canteens and non statutory recognised canteens.
The only material difference is that while one is obligatory under the , the other is not.
However.
there is no difference in the management of the two type of canteens.
[71 I G; 712C] (9) The Administration Instructions on Departmental Canteens in Government Offices and Government Industrial Establishments do not make any difference between the two so far as their applicability is concerned.
Hence, it cannot be seen why any distinction be made between the employees of the two types of canteens so far as their service conditions are concerned.
For this very reason, the two notifications of December 11, 1979 and December, 23, 1980 should also be equally applicable to the employees of these canteens.
[7 12G H] (10) If that is so, then these employees would also be entitled to be treated as railway servants.
A classification made between the employees of the two types of canteens would be unreasonable and will have no rational nexus with the purpose of the classification.
Surely it cannot be argued that the employees who otherwise do the same work and work under the same conditions and under a similar manage ment have to be treated differently merely because the canteen happens to be 691 run at an establishment which employees 250 or less than 250 members of the staff.
[712H; 713A B] Non Statutory Non Recognised Canteens (11) These canteens are run at establishments which employ 100 or less than 100 employees, and are established without prior approval or recognition of the Railway Board.
[692E] The Canteens are run more or less on ad hoc basis, the Railway Administration having no control of their function ing.
They are not required to be managed either as per the provisions of the Railway Establishment Manual or the Admin istrative Instructions.
In the circumstances the workers engaged in these canteens are not entitled to claim the status of the railway servants.
[713H; 714A]
|
ivil Appeal No. 1319 of 1990.
717 From the Judgment and Order dated 7.9.1987 of Delhi High Court in S.A.O. No. 99/1987.
Dr. L.M. Singhvi and Dalveer Bhandari for the Appellant.
Dr. Y.S. Chitale and A.K. Sangal for the Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Special Leave granted.
This is an appeal by the landlady whose application for being put in possession of the premises on the expiry of a limited tenancy of two years under section 21 of the Delhi Rent Control Act (hereinafter referred to as 'the Act ') has been dismissed by the Rent Controller, the Rent Control Tribunal and the High Court.
On 30th September, 1976, the appellant landlady and the respondent tenant appeared before Shri M.A. Khan, Additional Rent Controller for creation of a tenancy under section 21 of the Act.
The Additional Rent Controller recorded the statements of both the landlady and the prospective tenant and made the following order: "Having regard to the facts stated in the petition and the statement of the parties made above permission under section 21 of the Delhi Rent Control Act is granted to Yamuna Maloo applicant to let out ground floor of her premises No. B 2/104, Safderjung Enclave, New Delhi comprising of drawing cum dining hall, two bed rooms with attached bath room, kitchen, parking place and a small ' lawn delineated in the enclosed plan exhibit AI, to Mr.
Anand Swarup respondent for residential purposes for a limited period of two years with effect from 1.10.76.
" After the expiry of the two year period, when the re spondent did not vacate the premises, the landlady moved the Rent controller for issuance of warrant of possession to which the tenant filed his objection.
The Additional Rent Controller entertained the objection and dismissed the landlady 's petition for being put into possession.
There upon the landlady moved the Rent Control Tribunal in appeal and when she failed before it, a second appeal was filed before the High Court which was dismissed in limine.
718 The Controller relied upon the judgment of this Court in S.B.Noronah vs
Prem Kumari Khanna[1980] 1 SCR 281 and came to hold: "I have carefully gone through the execution appli cation, the objections, the evidence on record, the original file in which the permission was granted and have heard the learned counsel for parties.
I am of the view that the order dated 30.9.75 granting permission was not in accordance with law and that the applicant/petitioner is not entitled to obtain possession of the premises in dispute under section 21 of the Delhi Rent Control Act.
" Noronah 's case had stated: "Of course, there will be 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.
" It is interesting to note that by the time the appel lant 's appeal came up for hearing before the Tribunal, Shri M.A. Khan who as an Additional Rent Controller had approved the tenancy by his order dated 30th September, 1976, on being judicially satisfied that the tenancy under section 21 of the Act could be created had become the Rent Control Tribu nal.
He noticed this fact in his appellate order dated 11th April, 1986, by stating "In this appeal, the validity and executability of the order dr. 30.9.76 is disputed which was passed by me as Addl.
Rent Controller.
Since there is no other Rent Control Tribunal, therefore, in exigency of the situation I have no option but to proceed to decide this appeal.
" He concluded "The appellant in the application and in her statement did not give the reason for letting out the premises for two years only.
She even did not give the reason in application for recovery or ' possession.
In reply to the objection of the respondent, she states that she was residing in Vasant Vihar at a house which was allotted to her husband by the employer.
There was no possibility of her vacating the said 719 house and shifting to the disputed premises.
The first floor of the disputed premises was also let out by her to another tenant for a limited period.
She did not disclose that she intended to create a limited tenancy in respect of the first floor also.
Further the premises were let after an adver tisement of 'to let ' in Hindustan Times dt.
25.9.76.
It is conceded that in the advertisement it was not specified that the premises were available for letting for two years only.
All these facts proved that the appellant did not require the premises for occupation after two years and that these premises could have been let out for an indefinite period.
She made a wrong statement before the court.
She also con cealed the material facts from the court.
She obtained the permission from the court under section 21 by playing fraud.
The order passed under section 21 is therefore invalid and in execution thereof, the respondent cannot be evicted.
" We have already said that the second appeal was dis missed in limine.
Lengthy arguments were advanced at the hearing in support of the respective stands.
Counsel for the landlady argued that the Additional Rent Controller should not have entertained the objection of the tenant to the execution of the eviction order as the same had not been filed during the currency of the tenancy; it was further argued that some of the considerations which weighed with the Rent Control Tribunal were ) not at all relevant for judging the bona fides and genu ineness of actions taken on 30th of September, 1976, at the time of creation of the tenancy.
On the/side of the tenant, the contentions which had prevailed with the 'Additional Rent Controller and the Rent Control Tribunal were reiterated.
Section 14 of the Act deals with a normal tenancy and protects the tenant against unreasonable eviction.
Section 21 of the Act, on the other hand, places tile tenant outside the purview of section 14 and provides for an order of eviction at the time of creation of the tenancy.
There is a purpose behind enacting section 21 of the Act.
The Legislature considered it appropriate that should a landlord not need his residen tial premises for a period, instead of keeping the same vacant the same could be available for a tenant 's use on being let out for a limited period condi 720 tional upon the tenant 's surrendering possession as soon as the tenancy terminates by efflux of time and the need of the landlord revives.
The conditions to be fulfilled at the time of creation of such a tenancy are three, namely, (i) the landlord would not require the premises for a particular period, (ii) the Controller must be satisfied about that position, and (iii) the tenant agrees to vacate at the end of the period.
In Noronah 's case supra two Judge Bench dealt with this question.
This Court then said.
"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.
Third ly, we must realise that the whole effect of section 14 can be subverted by ritualistic enforcement of the conditions of sanction under section 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.
It is true that the judgment of this Court which is dated August 16, 1979, was not in existence when Sri Khan sanctioned the tenancy but the law then in force was not different.
In fact, the orders out of which that appeal arose had also taken the same view.
This Court Noronah 's case further said: "When an application under section 21 is filed by the land lord and/or tenant, the Controller must satisfy himself by such inquiry as he may make, about the compulsive require ments 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.
" A three Judge Bench of this Court in J.R. Vohra vs India Export House Pvt. Ltd. & Anr., ; was examin ing the requirement of notice to the tenant when at the expiry of the period of tenancy the landlord had applied for being put in possession.
While so examining that question this Court approved the following observations in Noronah 's case: 721 "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 land lord is able to let out for a strictly limited period pro vided 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 re tirement 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 litiga tive 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.
" Noronah 's judgment was approved to this extent.
In the three succeeding paragraphs in Vohra 's decision.
Noronah 's case was also referred to.
Dealing with the contentions relied upon in Noronah 's case, Tulzapurkar, J. who delivered the judgment of the Court, observed: "At the outset we would like to observe that in Noronah 's case the question whether a prior notice is required to be served upon the tenant before issuance of warrant of posses sion in favour of the landlord under section 21 did not arise for consideration.
It was a case where upon receipt of landlord 's application for recovery of possession under the section the tenant raised pleas that the premises had been let out for non residential purposes and that the sanction or permission granted for the creation of the limited tenan cy was vitiated by fraud and collusion and the question that 722 arose for consideration was whether at that stage the Rent Controller could go into and consider such pleas and this court has ruled that the Controller should consider those pleas even when raised at that stage.
" A little later Justice Tulzapurkar further observed: "In fact even in Noronah 's case this Court has observed,that there will be a presumption in favour of the sanction or permission being regular and if that be so, we fail to appreciate as to why the Rent Controller should invite such pleas of fraud, collusion etc.
at the instance of the tenant by being required to serve a notice upon him before issuing the warrant of possession in favour of the landlord espe cially when the scheme of sec.
21 and the connected relevant provisions do not require it.
" The three Judge Bench thereafter went to consider the remedy available to the tenant in a case where the objec tions were as in the present case: "What then is the remedy available to the tenant in a case where there was in fact a mere ritualistic observance of the procedure while granting permission for the creation of a limited tenancy or where such permission was procured by fraud practised by the landlord or was a result of collusion between the strong and the weak? Must the tenant in such cases be unceremoniously evicted without his plea being inquired into? The answer is obviously in the negative.
At the same time must he be permitted to protract the delivery of possession of the leased premises to the landlord on a false plea of fraud or collusion or that there was a mechan ical grant of permission and thus defeat the very subject of the special procedure provided for the benefit of the land lord in section 217 The answer must again be in the nega tive.
In our view these two competing claims must be harmo nised and the solution lies not in insisting upon service of a prior notice on the tenant before the issuance of the warrant of possession to evict him but by insisting upon his approach the Rent Controller during the currency of the limited tenancy for adjudication of his pleas no sooner he discovers facts and circumstances that tend to vitiate ab initio the initial grant of permission.
Either it is a 723 mechancial grant of permission or it is procured by fraud practised by the landlord or it is the result of collusion between two unequals but in each case there is no reason for the tenant to wait till the landlord makes his application for recovery of possession after the expiry of the fixed period under section 21 but there is every reason why the tenant should make an immediate approach to the Rent Con troller to have his pleas adjudicated by him as soon facts and circumstances giving rise to such pleas come to knowledge or are discovered by him with the diligence.
The special procedure provided for the benefit of the landlord in section 21 warrants such immediate approach on the part of the tenant.
" What followed thereafter perhaps is more in the nature of an obiter than a part of the decision proper, namely: "Of course if the tenant alliunde comes to know about land lord 's application for recovery of possession and puts forth his plea of fraud or collusion etc.
at that stage the Rent Controller would inquire into such plea but he may run the risk of getting it rejected as an afterthought.
" It may be pointed out that in Vohra 's case the objec tions on the ground of fraud and collusion were raised after the claim by the landlord for being put in possession but were rejected as belated.
The question that came for consid eration before the three Judge Bench was whether notice was necessary when the landlord applied to be put in possession after the termination of the tenancy.
In that context, the observation that tenant 's objections could be enquired into if the tenant aliunde came to know of the landlord 's move and objected was not relevant for the decision.
There are certain observations in Inder Mohan Lal vs Ramesh Khanna; , which are relevant: "An analysis of this judgment (Noronah 's case) which has been applied in the various cases would indicate that sec tion 21 only gives sanction if the landlord makes a state ment to the satisfaction of the court and the tenant accepts that the landlord does not require the premises for a limit ed period; this statement of the landlord must be bona fide.
The purpose must be residence.
There must not be 724 any fraud or collusion.
There is a presumption of regulari ty.
But it is open in particular facts and circumstances of the case to prove to the satisfaction of the executing court that there was no collusion or conspiracy between the land lord and the tenant and the landlord did not mean what he said or that it was a fraud or that the tenant agreed be cause the tenant was wholly unequal to the landlord.
In the instant case none of these conditions were fulfilled.
There is no evidence in this case that when the landlord stated that he did not require the premises in question for a particular period, he did not mean what he stated or that he made a false statement.
There was no evidence in this case at any stage that the tenant did not understand what the landlord was stating or that he did not accept what the landlord stated.
There was no evidence that either the tenant was in collusion or perpetrating any fraud with the landlord or the tenant was unequal to the landlord in bar gaining powers.
It is manifest that there is no evidence to show that the Controller did not apply his mind.
If that is so then on the principle enunciated by this Court in Noro nah 's case, this sanction cannot be challenged.
It is not necessary to state under section 21 the reasons why the landlord did not require the premises in question for any particular period.
Nor is there any presumption that in all cases the tenants are the weaker sections.
The presumption is, on the contrary, in favour of sanction, it is he who challenges the statement and the admission of the landlord or the tenant who has to establish facts as indicated in Nagindas case.
" In paragraph 22 of the judgment Mukharji, J. (as he then was) speaking for the Court held out a caution that the residue must be understood in its proper perspective.
We may point out that the respondent apart from being highly quali fied held the position of a Deputy Secretary to Government and, therefore, was not a tenant of the type in Noronah 's case.
As has been stated in Inder Mohan Lal 's case, the rule in Noronah 's case has to be confined to a particular set of facts and should not be freely extended so as to take away the effect of section 21.
Fraud is an allegation which can easily be made but unless the allegations are clearly pleaded and some evidence, either direct or circumstantial, is avail able, a charge of fraud would not succeed.
We may refer to another judgment of this Court in the case of Shiv Chander Kapoor.
vs Amar Bose, JT where the 725 validity of the permission under section 21 of the Act came up for consideration.
Noronah 's case was also referred to.
In paragraph 15 of the judgment this Court pointed out that there is nothing in this decision to support the respondent tenant 's contention in that appeal that the scope of enquiry is wider permitting determination of the land lord 's bona fide need of the premises as if such a ground for eviction specified in section 14 of the Act was required to be proved.
Extending the enquiry to that field would indeed be against the express prohibition enacted in section 21 of the Act.
Referring to Vohra 's case, the latest judgment indi cates: "It is obvious from the decision in J.R. Vohra 's case that the tenant is expected to raise such a plea during currency of the limited tenancy and on such a plea being raised by the tenant enquiry into it is contemplated.
Even though it is not expressly said in Vohra 's case, it is implicit that on such an application being made by the tenant requiting adjudication by the Controller, it is the Controller 's obligation to issue notice of the same to the landlord and then to make the adjudication with opportunity to both sides to prove their respective contentions.
Both in Vohra 's case and in Shiv Chander Kapoor 's case though not arising for determination in either, it has been stated while laying down the rule that proceeding to chal lenge limited tenancy has to be taken during the cunency of the tenancy, an objection filed by the tenant could be looked into is indeed an obiter.
We would like to make it clear that the rule having been stated to the contrary in Vohra 's case, there was indeed no warrant to indicate the contra situation.
Perhaps to meet the eventuality which might arise in a particular case, neither of the two Benches of this Court wanted to close the avenue of enquiry totally, and that is why in both the cases decided by coordinate Benches the exception has also been indicated.
It must be understood on the authority of the said two decisions and our judgment now that if the tenant has objection to raise to the validity of the limited tenancy it has to be done prior to the lapse of the lease and not as a defence to the landlord 's application for being put into possession.
We would like to reiterate that even if such an exercise is available that must be taken to be very limited and made applicable to exceptional situations.
Unless the tenant is able to satisfy the Controller that he had no opportunity at all to know the facts earlier and had come to be aware of them only then, should such an objection be entertained.
726 On the application of those tests to the present facts we must hold that the belated objections of the tenant should not have been entertained and prayer for possession made by the landlady after the limited tenancy ran out should have been granted.
The appeal is allowed; the decisions of the Controller, Rent Control Tribunal and the High Court are reversed and the landlady is directed to be put into possession of the premises by 31st of March, 1990.
The appellant would be entitled to her costs in the proceedings throughout.
Hearing fee is assessed at Rs.2,000.
G.N. Appeal al lowed.
| IN-Abs | The appellant landlady and the respendent tenant ap peared before the Rent Controller for creation of a tenancy under Section 21 of the Delhi Rent Control Act, 1958.
Ac cordingly, the authority passed an order creating tenancy for a limited period of two years.
Since the respondent did not vacate the premises on the expiry of two years, the appellant moved the Rent Controller for issuance of warrant of possession.
The Respondent filed his objection.
Enter taining the objection the Rent Controller dismissed the petition, holding that the order granting permission for the tenancy under section 21 of the Act was not in accordance with law.
The appellant 's first appeal before the Rent Control Tribunal, as also her second appeal before the High Court met the same fate.
This appeal, by special leave, is against the High Court 's order dismissing the second appeal in limine.
On behalf of the appellant, it was contended that the Rent Controller should not have entertained the objection of the respondent as the same has not been filed during the currency of the tenancy.
It was also contended that some of the considerations which weighed with the Rent Control Tribunal were not relevant for judging the bona fides and genuineness of actions taken at the time of creating the tenancy.
Allowing the appeal, this Court, HELD: 1.
Section 14 of the Delhi Rent Control Act, 1958 deals with a normal tenancy and protects the tenant against unreasonable eviction.
Section 21 of the Act, on the other hand, places the tenant outside the purview of section 14 and provides for an order of eviction at the time of creation of the tenancy.
There is a purpose behind enacting section 21 of the Act.
The Legislature considered it appropriate that should a 716 landlord not need his residential premises for a period, instead of keeping it vacant the same could be available for a tenant 's use on being let out for a limited period condi tional upon the tenant 's surrendering possession as soon as the tenancy terminates by efflux of time and the need of the landlord revives.
[719G H; 720A] 2.1.
The rule in Noronah 's case has to be confined to a particular set of facts and should not be freely extended so as to take away the effect ors.
[724F G] 2.2.
In Vohra 's case and in Shiv Chander Kapoor 's case, though not arising for determination in either, it has been stated while laying down the rule that proceeding to chal lenge limited tenancy has to be taken during the currency of the tenancy, an objection filed by the tenant could be looked into, is indeed an obiter.
The rule having been stated to the contrary in Vohra 's case, there was indeed no warrant to indicate the contra situation.
Perhaps to meet the eventuality which might arise in a particular case, the exception has also been indicated.
If, the tenant has an objection to raise to the validity of the limited tenancy it has to be done prior to the lapse of the lease and not as a defence to the landlord 's application for being put into possession.
Even if such an exercise is available that must be taken to be very limited and made applicable to excep tional situations.
Unless the tenant is able to satisfy the Controller that he had no opportunity at all to know the facts earlier and had come to be aware of them only then, should such an objection be entertained.
[725E H] 2.3.
In the facts and circumstances of the present case the belated objections of the tenant should not have been entertained and prayer for possession made by the landlady after the limited tenancy ran out should have been granted.
[726A] S.B. Noronah vs Prem Kumari Khanna, ; ; J.R. Vohra vs India Export House Pvt. Ltd. & Anr., ; ; Inder Mohan Lal vs Ramesh Khanna, ; and Shiv Chander Kapoor vs Amar Bose, JT , referred to.
[This Court directed that the landlady be put into possession of the premises by 31st March, 1990.]
|
ivil Appeal No. 2763 of 1987.
From the Judgment and Order dated 5.2.
1987 of the Karnataka High Court in R.S.A. No. 17/1987.
R.B. Datar and P.R. Ramasesh for the Appellant.
Dr. Y.S. Chitale and E.M.S.Anam for the Respondent.
The Judgment of the Court was delivered by KANIA, J.
This is an appeal by special leave against the judgment and order of a learned Single Judge of the Karnata ka High Court in Regular Second Appeal No. 17 of 1987 filed in the said High Court.
As we are generally in agreement with the reasoning and conclusion in the judgment of the Karnataka High Court relied upon by the learned Single Judge in the impugned judgment, the appeal can be disposed of shortly.
About 250 acres of wooded evergreen land in the district of Coorg was given by a grant to the ancestors of the re spondent over a hundred years ago.
The said district was a Scheduled district under the 729 control of the Governor General of India.
The terms of the said grant which is very old are not available but there is no dispute that the said land was granted to the ancestors of the respondent.
On November 1, 1899 Regulation No. 1 of 1899, called the Coorg Land and Revenue Regulation, 1899 came into force in the district of Coorg.
We propose to refer to the said Regulation as the Coorg Regulation.
It applied to the entire territories administered by the Chief Commissioner of Coorg.
We may at this stage take a brief note of some of the rele vant provisions of the Coorg Regulation as they stood at the time relevant for the purpose of this appeal.
The Coorg Regulation was enacted in order to amend and declare the law in force in Coorg in respect of the land and land revenue.
Regulation 4 of the Coorg Regulation prescribes the classes of Revenue Officers.
One of these is the Chief Commissioner and one other is the Revenue Officer.
Chapter VI of the Coorg Regulation deals with the records of rights and annual records.
Regulation 29 in this Chapter provides that there shall be a record of rights for every estate.
Clause (2) of Regulation 29 states that when it appears to the Chief Commissioner that a record of rights for an estate does not exist or that the existing record of rights for an estate requires special revision, the Chief Commissioner shall by notification direct that a record of rights be made or that the record of rights be specially revised, as the case may be.
Regulation 30 inter alia provides that the nature and extent of the interests of the landholders, tenants or assigness of land revenue in the estate shall be stated in the record of rights.
Regulation 35 deals with the restric tions on variations of entries in records and, generally speaking, provides that entries in records of rights or annual records cannot be varied except as provided in clauses (a) to (c) 'thereof.
Clause (a) of Regulation 35, the only possible relevant clause for the purposes of this appeal, provides that entries can be varied in accordance with the facts admitted of found by inquiry under Regulation 34 of the Coorg Regulation.
Regulation 40 provides that any person who is aggrieved as to any right of which he is in possession by an entry in a record of rights can file a declaratory suit to establish his right.
Shri Gustav Hallet, Settlement Officer, Coorg made his report by way of propos als for Land Revenue Resettlement of the Province of Coorg, on February 18, 1910 to the Secretary to the Chief Commis sioner of Coorg.
The contents of the report shows that it was made after examining the revenue settlements made earli er.
Pursuant to the said report a patta was given to the ancestors of the respondent in 1912 granting the aforesaid lands and in that patta there was an endorsement reading "redeemed coffee sagawali malai".
The word "sagawali" 730 means cultivation and the word "malai" means "hill".
It is common ground that the word "redeemed" used in this entry would show that the price of the standing timber on the said land had been paid by the grantee by the time when the patta was made.
It may be mentioned here that in the settlement in Coorg where the land was granted with the endorsement "unredeemed", it meant that the standing timber had not been paid for and the grantee would have to pay for the same if the grantee wanted to cut the trees and remove the timber from the land.
In 19 18 it appears that pursuant to an order made by the Commissioner the said entry has been altered to "unredeemed" showing that the trees had not been paid for.
For several years no problem arose because it appears that there was no question arose of cutting any trees, but later, in recent years, the respondent applied for permis sion of appellant No. 1 to cut and remove some of the trees from the land granted to the respondent.
The said applica tion was rejected on the ground that the seigniorage payable on the value of the timber standing on the land granted had not been paid and hence, before the trees could be cut and the timber removed, seigniorage in respect of the trees would have to be paid.
The respondent filed a suit in the Court of Civil Judge, Madakeri for a declaration that the said land granted to him was redeemed in tenure and hence no payment of seigniorage could be demaned in respect of the trees to be cut and removed.
In that suit, the respondent inter alia claimed that the alteration of the relevant entry from "redeemed" to "unredeemed" in the record of rights pertaining to the said lands, made pursuant to the order of the Commissioner, was void as the procedure prescribed by law had not been complied with the alteration in the entry not having been directed to be made by an authorised person.
The Trial Court decreed the said suit and granted the decla ration.
The appellants preferred an appeal against the said decision to the District Court but the said appeal was dismissed.
The appellants then preferred a Second Appeal to the High Court of Karnataka which dismissed the same as set out earlier.
We find that the question which has arisen in this appeal arose before a Division Bench of the Mysore High Court in State of Mysore vs Kainthaje Thimmanna Enat and Others, It is common ground that the facts in that case are in pari materia with the facts in the present case.
It was held by the Division Bench that the presumption that the entries relating to the change of tenure should be taken to have been lawfully and regularly made in the course of the performance of official duties and in due compliance with 731 the procedure enjoined by law could not be drawn in that case.
If the order in question for revision of the record of rights had been one that was made in exercise of the power under Regulation 29 of the Coorg Regulation, which is the provision which should have been resorted to for the purpose of preparation and revision of record of rights, the order should have been issued and published by the Chief Commis sioner of Coorg by notification and no such notification or publication of the same in the official gazette had been shown to the Court.
The order for correcting the entry was issued by the Commissioner and not by the Chief Commissioner as enjoined by Regulation 29 of the Coorg Regulation and there was no reference on the record to any such notifica tion having been issued under Regulation 29.
Moreover, it was not apparent who had made the alteration, altering the word "redeemed" to "unredeemed", in the Jambandi Register.
It was further held that under Regulation 39, the presump tion as regards the truth of the entries arises only when the entries in the record of rights have been made in ac cordance with law for the time being in force and if the provisions of the relevant rules had been complied with.
In the case before the Division Bench, that presumption could not be drawn, because in the absence of a notification issued by the Chief Commissioner, it was not possible to predicate whether the procedure enjoined by the rules had been followed at that time of effecting the change in the entry.
It was held that the suits in question were not barred by section 145 (vi) and (viii) of the Coorg Regula tion as the suits did not question the right of the Govern ment to levy seigniorage nor the liability of the plaintiffs to pay but the plea was that seigniOrage had already been levied and paid.
The suits were not barred by time under Article 14 of the Limitation Act, 1908 as no relief was prayed for in the nature of setting aside of an order of a Government Officer but the claim made for a declaration that the impugned order altering the entry was void and non est and hence, liable to be ignored.
We agree with these conclu sions which were upheld on appeal by the District Court and the High Court.
We would, however, like to give an additional ground which supports the conclusion that the said change in the entry from the word "redeemed" to "unredeemed" was not made according to law.
We find from a number of judgments that identical orders changing the word "redeemed" to the word "unredeemed" in the relevant entries have been uniformally made in a large number of cases which would suggest that these changes were made pursuant to a special revision of the record of rights in respect of a number of properties and was not an individual change in a particular entry in the record of rights of a 732 particular plot of land.
Under Regulation 29 of the Coorg Regulation, this could have been done only pursuant to a direction or order of the Chief Commissioner but no such order or direction or a notification to that effect appears to be on the record.
The result is that the said change must be held to be unauthorised in law void and of no legal effect.
In view of what is set out earlier, a detailed discussion regarding this contention is not called for.
We may also point out that the same view regarding a similar change of an entry in the record of rights was taken by a learned Single Judge of the Karnataka High Court in Regular Second Appeals Nos. 693 and 694 of 1977.
Petitions for special leave being Special Leave Petitions Nos.
38 12 13 of 1985 were preferred by the State of Karnataka against the said decision and the said petitions for special leave were dismissed summarily by this Court on 10th March, 1986.
In these circumstances, the only thing which surprises is that the State has again chosen to reagitate the same question before this court probably only because large stakes are involved.
In our opinion, there is no merit in the appeal and the same is dismissed with costs.
Y. Lal Appeal dismissed.
| IN-Abs | About 250 acres of wooded evergreen land was given to the ancestors of Respondent by grant over a hundred years ago and a patta in respect thereof granting the aforesaid lands was given to them in 1912 and in that patta there was an endorsement reading "redeemed coffee sagawall malai" indicating that the trees on the land had been paid for.
In 1918, it appears that pursuant to an order passed by the Commissioner, the said entry had been altered to "unre deemed" showing that the trees had not been paid for.
The respondent applied for permission of appellant No. 1 to cut and remove some of the trees from the land granted to his ancestors.
The said application was rejected on the ground that the seigniorage payable on the value of the timber standing on the land granted had not been paid and hence, before the trees could be cut and the timber removed, seign iorage in respect of the trees had to be paid.
The respond ent thereupon filed a suit in the Court of Civil Judge, Madakeri for a declaration that the said land granted to him was redeemed in tenure and hence no payment of seigniorage could be demanded from him.
The respondent claimed that the alteration of the relevant entry from 'redeemed ' to 'unre deemed ' in the record of rights pertaining to the lands in question was made under orders of the Commissioner and not of the Chief Commissioner as required under the Regulation and hence the alteration was void having been directed to be made by an unauthorised person.
The trial Court decreed the suit and granted the declaration.
The appellants preferred an appeal against the said decision to the District Court but the appeal failed.
Appellant 's further appeal to the High Court of Karnataka was also dismissed.
Hence this appeal by special leave.
Dismissing the appeal, this Court, HELD: The suit in the instant case were not barred as they did not question the right of the Government to levy seigniorage nor the liabi 728 lity of the plaintiffs to pay but the plea was that seign iorage had already been levied and paid.
[731E] Identical orders changing the word 'redeemed ' to the word 'unredeemed ' in the relevant entries have been unifor mally made in a large number of cases which would suggest that these changes were made pursuant to a special revision of the record of rights in respect of a number of properties and was not an individual change in a particular entry in the record of rights of a particular plot of land.
[731G H] Under regulation 29 of the Coorg Regulation, this could have been done only pursuant to a direction or order of the Chief Commissioner.
but no such order or direction of a notification to that effect appears to be on the record.
The result is that the said change must be held to be unautho rised in law, void and of no legal effect.
[732A B] State of Mysore vs Kainthaje Thimmanna Enat and Ors., to.
|
No. 723 of 1989 etc.
(Under Article 32 of the Constitution of India).
G. Ramaswamy, Additional Solicitor General (N.P.), F.S. Nariman, G.L. Sanghi, G.Prabhakar, M. Rangaswamy, N.D.B. Raju, Ms. C.K. Sucharita, S.K. Agnihotri, P.R. Ramashesh, K.R. Nagaraja and Ms. Anita Sanghi for the appearing par ties.
The following Judgments of the Court were delivered: RANGANATH MISRA, J. I have the benefit of reading the judgment prepared by my esteemed brethren Sawant and K. Ramaswamy, JJ.
Brother Sawant has taken the view that section 20 of the Karnataka Act has not become void with the enforce ment of the , while Brother K. Ramaswamy has come to the contrary conclusion.
Agreeing with the conclusion of Sawant, J., I have not found it possible to concur with Ramaswamy, J. Since an interesting question has arisen and in looking to the two judgments I have found additional reasons to support the conclusion of Sawant.
J., I proceed to indicate the same in my separate judgment.
These applications under Article 32 of the Constitution by a group of disgruntled applicants for contract carriage permits call in question action of the concerned transport authorities in not entertaining their applications under the provisions of the .
(4 of 1939) made provision for grant of contract carriage permits.
The Karnataka Contract Car riages (Acquisition) Act (Karnataka Act 21 of 1976) received assent of the President on 11th of March.
but was declared to have come into force from 30th of January, 1976, when the corresponding Karnataka Ordinance 7 of 1976 had come into force.
The long title of the Act indicated that it was an Act to provide for the acquisition of contract car riages and for matters incidental.
ancillary or subservient thereto, and the preamble stated: 625 "Whereas contract carriages and certain other categories of public service vehicles are being operated in the State in a matter highly detrimental and prejudicial to public interest; And whereas with a view to prevent such misuse and also to provide better facilities for the transport of passengers by road and to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment; And whereas for the aforesaid purposes it is considered necessary to provide for the acquisition of contract carriages and certain other categories of public service vehicles in the State and for matters incidental, ancillary or subservient thereto . " Section 2 contains the declaration to the following effect: "It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Con stitution of India and the acquisition therefore of the contract carriages and other property referred to in section 4." Under ss 4 contract carriages owned or operated by contract carriage operators along with the respective per mits and/or certificates of registration, as the case may be, vested in the State absolutely free from encumbrances, and compensation for such acquisition was provided under the scheme of the Act.
Section 14 prohibited application for any permit or fresh permit or renewal of existing permits for running of any contract carriage in the State by any private operator and all pending proceedings in relation to grant or renewal abated.
Consequential provisions were made in sections 15 and 16 of the Act.
Section 20 gave the Corporation the exclusive privilege of running contract carriages within the State to the exclusion of any provision under the 1939 Act.
The vires of the Act was the subject matter of the decision of this 626 Court in a group of appeals in the case of the State of Karnataka & Anr.
vs Shri Ranganatha Reddy & Anr., ; A Seven Judge Bench upheld the validity of the statute holding that the impugned statute was an 'acquisi tion Act ' within the ambit of Entry 42 of the Concurrent List under Schedule VII of the Constitution.
The Court took note of the fact that even though it may have had some incidental impact on inter State trade or commerce it did not suffer from any lacuna on that count.
Since the Act had been reserved for Presidential assent, to the extent section 20 made provisions contrary to those in the of 1939, was taken to be valid under article 254(2) of the Constitution.
The (59 of 1988) being a Parliamen tary legislation was brought into force with effect from 1.7. 1989.
Under section 1(2), the Act extended to the whole of India and, therefore, the Act became applicable to the State of Karnataka by the notification appointing the date of commencement of the Act.
The 1988 Act has admittedly liberalised the provisions relating to grant of permits of every class including con tract carriages.
Sections 73, 74 and 80 contain the relevant provisions in this regard.
While section 73 provides for an application for such permit, section 74 contains the procedure for the consideration of the grant and section 80 contains a general provision that the transport authority shall not ordinarily refuse to grant an application for permit of any kind made at any time under the Act.
It is the contention of the petitioners that with the enforcement of the of 1988 as a piece of central legislation, the provisions of section 20 of the Karnataka Act became void to the extent the state law was inconsistent with the provisions of the 1988 Act and, therefore, by operation of the provisions contained in article 254 of the Constitution, section 20 stood abrogated and the scheme of the 1988 Act became operative.
The applications of the petitioners for grant of contract carriage permits were maintainable and should have been entertained and disposed of in accordance with the provi sions of the 1988 Act.
It is the stand of the respondents, in particular of the Karnataka State Transport Undertaking, that the State Act is a legislation under a different entry and was not on the same subject.
Therefore, the matter did not come within the ambit of article 254 of the Constitution.
The State Act contin ues to hold the field and the transport authorities had rightly refused to entertain the petitioners ' applications.
627 The question for consideration is: Whether article 254( I) of the Constitution applies to the situation in hand and whether section 20 of the Karnataka Act being inconsistent with the provisions of sections 73, 74 and 80 of the 1988 Motor Vehi cles Act became void.
It would be convenient to extract the provisions of article 254 of the Constitution at this stage and recount the background in which such provision was warrant ed.
It is the common case of the parties that with the introduction of federalism and distribution of legislative powers and accepting a Concurrent List wherein in regard to specified subjects the Federal and the Federating State Legislatures had power to legislate, a provision of ration alisation became necessary.
Section 107 of the Government of India Act, 1935, contained the provision to deal with such a situation.
The Constituent Assembly accepted a similar mechanism and added a proviso to clause (2) of article 254 to meet the difficulties experienced in the intervening years.
The Article reads thus: "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 any 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 Legislature 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 repug nancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concur rent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legis lature 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.
" 628 Though for some time there was difference of judicial opinion as to in what situation article 254 applies, decisions of this Court by overruling the contrary opinion have now concluded the position that the question of repugnancy can arise only with reference to a legislation falling under the Concurrent List: Bar Council of Uttar Pradesh vs State of U.P. & Anr., ; and Kerala State Electricity Board vs Indian Aluminium Company, [1976] 1 SCR 552.
This Court in Deep Chand vs State of Uttar Pradesh & Ors., ; ; T. Barai vs Henry Ah Hoe & Anr., ; and Hoechst Pharmaceuticals Ltd. & Anr.
vs State of Bihar & Ors.
, ; has laid down that cl.
(1) of article 254 lays down the general rule and cl.
(2) is an exception thereto; the proviso qualifies the exception.
Therefore, while interpreting article 254 this position has to be kept in view.
The situation of the 1939 being existing law and the Karnataka Act containing provision repugnant to that Act with Presidential assent for the State Act squarely came within the ambit of cl.
(2) of the Article.
That is how the State Act had over riding effect.
The consideration of the present question has to be within the ambit of cl.
(1) as the State law is the earlier legislation and the Parliamentary Act of 1988 came later and it is contended that the State legislation has provisions repugnant to provisions made in the 1988 Act.
There can be no controversy that if there is repugnancy, the Parliamen tary legislation has to prevail and the law made by the State Legislature to the extent of repugnancy becomes void.
In cl.
(1) of article 254 it has been clearly indicated that the competing legislations must be in respect of one of the matters enumerated in the Concurrent List.
The seven Judge Bench examining the vires of the Karnataka Act did hold that the State Act was an Act for acquisition and came within Entry 42 of the Concurrent List.
That position is not disputed before us.
There is unanimity at the Bar that the is a legislation coming within Entry 35 of the Concurrent List.
Therefore, the Acquisition Act and the 1988 Act as such do not relate to one common head of legislation enumerated in the Concurrent List and the State Act and the Parliamentary statute deal with different mat ters of legislation.
The language of cl.
(2) is also similar though applica ble in a different situation.
Apparently in one sense both the clauses operate on a similar level though in dissimilar context.
In cl.
(2) what is rele 629 vant is the words: 'with respect to that matter '.
A Consti tution Bench of this court in Zaverbhai Amaidas vs State of Bombay, [1955] 1 SCR 799 emphasised that aspect.
Venkatarama Ayyar, J. pointed out: "The important thing to consider with reference to this provision is whether the legislation is 'in respect of the same matter '.
If the later legislation deals not with the matters which formed the subject of the earlier legisla tion but with other and distinct matters though of a cognate and allied character, then article 254(2) will have no applica tion.
" A lot of light relevant to the aspect under considera tion is available from another decision of a Constitution Bench of this Court: (M. Karunanidhi vs Union of India, ; Atp. 263 of the Reports, it has been said: "It would be seen that so far as clause (1) of Article 54 is concerned it clearly lays down that where there is a direct collision between a provision of a law made by the State and that made by Parliament with respect of one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the State law would be void to the extent of the repugnancy.
This naturally means that where both the State and Parliament occupy the field contemplated by the Concurrent List then the Act passed by Parliament being prior in point of time will prevail and consequently the State Act will have to yield to the Central Act.
In fact, the scheme of the Constitution is a scientific and equitable distribution of legislative powers between Parlia ment and the State Legislatures.
First, regarding the mat ters contained in List I, i.e., the Union List to the Sev enth Schedule, Parliament alone is empowered to legislate and the State Legislatures have no authority to make any law in respect of the Entries contained in List I. Secondly, so far as the Concurrent List is concerned.
both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by Article 254(1) discussed above.
Thirdly, so far as the matters in List II, i.e., the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain condi tions Parliament can do so.
It is, therefore, obvious that in such matters repugnancy may result from the following circumstances: 630 1.
Where the provisions of a Central Act and a State Act in the Concurrent List are full.v inconsistent (Emphasis added) and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
Where, however, a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) or Article 254.
Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law fails within the four corners of the State List and en trenchment, if any, is purely incidental or inconsequential.
Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution.
The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in its applicability to the State only.
Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the provision to Article 254.
" In Deep Chand vs State of Uttar Pradesh, supra, this court had pointed out that repugnancy between two statutes would arise if there was direct conflict between the two provisions and if the law made by Parliament and the law made by the State Legislature occupied the same field.
It has already been stated that the State Act intended to eli 631 minate private operators from the State in regard to con tract carriages acquired under the existing permits, vehi cles and ancillary property and with a view to giving effect to a monopoly situation for the State undertaking made provision in section 20 for excluding the private operators.
The 1988 Act does not purport to make any provision in regard to acquisition of contract carriage permits which formed the dominant theme or the core of the State Act.
Nor does it in section 73 or section 74 indicate as to who the applicant shall be while laying down how an application for a contract carriage permit shall be made and how such a permit shall be granted.
Section 80 of the 1988 Act does contain a liberalised provi sion in the matter of grant of permits but here again it has to be pointed out that the ancillary provision contained in section 20 of the Acquisition Act to effectuate acquisition does not directly run counter to the 1988 provision.
Section 20 of the State Act creates a monopoly situation in favour of the State undertaking qua contract carriages by keeping all private operators out of the filed.
Since sections 73, 74 and 80 of the 1988 Act do not contain any provision relating to who the applicants for contract carriages can or should be, and those sections can be applied without any difficulty to the applications of the State undertaking, and there does not appear to be any repugnancy between the two Acts for invoking article 254 of the Constitution.
A provision in the State Act excluding a particular class of people for operating contract carriages or laying down qualifications for them would not run counter to the relevant provisions of the 1988 Act.
A number of precedents have been cited at the hearing and those have been examined and even some which were not referred to at the bar.
There is no clear authority in support of the stand of the petitioners where the State law is under one head of legislation in the Concurrent List; the subsequent Parliamentary legislation is under another head of legislation in the same List and in the working of the two it is said to give rise to a question of repugnancy.
The State Act had done away with the private operators qua contract carriages within the State.
It is true that the 1988 Act is applicable to the whole of India and, therefore, is also applicable to the State of Karnataka in the absence of exclusion of the State of Karnataka from its operation.
But as has been pointed out already, there is no direct inconsistency between the two and on the facts placed in the case there is no necessary invitation to the application of cl.
(1) of article 254 of the Constitution.
632 The writ petitions fail and are dismissed.
SAWANT, J.
This group of petitions raises a common question of law viz. whether the (hereinafter referred to as the MV Act 1988) has impliedly repealed the Karnataka Contract Carriages (Acquisition) Act, 1976 (hereinafter referred to as the Karnataka Act).
The petitioners claim a declaration that the provisions of Sec. 14 and 20 of the Karnataka Act are invalid because of their repugnancy with the provisions of the MV Act, 1988, and a direction to respondent nos.
2 and 3, namely the Karnataka State Transport Authority and the Karnataka Re gional Transport Authority respectively, to consider their applications for the grant of contract carriage permits under Sec. 74 and 80 of the MV Act, 1988, without reference to the provisions of the Karnataka Act.
The precise question that falls for consideration, therefore, is whether there is a repugnancy between the two legislations.
The Karnataka Act, as its title shows, was enacted to provide for the acquisition of contract carriages and for matters incidental, ancillary and subservient thereto.
It was enacted under Entry 42 of the Concurrent List read with Article 31 of the Constitution, in furtherance of Article 39(b) and (c) thereof.
This is evident from the preamble, and Section 2 of the Act.
The preamble states that since the contract carriages and certain other categories of public service vehicles were being operated in the State in a manner highly detrimental and prejudicial to public inter est, it was necessary to prevent the misuse, and to provide better facility for the transport of the passengers by road.
It was also necessary to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community were so distributed as best to subserve the common good and that the operation of the economic system did not result in the concentration of wealth and means of production to the common detriment.
To effectuate the said intention it was considered necessary to enact the legislation.
Section 2 of the Act makes a declara tion in the following words: "It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles specified in Clauses (b) and (c) of Article 39 of the Con stitution of India and the acquisition therefor of the contract carriages and other property referred to in Section 4.
" 633 Under Section 4 of the Act every contract carriage owned or operated by contract carriage operator along with the permit or the certificate of registration or both as the case may be, vested in the State Government absolutely and free from all encumbrances.
Further, a11 rights, title and interest of the contract carriage operators in the lands, buildings, workshops and other places and all stores, in struments, machinery, tools, plants, apparatus and other equipments used for the maintenance, repair of, or otherwise in connection with the service of the contract carriage as the State Government may specify in that behalf and all books of accounts, registers, records and all other docu ments of whatever nature relating to the contract carriages vested in the State Government absolutely and free from all encumbrances, and all the said property was deemed to have been acquired for public purpose.
Section 6 provided for payment of compensation for the acquisition of all the said property.
Since the avowed object of the Act was two fold, namely (i) to prevent the misuse of the operation of the contract carriages and to provide better facilities for the transport of passengers, and (ii) to give effect to the policy under lying Clauses (b) and (c) of Article 39 of the Constitution, it was also necessary to prevent the issue of fresh permits or renewal of the existing permits for running the contract carriages in the State to any private individual.
Hence, Section 14 provided for a prohibition of the issue of fresh permit or renewal of the existing permit to any individual or the transfer of such permit to anyone except to the State Government or the Corporation which it may establish under the Karnataka State Road Transport Corporation Act, 1950.
To make an alternative arrangement for running the contract carriages and to prevent both the misuse of the permits as well as concentration of wealth in the hands of a few indi viduals, Section 20 of the Act provided that all contract carriage permits granted or renewed till then would stand cancelled and the Corporation alone would be entitled to the grant or renewal of the said permits to the exclusion of all other persons, and that applications from persons other than the Corporation for the grant of such permit shall not be entertained.
In State of Karntaka & Anr.
vs Shri Ranganatha Reddy & Anr.
; , this Court upheld the validity of the said Act holding, among other things, that the Act was for acquisition of property and was in the public interest and for a public purpose.
The Act, according to the Court, had nationalised the contract transport serv ice in the State and that was also for a public purpose as declared in the Act.
It was also observed that if Articles 38 and 39 are to be given 634 effect to, then the State has progressively to assume the predominant and direct responsibility for setting up new industrial undertakings which would also include development of transport facilities.
The State has also to become agency for planned national development, and the socialistic pat tern of society as the national objective required that public utility services should be in the public sector.
The acquisition of road transport undertaking by the State, therefore, undoubtedly served the public purpose.
It is thus clear from the provisions of the Karnataka Act that the whole object of the Act is to nationalise the contract carriage service in the State with a view to put an end to the abuse of the contract carriage services by the private operators and to provide better transport facilities to the public, and also to prevent concentration of the wealth in the hands of the few and to utilise the resources of the country to subserve the interests of all.
To secure the objective of the Act, it was also necessary to prohibit the grant of the contract carriage permits to private indi viduals and to reserve them exclusively to the State Under taking which was done by Sections 14 and 20 of the Act.
Unlike the MV Act 1988, which is admittedly enacted by the Parliament under Entry 35 of the Concurrent List, to regu late the operation of the motor vehicles, the object of the Karnataka Act is not only the regulation of the operation of the motor vehicles.
Nor is its object merely to prevent the private owners from operating their vehicles with the exclu sive privilege of such operation being reserved in favour of the State or the State Undertaking.
For if that were the only object, the same could have been achieved by the Trans port Undertakings of the State following the special provi sions relating to State Transport Undertakings in Chapter IV A of the which was in operation when the Karnataka Act was brought into force.
The very fact that instead, the State undertook the exercise of enacting the Karnataka Act shows that the object of the State Legis lature in enacting it was materially different.
This is also obvious from the various provisions of the enactment pointed out above.
It is for this reason that the contention advanced by the petitioners that the object of the Karnataka Act and that of the MV Act, 1988 is the same and that both of them occupy the same field, cannot be accepted.
A comparison of the provisions of the MV Act, 1939 (Old Act) and MV Act, 1988 (New Act) further shows that the latter has merely replaced the former.
All that it has done is to update, simplify and rationalize the law on the subject.
For this purpose it has made important provisions in the following matters, namely: 635 "(a) rationalisation of certain definitions with additions of certain new definitions of new types of vehicles; (b) Stricter procedures relating to grant of driving li cences and the period of validity thereof; (c) laying down of standards for the components and parts of motor vehicles; (d) standards for anti pollution control devices; (e) provision for issuing fitness certificates or vehicles also by the authorised testing stations; (f) enabling provision for updating the system of registra tion marks; (g) liberalised schemes for grant of stage carriage permits on non nationalised routes, all India Tourist permits and also national permits for goods carriages; (h), (i), (j), (k), (l) . . 6.
The special provisions relating to the State Trans port Undertakings which are contained in Chapter VI of the new Act are pari materia with those of Chapter IV A of the old Act, with only this difference that whereas under the old Act it was the State Transport Undertaking which had to prepare a scheme for running and operating the transport service by it in relation to any area or route or portion thereof exclusively, under the new Act such a scheme has to be prepared by the State Government itself.
There is no difference in the legal consequences of the schemes under the two enactments.
Both envisage the operation of the services by the State Transport Undertaking to the exclusion of the rest, and cancellation of the existing permits and compensation only for the deprivation of the balance of the period of the permit.
No acquisition of the vehicles or the paraphernalia connected with such vehicles is envisaged as is the case under the Karnataka Act.
It is also not correct to say that the new Act, i.e. MV Act 1988 incorporates a special policy of liberalisation for private sector operations in the transport field.
We see no such provision in the Act nor was any pointed out to us.
The provisions with regard to the grant of 636 permits under both the old and the new Act are the same.
In any case there is no provision for liberalisation of the grant of contract carriage permits in favour of the private individuals or institutions so as to come in conflict with the Karnataka Act.
Thus the Karnataka Act and the MV Act, 1988 deal with two different subject matters.
As stated earlier the Karna taka Act is enacted by the State Legislature for acquisition of contract carriages under entry 42 of the Concurrent list read with Article 31 of the Constitution to give effect to the provisions of Articles 39(b) and (c) thereof.
The MV Act 1988 on the other hand is enacted by the Parliament under entry 35 of the Concurrent list to regulate the operation of the motor vehicles.
The objects and the subject matters of the two enactments are materially different.
Hence the provisions of Article 254 do not come into play in the present case and hence there is no question of repugnancy between the two legislations.
Shri Nariman, the learned counsel for the petitioners however, contended that the provisions of Section 14 and 20 of the Karnataka Act were in direct conflict with the provi sions of Sections 74 and 80(2) of the MV Act 1988.
According to him while the Regional Transport Authority (RTA) is enjoined by the provisions of Section 74 read with Section 80(2) of the MV Act 1988, ordinarily not to refuse to grant an application for permit of any kind, the provisions of Section 14 and 20 of the Karnataka Act prohibit any person from applying for, and any officer or authority from enter taining or granting, application for running any contract carriage in the State.
Thus there is a direct conflict between the two legislations, and since the MV Act 1988 is a later legislation, operating in the same area, it should be deemed to have impliedly repealed the provisions of Section 14 and 20 of the Karnataka Act, even if the latter Act had received the assent of the President.
This is so because of the proviso to sub clause (2) of Article 254 of the Consti tution.
This contention proceeds on the footing that the two legislations occupy the same field.
As has been pointed out earlier, the objects of the two legislations are materially different.
The provisions of Sections 51 and 57 of the old Act further correspond to provisions of Sections 74 and 80 of the new Act.
The Karnataka Act had received the assent of the President inspite of the provisions of Sections 51 and 57 of the old Act.
The assent of the President, further as stated by the respondents, was taken by way of abundant precaution, although the subject matters of the two Acts were different.
The provisions of Sections 14 and 637 20 of the Karnataka Act were incidental and necessary to carry out the main object of the said Act.
Without the said provisions, the object of the said Act would have been frustrated.
In the case of State of Karnataka & Anr.
vs Ranganatha Reddy & Anr.
Etc., (supra) while repelling the contention that there was a legislation encroachment by the Karnataka Act because it impinged on the subject of Inter State Trade & Commerce in the Union List as it provided also for acquisition of transport carriages running on inter state routes, this Court in para 32 of the Judgment has observed as follows: " . .
It (the Karnataka Act) is not an Act which deals with any Inter State Trade and Commerce.
Even assuming for the sake of argument that carriage of passengers from one state to the other is in one sense a part of the InterState Trade and Commerce, the impugned Act is not one which seeks to legislate in regard to the said topic.
Primarily and almost wholly it is an Act to provide for the acquisition of contract carriages, the Intra State permits and the other properties situated in the State of Karnataka.
In pith and substance it is an Act of that kind.
The incidental en croachment on the topic of inter state trade and commerce, even assuming there is some, cannot invalidate the Act.
The MV Act 1939 was enacted under Entry 20 of List III of Sched ule Seven of the Government of India Act 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution.
The subject being in the Concurrent List and the Act having received the assent of the President, even the repugnancy, if any between the Act and the Motor Vehi cles Act stands cured and cannot be a ground to invalidate the Act.
Entry 42 of List 111 deals with acquisition of property.
The State has enacted the Act mainly under this entry . " (emphasis supplied) According to me these observations should put an end to any controversy on the subject, namely, whether the two Legislations are enacted under two different entries in the Concurrent List, and whether they occupy different areas or not.
I am also unable to appreciate the contention that the provisions of Sections 14 and 20 of the Karnataka Act are in conflict with the provisions of Sections 74 and 80 of the New MV Act 1988.
Section 98 of the MV Act 1988 in terms clearly states (as did Section 68B of the 638 MV Act 1939) that Chapter VI relating to the special provi sions about the State Transport Undertaking and the rules and orders made thereunder, shall have effect notwithstand ing anything inconsistent therewith contained in Chapter V or in any other law for the time being in force or in any instrument having effect by virtue of any such law.
Sections 74 and 80 relating to the grant of the contract carriage permit and the procedure in applying for the grant of such permits respectively, are in Chapter V.
This means that when under Chapter VI, a scheme is prepared by the State Govt.
entrusting the contract carriage services in relation to any area or route or portion thereof, to a State Transport Undertaking to the exclusion complete or partial of other persons, the provisions of Sections 74 and 80 would have no application, and the private transport operators cannot apply for the grant of contract carriage permits under Section 80 nor can such permits be granted by the Transport Authority.
In other words, the MV Act 1988 also makes a provision for nationalisation of routes, and envisages a denial of permits to private operators when routes are so nationalised.
Hence it is not correct to say that there is a conflict between the provisions of the two Acts.
It was then contended that when there is a repugnancy between the legislations under Article 254 of the Constitu tion, the doctrine of pith and substance does not apply, and even if some of the provisions of the impugned State legis lation are in conflict with some of the provisions of the Central legislation, the conflicting provisions of the State legislation will be invalid.
In support of this contention, reliance was placed on two decisions one of the Federal Court in the case of Meghraj & Ors.
vs Allahrakhiya & Ors., 29 AIR 1942 FC 27 and the other of the Privy Council report ed in AIR 34 confirming the former.
The Federal Court in the above decision has observed that when a provincial Act is objected to as contravening not Section 100 but Section 107(1) the Govt.
of India Act 1935 (corresponding to Article 254(1) of the Constitution) the question of the pith and substance of the impugned Act does not arise.
In that case, the validity of the Punjab Restitution of Mortgage Lands Act was challenged on the ground that some of its provisions were repugnant to certain provisions of the Contract Act and of the Civil Procedure Code.
The Court held that there was no repugnancy between the legislations.
But while holding so, the Court made a one sentence observation as follows: "In the judgment of the High Court there is some discussion of the question of the "pith and substance" of the Act; but that question does not 639 arise as objection is taken not under Section 100 of the Constitution act but Sec.
" There is no discussion on the point.
The arguments, if any advanced on the question are neither reproduced nor dealt with.
The observation further was not necessary for the decision in that case, since as is pointed out above, the Court had held that there was no repugnancy between the two statutes since they cov ered two different subject matters.
Hence the issue as to whether the impugned Punjab Restitution of Mortgage Lands Act was valid because the pith and substance of the Act covered an area different from the one covered by the Con tract Act and the Civil Procedure Code, did not fall for consideration before the Court.
What is more, when the matter went in appeal before the Privy Council, the said point was not even remotely referred to and I find no obser vation in the judgment either confirming, or dissenting from the said observations.
This being the case the said observa tions cannot be regarded as more than general in nature.
They are not even an obiter dicta much less are they the ratio decidendi of the case Hence the said observations do not have a binding effect.
Even otherwise, I am of the view that not to apply the theory of pith and substance when the repugnancy between the two statutes is to be considered under Article 254 of the Constitution, would be illogical when the same doctrine is applied while considering whether there is an encroachment by the Union or the State legislature or a subject exclu sively reserved for the other.
When the legislative en croachment is under consideration the doctrine of pith and substance comes to the aid to validate a legislation which would otherwise be invalid for the very want of legislative competence.
When the repugnancy between the two legislations is under consideration, what is in issue is whether the provision of the State enactment though otherwise constitu tionally valid, has lost its validity because the Parliament has made a legislation with a conflicting provision on allegedly the same matter.
If it is open to resolve the conflict between two entries in different Lists, viz. the Union and the State List by examining the dominant purpose and therefore the pith and substance of the two legisla tions, there is no reason why the repugnancy between the provisions of the two legislations under different entries in the same List, viz. the Concurrent List should not be resolved by scrutinizing the same by the same touchstone.
What is to be ascertained in each case is whether the legis lations are on the same subject matter or not.
In both cases the cause of conflict is the apparent identity of the sub ject matter.
The tests for resolving it therefore cannot be different.
640 10.
I may in this Connection refer to some of the au thorities relied upon by the parties.
In Municipal Council Palai vs
T.J. Joseph & Ors., ; this Court had to consider the repugnancy between the presolution passed by the appellant Municipal Council in exercise of the powers vested in it under Section 286 and 287 of the Travancore District Municipalities Act 1941, and the provisions of Section 42 of the Travancore Cochin Motor Vehicles Act 1950 which came into force on January 5, 1950, providing for the use of a public bus stand constructed for Stage Carriage buses starting from and returning to the Municipal limits or passing through its limits.
The respondent operators challenged the resolution of the Council by contending that the provisions of Sections 286 and 287 of the Municipalities Act stood repealed by implication by virtue of the provisions of Section 42 of Travancore Cochin Motor Vehicles Act, 1950.
That Section read as follows: "Government or any authority authorised in this behalf by Government may, in consultation with the local authority having jurisdiction in the area concerned, determine places at which motor vehicles may stand either indefinitely or for a specified period of time, and may determine the places at which public service vehicles may stop for a longer time than is necessary for the taking up and setting down of passengers. ' ' The High Court accepted the contention of the respondents and allowed the Writ Petition.
In appeal against the said decision, this Court discussed the law relating to the repugnancy between two legislations by referring to various decided cases foreign as well as Indian.
The Court pointed out that in Daw vs The Metropolitan Board of Works, ; after stating the general principles of con struction, the Court there had said that when the legisla tion was found dealing with the same subject matter in two Acts, so far as the later statute derogates from and is inconsistent with the earlier one, the legislature must be held to have intended to deal in the later statute with the same subject matter which was within the ambit of the earli er one.
This Court further observed that in that case the English Court was concerned with the statutes which covered more or less the same subject matter and had the same object to serve.
That decision further had kept open the question whether the powers conferred upon one authority by an earli er Act, could continue to be exercised by that authority after the enactment of a provision in a subsequent law which 641 conferred wide powers on another authority which would include some of the powers conferred by the earlier statute till the new authority chose to exercise the powers con ferred upon it.
Referring to the case of The Great Central Gas Consumers Co. vs Clarke, ; the Court observed that the foundation of that decision was that the later statute was a general one whereas the previous one was a special one and, therefore, the special statute had to give way to the later general statute.
Referring to the case of Goodwin vs Phillips, the Court observed that the doctrine of implied repeal was well recognised, and that repeal by implication was a convenient form of legislation and that by using this device, the legislature must be presumed to intend to achieve a consistent body of law.
The Court then went on to say that it is undoubtedly true that the legislature can exercise the powers of repeal by implication, but it is an equally well settled principle of law that there is a pre sumption against an implied repeal.
Upon the assumption that the legislature enacts laws with a complete knowledge of all existing laws pertaining to the same subject, the failure to acid a repealing clause indicates that the intent was not to repeal existing legislation.
This presumption is rebutted if the provisions of the new Act are so inconsistent with the old ones that the two cannot stand together.
Then the Court referred to the following observations from page 631, para 311 of Crawford on Statutory Construction: "There must be what is often called 'such a positive repug nancy between the two provisions of the old and the new statutes that they cannot be reconciled and made to stand together '.
In other words they must be absolutely repugnant or irreconcilable.
Otherwise, there can be no implied repeal . . for the intent of the legislature to repeal the old enactment is utterly lacking.
" The Court then referred to the observations made in Crosby vs Patch, 18 Calif. 438 quoted by Crawford "Statutory Con struction" p. 633 to point out the reasons of the rule that an implied repeal will take place in the event of clear inconsistency or repugnancy.
The said observations are as follows: "As laws are presumed to be passed with deliberation, and with full knowledge of all existing ones on the same sub ject, it is but reasonable to conclude that the Legislature, in 642 passing a statute, did not intend to interfere with or abrogate any former law relating to the same matter, unless the repugnancy between the two is irreconcilable.
Bowen vs Lease, 5 Hill 226.
It is a rule, says Sedgwick, that a general statute without negative words will not repeal the particular provisions of a former one, unless the two acts are irreconcilably inconsistent. 'The reason and philosophy of the rule ', says the author, 'is, that when the mind of the legislator has been turned to the details of a subject, and he has acted upon it, a subsequent statute in general terms, or teating the subject in a general manner, and not expressly contradicting the orginal act, shall not be con sidered as intended to affect the more particular or posi tive previous provisions, unless it is absolutely necessary to give the latter act such a construction, in order that its words shall have any meaning at all.
" The Court then pointed out that for implying a repeal the next thing to be considered is whether the two statutes relate to the same subject matter and have the same purpose.
The Court in this connection quoted the following passage at page 634 from Crawford: "And, as we have already suggested, it is essential that the new statute covers the entire subject matter of the old; otherwise there is no indication of the intent of the legis lature to abrogate the old law.
Consequently, the later enactment will be construed as a continuation of the old one." (emphasis supplied) These observations are very material for considering the question with which we are concerned in the present case, namely whether the doctrine of pith and substance is ap plicable while examining the repugnancy of the two statutes.
The Court then stated that the third question to be considered was whether the new statute purports to replace the old one in its entirety or only partially, and the Court observed that where replacement of an earlier statute is partial, a question like the one, which the Court did not choose to answer in Daw 's case (supra) would arise for decision.
The Court also stated that it has to be remembered that at the basis of the doctrine of implied repeal is the presumption that the legislature which must be deemed to know the existing law did not intend to create any confusion in the law by retaining conflicting provi 643 sions on the statute book and, therefore, when the court applies this doctrine, it does no more than give effect to the intention of the legislature ascertained by it in the usual way, i.e., by examining the scope and the object of the two enactments, the earlier and the later.
The Court then referred to its earlier decision in Deep Chand vs State of U.P. & Ors., and pointed out that in that case the following principles were laid down to ascertain whether there is repugnancy or not: 1.
Whether there is direct conflict between the two provi sions; 2.
Whether the legislature intended to lay down an exhaus tive code in respect of the subject matter replacing the earlier law; 3.
Whether the two laws occupy the same field.
The Court then referred to Sutherland on Statutory Construc tion (Vol.
13rd Edn.
p. 486) on the question of "repeal of special and local statutes by general statutes".
The para graph reads as follows: "The enactment of a general law broad enough in its scope and application to cover the field of operation of a special or local statute will generally not repeal a statute which limits its operation to a particular phase of the subject covered by the general law, or to a particular locality within the jurisdictional scope of the general statute.
An implied repeal of prior statutes will be restricted to statutes of the same general nature since the legislature is presumed to have known of the existence of prior special or particular legislation, and to have contemplated only a general treatment of the subject matter by the general enactment.
Therefore, where the later general statute does not propose an irreconcilable conflict, the prior special statute will be construed as remaining in effect as a quali fication of or exception to the general law.
" The Court, however, hastened to add that there is no rule of law to prevent repeal of special and local statute by a later general statute and therefore, where the provisions of the special statute are wholly repugnant to the general statute, it would be possible to infer that the special statute was repealed by the general enactment.
However, the Court observed that where it is doubtful whether the special statute 644 was intended to be repealed by the general statute, the Court should try to give effect to both the enactments as far as possible, since the general statute applies to a11 persons and localities within its jurisdiction and scope as distinguished from the special one which in its operation is confined to a particular locality.
Where the repealing effect of a statute is doubtful, the statute is to be strictly construed to effectuate its consistent operation with previous legislation as observed by Sutherland on Statutory Construction.
The Court also approved of the observations of Suleman J., in Shyamakant Lal vs Rambhajan Singh, that repugnancy must exist in fact, and not depend merely on a possibility.
After discussing the principles of repugnancy as above, the Court answered the question that fell for consideration before it in favour of the Municipal Council by observing as follows: "It seems to us however, clear that bearing in mind the fact that the provisions of section 72 of the Travancore Cochin Motor Vehicles Act were intended to apply to a much wider area than those of sections 286 and 287 of the Travancore District Municipalities Act it cannot be said that section 72 was intended to replace those provisions of the Travancore Distt.
Municipalities Act.
The proper way of construing the two sets of provisions would be to regard section 72 of the Travancore Cochin Motor Vehicles Act as a provision inconti nuity with sections 286 and 287 of the Travancore District Munic ipalities Act so that it could be availed of by the appro priate authority as and when it chose.
In other words the intention of the legislature appears to be to allow the two sets of provisions to co exist because both are enabling ones.
Where such is the position, we cannot imply repeal.
The result of this undoubtedly would be that a provision which is added subsequently, that is, which represents the latest will of the legislature will have an overriding effect on the earlier provision in the sense that despite the ' fact that some action has been taken by the Municipal Council by resorting to the earlier provision the appropri ate authority may nevertheless take action under section 72 of the Travancore Cochin Motor Vehicles Act, the result of which would be to override the action taken by the Municipal Council under section 287 of the District Municipalities Act.
No action under section 72 has so far been taken by the Govern ment and, therefore, the resolutions of the Municipal Coun cil still hold good.
Upon this view it is not necessary to consider certain other points raised by learned counsel.
" 645 It would thus appear from this decision that the Court held there that the allegedly conflicting provisions of Travancore Cochin Motor Vehicles Act were intended to apply to much wider area than the relevant provisions of the Distt.
Municipalities Act and, therefore, it could not be said that the provisions of the Motor Vehicles Act were intended to replace the provisions of Municipalities Act.
The Court also held that the proper way of construing the two sets of provisions would be to regard the conflicting provisions of the Motor Vehicles Act as provisions in conti nuity with the relevant provisions of the Municipalities Act so that it could be availed of by the appropriate authority as and when it chose.
The Court, therefore, read into the relevant provisions, the intention of the legislature to allow the two sets of provisions to co exist because both were enabling ones, and in such circumstances no repeal could be implied.
The Court also rested the said decision by relying on the fact that since no action was taken by the Government under the relevant provisions of the Motor Vehi cles Act, till such time as the action was taken under the said provisions, the Municipal Council could act under the provisions of the Municipalities Act.
What is important from our point of view, is the view taken in that case that when repugnancy is alleged between the two statutes, it is necessary to examine whether the two laws occupy the same field, whether the new or the later statute covers the entire subject matter of the old, whether legislature intended to lay down an exhaustive code in respect of the subject matter covered by the earlier law so as to replace it in its entirety and whether the earlier special statute can be construed as remaining in effect as a qualification of or exception to the later general law, since the new statute is enacted knowing fully well the existence of the earlier law and yet it has not repealed it expressly.
The decision further lays down that for examining whether the two statutes cover the same subject matter, what is necessary to examine is the scope and the object of the two enactments, and that has to be done by ascertaining the intention in the usual way and what is meant by the usual way is nothing more or less than the ascertainment of the dominant object of the two legislations.
In Ratan Lal Adukia vs Union of India, the conflict was between the provisions of Section 80 of the Railways Act 1890 as amended by the Railways (Amendment) Act 1961 on the one hand and the provisions of Section 20 of the Code of Civil Procedure, 1908 and section 18 of the Presi dency Small Causes Courts Act 1882, on the other.
Section 80 of the Railways Act before its amendment had 646 provided that a suit for compensation for loss of life or injury to a passenger or for loss, destruction and deterio ration of animals or goods, would lie where the passengers or the animals or goods were booked through over the Rail ways of two or more Railway Administrations, against the Railway Administration from which the passengers and the goods were booked or against the Railway Administration on whose railway the loss injury, destruction or deterioration occurred.
By the amendment of 1961, the aforesaid provisions of Section 80 were changed and such a suit was made main tainable (a) if the passenger or the animals or goods were booked from one station to another on the railway of the same Railway Administration, against that Railway Adminis tration.
(b) if they were booked through over the railway of two or more Railway Administrations, against the Railway Administration from which they were booked or against the Railway Administration on whose railway the destination station lay or the loss etc.
occurred.
It was further pro vided that in either of these two cases the suit may be instituted in a court having jurisdiction over the place at which the passenger or the goods were booked or the place of destination or over the place in which the destination station lies or the loss etc.
occurred.
Thus the changes brought about by the amendment were significant.
The old section did not deal with the liability of claims in respect of goods etc.
carried by single railway.
It only concerned itself with them when they were carried by more than one railway and provided that the suit for loss of such goods could he brought against either the Railway Administration with which the booking was made or against the Railway Administration of the delivery station.
The old section further did not speak of the places where such suits could be laid.
The choice of the forum was regulated by section 20 of the Code of Civil Procedure or section 18 of the Presi dency Small Causes Courts, as the case may be.
The amendment of the section however, made a departure in this respect, namely, it also named the place where such suits could be instituted and it is with this change the decision in ques tion was concerned.
Confirming the High Court 's view, the Court held that the new Section 80 prevailed over the provi sions of Section 20 of the Code of Civil Procedure and of Section 18 of the Presidency Small Causes Courts Act.
The Court took the view that in view of the fact that the provi sions of the new Section 80 as well as the relevant provi sions of the Code of Civil Procedure and the Presidency Small Causes Courts Act dealt with the same subject matter, namely, the forum for suits, and since the new Section 80 was a special provision relating to special suits against the Railway Administration the special provisions would prevail over the general provisions.
The Court also stated that Section 80, looking into its earlier history 647 and the other changes which were brought in it, was a code in itself dealing with the relevant subject matter, and therefore, it repealed the provisions of Section 20 of the Code of Civil Procedure and of Section 18 of the Presidency Small Causes Courts Act by necessary implication.
The Court also held that since the provisions of the latter two gener al statutes related to territorial jurisdiction of courts and since the amendment to Section 80 also dealt with the same subject, but in case of only suits for compensation against the Railway, Section 80 being the special statute should be deemed to have supplanted the general statutes like the Code of Civil Procedure and general provisions of section 20 of the Code and Section 18 of the Presidency of Small Causes Courts Act.
It will thus be apparent that in that case the provi sions which were in conflict related to the same subject matter unlike in our case.
The provisions with regard to application and grant of permits in Sections 14 and 20 have nothing in common with the provisions of Sections 74 and 80 of the .
The former provisions are ancillary to giving effect to the acquisition and nationali sation of the road transport within local territorial lim its.
The later provisions are general in nature and in furtherence of the object of the Act which is to regulate transport.
The subject matters of both the statutes and the object of the two sets of provisions are, therefore, materi ally different.
In our case both the statutes can stand together.
The legislative intent is clear.
Since, further, the Parliament had enacted the later statute knowing fully well the existence of the earlier statute and yet it did not expressly repeal it, it will be presumed that the Parliament felt that there was no need to repeal the said statute.
In Ch.
Tika Ramji & Ors.
vs State of U.P. & Ors.
, ; what fell for consideration was the alleged repugnancy between the U.P. Sugarcane (Regulation of Supply and Purchase) Act 1953 and two Notifications issued by the State Government under it on September 27, 1954 and November 9, 1955 on the one hand, and Industries (Development & Regulation) Act 1951 and the and the Sugar Cane Control Order 1955 issued under it on the other.
The Court has stated there that no question of repug nancy under Article 254 of the Constitution can arise where Parliamentary legislation and State legislation occupy different fields and deal with separate and distinct matters even though of a cognate and allied nature, and whereas in that case there was no inconsistency in the actual terms of the Act enacted by Parliament and the State Legislature, the test of repugnancy would be whether Parliamentary 648 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.
The Court then referred to three tests of inconsistency or repugnancy listed by Nicholas on p. 303 2nd Edn. of his Australian Constitution, namely, (1) there may be inconsist ency in the actual terms of the competing statutes, (2) though there may be no direct conflict, a State law may be inoperative because the Common Wealth Law, or the Award of Common Wealth Court is intended to be a complete exhaustive code, (3) even in the absence of intention, the conflict may arise when both State and Common Wealth Law seek to exercise their powers over the same subject matter.
The Court also quoted with approval, observations of the Calcutta High Court in G.P. Stewart vs
B.K. Roy Choudhary, AIR 1939 Cal.
628 on the subject which are as follows: "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 principle deducible from the English cases, as from the Canadian cases, seems therefore to be the same as that enunciated by Issacs, J.in the Australian 44 hours 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 649 given case, the dominant law evinces such an intention must necessarily depend on the language of the particular law".
The Court also approved the observations of Sulaiman, J. in Shyamakant Lal vs Rarnbhajan Singh, (supra) on the subject which are as follows: "When the question is whether a Provincial legisla tion is repugnant to an existing Indian law, the onus of showing its repugnancy and the extent to which it is repug nant 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, 11.
Referring to the case in hand; the Court then stated that there was no question of any inconsistency in the actual terms of the two Acts.
The only questions that arose there were whether the Parliament and the State Legislature sought to exercise their powers over the same subject matter or whether the laws enacted 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.
The Court then compared the provisions of Industries (Devel opment and Regulation) Act, 1951 as amended by Act XXVI of 1953, the X of 1955 and the Sugar Control order 1955 issued thereunder with the U.P. Act and Order of 1954 issued by the State Government thereunder.
By comparing the impugned State Act with the Central Act of 1951 as amended by the Act, 1953, the Court held that the Central Act related to sugar as a finished product while the State legislation covered the field of sugar cane.
Thus the fields of operation of the two legislations were different and hence there was no repugnancy between the Central Act and the State Act.
It was also further pointed out there that even assuming that sugar cane 650 was an article or class of articles relatable to the sugar industry within the meaning of Section 18(g) of the Central Act, no order was issued by the Central Government in exer cise of the powers vested in it under that Section, and hence no question of repugnancy could ever arise because 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 pre requisite before any repugnancy could ever arise.
As far as the was concerned, the Court pointed out that the Parliament was well within its powers in legislating in regard to sugar cane, and the Central Government was also well within its powers in issuing the Sugar Cane Control Order, 1955 because all that was in exercise of the concurrent powers of legis lation under Entry 33 of List 111.
That, however, did not affect the legislative competence of the U.P. State Legisla ture to enact the law in regard to sugar cane and the only question which had to be considered was whether there was any repugnancy between the provisions of the and the State legislation in that behalf.
The Court then pointed out that the State Government did not at all provide for the fixation of minimum price for sugar cane.
Neither had it provided for the regulation of movement of sugar cane as was done by the Central Government in Clauses (3) and (4) of the Sugar Cane Control Order 1955.
Likewise, the provision contained in Section 17 of the State Act in regard to the payment of sugar cane price (as fixed by the Central Govt.) and the recovery thereof as if it was an arrear of land revenue, did not find its place in the Central Government Sugar Cane Control Order 1955.
The provi sions in the two legislations were, therefore, mutually exclusive and did not impinge upon each other.
By referring to the provisions of Central Government Sugar Cane Control Order 1955 and the U.P. Govt.
Sugar Cane (Regulation and Purchase) Order 1954 issued under the respective statutes, the Court pointed out that none of those provisions also overlapped.
The Centre was silent with regard to some of the provisions which had been enacted by the State and the State was silent with regard to some of the provisions which had been enacted by the Centre.
There was no repugnancy whatever between those provisions, and neither the State Act nor the rules flamed thereunder as well as the State Government 's Order issued under it, trenched upon the field covered by the .
The Court therefore held that since there was no repugnancy between the two, the provi sions of Article 254(2) of the Constitution did not come into play.
The Court then considered 651 whether the repealing Section 16 of the Essential Commodi ties Act and clause 7 of the Sugar Cane Control Order 1955 had repealed the State Act to the extent mentioned therein.
Section 16(1)(b) provides as follows: "16(1) The following laws are hereby repealed (a) x x x x (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".
The contention was that the expression "any other law" covered the impugned State Act which was in force in the State immediately before the commencement of the in so far as it controlled or authorised the control of production, supply and distribution of and trade and commerce in sugar cane (which was), an essential commod ity under the Central Act and Clause (7) of the Sugar Cane Control Order.
The contention advanced on behalf of the U.P. State was that under the proviso to Article 254(2), the power to repeal a law passed by the State Legislature was 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 on a topic within the concurrent sphere of the legislation, there should be a vaccum.
The Court observed that there was considerable force in the said contention and there was much to be said for the view that a repeal simpliciter was not within the scope of the proviso.
The Court however, stated that it was not necessary to give its decision on the said point as the petitioner in that case would fail on another ground.
The Court then observed that 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 Legislature".
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 652 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 was not a law relating to any matter, which is the subject of an earlier legislation by Parliament.
It was 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 had no application and Section 16(1)(b) of Act X of 1955 and clause 7(1) of the Sugar Cane Control Order 1955 must, in this view, be held to be invalid.
(Sic).
The aforesaid review of the authorities makes it clear that whenever repugnancy between the State and Central Legislation is alleged, what has to be first examined is whether the two legislations cover or relate to the same subject matter.
The test for determining the same is the usual one, namely, to find out the dominant intention of the two legislations.
If the dominant intention, i.e. the pith and substance of the two legislations is different, they cover different subject matters.
If the subject matters covered by the legislations are thus different, then merely because the two legislations refer to some allied or cognate subjects they do not cover the same field.
The legislation, to be on the same subject matter must further cover the entire field covered by the other.
A provision in one legis lation to give effect to its dominant purpose may inciden tally be on the same subject as covered by the provision of the other legislation.
But such partial coverage of the same area in a different context and to achieve a different purpose does not bring about the repugnancy which is intend ed to be covered by Article 254(2).
Both the legislations must be substantially on the same subject to attract the Article.
In this view of the matter I am of the view that there is no repugnancy in the provisions of Sections 14 and 20 of the Karnataka Act and Sections 74 and 80 of the MV Act 1988.
The petitions must therefore fail and are hereby dismissed with costs.
ORDER 15.
In view of the decision of the majority the Writ Petitions stand dismissed and the rule in each is discharged with costs.
K. RAMASWAMY, J. 1.
Despite my deep respect to my learned brother, I express my inability to persuade myself to agree with the result proposed in the draft judgments of my brothers.
653 The notoriety of open and uninhibited misuse of contract carriage as stage carriages in picking up and setting down the passengers en route the route for hire or reward sabo taging the economic, efficient and co ordinated transport service by the respective State Transport Undertakings (for short, "the S.T.U.") had been taken cognizance of by the Karnataka State Legislature.
It provided the remedy making the Karnataka Contract Carriages (Acquisition) Act (21 of 1976), for short, "the Acquisition Act" by taking aid of the Entry 42, List III (Concurrent List) of the Seventh Schedule to the Constitution and Articles 31, 39(b) and (c) of the Constitution.
It was reserved for consideration and has received the assent of the President on March 11, 1976.
It came into force with effect from March 12, 1976.
Section 3(g) of the Acquisition Act defines "Contract Carriage" as one covered under section 2(4) of the (4 of 1939), for short, "the Repealed Act" including public serv ice vehicle defined under section 63(6), etc.
section 3(a) defines "acquired property" means the vehicles and other immovable and movable property vesting in the State Government under section 4 thereof.
The Acquisition Act excluded tourist vehicles, motor cabs, etc.
Section 4 declares that on and from the notified date, every contract carriage along with permit or certificate of registration or both, lands, buildings, workshop, etc.
shall stand vested in the State Government free from encumbrances.
Section 6 provides machinery to determine the amount for the vesting of the acquired proper ty under section 4.
Section 14 which is relevant for the purpose of this case read thus: "Fresh permit or renewal of the existing permit barred Except as otherwise provided in this Act (1) No person shall on or after the commencement of this Act apply for any permit or fresh permit or for renewal of an existing permit for the running of any contract carriage in the State; and (2) every application for the grant of a permit or fresh permit or for the renewal of the existing permit and all appeals or revisions arising therefrom relating thereto made or preferred before the commencement of this Act and pending in any Court or with any Officer, Authority or Tribunal constituted under the shall abate.
" A reading thereof manifests its unequivocal declaration that on and 654 from the date of vesting viz., March 12, 1976, the statute prohibits any person to apply for, any fresh permit or renewal of an existing permit to run any contract carriage in that State and all applications, appeals or revisions pending before the appropriate authority as on the notified date, statutorily declared to have been abated.
Section 20 declares by employing non obstenti clause in sub section
(1) that notwithstanding anything in the repealed Act with effect from March 12, 1976 all contract carriage permits granted or renewed in respect of any vehicle other than a vehicle acquired under the Acquisition Act, or belonging to the S.T.U., Karnataka; or referred to in section 24 thereof shall stand canceled.
Sub section
(2) accords with mandatory language that the S.T.U. "shall be entitled for or renewal of con tract carriage permits to the exclusion of all other per sons" and sub section
(3) prohibits by employing a negative language that "no officer or authority shall invite any application or entertain any such application of persons other than the Corporation (S.T.U.) for grant of permit or the running of the contract carriage.
" By conjoint operation of sections 14 and 20, the right of any person other than S.T.U., Karnataka to apply for and to obtain any permit or renewal of an existing permit to run a motor vehicle as a contract carriage has been frozen and issued statutory injunction restraining the authority concerned from either inviting or entertaining any application from him for the grant or renewal of contract carriage permit.
Monopoly to obtain permit or renewal to run contract carriage was conferred on S.T.U., Karnataka.
The constitutional validity of the Acqui sition Act was upheld by this Court in State of Karnataka vs Ranganatha Reddy, 1.
The contention that the Acquisition Act fails under Entry 42 of List I of Seventh Schedule to the Constitution, viz., inter state trade and commerce and that therefore the State Legislature lacked competence to make the Acquisition Act was negatived.
It was held that in pith and substance, it is an act of acquisition of the contract carriages falling in Entry 42 of List III.
It was further held that the effect of operation of sections 14 and 20 is incidental or ancillary to the acquisition.
Having received the assent of the President, it is saved by article 254(2) of the Constitution.
When an attempt to obtain renew al or fresh special permits to run contract carriages taking aid of section 62(1) or section 63(6) respectively of the repealed Act 4 of 1939 was made on the ground that the Acquisition Act had saved their operation, this Court in Secretary, R.T.A., Bangalore vs P.D. Sharma, ; held that by operation of sections 14 and 20(3), a public service vehicle be it a contract carriage or stage carriage for which temporary permits under sections 62(1) and 63(6) were issued and were in force on January 30, 1976 are not entitled to fresh permits and exclusive monopoly to run contract carriages was given to S.T.U., Karnataka.
655 2.
The (Act 59 of 1988), for short, "the Act", came into force with effect from July 1, 1989.
Section 2(7) defines 'contract carriage '.
Section 2(8) defines 'motor vehicle ' or 'vehicle ' to mean any mechanical ly propelled vehicle adapted for use upon road whether the power of propulsion is transmitted thereto from an external or internal source and includes a chasis to which a body has not been attached and a trailer . .
Section 2(34) de fines 'public place ' to mean, a road, street, way or other place whether a thoroughfare or not, to which the public have a right of access and includes any place or stand at which passengers are picked up or set down by a stage car riage.
Section 2(35) defines 'public service vehicle ' to mean, any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a . . , contract carriage and stage carriage.
Section 2(47) defines 'transport vehicle ' to mean, a public service vehicle . . , or a private service vehicle.
Chapter V deals with Control of Transport Vehicles, section 66 mandates an owner of a motor vehicle to obtain permit to run it in accordance with the conditions of a permit thus: "(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passen gers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used." (Emphasis supplied) (The provisos are not necessary for the purpose of this case.
Hence omitted) Section 73 requires him to make an application for permit of a contract carriage with particulars specified therein.
Section 74 deals with grant of contract carriage permit.
Sub section
(1) thereof provides that "subject to provisions of sub section
(3), a Regional Transport Authority may, on an appli cation made to it under section 73, grant a contract carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit, provided that no such permit shall be granted in respect of any area not specified in the application." Sub section (2) empowers the Regional Transport Authority to impose any one or more conditions enumerated therein to be attached to the permit, the details thereof are redundant.
Sub section
(3) empowers a State 656 Government, when directed by the Central Government, to limit the number of contract carriages generally or a speci fied type as may be fixed in the notification published in this behalf for their operation on the city routes.
The details are also not necessary for the purpose of this case.
Under section 80(1), an application for a permit of any kind may be made at any time.
Sub section
(2) posits that "a Regional Transport Authority shah not ordinarily refuse to grant an application for permit of any kind made at any time under this Act." (Emphasis Supplied).
The proviso are omitted as not being relevant.
The petitioners have applied under sections 73, 74 and 80 of the Act for grant of contract carriage permits.
Placing reliance on sections 14 and 20 of the Acquisi tion Act, the concerned authorities have refused to enter tain their applications.
Calling them in question the above writ petitions have been filed under article 32 of the Consti tution.
The contention of Sri Nariman, learned senior counsel for the petitioners, is that the object of the Act is to liberalise grant of contract carriages which do not ply on any particular routes.
Contract carriage defined under section 2(7) of the Act is a public service vehicle within the meaning of section 2(35) of the Act.
Section 66 obligates the owner to obtain permits to run contract carriages.
Section 14(1) read with section 80(1) accords the right to the petition ers to apply for, and enjoins the authorities under section 80(2) to consider and to grant permits to run public service vehicles as contract carriages.
Section 217(1) repealed all the laws, save such of the laws which are not inconsistent with the provisions of the Act.
The operation of sections 14 and 20 of the Acquisition Act is inconsistent with sections 74 and 80 of the Act.
Grant of permit to run contract carriage is covered by Entry 35 of List III of the Seventh Schedule.
Though, the Acquisition Act was made under Entry 42 of List III and has received the assent of the President, by opera tion of section 74 read with section 80 and section 2 17, the operation of sections 14 and 20 became void under proviso to article 254(2).
Sections 14 and 20 also stood repealed by implication.
The authorities are, hereby, enjoined to consider the petition ers ' applications for grant of contract carriage permits as per the provisions of the Act and the relevant rules.
Mr. Sanghi, learned senior counsel for the S.T.U., Karnataka, contended that the Acquisition Act was made in exercise of the power under Entry 42 of List III of Seventh Schedule to the Constitution.
Its constitutional validity was upheld by this Court.
It does not occupy the same field as under the Act.
The Acquisition Act, having been reserved for consider ation under article 254(2) and has received the assent of the President, it prevails over the Act in the State of Karnata ka.
The Acquisition Act is a "special law" in juxtaposition to the general law under the 657 Act.
The argument of Mr. Sanghi, though apparently at first blush is alluring and attractive, but on a deeper probe, I find insurmountable difficulties in his way to give accept ance to them.
The main questions are whether sections 14 and 20 of the Acquisition Act and sections 73, 74 and 80 of the Act is "in respect of the same matter" and whether the Act evinces its intention to occupy the same field.
At the cost of repetition, it may be stated that sections 49 to 51 and the relevant rules under the Repealed Act govern the grant of contract carriage permits and in partic ular the rigour imposed in section 50 thereof is absent in the Act.
The Acquisition Act aimed to acquire the contract carriages.
They stood vested in the State Government under section 4.
Incidental and ancillary thereto, the operation of the existing permits or seeking renewal thereof and the pendency of the proceedings in that regard either by way of an appli cation or in appeal or in revision, having statutorily been declared under section 14(2) to have been abated, the right to obtain permits or special permits afresh or renewal thereof to run contract carriages or stage carriages after expiry of the term, has been frozen to all citizens.
Exclusive monopo ly to obtain permits or of the renewal to run them has been given to the S.T.U., Karnataka.
On and from March 12, 1976, section 20(3) prohibits the authorities concerned to invite or entertain an application or to grant or renew the permits to a contract carriage or special permit, except to the S.T.U., Karnataka.
The non obstenti clause makes clear any cloud of doubts of the applicability of the repealed Act 4 of 1939.
After the receipt of the assent of the President, though it is inconsistent with the Repealed Act, its operation is saved by article 254(2) of the Constitution.
Sections 73 and 74 read with section 80 of the Act gives to an applicant the right to apply for and to obtain, and obligates the Regional Transport Authority to grant permit to run any public serv ice vehicle as contract carriage throughout the country including the State of Karnataka.
Though, section 80(1) gives discretionary power to grant permit but sub section
(2) of section 80 manifests that refusal to grant contract carriage permits appears to be an exception for stated grounds and obviously for reasons to be recorded.
4A. Constitutionalism is the alter to test on its anvil the constitutionality of a statute and article 254 is the sole fountain source concerning a State law in the Concurrent List.
Article 254(1) deals with inconsistency of law made by Parliament and the law made by the Legislature of a State.
Clause (1) adumbrates that the existing law, if it is repug nant with the law made by the Parliament, subject to the provisions of cl.
(2), the law made by the Parliament wheth er passed before or after the law made by the Legislature of such state, or, as the case 658 may be, the existing law shall prevail and the law made by the Legislature of the State shall, to the extent of repug nancy, be void.
Clause (2) deals with the law made by the Legislature of a State 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 the Parliament or an existing one "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 Presi dent and has received his assent, prevails in that State; provided that nothing in this clause shall prevent Parlia ment 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.
(Emphasis supplied) 5.
In a federal system like ours, there are two streams of law, viz., Union and State.
At times, the citizen sub jected to both of laws Central and State will find incon sistency between the obligations imposed on him by those laws or finds variance to avail both laws.
In fact, both the Union and State Legislatures are competent to make laws on a subject enumerated in the Concurrent List.
We are not con cerned in this case with regard to Union List or State List.
it is quite possible that while legislating upon the sub ject, they might end up in handing down inconsistent law and the observance of one law may result is non observance of the other.
The citizen will, in such a situation, be at a loss to decide which of the two laws he should follow.
To resolve the inconsistency, in other words, to bring about operational uniformity Constitution presses into Service article 254.
Its forerunner is section 107 of the Government of India Act, 1935.
Both the Parliament and a State Legislature derive their power only under article 254 and article 246(2) to legislate concurrently on the subjects enumerated in the Concurrent List.
The enumeration of the subjects in the Concurrent List is only for demarcation of legislative heads or distribution of the subject/subjects over which the Parliament and the State Legislature have competence to make law.
However, paramouncy has been accorded to the Union Law, making provision in article 254 firstly as to what would happen in case of repugnancy between the Central and the State law in the concurrent field and secondly resolving such a con flict.
The reason is that there are certain matters which cannot be allocated exclusively either to the Parliament or to a State Legislature and for which, though often it is desirable that the State Legislature should make a provision in that regard.
Local conditions necessarily vary from State to State and the State Legislature ought to have the power to adopt general legislation to meet the particular circum stances of a State.
It is equally necessary that the 659 Parliament should also have plenary jurisdiction to enable it in some cases to secure uniformity in the main principles of law throughout the country or in other matters to guide and encourage the States ' efforts and to provide remedies for mischiefs arising in the State sphere extending or liable to extent beyond the boundaries of a single State.
The subjects like the Indian Penal Code, Civil Procedure Code, Criminal Procedure Code, Labour Laws, the Motor Vehi cles Act, etc.
occupy this area.
The essential condition for the application of article 254(1) is that the existing law or a law made by the Parliament subsequent to State law, must be with respect to one of the matters enumerated in the Concur rent List.
In other words, unless it is shown that the repugnancy is between the provisions of a State law and an existing or subsequent law or amended law etc.
of the Par liament in respect of the same specified matter, article 254 would be inapplicable, 6.
The Court has to examine in each case whether both the legislations or the relevant provisions therein occupy the same field with respect to one of the matters enumerated in the Concurrent List and whether there exists repugnance between the two laws.
The emphasis laid by article 254 is "with respect to that matter".
Clause (1) of article 254 posits as a rule that in case of repugnancy or inconsistency between the State law and the Union law relating to the same matter in the Concurrent List occupying the same field, the Union law shall prevail and the State law will fail to the extent of the repugnancy or inconsistency whether the Union law is prior or later in point of time to the State law.
To this general rule, an exception has been engrafted in cl.
(2) thereof, viz., provided the State law is reserved for con sideration of the President and it has received his assent, and then it will prevail in that State notwithstanding its repugnancy or inconsistency with the Union law.
This excep tion again is to be read subject to the proviso to cl.
(2) thereof, which empowers the Parliament to make law afresh or repeal or amend, modify or vary the repugnant State law which will become void even though it received President 's assent.
In short, cl.
(1) lays down a general rule; cl.
(2) is an exception to cl.
(1) and proviso qualifies that excep tion.
The premise is that the law made by the Parliament is paramount and Union and State law must relate to the same subject matter in the Concurrent List.
It is, thus, made clear that the Parliament can always, whether prior or subsequent to State law, make a law occupied by the State law.
An absurd or an incongruous or irreconcilable result would emerge if two inconsistent laws or particular provi sions in a statute, each of equal validity, could coexist and operate in the same territory.
660 7.
Repugnancy between the two pieces of legislation, generally speaking, means that conflicting results are produced when both laws are applied to the same set of facts.
Repugnancy arises when the provisions of both laws are fully inconsistent or are absolutely irreconcilable and that it is impossible to obey without disobeying the other.
Repugnancy would arise when conflicting results are produced when both the statutes covering the same field are applied to a given set of facts.
The Court should, therefore, make every attempt to reconcile the provisions of the apparently conflicting enactments, and would give harmoneous construc tion.
There is no repugnancy unless the two Acts or provi sions are wholly incompatible with each other or the two would lead to absurd result.
The purpose of determining the inconsistency is to ascertain the intention of the Parlia ment which would be gathered from a consideration of the entire field occupied by the State Legislature.
The proper test is whether the effect can be given to the provisions of both the laws or whether both the laws can stand together.
There is no repugnaney if these two enactments relate to different fields or different aspects operating in the same subject.
In my considered views, article 254 was engrafted in the Constitution by the rounding fathers to obviate such an absurd situation.
The reason is obvious that there is no provision in the Constitution that the law made by the Parliament is to be void by reason of its inconsistency with the law made by the Legislature of a State.
It may be dif ferent if the State law is only to supplement the law made by the Parliament.
If both the laws without trenching upon another 's field or colliding with each other harmoneously operate, the question of repugnancy does not arise.
It is also axiomatic that if no law made by Parliament occupies the field, the State Legislature is always free to make law on any subject/subjects in the Concurrent List III of the Seventh Schedule of the Constitution.
It is seen that the Acquisition Act was made in exercise of the power under Entry 42 of the Concurrent List and sections 14 and 20 thereof are integral part of the Acquisi tion Act.
Undoubtedly, they are consequential or ancillary to section 4 thereof.
It had received the assent of the Presi dent.
But after the Act was brought on statute, the question emerges whether there exists no repugnancy between sections 14(1) and 20(3) of the Acquisition Act in juxtaposition to sections 66(1), 73, 74 and 80 of the Act.
Before embarking upon an enquiry into the results produced by these provisions in the light of above discussion, let us consider the relevant decisions and the ratio laid down therein in this context.
661 Occupied Field: 1n Tika Ramji vs State of U.P., ; Bhag wati, J. speaking for the Constitution Bench, applied three tests propounded by Nicholas in his Australian Constitution, Second Edition, page 303, to find the inconsistency or repugnancy thus.
(1) There may be inconsistency in the actual terms of competing statutes; (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 and` exhaustive Code; and (3) Even in the absence of intention, a conflict may arise when both State and Commonwealth seek to exercise their power over the same subject matter.
(Emphasis sup plied).
The repugnancy between the two statutes should exist in fact and not depend merely on a possibility.
In that case, the question was whether the U.P. Sugarcane (Regula tion of Supply and Purchase) Act (Act 24 of 1953) is ultra vires of the U.P. Legislature in view of article 246 read with Entry 52 of List I and Item 33 of List III of Seventh Sched ule to the Constitution.
In that context, it was held that if both the Central Legislature and the Provincial Legisla tures were entitled to legislature 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.
Repugnancy falls to be considered when the law made by the Parliament and the law made by the 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.
(Emphasis supplied) So far as our Constitution is concerned, repugnancy is dealt with in article 254.
On a com parison of various provisions of the State and Central laws, it was held that there was no question of any inconsistency in the actual terms of the Act enacted by the Parliament and the impugned Act and they did not occupy the same field.
In A.S. Krishna vs Madras State, ; , the question was whether section 4(2) of the Madras Prohibition Act which lays down a presumptive evidence is repugnant to the Central legislation, viz., Criminal Procedure Code.
Dealing with section 107 of the Government of India Act, 1935 which is in pari material to article 254 read with Schedule VII, List II, Items 2 and 31 and List III, Items 2 and 5 of Schedule VII to the Constitution, Venkatarama Ayyar, J. speaking for the Constitution Bench, held that for applying section 107 of the Government of India Act 1935, two conditions must be ful filled the provisions of the provincial law and those of the Central legislation must both be in 662 respect of a matter which is enumerated in the Concurrent List; and they must be repugnant to each other.
It is only when both these requirements are satisfied that the provi sional law will to the extent of repugnancy becomes void.
Section 4(2) of the Prohibition Act was held to be void.
In Prem Nath Kaul vs State of J & K, [1959] 2 Supp.
SCR 273, another Constitution Bench held that the essential condition for application of article 254(1) is that the exist ing law must be with respect to one of the matters enumerat ed in the Concurrent List; in other words, unless it is shown that the repugnancy is between the provisions of a subsequent law and those of an existing law in respect of the specified matters, the Article would be inapplicable.
In Bar Council of U.P.v.
State of U.P.; , the question arose was whether the State Government is empowered to impose stamp duty on the certificate of enrollment under section 22 of the Advocates Act.
In considering schedule VII, List I, Entries 77, 78 and 96; List II, Entry 63 and List III, Entries 44 and 26 and the relevant provisions of the Stamp Act and its Schedules, this Court held that the ques tion of repugnancy can only arise in respect of matters where both the parliament and the State Legislature have competence to pass laws.
In other words, when the Legisla tive power is located in the Concurrent List, the question of repugnancy arises.
In Deep Chand vs State of U.P., [1959] Supp. 2 SCR 8 relied on by Sri Nariman, the Uttar Pradesh legislature made U.P. Transport Service (Development) Act, which had received the assent of the President, introduced a scheme of nationalisation of the transport service.
Subse quently, Parliament has amended Act IV of 1939 through Amendment Act 100 of 1956.
By reason thereof, it was con tended that the U.P. Amendment Act became void by reason of article 254 of the Constitution.
The matter was examined by the Constitution Bench of this Court.
Subba Rao, J. (as he then was) per majority, while considering the question, laid three propositions to determine the repugnancy thus: (1) Whether there is direct repugnancy between the two provi sions; (2) Whether Parliament intended to lay down an ex haustive code in respect of the subject matter replacing the Act of the State Legislature; and (3) Whether the law made by the Parliament and the law made by the State Legislature occupy the same field.
After examining in detail the provi sions of the respective Acts, it was held that after the Central Amendment Act 100 of 1956, it prevailed over the U.P. Act and prospectively became void as the Central Amend ment Act occupied the same field in respect of the same schemes initiated under the U.P. Amendment Act and to that extent the State Act must yield its place to the Central Act.
663 In State of Orissa vs
M.A. Tulloch & Co., ; another Constitution Bench of this Court held that the inconsistency may be demonstrated not by a detailed compari son of provisions of the two statutes but by the mere exist ence of the two pieces of legislation.
Meeting the argument as to on which Entry in the list the subject falls, it was held thus: "If by reason of the declaration by Parliament the entire subject matter of 'conversation and development of minerals ' has been taken over for being dealt with by Parliament, thus depriving the State of the power which it therefore pos sessed, it would follow that the 'matter ' in the State List is, to the extent of the declaration, (substracted from the scope of the declaration) and ambit of Entry 23 of the State List.
There would, therefore after the Central Act 67 of 1957, be no matter in the List to which the fee could be related in order to render it valid.
" It was accordingly held that the Orissa Mining Areas Devel opment Fund Act (27 of ' 1952) to be void.
Of course, this was in considering the question under Article 246, Entry 54 of List I, and Entry 23 of List 11.
In State of Assam vs Horizon Union, ; the facts are that under the , Section 7 A(3)(a) provided that the appropriate Government may by notification constitute an Industrial Tribunal con sisting of one person to be appointed by the appropriate Government.
The person shall not be qualified for appoint ment as presiding officer of the Tribunal unless he is or has been a Judge of a High Court or he has held the office of Chairman or any other member of the Labour Appellate Tribunal constituted under the Industrial Disputes (Appel late Tribunal) Act, 1950, or of any Tribunal, for a period of not less than two years.
Assam Act 8 of 1962 made an amendment to the above procedure and had received the assent of the President, introducing clause (aa) to sub section (3)(a) of Section 7 A thus: "He has worked as a District Judge or as an Additional District Judge or as both for a total period of not less than three years or is qualified for appointment as a Judge of a High Court; provided that the appointment to a Tribunal of any person qualified under this clause shall not be made without consultation with the Assam High Court." 664 In 1964, the Parliament made an amendment viz.
Industri al Disputes (Amendment) Act (36 of 1964) amending Section 7 A(3)(a) stating that "he has, for a period of not less than three years, been a District Judge or an Additional District Judge.
" The contention raised was that the Assam Act became void by reason of the subsequent Amendment Act of 1964.
Both the Parliament and the State Legislature have exercised their power under the Concurrent List of VII Schedule.
Another Constitution Bench of this Court has held that the Central Amendment Act 36 of 1964 intended to be an exhaustive code in respect of the subject matter and occu pies the same field.
Therefore, the Assam Act 8 of 1962 was repugnant to the Central Amendment Act 36 of 1964 as it does not require the consultation with the High Court for the appointment of an Industrial Tribunal.
Accordingly, it was held to be void.
In State ofJ & K vs
M.S. Farooqi; , the facts were that the respondent was a member of the Indian Police Service governed by the All India Services Act, 1951 and the All India Services (Discipline and Appeal) Rules, 1955.
They provided an exhaustive procedure to enquire into the misconduct by a member of the All India Services.
The State Legislature, exercising the concurrent power, made Jammu and Kashmir Government Servants ' Prevention of Corrup tion (Commission) Act, 1962.
The validity thereof was ques tioned on the anvil of Article 254 of the Constitution.
Dealing with the subject, another Constitution Bench, speak ing through Sikri, C.J. held that the Commission Act empow ers to conduct on enquiry into the charges of corruption and misconduct against all Government Servants including the members of All India Services.
In addition to the recommen dation for imposition of punishment engrafted in sub section (2) of Section 17 of the Commission Act, it also disquali fies for any public office to a specified period and also recommendation for prosecution for an offence in a Court of law.
These details were not dealt with under the Central Act and the Rules.
From this conspectus, this Court further held thus: "It seems to us that in so far as the Commission Act deals with the infliction of disciplinary punishments it is repug nant to Discipline and Appeal Rules.
Parliament has occupied the field and given clear indication that this was the only manner in which any disciplinary action should be taken against the members of the All India Services 665 Accordingly it was held that the State Act must be read down so as to leave the members of the All India Services outside its purview.
Thereby, by implication it was held that by operation of Article 254 of the Constitution the Commission Act is repugnant to the All India Services Act and Rules.
In Kerala State Electricity Board vs Indian Aluminium Co., [1976] 1 SCR 552 another Constitution Bench of this Court held that: "Having discussed the question of the legislative field it might be necessary to discuss the question as to what hap pens if it should be held that the matter under considera tion in these cases falls within the concurrent list, that is, Entry 38 in List III as contended in the alternative by some of the respondents.
As already mentioned the question will arise only if it should be held that the Kerala State Act falls under Entry 38 as contended by Mr. B. Sen.
If the impugned legislation falls under List III then the question of repugnancy of that legislation with the existing law or the law made by Parliament as the case may be, will have to be considered.
" In Basu 's Commentary on the Constitution of India (Silver Jubilee Edition), Volume K, at page 144, it is stated that "the repugnancy to be found is the repugnancy in the actual provisions of two laws and not the subject matter of the two laws.
The proper test is whether effect can be given to the provisions of both the laws or whether both the laws can stand together." (Emphasis added).
It is trite law that the form of the provision does not conclude the matter.
It must be the "same matter" under consideration.
Operational Incompatibility: 9.
Repugnancy could also be angulated from the perspec tive of operational incompatibility as well.
The celebrated decision in Clyde Engineering Co. vs Cowburn, popularly known as 44 hour case, is a leading authority on this topic.
The facts therein are that a Commonwealth Arbitration award fixed rates of pay and overtime on the basis of 48 hour working week while Forthfour Hours Week Act 1925 (NSW) section 6 purported to deal with the same matter on the basis of 44 hours working week.
The respondent employee claimed the State Act rate of pay but was denied on the basis of 48 hours working week.
When questioned, it was argued that there was no 666 inconsistency between the award and the State Act because the employer, it was said, could obey both laws by observing the 44 hours working week but on the basis that the pay scale determined by the award applied to the 44 hours work ing week.
The High Court of Australia relying on section 109 of Australian Constitution rejected the argument and found that an inconsistency existed, as the State law operated to vary the adjustment of industrial relations established by the Commonwealth award.
Knox, C.J. held that two enactments may be inconsistent although obedience to each of them may be possible without disobeying the other.
Statute may do more than impose duties; they may for instance confer rights; and one statute is inconsistent with another when it takes away a right conferred by the other even though the right may be one which might be waived or abandoned without disobeying the statute which conferred it.
Issacc, J. in his separate but concurrent judgment held: "The vital question would be: was the second Act in its true construction intended to cover the whole ground, and there fore, to supersede the first? If it was intended, then the inconsistency would consist in giving operative effect at all to the first Act; because the second was intended en tirely to exclude it.
The suggested test however useful a working guide it may be in some cases prove a test; cannot be recognised as the standard measuring rod of inconsisten cy.
If, however, a competent legislature expressly or im pliedly evinces its intention to cover the whole field, that is a conclusive test of inconsistency where another legisla ture assumes to enter to any extent upon the same field .
If such a position as I have postulated be in fact estab lished the inconsistency is demonstrated not by comparison of detailed provisions but by the existence of the two sets of provisions; where that wholesale inconsistency does not occur but the field in partly open, then it is necessary to enquire further and possibly to examine and contrast partic ular provisions.
If one enactment makes or acts upon as lawful that which the other makes unlawful or if one enact ment makes unlawful that which the other makes or acts upon as lawful, the two or to that extent inconsistent.
It is plain that it may be quite possible to obey both simply by not doing what is declared by either to be unlawful and yet there is palpably inconsistency.
The basic reason is that the 667 Constitution clearly intended that once the Commonwealth settled an interstate dispute, that settlement shall stand and that its terms should be framed by the one hand, the other being necessarily excluded.
Forty four hours shall constitute a week 's work.
No day 's work to exceed either hours without payment for overtime, etc.
" Higgins, J. has held that: "When is a law inconsistent with another law? Etimologically I presume that things are inconsistent when they cannot stand together at the same time and law is inconsistent with another when the command or power or provision in one law conflicts directly with the command, power or other provi sion of another.
Where two legislations operate over the same territory and came into collision, it is necessary that one should prevail, but the necessity is confined to actual collision as one legislature says 'do ' and the other says 'do not '.
(Emphasis supplied) In that case it was held that there is operational incompat ibility between the Commonwealth award and the State law.
The State law was held to be void.
In Hume vs Palmer, ; both New South Wales Act and Commonwealth Act authorised making of the Regulations dealing with collisions at sea.
In both cases regulations had been made.
They were in identical terms except that in relation to the jurisdiction to convict for breaches.
The New South Wales regulations prescribed summary prosecution and a maximum penalty of Pound 50 whereas the Commonwealth regulations prescribed summary prosecution on indictment and a maximum penalty Pound 100.
It was held that the same facts produced different legal results under the two Acts, the penalty under State law was held displaced.
In R.v.
Brisbane Licensing Court; , a section of the Commonwealth Electoral Act provided that on a polling day fixed for a federal election, a referandum or vote of the electors of a State or part thereof, should not be taken.
A local option poll had been taken on such a day under Queensland legislation.
It was held that a direct inconsistency existed, and that the local option poll was, therefore, declared to be invalid.
In Colvin vs Bradley Bros. Pvt. Ltd., [1943] 68 an order made pursuant to a section of New South Wales Factories and Shops Act prohibiting the employment of women on a milling machine.
An award had been made by the Commonwealth Arbitration Court under the Conciliation and Arbitration Act which permitted the employment of females on work, which included work on a milling machine, unless the work was declared to be unsuitable for women by a Board of Reference.
No such declaration had been made by the Board.
it was held that the order was inconsistent with the award by virtue of section 109 in that it directly prohibited something which the Commonwealth award permitted.
In In Re Ex Parte Maclean, ; at 483.
Dixon J. held: "When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and pre scribe what the rule of conduct should be, they make laws which are inconsistent notwithstanding that the rule of conduct is identical, which each prescribes, and section 109 applies.
" It was further held that the Federal statute had evinced an intention to cover the subject matter and provide what the law upon it should be.
In Wenn vs Attorney General (Victoria), ; the Re establishment and Employment Act dealt with the obligations of employers ' to give preference to ex service men in employment (but included no provision as to the duty to give preference in promotion to ex servicemen already employed).
The State Act dealt not only with the same mat ter, but also included a provision requiring employers to give preference in promotion.
It was held that Commonwealth Legislation was an exhaustive code allowing no room for the operation of the State legislation relating to matter not covered by the Commonwealth Act.
The Victorian Law giving preference in promotion was, therefore, held to have been displaced.
In O 'Sullivan vs Noarlunga Meat Co. Ltd., ; the facts are that the South Australian Act prohibited laughter of stock for export without a State licence while the Commonwealth Act prohibited export of meat from stock which had not been slaughtered on premises registered under the regulations thereof.
In an evenly divided Court, the opinion of the Chief Justice had prevailed, it was held that the Commonwealth regulations were detailed enough to show that 669 they covered the whole field of 'slaughter for export ' and, therefore, the State licensing requirement did not apply.
On further appeal the Judicial Committee in O. Sullivan vs Noarlunga Meat Co. Ltd., at 28 added that "in applying this principle it is important to bear in mind that the relevant field or subject is that covered by the law said to be invalid." In Australian Federal Constitutional Law by Collin Howard, Second Edition (1972).
at page 27, it was stated that where both a Commonwealth Law and a State law are in terms applicable to a given set of facts, and they produce conflicting legal results on those facts, the Commonwealth law applies and not the State law.
In Blackley vs Devondale Cream (Vie.) Pvt. Ltd., ; , a State wages determination prescribed a minimum rate of pay for certain work which was also covered by a Commonwealth award.
The Commonwealth award prescribed a lower minimum rate.
It was held that there was a direct inconsistence because on the same facts the two laws produced different entitlements.
The award rate, therefore, prevailed over the State 's determina tion.
REPEAL BY IMPLICATION: Sub section
(1) of section 217 of the Act repeals thus: "The , and any law corresponding to that Act in force in any State immediately before the com mencement of this Act (hereafter in this section referred to as the repeal enactments) are hereby repealed." (The other sub sections are not relevant.
Hence omitted. ) (Emphasis supplied) Thereby s.217(1) does not expressly repeal sections 14(1) and 20(3) of the Acquisition Act.
In Zaveribhai vs State of Bombay, [1955] 1 SCR 799 relied on by Sri Nariman, the facts were that section 7 of the Essential Supplies (Temporary Powers) Act, 1949 provides penalty for contravention of orders issued under section 3 for a term of three years or with fine or with both.
The Bombay Legislature amended the Act, by Act 52 of 1950.
Section 2 of the Amendment Act provides that ' notwithstanding anything contained in Essential Supplies (Temporary Powers) Act, 1946, whoever contravenes an order made under Sec. 3 of the Essential Supplies (Temporary Powers) Act, shall be punishable with imprisonment for a term which may extend to seven years but shall not, 670 except for reasons to be recorded in writing, be less than six months and shall also be liable to fine".
Thus, the Bombay Act imposes minimum sentence while indicating maximum sentence and obtained the assent of the President.
Later, the Central Act was amended in 1948, 1949 and 1950.
In 1950 Act, Sec. 7 categorised three groups of offences covering the same field and imposd graded sentences depending on the character of the offence and the nature of the commodity contravened.
The Bombay Act was challenged on the ground that it was repugnant and was repealed by implication.
Venkatarama Iyer, J. speaking for the Constitution Bench held that repugnancy might result when both the legislations cover the same field.
It was further held: "The important thing to consider with reference to this provision is whether the legislation in 'in respect of the same matter. ' If the later legislation deals not with the matters which formed the subject of the earlier legislation but with other and distinct matters though of a cognate and allied character, then article 254(2) will have no application.
The principle embodied in section 107(2) and article 254(2) is that when there is legislation covering the same ground both by the Centre and by the Province, both of them being competent to enact the same, the law of the Centre should prevail over that of the State.
" It was further held that though there is no express repeal, even then the State law will be void under the proviso if it conflicts with later law with respect to the same matter that may be enacted by the Parliament.
The principle on which the rule of implied repeal rests, namely, that if the subject matter of later legislation is identical with that of the earlier, so that they cannot both stand together then the earlier is repealed by the later enactment, will be equally applicable to a question under article 254(2) where the further legislation by Parliament is in respect of the same matter as that of the State law.
Accordingly, it was held that Sec. 2 of the Bombay Act, No. 36 of 1947 cannot prevail as against Sec. 7 of the Essential Supplies (Temporary Powers) Act as amended by Act 52 of 1950.
The doctrine of repugnancy and implied repeal was again considered by this Court in M. Karunanidhi vs Union of India, ; where the Tamil Nadu Public Men (Criminal Misconduct) Act (2 of 1974) was assailed to be repugnant to the Indian Penal Code and the Prevention of Corruption Act 1947.
In considering that question, Fazal Ali, J. speaking for the Constitution Bench held: 671 ".
So far as the Concurrent List is concerned, both Par liament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by article 254(1).
Where the provisions of the Central Act and a State Act in the Concurrent List are fully inconsistent and are absolute ly irreconciliable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
Where, however, a law passed by the State comes into colli sion with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with CI.
(2) of article 254.
Where a law passed by the State Legislature the entries in the State List entrenches upon any of the entries in the Central List the consitutionality of the law may be upheld by invoking the doctrine on a subject covered by the Concur rent List is inconsistent with and repugnant to a previous law made by the Parliament, then such a law can be protected by obtaining the assent of the President under article 254(2) of the Construction.
The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in their applicability to the State only.
Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amend ing, varying or repealing the law made by the State Legisla ture under the proviso to Article 254.
" Dealing with the question of repeal by implication, it was held that there is no repeal by implication unless the inconsistency appears on the face of the two statutes that where two statutes occupy a particular field but there is a room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results and that where there is no inconsistency, a statute occupying the same field seeks to create distinct and separate offence, no question of repugnancy arises and both the statutes continue to operate in the same field.
On a comparison of the relevant provisions of the ,impugned Act and the Central Acts, it was not repealed by implication.
672 In T. Barai vs Henry Ah Hoe, ; relied on by.
Sri Nariman, the facts are that for an offence under Sec. 16(1)(a) read with Sec. 7 of the , prescribed maximum punishment of six years.
But the West Bengal Legislature amended the Central Act with effect from April 29, 1974 by the Prevention of Adulteration of Food, Drugs and Cosmatics (West Bengal) (Amendment) Act, 1973, providing punishment with imprison ment for life and triable by a Court of Sessions.
It had received the assent of the President.
Later on the Parlia ment amended the Section (Section 16(a) and also introduced Section 16 A in 1976 to the , imposing punishment of three years.
Both the enactments have been made in exercise of the concurrent power.
In considering the question whether the State Act became void, A.P. Sen J. speaking for three Judges ' Bench has held thus: "There is no doubt or difficulty as to the law applicable.
article 254 of the Constitution makes provision firstly, as to what would happen in the case of conflict between a Central and State Law with regard to the subjects enumerated in the Concurrent List.
and secondly, for resolving such conflict, article 254(1) enunciates the normal rule that in the event of a conflict between a Union and a State Law in the concurrent field, the former prevails over the latter.
Clause (1) lays down that if a State law relating to a concurrent subject is 'repugnant ' to a Union law relating to that subject, then, whether the Union law is prior or later in time, the Union law will prevail and the State law shall.
to the extent of such repugnancy, be void.
To the general rule laid down in Clause (1), Clause (2) engrafts an exception, viz., that if the President assents to a State law which has been reserved for his consideration, it will prevail notwithstanding its repugnancy to an earlier law of the Union, both laws dealing with a concurrent subject.
In such a case, the Central Act will give way to the State Act only to the extent of incon sistency between the two, and no more.
in short, the result of obtaining the assent of the President to a State Act which is inconsistent with a previous Union law relating to a concurrent subject would be that the State Act will pre vail in that State and override the provisions of the Cen tral Act in their applicability to that State only.
The predominance of the State law may, however, be taken away if Parliament legislate under the proviso to Clause (2).
The proviso to article 254(2) empowers the Union Parliament to 673 repeal or amend a repugnant State law even though it has become valid by virtue of the President 's assent.
Parliament may repeal or amend the repugnant State law, either direct ly, or by itself enacting a law repugnant to the State law with respect to the 'same matter '.
Even though the subse quent law made by Parliament does not expressly repeal a State law, even then, the State law will become void as soon as the subsequent law of Parliament creating repugnancy is made.
A State law would be repugnant to the Union law when there is direct conflict between the two laws.
Such repug nancy may also arise where both laws operate in the same field and the two cannot possibly stand together, e.g. where both prescribe punishment for the same offence but the punishment differs in degree or kind or in the procedure prescribed, In all such cases, the law made by Parliament shall prevail over the State law under article 254(1).
That being so, when Parliament stepped in and enacted the Central Amendment Act, it being a latter law made by Parliament 'with respect to the same matter ', the West Bengal Amendment Act stood impliedly repealed." In M/s Hoeshst Pharmaceuticals Ltd. vs State of Bihar, ; the Bihar Finance Act, 1981 was made in exercise of the power under Entry 54 of List II of Seventh Schedule to the Constitution amending and repealing the previous Act providing therein to levy tax on sale or pur chase of goods.
Section 5(1) imposes levy of surcharge on every dealer whose gross turnover during an year exceeds Rupees Five lakhs, in addition to the tax payable by him at such rate not exceeding 10 per cent of the total amount of tax.
Sub section
(3) of section (5) prohibits such dealer from col lecting the amount of surcharge from the purchasers.
The made under Entry 33 of the Concur rent List III empowering the Government to fix prices of the essential commodities including drugs, medicines, etc.
It was contended that by operation of sub section
(1) of section 5, the State Act is repugnant and is void.
In considering that question, A.P. Sen, J. speaking for three Judges ' Bench held that both the Union and the State Legislature have concur rent powers of legislation with respect to any of the mat ters enumerated in List 111, subject only to the proviso contained in el.
(2) of article 254, i.e. provided the State Act do not conflict with those of any Central Act on the subject .
The question of repugnancy arises only when both legislatures are competent to legislature in the same field, i.e. when both Union and the State laws relate 674 to a specified subject in List III and occupy the same field.
Yet another place it was held that it is only when both these requirements are fulfilled that the State law will, to the extent of repugnancy became void.
article 254(1) has no application to the cases of repugnancy due to over lapping found between List II on the one hand and Lists I and II on the other.
If such overlapping exists in any particular case, State law will be ultra vires because of the non obstenti clause in article 246(1) read with opening words "Subject to" article 246(3).
In such cases, the State law will fail not because of repugnance in the Union List but due to want of legislative competence.
Repugnancy arises where there is a direct conflict or collision between the Central Act and the State Legislation and to the extent of repugnancy by necessary implication or by express reference the State legislation stands repealed.
It is true, as tightly contended by Mr. Sanghi, that sections 14 and 20 are consequential or ancillary to section 4 of the Acquisition Act 21 of 1976 which had received the assent of the President.
Its constitutionality was upheld by seven Judges ' Bench of this Court, when the legislative competence was assailed on the anvil of Entry 42 of List I of the Seventh Schedule, but not on the touchstone of proviso to cl.
(2) of article 254 which gives overriding power to the Parliament to make any law or amend, vary, modify or repeal the law made by a State Legislature.
Ranganatha Reddy 's ratio, thereby, does not stand an impediment to go into the validity of sections 14 and 20 of the Acquisition Act.
The result of the above discussion leads to the following conclusions: (a) The doctrine of repugnancy or inconsistency under article 254 of the Constitution would arise only when the Act or provision/ provisions in an Act made by the Parliament and by a State Legislature on the same matter must relate to the Concurrent List III of Seventh Schedule to the Constitution; must occupy the same field and must be repugnant to each other; (b) In considering repugnance under article 254 the question of legislative competence of a State Legislature does not arise since the Parliament and the Legislature of a State have undoubted power and jurisdiction to make law on a subject, i.e. in respect of that matter.
In other words, same matter enumerated in the Concurrent List has occupied the field.
(c) If both the pieces of legislation deal with separate and dis 675 tinct matters though of cognate and allied character repug nancy does not arise.
(d) It matters little whether the Act/Provision or Provi sions in an Act falls under one or other entry or entries in the Concurrent List.
The substance of the "same matter occupying the same field by both the pieces of the legisla tion is material" and not the form.
The words "that matter" connotes identity of "the matter" and not their proximity.
The circumstances or motive to make the Act/Provision or Provisions in both the pieces of legislation are irrelevant.
(e) The repugnancy to be found is the repugnancy of Act/ provision/Provisions of the two laws and not the predoninant object of the subject matter of the two laws.
(f) Repugnancy or inconsistency may arise in diverse ways, which are only illustrative and not exhaustive: (i) There may be direct repugnancy between the two provi sions; (ii) Parliament may evince its intention to cover the whole same field by laying down an exhaustive code in respect thereof displacing the State Act, provision or provisions in that Act.
The Act of the Parliament may be either earlier or subsequent to the State law; (iii) Inconsistency may be demonstrated, not necessarily by a detailed comparison of the provisions of the two pieces of law but by their very existence in the statutes; (iv) Occupying the same field; operational incompatibility; irreconcilability or actual collision in their operation in the same territory by the Act/provision or provisions of the Act made by the Parliament and their counter parts in a State law are some of the true tests; (v) Intention of the Parliament to occupy the same field held by the State Legislature may not be expressly stated but may be implied which may be gethered by examination of the relevant provisions of the two pieces of the legislation occupying the same field; 676 (vi) If one Act/Provision/Provisions in an Act makes lawful that which the other declares unlawful the two to that extent are inconsistent or repugnant.
The possibility of.
obeying both the laws by waiving the beneficial part in either set of the provisions is no sure test; (vii) If the Parliament makes law conferring right/obliga tion/ privilege on a citizen/person and enjoins the authori ties to obey the law but if the State law denies the self same rights or privileges negates the obligation or freezes them and injuncts the authorities to invite or entertain an application and to grant the right/privilege conferred by the Union law subject to the condition imposed therein the two provisions run on a collision course and repugnancy between the two pieces of law arises thereby; (viii) Parliament may also repeal the State law either expressly or by necessary implication but Courts would not always favour repeal by implication.
Repeal by implication may be found when the State law is repugnant or inconsistent with the Union law in its scheme or operation etc.
anti conflicting results would ensue when both the laws are applied to a given same set of facts or cannot stand togeth er or one law says do and other law says do not do.
In other words, the Central law declares an act or omission lawful while the State law says them unlawful or prescribes irrec oncilable penalties/punishments of different kind, degree or variation in procedure etc.
The inconsistency must appear on the face of the impugned statutes/provision/provisions therein; (ix) If both the pieces of provisions occupying the same field do not deal with the same matter but distinct, though cognate or allied character, there is no repeal by implica tion; (x) The Court should endeavour to give effect to both the pieces of legislation as the Parliament and the legislature of a State are empowered by the Constitution to make laws on any subject or subjects enumerated in the Concurrent List III of Seventh Schedule to the Constitution.
Only when it finds the incompatibility or irresconcilability of both Acts/provision or provisions, or the two laws cannot stand together, the Court is entitled to declare the State law to be void or repealed by implication; and (xi) The assent of the President of India under article 254(2) given to a State law/provision, provisions therein accord only opera 677 tional validity though repugnant to the Central law but by subsequent law made by the Parliament or amendment/modifica tion, variation or repeal by an act of Parliament renders the State law void.
The previous assent given by the Presi dent does not blow life into a void law.
Scope and operation of Rule of Pith and Substance and pre doninant purpose vis a vis Concurrent List.
The further question is whether the doctrines of dominant purpose and pith and substance would be applied to the matter covered under the Concurrent List.
in my consid ered view, they do not apply.
The doctrine of pith and substance primarily concerns in determining the legislative competence.
The idea underlying the detailed distribution of legislative powers in three Lists was to ensure that Parlia ment and State Legislatures should keep themselves within the spheres allocated to them in List I and vice versa in List II respectively.
However, legislation is a very compli cated matter as it reflects life, which itself is a compli cated one.
Hence, it is sometimes inevitable that a law passed by the Parliament may trench upon the domain of the State Legislature and vice versa.
Would such incidental encroachment on the territory of the other invalidates the legislation? In examining this question and finding a solu tion, the Courts try to save the legislation from unconsti tutionality by applying the flexible rule of pith and sub stance.
It is not that the Courts encourage one legislature to encroach upon the legislative field of another legisla ture but merely recognise the reality that despite the strict demarcation of legislative fields to respective legislatures, it is not always possible to effectuate a legislative purpose without incidental encroachment on another 's field.
In such a situation the Courts try to find out the pith and substance of the legislation.
If the legis lation is found in its pith and substance, within the legis lative competence of the particular legislature, it is held to be valid, despite incidental encroachment on the legisla tive power of another legislature.
Thus, the rule of pith and substance is applied to determine whether the impugned legislation is within that competence under articles 246(1) and 246(3) of the Constitution, and to resolve the conflict of jurisdiction.
If the Act in its pith and substance falls in one List it must be deemed not to fall in another List, despite incidental encroachment and its validity should be determined accordingly.
The pith and substance rule, there by, solves the problem of overlapping of "any two entries of two different List vis a vis the Act" on the basis of an inquiry into the "true nature and character" of the legisla tion.
The Court examines the legislation as a whole and tries 678 to find whether the impugned law is substantially within the competence of the Legislature which enacted it, even if it incidentally trespasses into the legislative field of anoth er Legislature.
In a case where the question of validity of an act arises, it may be that the topic underlying the provisions of the Act may in one view of the matter falls within the power of the Centre, and on another view within the power of the States.
When this happens, it is necessary to examine the pith and substance of the impugned legisla tion; and to see whether in its pith and substance it fails within one, or the other of the Legislative Lists.
As stated earlier the constitutionality of the Impugned Act is not determined by the degrees of invasion into the domain as signed to the other legislature but its pith and substance and its true nature and character to find whether the matter fails within the domain of the enacting legislature.
The incidental or ancillary encroachment into forbidden field does not effect the competence of the legislature to make the impugned law.
From this scenerio let us peep into few important decisions touching the subject.
In Prafulla Kumar vs Bank of Commerce, Khulna, AIR 1947 PC 60 the question was whether the Bengal Moneylenders Act (10 of 1940) is ultra vires by reason of Schedule 7, List II, Items 28 and 38 of the Gov ernment of India Act, 1935, and thereby is void.
In consid ering that question, the Judicial Committee held as culled out in Head note (b) thus: "It is not possible to make a clean cut between the powers of the Federal and Provincial Legislatures.
They are bound to overlap and where they do the question to be considered is what is the pith and substance of the impugned enactment and in what list is its true nature and character to be found.
The extent of invasion by the Provinces into subjects in Federal List is an important matter not because the validity of a Provincial Act can be determined by discrimi nating between degrees of invasion but for determining the pith and substance of the impugned Act.
The question is not has it trespassed more or less but is the trespass, whatever it be, such as to show that the pith and substance of the impugned Act is not a Provincial matter but a Federal mat ter.
Once that is determined the Act falls on one or the other side of the line and can be seen as valid or invalid according to its true import.
No doubt where they come in conflict List I has priority 679 over Lists III and II and List III has priority over List II but in each case one has to consider what the substance of an Act is and whatever its ancillary effect, attribute it to the appropriate list according to its true character" This leading ratio formed foundation in countless cases decided by this Court.
In State of Bombay vs
F.N. Balsara, [ ; it was held that: "It is well settled that the validity of an Act is not affected if it incidentally trenches on matters outside the authorised field and, therefore, it is necessary to enquire in each case what is the pith and substance of the Act impugned.
If the Act, when so viewed, substantially falls within the powers expressly conferred upon the Legislature which enacted it then it cannot be held to be invalid merely because it incidentally encroaches on matters which have been assigned to another Legislature.
" In Atiabari Tea Co. Ltd. vs State of Assam, ; Gajendragadkar, J. (as he then was) speaking per majority, has explained the purpose of the rule of pith and substance thus: "The test of pith and substance is generally and more appro priately applied when a dispute arises as to the legislative competence of the legislature, and it has to be resolved by reference to the entries to which the impugned legislation is relateable, when there is a conflict between the two entries in the legislative list, and legislation by refer ence to one entry would be competent but not by reference to other, the doctrine of pith and substance is invoked for the purpose of determining the true nature and character of the legislation in question.
" In Meghraj & Ors.
vs Allaharakhiya & Ors., AIR 1942 FC 27 relied on by Sri Nariman, the contention raised was that when the matter in the Concurrent List had occupied the flied whether the question of pith and substance of the impugned Act would arise? The Federal Court held that when the Provincial Act is objected to as contravening not Sec.
100 but Sec.
107(1) of the Government of India Act 1935, which is in pari materia to article 254 of the Constitution, that the question of pith and substance of the impugned Act does not arise.
In Tika Ramji 's case, the same question had arisen for resolution.
It was held that 680 "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.
there was no question of any trespass upon the exclu sive jurisdiction vested in the Centre under Entry 52 of List I, 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.
" I have no hesitation to hold that the doctrine of pith and substance on the predoninant purpose, or true nature and character of the law have no application when the matter in question is covered by an entry or entries in the Concurrent List and has occupied the same field both in the Union and the State Law.
It matters little as to in which entry or entries in the Concurrent List the subject matter falls or in exercise whereof the Act/provision or provisions therein was made.
The Parliament and Legislature of the State have exclusive power to legislate upon any subject or subjects in a Concurrent List.
The question of incidental or ancillary encroachment or to trench into forbidder field does not arise.
The determination of its 'true nature and character ' also is immaterial.
Power to legislate whether derived from the con cerned Articles or legislative lists in Seventh Schedule 16.
Parliament and the Legislature of any state derive their power from article 246(2) of the Constitution to make laws with respect to any of the matters enumerated in List III of the VIIth Schedule to the Constitution.
With a non obstanti clause engrafted therein namely notwithstanding anything in Clause ? the Parliament, and, subject to Clause 1, the Legislature of any State also have power to make laws with respect to any of the matters enumerated in List III.
List III of Seventh Schedule enumerates the legislative heads over which the appropriate Legislature can operate.
The function of the list is not to confer power on either the Parliament or a State Legislature.
Article 254 of the Constitition removes the inconsistency between the law made by the Parliament and by the Legislatures of States.
Thus the power to legislate on the Concurrent List is derived by the Parliament and the Legislature of any State from Article 246(2) read with Article 254 only.
Paramouncy to the law made by the Parliament is given by Article 254(1) and provi so to Article 254(2).
The Parliament derives its exclusive power under Article 246(1) to legislate upon any of the 681 subjects enumerated in List I of the Seventh Schedule in the Constitution.
Similarly the Legislature of a State derives its exclusive power from Article 246(3) to make laws on any matters in List II.
When the Parliament or the Legislature of a State while making legislation within its exclusive domain, namely, List I or List II respectively if it inci dentally trenches upon the forbidden flied, namely, the field demarcated or distributed to the State Legislature and vice versa by the Legislature into List I the doctrine of Pith and Substance was applied to find the "true purpose and character of the Legislation".
In considering the question of the doctrine of Pith and Substance in Subrahmanyam Chet tiar vs Muttuswami Goundan, A.I.R. 1941 F.C. 47 at p. 51 held that it must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal inter pretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere.
Hence the rule which has been evolved by the Judicial Committee where by the impugned statute is examined to ascertain its "pith and substance", or its "true nature and character", for the purpose of determining whether it is legislation with re spect to matters in this list or in that.
In that case the question was whether the Madras Agriculturists Relief Act 4 of 1938, Section 8 thereto is invalid, since the matter is in Schedule VII, List I or List II of the Government of India Act, 1935.
The contention was that the negotiable instrument; promissory notes are covered by List I of the Seventh Schedule, therefore, the Act is invalid.
In consid ering that question and negativing the contention the above ratio was enunciated.
(emphasis supplied) In Governor General in Council vs The Reliegh Investment Co. Ltd., at p. 261 in considering the ques tion whether the Federal Legislature 's power is not limited to cases specified in clauses (a) to (e) of sub section (2) of Section 99 from Entry No. 23 of the List I of the Seventh Schedule; it was held by Spens, C.J. that it would not be right that the Legislature would derive the power to legis late on this topic merely from the reference to it in the List, because the purpose of the Lists was not to create or confer powers, but only to distribute between the Federal and the Provincial Legislatures, the powers which had been conferred by Section 99 and 100.
(emphasis added) 682 In Harakchand Ratanchand Banthia vs Union of India, ; at p. 489 the Constitution Bench speaking through Ramaswami, J. dealing with the Gold (Control) Act (45 of 1968) observed thus: "Before construing these entries it is useful to notice some of the well settled rules of interpretation laid down by the Federal Court and by this Court in the matter of construing the entries.
The power to legislate is given to the appro priate legislature by Article 246 of the Constitution.
The entries in the three Lists are only legislative heads or fields of legislation; they demarcate the area over which the appropriate legislatures can operate." (emphasis added) In Union of India vs
H.S. Dhillion; , at p. 52 Sikri, C.J. speaking per majority of Seven Judges ' Bench held that it must be remembered that the function of the lists is not to confer powers; they merely demarcate the legislative field.
The Constitution Bench followed the ratio in Releigh Investment case, etc.
(emphasis supplied) 16.
Thus I hold that the Parliament and the legislature of a State derive their power to legislate on a subject/subjects in Lists I and List II of Seventh Schedule to the Constitution from article 246(1) and (3) respectively.
Both derive their power from article 246(2) to legislate upon a matter in the Concurrent List III subject to article 254 of the Constitution.
The respective lists merely demarcate the legislative field or legislative heads.
The Parliament and the legislature of a State have concurrent power to legis late upon any subject/subjects in the Concurrent list III of Seventh Schedule to the Constitution.
article 254(1) and provi so to article 254(2) give paramouncy to the law made by the Parliament, whether existing or made afresh or amended, modified, added or repealing the law subsequent in point of time to the state law made under article 254(2).
The exercise of the power by a state legislature to make impugned law under one entry or other in the concurrent list is not decisive.
The concerned entry or entries is not the source of power to make impugned law.
Keeping the principles laid hereinbefore at the back of our mind, let us consider the impugned provision.
Section 14 read with section 20 of the Acquisition Act (21 of 1976) freezed the right of a citizen to apply for an to obtain permit or special permit to run a contract car 683 riage in terms of the permit and monopoly to run a contract carriage was conferred on the S.T.U., Karnataka.
But the Act evinces its intention to liberalise the grant of contract carriage permit by saying in section 80(2) that the Regional Transport Authority "shall not ordinarily refuse to grant the permit.
" It also confers the right on an applicant to apply for and authorises and Regional Transport Authority to grant liberally contract carriage permit except in the area covered by section 80(3) and refusal appears to be an exception, that too, obviously for reasons to be recorded.
It may be rejected if the permit applied for relate to an approved or notified route.
The Act accords the right, while the Acqui sition Act negates and freezes the self same right to obtain a permit and to run a contract carriage and prohibits the authorities to invite or entertain an application and to grant a permit to run contract carriage.
the Act and the relevant rules cover the entire field of making an applica tion in the prescribed manner and directs the Regional Transport Authority to grant permit with condition attached thereto to run contract carriages vide sections 66(1), 73, 74 and 80 of the Act.
Thus, the existence of two sets of provisions in the Act 59 of 1988 and Acquisition Act 21 of 1976 is sufficient to produce conflicting results in their operation in the same occupied field.
The two sets of provisions run on collision course, though an applicant may waive to make an application for a permit.
Thereby, there exists the operational incompatibility and irreconcilability of the two sets of provisions.
Sections 14(1) and 20(3) of the Acquisi tion Act are repugnant and inconsistent of sections 73, 74 and 80 of the Act.
By operation of proviso to article 254(2) of the Constitution, the embargo created by sections 14(1) and 20(3) of the Acquisition Act (21 of 1976) to make or invite an appli cation and injunction issued to Regional Transport Authority prohibiting to grant contract carriage permit to anyone except to S.T.U., Karnataka within the State of Karnataka became void.
For the applicability of the principle that special law prevails over the general law, the special law must be a valid law in operation.
Voidity of law obliterates it from the statute from its very inception.
In view of the finding that sections 14(1) and 20(3) are void the contention that the special law prevails over the general law is without sub stance.
In Justiniano Augusto De Peidada Barreto vs Antonia Vicento De Fonseca & Ors., ; section 5(1) of the declared that all laws in force immediately before December 20, 1961 in Goa, Daman and Diu or in part thereof shall continue to be in force therein until amended or repealed by a competent Legislature or other competent authority.
Pursuant to the powers conferred by article 240 of the Constitution, the Presi dent pro 684 mulgated Goa, Daman and Diu (Laws) Regulations from time to time.
These regulations were extended with specified modifi cation to Goa, Daman and Diu like Civil Procedure Code, 1908 and the , but the Limitation Act, 1908 was not extended by any regulation made by the President.
The Portuguese Civil Code inter alia provides limitation to lay suits which is different from the periods prescribed in .
It was contended that the Portuguese Civil Code is void by operation of article 254 of the Constitu tion.
While considering this question this Court at page 500 has stated thus: "We are not here concerned with the provisions of cl.
For the purpose of the present appeals, we will assume that the Portuguese Civil Code which was continued by Par liament to be in force in Goa, Daman and Diu was a law made by the State, though there may be several objections to so doing .
Without doubt the provisions of the Portuguese Civil Code, unless they are saved by section 29(2) of the Limita tion Act, are repugnant to the provisions of the Portuguese Civil Code are saved by section 29(2) then there can be no ques tion of any repugnancy.
So the question whether the provi sions of Portuguese Civil Code are void on the ground that they are repugnant to the provisions of the depends on the question whether the Portuguese Civil Code is saved by section 29(2) of the ." After exhaustive consideration of that question it was held by Chinnappa Reddy, J. speaking for a bench of two Judges that the provisions of the Portuguese Civil Code deal with the subject of limitation of suits etc. and in force in the Union Territory of Goa, Daman and Diu only is 'local law ' within the meaning of section 29(2) of the and they have to read into the , as if the schedule to the is amended mutatis mutandis Thus, it is clear that the question of repugnancy in cl.
(2)of 'article 245 did not arise in that case.
On the other hand, operation of Portuguese Civil Code was saved by section 29(2) of the as a local law.
The doctrine of predominant purpose of Acquisition Act (21 of 1976) as discussed by my learned brothers is to achieve the objective of preventing the flagrant and blatant misuse or abuse of the contract carriages as stage carriages by eliminating that class of private pliers from all Karna taka roads I am in complete agreement with it.
It is a laudable object to subserve public purpose.
But the opera tion of its incidental or ancillary provisions, i.e. articles 14(1) and 20(3) to the 685 primary or predominant purpose is nailed by the altered/situation, viz., making the law under the Act 59 of 1988.
It is already held that article 254 applies only to repugnancy arising between an existing or subsequent Union law and State law on any one or more subjects in the Concur rent List III of Seventh Schedule to the Constitution.
The inconsistency arising between laws on the other two Lists, i.e. Lists I and II, of Seventh Schedule to the Constitu tion, has been taken care of by the opening non obstenti clause of article 246(1) of the Constitution which gives Su premacy of List I over List II/Laws made by Parliament in its residuary jurisdiction will be governed by the same provision because article 248 is to be read with Entry 97 of List I. Same is the position under article 252 of the Constitu tion.
Once Parliament has made a law under that Article on a matter in State List, the Legislatures of those States on whose resolution the law was passed by Parliament or which subsequently adopt it ceases to have a power to make a law relating to that matter, and, therefore, there is no ques tion of retaining any legislative competence to make law on that matter.
Same should De the position under article 253 of the Constitution.
The position under temporary measures are, therefor dealt with by article 251 that in case of inconsisten cy between the Union and State law, the former shall prevail and the latter will be only 'inoperative ' but not 'null and void '.
Under articles 252 and 253, the loss of legislative power of the States is complete and, thereafter, the States can no longer make any law on a subject on which Parliament has made a law and, therefore, their existing laws and any laws that they may venture to make in future will be null and void and for that matter article 254(1) cannot be invoked.
But that is not the case with matter enumerated in the Concurrent List.
The State Legislature did not surrenderated power or jurisdiction.
The Parliament, with a view to lay down general principles makes law or amends the existing law.
The State Legislature still may feel that its local conditions may demand amendment or modification of the Central law.
Their reserve power is article 254(2).
If the Parliament expressly repeals the repugnant law made under article 254(2) different considerations may arise for which no final pronouncement is needed here.
It is already found that sections 14(1) and 20(3) of the Acquisition Act (21 of 1976) became void.
But after making the Act 59 of 1988, the power of the State Legislature under article 254(2) is not exhausted and is still available to be invoked from time to time Though, there is opposite school of juristic thought, in my considered view the interpretation I have but up will sub serve the animation of the rounding fathers of the Constitu tion; the Constitutional Scheme and purpose envisioned by article 254.
Therefore, after the Act has come into force, the State legislature has its reserve power under article 254(2) 686 to make law.
But unless it again enacts law and reserves it for consideration and obtains the assent of the President afresh, there is no prohibition for the petitioners to make applications for the grant of contract carriage permits under the Act and consideration and grant or refusal thereof according to law by the concerned Regional Transport Author ity.
It is, therefore, made clear that this order does not preclude the Karnataka State Legislature to make afresh the law similar to sections 14(1) and 20(3) of the Acquisition Act with appropriate phraseology and to obtain the assent of the President.
The authorities have misconstrued the effect of the Act.
Accordingly I hold that section 14(1) to the extent of prohibiting to make fresh application for grant of permits to run the contract carriages other than those acquired under Act 21 of 1976 (Acquisition Act) and the embargo and prohibition created under section 20(3) thereof on the respective Regional Transport Authority in the State of Karnataka to invite/receive the application to consider the grant of permits to such contract carriages according to law, are hereby, declared to be void.
The writ petitions are accordingly allowed, but, in the circumstances, without costs.
P.S.S. Petitions dismissed.
| IN-Abs | Constitution of India, Article 254. ' Repugnancy between the Parliamentary Act and the State Act in respect of mat ters, in the Concurrent List, Seventh Schedule When arises Karnataka Contract Carriages (Acquisition) Act, 1976 Whether repugnant to the .
Statutory interpretation Doctrine of pith and substance or dominant purpose Scope of Whether applicable to find repugnancy under Article 254 of the Constitution between Parliamentary and State laws in respect of matters in List 111.
Seventh Schedule to the Constitution.
The Karnataka Contract Carriages (Acquisition) Act, 1976 enacted by the State Legislature by taking aid of Entry 42 List III of the Seventh Schedule and Articles 31 and 39 (b) and (c) of the Constitution was reserved for consideration and received the assent of the President of March 11, 1976.
Section 4 of that Act provided for vesting of contract carriages along with the respective permits and/or certifi cates of registration issued under the in the State absolutely free from encumbrances.
Sub section (1) of section 14 prohibited applications for fresh permits or renewal of existing permits on or from the date of vesting.
Section 14(2) provided for abatement of all applications, appeals or revisions pending before the appro priate authority as on the notified date.
Sub section (1) of section 20 provided for cancellation of, notwithstanding anything in the 1939 Act, all contract carriage permits granted or renewed in respect of any vehicle other than a vehicle acquired under the Act or belonging to the State Road Trans port Corporation.
Sub section (2) entitled the Corporation to the grant or renewal of contract carriage permits to the exclusion of all other persons, while sub section (3) re strained the authority concerned from ?615 entertaining applications from persons other than the Corpo ration.
Section 73 of the (enacted to replace the 1939 Act) lays down the mode of application for a contract carriage permit.
Section 74(1) empowers the Regional Transport Authority to grant such permits.
Sub section (2) enumerates conditions that could be attached to such permit.
Sub section (3) empowers the State Government when directed by the Central Government to limit the number of contract carriages on the city routes.
Under section 80(1) such application could be made at any time.
Sub section (2) posits that a Regional Transport Authority shall not ordi narily refuse to grant such application.
Section 217(1) repealed all the laws which were inconsistent with the provisions of the Act.
The petitioners, a group of contract carriage operators who were denied permits that they had applied for under sections 73, 74 and 80 of the in view of the provisions of sections 14 and 20 of the Karnataka Contract Car riages (Acquisition) Act, 1976, filed writ petitions under Article 32 of the Constitution questioning the action of the R.T.A. It was contended that the provisions of sections 14 and 20 of the Karnataka Act were in direct conflict with the provi sions of sections 74 and 80(2) of the M.V. Act, 1988 in as much as while the Regional Transport Authority was enjoined by the said provisions of the 1988 Act ordinarily not to refuse to grant an application for permit of any kind, the said provisions of the Karnataka Act prohibited any person from applying for, and any officer or authority from entertaining or granting application for running any contract carriage in the State; that since the M.V. Act, 1988 was a later legis lation operating in the same area, it should be deemed to have impliedly repealed the provisions of sections 14 and 20 of the Karnataka Act even if the latter Act had received the assent of the President, in view of the proviso to sub clause (2) of Article 254 of the Constitution; that when there is a repugnancy under Article 254 of the Constitution, the doctrine of pith and substance does not apply, and even if some of the provisions of the State Legislation are in conflict with some of the provisions of the Central legisla tion, the conflicting provisions of the State legislation, will be invalid and that, therefore, their applications under sections 74 and 80 were maintainable without reference to the provisions of the Karnataka Act.
For the respondents it was contended that the Acquisi tion Act was made in exercise of the power under a different entry and was not on the same subject, therefore, the matter did not come within the ambit of article 254 of the Constitu tion, and that the Acquisition Act having been 616 reserved for consideration under article 254(2) and having received the assent of the President, it prevails over the Parliamentary Act in the State of Karnataka.
On the question: Whether there is repugnancy between the provisions of sections 14 and 20 of the Karnataka Contract Car riages (Acquisition) Act, 1976 and sections 74 and 80 of the and whether the doctrine of domi nant purpose and pith and substance is applicable while examining the repugnancy of the two statutes? Per Misra, J. (Concurring with Sawant, J.) 1.
There is no direct inconsistency between the Karnata ka Contract Carriages (Acquisition) Act, 1976 and the .
[631G H] 2.1 In cl.
(1) of article 254 of the Constitution it has been clearly indicated that the competing legislations must be in respect of one of the matters enumerated in the Con current List.
In the instant case, the State Act was an Act for acquisition and came within Entry 42 of The Concurrent List.
The Parliamentary Act on the other hand is a legisla tion coming within Entry 35 of the Concurrent List.
There fore, the said two Acts as such do not relate to one common head of legislation enumerated in the Concurrent List.
Clause (2) also refers to the law with respect to the same matter.
[628F; 629A] 2.2 Repugnancy between two statutes would arise if there is direct conflict between the two provisions and if the law made by Parliament and the law made by the State Legislature occupy the same field.
In the instant case, the State Act intended to eliminate private operators from the State in regard to contract carriages acquired under the existing permits, vehicles and ancillary property and with a view to giving effect to a monopoly situation for the State Under taking made provision in section 20.
The Parliamentary Act does not purport to make any provision in regard to acquisition of contract carriage permits which formed the dominant theme or the core of the State Act.
Nor does it in section 73 and section 74 indicate as to who the applicant shall be while laying down how an application for a contract carriage permit shall be made and how such a permit shall be granted.
Section 80 of the Parliamentary Act does contain a liberalised provision in the matter of grant of permits but even then there again the ancillary provision contained in section 20 of the State Act to effectuate acquisition does not directly run counter to the 1988 provision.
[630G; 631C] 617 There does not thus appear to be any repugnancy between the two Acts for invoking article 254 of the Constitution.
[631D E] Bar Council of Uttar Pradesh vs State of U.P. & Anr.
, ; ; Kerala State Electricity Board vs Indian Aluminium Company, [1976] 1 SCR 552; Deep Chand vs State of Uttar Pradesh & Ors., ; ; T. Barai vs Henry Ah Hoe & Anr., ; ; Hoechst Pharmaceuti cals Ltd. & Anr.
vs State of Bihar & Ors.
, ; ; Zaverbhai Amaidas vs State of Bombay, [1955] 1 SCR 799; M. Karunanidhi vs Union of India, ; and State of Karnataka & Anr.
vs Ranganatha Reddy & Anr. ; , referred to.
Per Sawant, J: 1.
There is no repugnancy in the provisions of sections 14 and 20 of the Karnataka Contract Carriages (Acquisition) Act, 1976 and sections 74 and 80 of the .
Hence the provisions of Article 254 of the Constitution do not come into play.
[652F; 636C] 2.1 Whenever repugnancy between the State and Central Legislation is alleged, what has to be first examined is whether the two legislations cover or relate to the same subject matter.
The test for determining the same is to find out the dominant intention of the two legislations.
If the dominant intention of the two legislations is different, they cover different subject matters.
If the subject matters covered by '.he legislation are thus different, then merely because the two legislations refer to some allied or cognate subjects they do not cover the same field.
The legislation to be on the same subject matter must further cover the entire field covered by the other.
[652C D] A provision in one legislation to give effect to its dominant purpose may incidentally be on the same subject as covered by the provision of the other legislation.
But such partial coverage of the same area in a different context and to achieve a different purpose does not bring about the repugnancy which is intended to be covered by Article 254(2).
Both the legislations must be substantially on the same subject to attract the Article.
[652E] Municipal Council Palai vs
T.J. Joseph & Ors., ; ; Tika Ramji & Ors.
vs State of U.P. & Ors.
, ; and State of Karnataka & Anr.
vs Ranga natha Reddy & Anr.
; , , referred to.
618 Ratan Lal Adukia vs Union of India, , distinguished.
2.2 In the instant case, the objects and the subject matters of the two enactments were materially different.
The Karnataka Act was enacted by the State Legislature for acquisition of contract carriages under Entry 42 of the Concurrent List read with Article 31 of the Constitution to give effect to the provisions of Articles 39(b) and (c) thereof.
The MV Act 1988 on the other hand was enacted by the Parliament under Entry 35 of the Concurrent List to regulate the operation of the motor vehicles.
They thus occupy different areas.
[636C, B C] 2.3 Unlike the MV Act 1988 which was enacted to regulate the operation of the motor vehicles, the object of the Karnataka Act was, not only the regulation of the operation of the motor vehicles.
Nor was its object merely to prevent the private owners from operating their vehicles with the exclusive privilege of such operation being reserved in favour of the State or the State Undertaking.
For if that were the only object, the same could have been achieved by the Transport Undertakings of the State following the spe cial provisions relating to State Transport Undertakings in Chapter IV A of the Motor Vehicle Act, 1939 which was in operation when the Karnataka Act was brought into force.
The very fact that instead the State undertook the exercise of enacting the Karnataka Act shows that the object of the State Legislature in enacting it was materially different i.e. to nationalise the contract carriage services in the State with a view to provide better transport facilities to the public and also to prevent concentration of wealth in the hands of the few and to utilise the resources of the country to subserve the interests of all.
[634D F; B C] 3.1 A comparison of the provisions of the MV Act, 1939 and MV Act, 1988 shows that the latter has merely replaced the former.
The special provisions relating to the State Transport Undertakings which are contained in Chapter VI of the MV Act, 1988 are pari materia with those of Chapter IV A of the MV Act, 1939 with only this difference that whereas under the old Act it was the State Transport Undertaking which had to prepare a scheme for running and operating the transport service by it in relation to any area or route or portion thereof exclusively, under the new Act such a scheme has to be prepared by the State Government itself.
There is no difference in the legal consequences of the schemes under the two enactments.
Both envisage the operation of the services by the State Transport Undertaking to the exclusion of the rest, and cancellation of the existing permits and compensation only for the deprivation of the balance of the period of the permit.
No acquisi 619 tion of the vehicles or the paraphernalia connected with such vehicles is envisaged as is the case under the Karnata ka Act.
[634G; 635E G] 3.2 Section 98 of the MV Act 1988 in terms clearly states (as did Section 68B of the MV Act 1939) that Chapter VI relating to the special provisions about the State Trans port Undertaking and the rules ' and orders made thereunder, shall have effect notwithstanding anything inconsistent therewith contained in Chapter V or in any other law for the time being in force or in any instrument having effect by virtue of any such law.
Sections 74 and 80 relating to the grant of the contract carriage permit and the procedure in applying for the grant of such permits respectively, are in Chapter V.
This means that when under Chapter VI, a scheme is prepared by the State Govt.
entrusting the contract carriage services in relation to any area or route or por tion thereof, to a State Transport Undertaking to the exclu sion complete or partial of other persons, the provisions of sections 74 and 80 would have no application, and the private transport operators cannot apply for the grant of contract carriage permits under section 80 nor can such permits be granted by the Transport Authority.
The MV Act 1988 thus also makes a provision for nationalisation of routes, and envisages a denial of permits to private operators when routes are so nationalised.
Hence it cannot be said that there was a conflict between the provisions of the Karnataka Act and the M.V. Act, 1988.
[637H; 638D] 4.
When the legislative encroachment is under considera tion the doctrine of pith and substance comes to the aid to validate a legislation which would otherwise be invalid for the very want of legislative competence.
When the repugnancy between the two legislations is under consideration, what is in issue is whether the provision of the State enactment though otherwise constitutionally valid, has lost its valid ity because the Parliament has made a legislation with a conflicting provision on allegedly the same matter.
If it is open to resolve the conflict between two entries in differ ent Lists, viz., the Union and the State List by examining the dominant purpose and therefore the pith and substance of the two legislations, there is no reason why the repugnancy under Article 254 of the Constitution between the provisions of the two legislations under different entries in the same List, viz. the Concurrent List should not be resolved by scrutinizing the same by the same touchstone.
What is to be ascertained in each case is whether the legislations are on the same matter or not.
In both cases the cause of conflict is the apparent identity of the subject matters.
The tests for resolving it therefore cannot be different.
[639E H] 620 Meghraj & Ors.
vs Allahrakhiya & Ors., AIR 1942 FC 27 distinguished.
Per K. Ramaswamy, J. (Dissenting) 1.
Section 14(1) of Karnataka Contract Carriages (Acqui sition) Act, 1976 to the extent of prohibiting to make fresh application for grant of permits to run the contract car riages other than those acquired under that Act and the embargo and prohibition created under section 20(3) thereof on the respective Regional Transport Authority in the State of Karnataka to invite/receive the application to consider the grant of permits to such contract carriages according to law, are void.
[686C D] 2.1 The Parliament and the legislature of a State derive their exclusive power to legislate on a subject/subjects in List I and List II of Seventh Schedule to the Constitution from article 246(1) and (3) respectively.
Both derive their power from article 246(2) to legislate upon a matter in the Concurrent List III subject to article 254 of the Constitution.
The entries in the three lists merely demarcate the legisla tive field or legislative heads.
Their function is not to confer powers on either the Parliament or the State Legisla ture.
[682E D] Subrahmanyam Chettiar vs Muttuswami Goundan., AIR 1941 FC 47; Governor General in Council vs The Reliegh Investment Co. Ltd., ; Harakchand Ratanchand Banthia vs Union of India; , AND Union of India vs
H.S. Dhillon; , , referred to.
2.2 Clause (1) of article 254 posits as a rule that in case of repugnancy or inconsistency between the State Law and the Union Law relating to the same matter in the Concurrent List occupying the same field, the Union law shall prevail and the State law will fail to the extent of the repugnancy or inconsistency whether the Union law is prior or later in point of time to the State law.
To this general rule, an exception has been engrafted in cl.
(2) thereof, viz., provided the State law is reserved for consideration of the President and it has received his assent, and then it will prevail in that State notwithstanding its repugnancy or inconsistency with the Union law.
This exception again is to be read subject to the proviso to cl.
(2) thereof, which empowers the Parliament to make law afresh or repeal or amend, modify or vary the repugnant State law and it became void even though it received President 's assent.
[659D F] 621 2.3 The question of repugnancy under Article 254 of the Constitution arises when the provisions of both laws are fully inconsistent or are absolutely irreconcilable and it is impossible to obey without disobeying the other, or conflicting results are produced when both the statutes covering the same field are applied to a given set of facts.
It matters little whether the provisions fall under one or other entry in the Concurrent List.
The substance of the same matter occupying the same field by both the pieces of the legislation is material and not the form.
The repugnancy to be found is the repugnancy of the provisions of the two laws and not the predominant object of the subject matter of the two laws.
The proper test is whether effect can be given to the provisions of both the laws or whether both the laws can stand together.
If both the pieces of legislation deal with separate and distinct matters though of cognate and allied character repugnancy does not arise.
[660A B; 675B C; 660C; 674H; 675A] Tika Ramji vs State of U.P., ; ; A.S. Krish na vs Madras State; , ; Prem Nath Kaul vs State of J &K, [1952] 2 Supp.
SCR 273; Bar Council of U.P.v.
State of U.P.; , ; Deep Chand vs State ofU. P., [1959] Supp.
2 SCR 8; State of Orissa vs
M.A. Tulloch & Co., ; ; State of Assam vs Horizon Union, ; ; State ofJ & K vs
M.S. Farooqi; , ; Kerala State Electricity Board vs Indian Aluminium Co., [1976] I SCR 552; Basu 's Commentary on the Constitution of India (Silver Jubilee Edition) Volume K 144; Clyde Engineer ing Co. vs Cowburn, ; Hume vs Palmer, ; ; Brisbane Licensing Court; , ; Colvin vs Bradley Bros. Pvt. Ltd., ; ; In Re Ex Parte Maclean, ; ; Wenn vs Attorney General (Victoria), ; ; O ' Sullivan vs Noarlunga Meat Co. Ltd.; , ; O 'Sullivan vs Noarlunga Meat Co. Ltd., and Blackley vs Devon dale Cream (Vic.) Pvt. Ltd.; , , referred to.
2.4 Section 14 read with section 20 of the Acquisition Act freezed the right of a citizen to apply for and to obtain permit or special permit to run a contract carriage in terms of the permit and monopoly to run a contract carriage was conferred on the S.T.U., Karnataka.
But the M.V. Act, 1988 evinces its intention to liberalise the grant of contract carriage permit by saying in section 80(2) that the Regional Transport Authority "shall not ordinarily refuse to grant the permit".
It also confers the right on an applicant to apply for and authorises the Regional Transport Authority to grant liberally contract carriage permit except in the area covered by section 80(3) and refusal appears to be an exception, that too, obviously for reasons to be recorded.
It may be 622 rejected if the permit applied for relate to an approved or notified route.
The M.V. Act accords the right, while the Acquisition Act, negates and freezes the self same right to obtain a permit and to run a contract carriage and prohibits the authorities to invite or entertain an application and to grant a permit to run contract carriage.
The Act and the relevant rules cover the entire field of making an applica tion in the prescribed manner and directs the Regional Transport Authority to grant permit with condition attached thereto to run contract carriages vide sections 66(1), 73, 74 and 80.
Thus the existence of two sets of provisions in the 59 of 1988 and Acquisition Act 21 of 1976 is sufficient to produce conflicting results in their opera tion in the same occupied filed.
The two sets of provisions run on collision course, though an applicant may waive to make an application for a permit.
Thereby there exists the operational incompatibility and irreconcilability of the two sets of provisions.
Sections 14(1) and 20(3) of the Acquisi tion Act are repugnant and inconsistent to sections 73, 74 and 80 of the Act.
By operation of proviso to article 254(2) of the Constitution, the embargo created by sections 14(1) and 20(3) of the Acquisition Act to make or invite an application and injuction issued to Regional Transport Authority prohibiting to grant contract carriage permit to anyone except to S.T.U., Karnataka within the State of Karnataka became void.
[682H; 683E] 3.1 The Parliament with a view to lay down general prin ciples makes law or amends the existing law.
The State Legislature still may feel that its local conditions may demand amendment or modification of the Central Law.
Their reserve power is article 254(2).
After making the Act 59 of 1988 the power of the State Legislature under article 254(2) is not exhausted and is still available to be invoked from time to time.
But unless it again enacts law and reserves it for consideration and obtains the assent of the President afresh, there is no prohibition for the petitioners to make applications for the grant of contract carriage permits under the Act and consideration and grant or refusal thereof according to law by the concerned Regional Transport Author ity.
[685E; 686B] 3.2 The Karnataka State Legislature is, therefore, at liberty to make afresh the law similar to sections 14(1) and 20(3) of the Acquisition Act with appropriate phraseology and to obtain the assent of the President.
[686B] 4.
Parliament may repeal the State law either expressly or by necessary implication but Courts would not always favour repeal by implication.
Repeal by implication may be found when the State law is repugnant or inconsistent with the Union law in its scheme or opera:ion.
The principle would be equally applicable to a question under 623 Article 254(2) of the Constitution.
In the instant case, section 217(1) of the Union law does not expressly repeal sections 14(1) and 20(3) of the State law.
They are repugnant with the Union law.
[676C D; 670E F; 669F] Zaveribhai vs State of Bombay, [1955] 1 SCR 799; M. Karunanidhi vs Union of India, ; ; T. Barai vs Henry Ah Hoe; , and M/s Hoechst Pharmaceuti cals Ltd. vs State of Bihar, ; , referred to.
For the applicability of the principle that special law prevails over the general law, the special law must be valid law in operation.
Voidity of law obliterates it from the statute from its very inception.
In the instant case, since sections 14(1) and 20(3) are void the said principle is not applicable.
[683F] Justiniano Augusto De Peidada Barreto vs Antonia Vicente De Fonseca & Ors., [ ; , distinguished.
6.1 The doctrine of pith and substance or the predomi nant purpose or true nature and character of law is applied to determine whether the impugned legislation is within the legislative competence under articles 246(1) and 246(3) of the Constitution, and to resolve the conflict of jurisdiction.
If the Act in its pith and substance fails in one List it must be deemed not to fail in another List, despite inciden tal encroachment and its validity should be determined accordingly.
The pith and substance rule, thereby, resolves the problem of overlapping of "any two entries of two dif ferent Lists vis a vis the Act" on the basis of an inquiry into the "true nature and character" of the legislation as a whole and tries to find whether the impugned law is substan tially within the competence of the Legislature which enact ed it, even if it incidentally trespasses into the legisla tive field of another Legislature.
[680C; 677F; 678A1 6.2 The doctrine has no application when the matter in question is covered by an entry or entries in the Concurrent List and has occupied the same field both in the Union and the State Law.
It matters little as in which entry or en tries in the Concurrent List the subject matter falls or in exercise whereof the Act/provision or provisions therein was made.
The Parliament and Legislature of the State have exclusive power to legislate upon any subject or subjects in the Concurrent List.
The question of incidental or ancillary encroachment or to trench into forbidden field does not arise.
The determination of its 'true nature and character also is immaterial.
[680C D] 624 Prafulla Kumar vs Bank of Commerce, Khulna, AIR 1947 PC 60; State of Bombay vs
F.N. Balsara; , ; Atiabari Tea Co.Ltd.
vs State of Assam, ; and Meghraj & Ors.
vs Allaharakhiya & Ors., AIR 1942 FC 27, referred to.
|
ivil Appeal No. 1312 of 1990.
From the Judgment and Order dated 6.7.
1988 of the Rajasthan High Court in D.B. Civil W.P. No. 71/77.
section Hegde, Additional Solicitor General, A. Subba Rao for C.V.S. Rao for the Appellants.
S.C. Birla for the Respondent.
The Judgment of the Court was delivered by 762 K. JAGANNATHA SHETTY, J.
Special leave granted.
Bakshi Ram respondent was a constable in the Central Reserve Police Force at Devli in Rajasthan.
On 17th March 1971 at about 8.45 p.m. he along with another constable forced entry into the room of Garib Das the constable of the CRP Group Centre band platoon.
Garib Das was then not present in the room.
His wife Savitri Devi who was inside tried to prevent their entry, but in vain.
Both the consta bles caught hold of her and misbehaved with her.
The respondent was tried for an offence under Section 10(1) of the .
Section 10 of the Act sets out less heinous offences and Section 10(1) refers to any act or omission which, though not speci fied in the Act, is prejudiciable to good order and disci pline.
On the evidence adduced in the case he was found guilty of the charge and by judgment dated 23rd March 1971 he was sentenced to four months R.I. by the Magistrate 1st Class and Commandant Group Centre, CRPF, Deoli (Rajasthan).
He was lodged in the Civil Jail, Jaipur to undergo the sentence.
In view of his conviction and sentence.
, the Department by way of disciplinary action dismissed him from service.
This action was taken when his appeal against the conviction and sentence was pending before the Sessions Judge.
The learned Judge by judgment dated 22 September 1971 upheld the conviction but released him under the ("the Act").
Apparently he was released under Section 4 of the Act upon furnishing bonds to keep peace and be of good behaviour for a period of six months.
The re spondent complied with those conditions.
After expiry of the period of good conduct, he moved the High Court with Writ Petition under Article 226 of the Constitution challenging his dismissal from service.
The High Court relying upon Section 12 of the Act has set aside the dismissal and di rected that he should be reinstated into service with all consequential benefits.
The High Court has expressed the view that the sole reason for dismissal of the respondent was his conviction under Section 10(1) of the Central Re serve Police Force Act but in view of Section 12 of the Probation of Offenders Act, 1968, there was no disqualifica tion for him to continue in service.
This is how the High Court observed: "The clear language of Section 12 of the Probation of Of fenders Act, 1958 which provides that a person dealt with under the provisions of Section 3 or Section 4 of that 763 Act shall not suffer disqualification, if any, attaching to a conviction under any law, notwithstanding anything con tained in any other law.
This provision has the effect of removing disqualification attaching to the petitioners ' conviction under Section 10(n) of the C.R.P.F. Act.
Section 12 of the Probation of Offenders Act dealing specifically with this situation clearly provides that the provisions therein is 'notwithstanding any thing contained in any other law. ' Hence, effect has to be given to the same.
" The judgment of the High Court has been challenged in this appeal.
Since the result of the appeal turns on the scope and meaning of Section 12 of the Probation of Offenders Act, it is necessary to set out the Section.
Section 12 is in these terms: "12.
Removal of disqualification attaching to conviction Notwithstanding anything contained in any other law, a person found guilty of an offence and dealt with under the provisions of Section 3 or Section 4 shall not suffer dis qualification, if any, attaching to a conviction of an offence under such law, Provided that nothing in this section shall apply to a person who, after his release under Section 4, is subse quently sentenced for the original offence.
" Section 3 of the pro vides power to the Court to release certain offenders after admonition.
Section 4 provides power to the Court to release certain offenders on probation of good conduct.
Under the disposition made by the Court under Section 4 the sentence is suspended during the period of probation and the offender is released on his entering into a bond to keep peace and be of good behaviour.
Section 9 provides for procedure in case of offender failing to observe conditions of bond.
The Court, if satisfied, that the offender has failed to observe any of the conditions of bond for keeping good behaviour could sentence him for the original offence or where the failure is for he first time, then, without prejudice to the continuance in force of the bond, the Court may impose upon him a penalty not exceeding fifty rupees.
764 It will be clear from these provisions that the release of the offender on probation does not obliterate the stigma of conviction.
Dealing with the scope of Sections 3, 4 and 9 of the , Fazal Ali, J., in The Divisional Personnel Officer, Southern Railway and Anr.
T.R. Challappan etc.
, at 596 speaking for the Court observed: "These provisions would clearly show that an order of re lease on probation comes into existence only after the accused is found guilty and is convicted of the offence.
Thus the conviction of the accused or the finding of the Court that he is guilty cannot be washed out at all because that is the sine qua non for the order or release on proba tion of the offender.
The order of release on probation is merely in substitution of the sentence to be imposed by the Court.
This has been made permissible by the Statute with a humanist point of view in order to reform youthful offenders and to prevent them from becoming hardened criminals.
The provisions of Section 9(3) of the Act extracted above would clearly show that the control of the offender is retained by the criminal court and where it is satisfied that the condi tions of the bond have been broken by the offender who has been released on probation, the Court can sentence the offender for the original offence.
This clearly shows that the factum of guilt on the criminal charge is not swept away merely by passing the order releasing the offender on proba tion.
Under sections 3, 4, or 6 of the Act, the stigma continues and the finding of the misconduct resulting in conviction must be treated to be a conclusive proof.
In these circumstances, therefore, we are unable to accept the argument of the respondents that the order of the Magistrate releasing the offender on probation obliterates the stigma of conviction.
" As to the scope of Section 12, learned Judge went on (at 596): "It was suggested that Section 12 of the Act completely obliterates the effect of any conviction and wipes out the disqualification, attached to a conviction of an offence under such law.
This argument, in our opinion, is based on a gross misreading of the provisions of Section 12 of the Act, the words "attaching to a conviction of an offence 765 under such law" refer to two contingencies: (i) that there must be a disqualification resulting from a conviction and (ii) that such disqualification must be provided by some law other than the .
The Penal Code does not contain any such disqualification.
Therefore, it cannot be said that section 12 of the Act contemplates an automatic disqualification attaching to a conviction and obliteration of the criminal misconduct of the accused.
It is also manifest the disqualification is essentially differ ent in its connotation from the word 'misconduct '." In criminal trial the conviction is one thing and sen tence is another.
The departmental punishment for misconduct is yet a third one.
The Court while invoking the provisions of Section 3 or 4 of the Act does not deal with the convic tion; it only deals with the sentence which the offender has to undergo.
Instead of sentencing the offender, the Court releases him on probation of good conduct.
The conviction however, remains untouched and the stigma of conviction is not obliterated.
In the departmental proceedings the delin quent could be dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; (See Article 311(2)(b) of the Constitution and Tulsiram Patel case: [1985] Supp.
2 SCR 131 at 282).
Section 12 of the Act does not preclude the department from taking action for misconduct leading to the offence or to his conviction thereon as per law.
The section was not intended to exonerate the person from departmental punish ment.
The question of reinstatement into service from which he was removed in view of his conviction does not therefore, arise.
That seems obvious from the lerminology of Section 12.
On this aspect, the High Court speak with one voice.
The Madras High Court in R. Kumaraswami Aiyer vs The Commission er, Municipal Council Tiruvannamalai and Anr., [1957] Crl.
L. J. 225 Vol.
58 and Embaru (P) vs Chairman Madras Port Trust, Mad., the Andhra Pradesh High Court in A. Satyanarayana Murthy vs Zonal Manager, L.I.C., AIR 1969 AP 371, the Madhya Pradesh High Court in Prem Kumar vs Union of India and Ors., [1971] Lab & Ind. cases 823, the Punjab & Haryana High Court in Om Prakash vs The Director Postal Services (Post and Telegraphs Deptt.) Punjab Circle, Ambala and Ors., The Delhi High Court in Director of Postal Services and Anr.
vs Daya Nand, have expressed the same view.
This view of the High Courts in the aforesaid cases has been approved by this Courtin T.R.Challappan 's case 766 In Trikha Ram vs
V.K. Seth and Anr., [1987] Supp.
SCC 39 this Court after referring to section 12 has altered the punishment of dismissal of the petitioner therein into "removal from service", so that it may help him to secure future employment in other establishment.
Section 12 is thus clear and it only directs that the offender "shall not suffer disqualification, if any, attach ing to a conviction of an offence under such law".
Such law in the context is other law providing for disqualification on account of conviction.
For instance, if a law provides for disqualification of a person for being appointed in any office or for seeking election to any authority or body in view of his conviction, that disqualification by virtue of Section 12 stands removed.
That in effect is the scope and effect of Section 12 of the Act.
But that is not the same thing to state that the person who has been dismissed from service in view of his conviction is entitled to reinstate ment upon getting the benefit of probation of good conduct.
Apparently, such a view has no support by the terms of Section 12 and the order of the High Court cannot, there fore, be sustained.
In the result the appeal is allowed.
The impugned order of the High Court is set aside.
However, we alter the penal ty of dismissal from service into 'removal from service ' as it was done in Trikha Ram 's case.
In the circumstances of the case, we make no order as to costs.
T.N.A. Appeal al lowed.
| IN-Abs | The respondent, a constable, convicted under section 10(n) of the but released on probation under section 4 of the , was dismissed from service.
He chal lenged his dismissal before the High Court which ordered his reinstatement holding that there was no disqualification for him to continue in service, for section 12 of the has the effect of removing the dis qualification attaching to his conviction.
Hence this appeal by the Union of India.
Allowing the appeal and setting aside the order of the High Court, this Court.
HELD: 1.
Section 12 of the only directs that the offender 'shall not suffer dis qualification, if any, attaching to a conviction of an offence under such law '.
Such law in the context is the other law providing for disqualification on account of conviction e.g. if a law provides for disqualification of a person for being appointed in any office or for seeking election to any authority or body in view of his conviction, that disqualification by virtue of section 12 stands re moved.
But that is not the same thing to state that the person who has been dismissed from service in view of his conviction is entitled to reinstatement upon getting the benefit of probation of good conduct.
Section 12 does not preclude the department from taking action for misconduct leading to the offence or to his conviction theron 761 as per law.
It was not intended to exonerate the person from departmental punishment.
[766B C; 765E] R. Kumaraswami Aiyer vs The Commissioner, Municipal Council Tiruvannarnalai and Anr., ; Embaru (P) vs Chairman Madras Port Trust, Mad; A. Satyanarayana Murthy vs Zonal Manager L.I.C., AIR 1969 A.P. 371; Prern Kumar vs Union of India & Ors., [1971] Lab.
& Ind. Cases 823; Om Prakash vs The Director Postal Services & Ors., and Director of Postal Services & Anr.
vs Daya Nand, , approved.
The Divl.
Personnel Officer Southern Railway & Anr.
T.R. Challappan, , followed.
In criminal trial the conviction is one thing and sentence is another.
The departmental punishment for miscon duct is yet a third one.
The Court while invoking the provi sions of section 3 or 4 of the Act does not deal with the conviction; it only deals with the sentence which the of fender has to undergo.
Instead of sentencing the offender, the Court releases him on probation of good conduct.
The conviction, however, remains untouched and the stigma of conviction is not obliterated.
In the departmental proceed ings the delinquent could be dismissed or removed or reduced in rank on the ground of conduct which has led to his con viction on a criminal charge.
Therefore the question of respondent 's restatement into service does not arise.
Howev er, the penalty of dismissal from service is altered into removal from service.
[765C D, F; 766E] Tulsi Ram Patel vs Union of India, [1985] Suppl.
2 SCR 131 and Trikha Ram vs
V.K. Seth & Anr., , followed.
|
Civil Appeal No. 1577 (NCE) of 1987.
From the Judgment and Order dated 24.4.
1987 of the Madras High Court in Election Petition No. 1 of 1986.
Ram Jethmalani, Ms. Rani Jethmalani and M.G. Ramachan dran for the Appellant.
R.K. Garg, section Padmanabhan, K. Raj.
Choudhary, R. Mohan, K. Chandrashekharan, R. Ayyam Perumal, V. Krishnamurthy, section Thananjayan, K.V. Vijaya Kumar, A.V. Rangam and V.R. Kari thi~ kayan for the Respondents.
770 The Judgment of the Court was delivered by KANIA, J.
This is an appeal from a judgment and order delivered by a learned Single Judge of the Madras High Court on April 24, 1987 dismissing an election petition filed by the appellant.
The appellant herein was the petitioner before the High Court and the respondents nos.
1 to 8 herein were arraigned as respondents in the same order in the election petition.
The dispute pertains to the election of six Members to the Rajya Sabha by the elected Members of the Tamil Nadu Legislative Assembly.
The election was held, as scheduled, on June 28, 1986.
The appellant and respondents nos.
1 to 7 were the eight candidates in the field, all the nominations having been found valid.
The 8th respondent was the Returning Officer.
The polling took place, as scheduled, on June 28, 1986 and, immediately thereafter, the ballot box was opened and the votes were sorted out.
The election was under the preferential system of voting and the particulars of the first preferences votes cast and secured by the candidates are as follows: Candidates First Preference Votes 1.
Appellant 33 2.
1st Respondent 35 3.
2nd Respondent 31 4.
3rd Respondent 33 5.
4th Respondent 32 6.
5th Respondent 34 7.
6th Respondent 34 8.
7th Respondent nil Out of the 33 first preference votes cast in favour of the appellant, one ballot paper was rejected by the 8th respondent, the Returning Officer, on the ground that the said ballot paper was marked by the voter otherwise than with the article supplied for that purpose.
It may be men tioned here that the first preference was indicated on the said ballot paper by a ball point pen with green ink whereas in the ball point pen kept along with the ballot box had blue ink.
The working result sheets of the counting were prepared and announced by the 8th 771 respondent.
The particulars of the said working result sheets are as follows: 1.
Appellant 3219 2.
1st Respondent 3301 3.
2nd Respondent 3270 4.
3rd Respondent 3300 5.
4th Respondent 3301 6.
5th Respondent 3301 7.
6th Respondent 3301 In consequence, respondents nos.
1 to 6 were declared as duly elected and the appellant was declared as having lost the election.
It is submitted by learned counsel for the appellant, that (1) the first preference vote in his favour in which first preference was indicated on the ballot paper in green ink was wrongly rejected.
The rejection of the said ballot paper by the Returning Officer was duly objected to by the appellant at the time of counting.
The said ballot paper is hereinafter referred to as "the said rejected ballot paper".
If the said rejected ballot paper had been received as valid, the appellant would have the proportionate number of preference votes and would have been declared elected.
The second contention raised by the appellant was that three ballot papers which did not contain the figure 1 in the space intended for marking the said figure should have been rejected and the same were wrongly accepted.
These ballot papers had been used for casting first preference votes in favour of the first respondent and if the same had been rejected, first respondent would not have been elected and in his place the appellant would have been elected.
Both the mistakes according to the appellant materially affected the result of the election.
Before going into the controversy raised before us, we may note the relevant provisions of the Election Law.
The election petition was filed under Chapter II of the Repre sentation of the People Act, 1951 (hereinafter referred to as "the said Act").
Section 59 of the said Act provides that at every election where a poll is taken votes shall be given by ballot in such manner as may be prescribed.
We are not 772 concerned here with the special procedure for voting pro vided in certain cases provided for under section 60 said Act.
Section leo of the said Act deals with the grounds for during elections to be void.
The relevant portion of the said section reads thus: "100(1) Subject to the provisions of sub section (2) if the High Court is of opinion (a) x x x (b) x x x (c) That any nomination has been improperly rejected; or (d) that the result of the election, in so far as it con cerns a returned candidate, has been materially affected (i) by the improper acceptance or any nomination, or (ii) by any corrupt practice committed in the interests of the returned candidate by an agent other than his election agent, or (iii) by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, or (iv) by any non compliance with the provisions of the Con stitution or of this Act or of any rules or orders made under this Act, the High Court shall declare the election of the returned candidate to be void".
Conduct of Election Rules, 1961 (referred to hereinafter as "the Election Rules") came into force on 25th of April, 1961.
Rule 30 of the Election Rules prescribes the form of the ballot papers.
Rule 31 of the Election Rules provides for arrangements at polling stations.
Sub rule (3) of Rule 31 runs as under: "(3) the returning officer shall provide at each polling station a sufficient number of ballot boxes, copies of the relevant part of the electroal roll, ballot papers, instru ments for stamping the distinguishing mark on ballot 773 papers and articles, necessary for electors to mark the ballot papers.
" Rule 39 of the Election Rules deals with the maintenance of secrecy of voting by electors within polling stations and the voting procedure.
The material portion of sub rule (2) of that rule runs as follows: "(2) The elector on receiving the ballot paper shall forth with (a) proceed to one of the voting compartments: (b) there make a mark on the ballot paper with the instru ment supplied for the purpose on or near the symbol of the candidate for whom he intends to vote." Rule 70 lays down rules for the conduct of polls.
The portion of Rule 70 material for the purposes of the case runs as follows: "(a) x x x x (b) to every election in a council unless voting by postal ballot has been directed in the whole of that constituency under clause (b) of rule 68, subject to the following modifications, namely: (i) clause (a) of sub rule (1) of rule 31 shall not apply to an election by assembly members; (ii) in lieu of rules 37 to 40, the following rules shall apply: 37A. Method of voting.
(1) Every elector has only one vote at an election irrespective of the number of seats to be filled.
(2) An elector in giving his vote (a) shall place on his ballot paper the figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance; and 774 (b) may, in addition, place on his ballot paper the figure 2 or the figures 2 and 3 or the figures 2, 3 and 4 and so on, in the space opposite the names of the other candidates in the order of his preference.
38A. x x x x 39A. Maintenance of secrecy of voting by electors within polling station and voting procedure (1) Every elector, to whom a ballot paper has been issued under rule 38A or under any other provision of these rules, shall maintain secrecy of voting within the polling station and for that purpose observe the voting procedure hereinafter laid down.
(2) The elector on receiving the ballot paper shall forth with (a) proceed to one of the voting compartments; (b) record his vote in accordance with sub rule (2) of rule 37A with the article supplied for the purpose.
(c) fold the ballot paper so as to conceal his vote; (d) insert the folded paper in the ballot box; and (e) quit the polling station: (It is not necessary to quote the rest of Rule 39A for the purposes of this Judgment) It was submitted by learned counsel for the appellant that the express on "article supplied for the purpose" used in Rule 39A(2)(b) and Rule 73(2)(e) of the Election Rules was misconstrued by the High Court.
It was submitted by him that in the context of the election law and the instructions contained in the hand books to which reference will be made that expression should be interpreted as meaning "actually given" or "handed over".
In this regard, reference was made to instructions given to the Presiding Officer in respect of elections to Lok Sabha and State Assemblies.
The relevant instructions in the said hand book provide that the proce dure followed in respect of the election to Lok Sabha and State Assemblies is that the Polling Officer or 775 Polling Assistant must give the rubber stamp properly inked to the voter before he proceeds into the voting booth for marking his choice and the Polling Officer or Polling As sistant must take back the said rubber stamp from the voter after he comes out from the voting both having cast his vote and then hand it over to the next voter and so on.
It was urged that the same procedure should have been followed mutatis matandis in the case of an election to the Legisla tive Council like the one in question before us, and if this were done, it would imply that the ball point pen for mark ing the preference should have been personally handed over to the voter with instructions to use it for marking his preference.
This argument is not worthy of acceptance.
As pointed out by the High Court, the nature of the elections to the Lok Sabha and the State Assemblies is different from that of elections to a Legislative Council or Rajya Sabha and this difference has to be taken into account in inter preting the relevant words used in the rules relating to an election.
The election to Lok Sabha and the State Assemblies is a direct election on the basis of a single member con stituency where the voter has only one choice whereas in the case of an election to the Rajya Sabha, the said election is by members of the Legislative Assemblies of the States and the election is an indirect election conducted on the prin ciple of proportional representation by means of a single transferable vote.
In the case of elections to the Lok Sabha and State Assemblies, a rubber stamp with arrow cross mark is provided with which the voter has to make a mark on the symbol of the candidate of his choice in the ballot paper.
Many of the voters are not familiar with the election proce dure and it is in these circumstances that the requirement has been provided that a rubber stamp containing the cross mark properly inked should be handed over to each voter with instructions to use the same for marking his vote or choice.
In the case of the election to the Rajya Sabha or a Legisla tive Council, the situation is entirely different.
The number of voters is limited.
One could assume that they are reasonably familiar with the procedure of voting; and the article supplied for marking the preference is a fountain pen or ball point pen.
In these circumstances, there is hardly any warrant for requiring that the procedure of handing over personally to each voter the article for mark ing his preference should be followed and it is quite/ ' adequate if the article for marking the preference, namely, the fountain pen or ball point pen is made available in the voting booth with clear instructions that the same should be used in marking the preference.
It must also be borne in mind that there is no express rule or instruction in connec tion with the elections to the RaRajya Sabha by Members of the State Assemblies or elections to the Legislative Coun cils of States which specifically requires that the arti 776 cle for marking the preference should be handed over to each voter personally.
In these circumstances, in our view, the High Court was right in interpreting the expression "article supplied for the purpose" in Rule 39A(2)(b) and Rule 73(2)(e) of the Election Rules as meaning "made available for the purpose" or "provided for the purpose".
Reliance was placed by learned counsel for the appellant on the decision of this Court in Ram Utar Singh Bhaduria vs Ram Gopal Singh & Ors., ; and particularly, the observations at page 200 of the said report.
We are of the view that that decision as well as the other decisions in this connection cited before us are in connection with the elections to the Lok Sabha or the State Assemblies and have no application to an indirect election like the election to the Rajya Sabha by Members of State Assemblies.
Rule 56 of the Election Rules deals with counting of votes.
The material portion of sub rule (2) of Rule 56 of the Election Rules runs as follows: "56.
Counting of Votes.
(1) The ballot papers taken out of each ballot box shall be arranged in convenient bundles and scrutinized.
(2) The returning officers shall reject a ballot paper (a) x x (b) If it bears no mark at all or, to indicate the vote it bears a mark elsewhere than on or near the symbol of one of the candidates on the face of the ballot paper or, it bears a mark made otherwise than with the instrument supplied for the purpose, or . " Rule 73 deals with the scrutiny of opening of ballot boxes and packets of postal ballot papers.
The material portion of sub rule (2) of Rule 73 runs as follows: "(2) a ballot paper shall be invalid on which (a) the figure 1 is not marked; or (b) the figure 1 is set opposite the name or more than one candidate or is so placed as to render it doubtful to which candidate it is intended to apply; or 777 (c) x x x (d) x x x (e) there is any figure marked otherwise than with the article supplied for the purpose.
" It would now be convenient to deal with the first con tention of the learned counsel for the appellant.
As we have already pointed out, the said rejected ballot paper was rejected on the ground that it was marked otherwise than with an article supplied for the purpose.
As we have already pointed out, the figure 1 indicating the first preference in the said ballot paper was marked in green ink whereas in the ball point pen kept in the voting booth with the ballot box, the ink used was blue.
The returning officer took the view that the said marking of preference in green ink clearly established that it was done with a bail point pen other than the one which was supplied for marking the preference and hence the vote was invalid.
It was urged by Shri Jeth malani in this connection that although the marking of preference was done in green ink, there was no doubt that the intention of the over concerned was to give the first preference vote to the appellant.
It was submitted by him that the fundamental rule of election law is that effect should be given to the intention of the voter and this could be done only by treating the vote as valid, as the intention of the voter was quite clear.
Mr. Jethmalani may be right when he contends that the intention of the voter could be clearly gathered and it was to cast the first preference vote for the appellant.
However, it is not enough for the vote to be valid that it is possible to gather the intention of the voter to vote for a particular candidate as pointed out by the Constitution Bench of this Court in the leading case of Hari Vishnu Kamath vs Syed Ahmad Ishaque and Others, ; at page 1132.
This Court held that ( 1132): "But when the law prescribes that the intention should be expressed in a particular manner, it can be taken into account only if it is so expressed.
An intention not duly expressed is, in a court of law, in the same position as an intention not expressed at all." In the present case Rule 39(2)(b) which is applicable to the election petition before us clearly prescribes that the vote must be cast by the voter in accordance with the said sub rule (2) of Rule 39 of the Election Rules, with the article supplied for the purpose.
Rule 39A(2)(b) read with Rule 37A(2)(a) prescribes that an elector in giv 778 ing his vote shall place on his ballot paper the figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance with the article sup plied for the purpose.
Hence, unless the ball point pen kept with the ballot box is not to be regarded as the article supplied for marking the preference, the intention of the elector in the present case cannot be given effect to as it was expressed in a manner inconsistent with the provisions in the rules.
Clause (b) of sub rule (2) of Rule 56 of the Election Rules provides inter alia that if a ballot paper contains a mark made on it otherwise than with the instru ment supplied for the purpose, the returning officer shall reject the said ballot paper.
Rule 73 is included in Part VII of the Election Rules and that Part applies to the counting of votes at elections by Assembly members.
Clause (e) of sub rule (2) of Rule 73 of the Election Rules set out earlier that a ballot paper shall be invalid on which there is any figure marked otherwise than with the article sup plied for the purpose.
Rule 73 is directly applicable to the case of the election in question and as aforesaid it pre scribes that if on the ballot paper there is any figure marked otherwise than with the article supplied for the purpose, the ballot paper shall be invalid.
Assuming that the voter in this case had expressed his intention clearly by marking the figure 1 in green ink, he did so in violation of the express provisions of the Rules which have a statuto ry force and hence no effect can be given to that intention.
It was next argued in this connection that the expres sion "article supplied for the purpose" as used in the said Rules 39A(2)(b) and 73(2)(e) was misconstrued by the Presid ing Officer and the High Court in the present case.
It was submitted by learned counsel for the appellant that Rule 56(2)(b) was not complied with by making a ball point pen available in the polling compartment near the ballot box for the use of the electors in marking their preference as law required that the Polling Officer should personally hand over the bali point pen to the voter before he proceeds to the voting booth with instructions to mark his preference with that ball point pen.
He referred to the hand book dealing with the procedure prescribed in elections to the Lok Sabha and to the Legislative Assemblies and submitted that the said procedure was applicable mutatis mutandis to elections to the Rajya Sabha and the Legislative Councils.
It was urged by him that the second proviso to clause (e) of sub rule (2) of Rule 73 of the Election Rules provides that if the returning officer is satisfied that any such defect as is mentioned in the said clause has been caused by any mistake or fault on the part of the Presiding Officer or Polling Officer, the ballot paper shall not be rejected merely on the ground of the said defect.
It was contended by him that the Polling Officer was bound to hand over to 779 each voter individually the ball point pen to be used for marking his preference on the ballot paper.
He submitted that the duty of the Polling Officer was to hand over the ball point pen to the voter to use the same for marking his preference and it was also his duty to take back the said pen from the voter after he has cast his vote and given the same to the next voter.
He urged that merely providing a bail point pen for voting did not constitute substantial compliance with Rule 39A(2)(b) or Rule 73(2)(e).
He urged that the mistake in the present case, namely, marking of the preference with green ink on the ballot paper, had occurred because no bail point pen was handed over as aforesaid to the voter concerned.
We are unable to accept this submis sion.
The procedure followed in an election to the Lok Sahba or the State Assembly is to give to the voter a rubber stamp for voting with an arrow mark properly inked with instruc tions to use the same for voting before the voter enters the voting compartment to put his mark against the name of the candidate for whom he desires to vote and to take the rubber stamp back from the voter when he comes out of the voting compartment and to repeat this process for every voter.
In the first place, it must be noticed that there is no rule or standing order requiring the Presiding Officer or to follow this procedure in the case of an election to the Rajya Sabha or Legislative Council of a State.
There is a material difference between an election to Lok Sabha or a Legislative Assembly which is a direct election with one constituency for each seat and only vote is to be cast and an election to Rajya Sabha which is an indirect election with the preferen tial system of voting.
Sub rule (2) of Rule 39 which is applicable to such an election to a Legislative Assembly provide that the elector on receiving the ballot paper has to make a mark on the ballot paper with the instrument supplied for the purpose on or near the symbol of the candi date for whom he intends to vote.
It is only in the case of an election like this that it becomes necessary to provide a rubber stamp properly inked to the voter to mark his prefer ence.
It must be remembered that in such an election case, the number of voters or electors is extremely large and many of them might be unfamiliar with the voting procedure.
An election to the Rajya Sabha, on the other hand, is an indi rect election with multiple candidates ' constituency and the system of voting followed is the preferential system of voting.
Rule 37A of the Election Rules which is applicable to such an indirect election by virtue of the provisions of Rule 70 provides that an elector in giving his vote shall place on his ballot paper figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance.
This difference in the case of an election to the Rajya Sabha makes it wholly unnecessary that the Presiding Officer or the Polling Officer should hand over to 780 every voter individually a bail point pen to mark his vote and it would quite wholly be adequate if the article for marking the preference, namely, a ball point pen, is provid ed to the voter to use the same for marking his preference or if the pen is placed in such a way as to make it clear that the marking of the preference is to be done with that pen and instructions given to use that pen for marking the preference.
The evidence of the returning officer, which has been accepted by the High Court is to the effect that there were two voting compartments in the polling booth and in each of them a ball point pen with blue ink was kept as soon as an elector went into the polling booth, one Polling Assistant gave him his identity slip and another Polling Assistant gave to the elector printed copies of Rules 37A and 39A of the Election Rules and a copy of the guidelines.
Then the elector went to the first Polling Officer who obtained his signature in the counter foil of the ballot paper and instructed the elector that he should mark his preference on the ballot paper with the article kept for the purpose inside the voting compartment.
Another Polling Officer gave the ballot paper to the voter and again in structed him to go into the voting compartment and mark the ballot paper with the article kept there for that purpose, fold the ballot paper before coming out and put in into the ballot box in front of the Polling Officer.
In the light of this evidence, we are of the view that the ball point pen with blue ink kept in the voting compartment for marking the preference must be regarded as the article supplied for that purpose, namely, the purpose of the voter marking his pref erence on the ballot paper.
It was submitted by learned counsel for the appellant that it was possible that a voter might have used his own pen if the pen kept in the voting compartment was not working and such a vote cannot be re garded as invalid.
We are not concerned with a case of that kind here as there is no evidence that in any voting com partment the ball point pen kept there was not working.
It was next urged that if a voter had used another ball point pen, that is, other than the one kept in the voting compart ment containing the blue ink, it would not have been possi ble to find out that the preference marked with such a bail point pen had been used for marking the preference and not the pen supplied.
This is of no relevance here.
The possibility that in a given case a breach of the rules may be difficult to detect cannot lead to the conclusion that the mandatory requirement that preference on the ballot paper must be marked with the article supplied for the purpose should be regarded as not binding in law.
We are, therefore, of the view that the said ballot paper was right ly rejected by the returning officer and the arguments urged by learned counsel for the appellant in that contention must be rejected.
781 The next point is regarding the three first preference votes cast in favour of respondent No. 1 which were accepted by the returning officer as stated earlier.
In respect of these three votes, the figure 1 is marked, not in the right hand column opposite the name of respondent No. 1, but in the left hand column containing the name of candidate and opposite the name of respondent No. 1.
The appellant unsuc cessfully objected to the validity of these three ballot papers on the ground that the first preference had not been marked in the space provided for that purpose opposite the name of the candidate concerned, namely, respondent No. 1, as required by Rule 37A(2).
It was submitted by learned counsel for the appellant that the returning officer as well as the High Court were in error in holding that the said three ballot papers were valid.
We propose to discuss this controversy very shortly because we are in full agreement with the reasoning and conclusions given by the High Court in its impugned judgment in coming to the conclusion that the returning officer was justified in rejecting the objec tions preferred by the appellant to the said three votes and holding that the same were valid.
The relevant portion of Rule 37A(2) of the Election Rules has already been quoted earlier.
Clause (a) of sub rule (2) of that Rule only pro vides that the voter shall place on his ballot paper the figure i in the space opposite the name of the candidate for whom he wishes to vote in the first instance.
it is signifi cant that this rule does not specifically say that the figure 1 must be placed in the column earmarked for marking the preference but only requires that the figure 1 should be placed opposite the name of the candidate.
Sub rule (4) of Rule 71 which is a definition runs as follows: "71(4): 'first preference ' means the figure 1 set opposite the name of a candidate; 'second preference ' means the figure 2 set opposite the name of a candidate; 'third pref erence ' means the figure 3 set opposite the name of a candi date, and so on;" It is significant that in this sub rule also there is nothing to indicate that the preference must be indicated in the column reserved for that purpose, the only requirement being that the figure 1 should be written opposite the name of the candidate.
Similarly, sub rule (2)(b) of Rule 73 only lays down that if the figure 1 is set opposite the name of more than one candidate or is so placed as to render it doubtful to which candidate it applied, the ballot paper would be invalid.
Sub rule 12) of Rule 73 deals with the invalidity of ballot papers and that subrule nowhere states that merely by reason of the preference being 782 marked in the wrong column, if the marking is opposite the name of the candidate concerned, the ballot paper shall be rendered invalid.
It is true that the column in which the preference should have been marked and intended for that purpose was the column on the righthand side of the first column where the name of the candidate was to be put; but there is no express provision to the effect that unless the preference is marked in the correct column, the ballot paper would be invalid.
In such a situation, the principle enunci ated by this Court in several judgments and reiterated in section Sivaswami vs
V. Malaikannan & Ors., ; that the primary task of the Court in a case where the question is whether the ballot paper is invalid is to ascertain the intention of the voter, must be applied.
In that case, the Court held that the ballot paper shall not be rejected as invalid if it is reasonably possible to gather a definite indication from the marking so as to identify the candidate in favour of whom the vote had been intended to be given.
This, of course, is subject to the rule that before a ballot paper is accepted as valid the ballot paper must not be invalid under any other express provision and the intention of the voter must not be expressed in a manner which is contrary tO or totally inconsistent with the manner pre scribed under the said Act or the Election Rules for ex pressing the same.
In the case of the said, three votes in question, the figure 1 was clearly marked opposite the name of respondent No. 1, being the candidate concerned, as required by the express provision of the said Rule 37A and the intention of the voter was clearly to cast the first preference in favour of respondent No. 1.
In these circum stances, the ballot papers were rightly accepted by the returning officer as valid and the High Court was justified in coming to the conclusion to which it has arrived.
In the result, the appeal fails and is dismissed.
Howev er, considering the facts and circumstances of the case, there will be no order as to costs.
R.S.S. Appeal dis missed.
| IN-Abs | Election of six Members to the Rajya Sabha by the elect ed Members of the Tamil Nadu Legislature Assembly was held in June 1986.
The appellant and respondent nos.
1 to 7 were the eight candidates in the field.
Respondent Nos. 1 to 6 were declared duly elected and the appellant was declared as having lost the election.
The appellant thereupon filed an election petition which was dismissed by the High Court.
Before this Court it was contended on behalf of the appellant that: (1) the first preference vote in his favour in which the first preference was marked on the ballot paper in green ink had been wrongly rejected on the ground that it was marked otherwise than with the article supplied for the purpose, i.e., the ball point pen with blue ink which had been kept in the voting booth; and (2) the three ballot papers indicating the first preference in favour of the first respondent, which did not contain the figure 'I ' in the space intended for marking the said figure, had been wrongly accepted.
In support of the first contention it was argued that: (1) the expression "article supplied for the purpose" used in Rule 39A(2)(b) and Rule 73(2)(e) of the Conduct of Election Rules, 1961, was misconstrued by the High Court; (2) in the context of the election law, the instructions contained in the hand books, and the procedure followed in respect of the election to Lok Sabha and State Assemblies, the expression "article supplied for the pur pose" should be interpreted as meaning "actually given" or "handed over", and as such the ball point pen for marking the preference should have been personally handed over to the voter with instructions to use it for marking his pref erence; (3) the mistake in the present case, namely, marking 768 of the preference with green ink on the ballot paper, had occurred because no bail point pen was handed over to the voter concerned; and (4) the fundamental rule of election law is that effect should be given to the intention of the voter and this could be done only by treating the vote as valid.
Dismissing the appeal, this Court, HELD: (1) There is a material difference between an election to Lok Sabha or a Legislative Assembly which is a direct election with one constituency for each seat and only the vote is to be cast, and an election to Rajya Sabha which is an indirect election with the preferential system of voting.
This difference has to be taken into account in interpreting the relevant words used in the Rules relating to an election.
[779D E] (2) Rule 39A(2)(b) read with Rule 37A(2)(a) of the Conduct of Election Rules 1961 prescribes that at an elec tion in a council an elector in giving his vote shall place on his ballot paper the figure 'I ' in the space opposite the name of the candidate for whom he wishes to vote in the first instance with the article supplied for the purpose.
Further, Rule 73 which is directly applicable to the count ing of votes at elections by Assembly Members, prescribes that if on the ballot paper there is any figure marked otherwise than with the article supplied for the purpose, the ballot paper shall be invalid.
[777H; 778A; D] (3) The High Court was right in interpreting the expres sion "article supplied for the purpose" in Rule 39A(2)(b) and Rule 73(2)(e) of the Election Rules as meaning "made available for the purpose" or "provided for the purpose.
" [778E] Ram Utar Singh Bhaduria vs Ram Gaopal Singh & Ors., ; distinguished.
(4) The difference in the case of an election to the Rajya Sabha makes it wholly unnecessary that the Presiding Officer or the Polling Officer should hand over to every votor individually a hall point pen to mark his vote and it is enough if the article for marking the preference, namely, bail point pen, is provided to the voter to use the same for marking his preference or if the pen is placed in such a way as to make it clear that the marking of the preference is to be done with that pen and instructions given to use that pen for marking the preference.
[779H; 780A B] (5) It is not enough for the vote to be valid that it is possible 769 to gather the intention of the voter to vote for a particu lar candidate.
When the law prescribes that the intention should be expressed in a particular manner, it can be taken into account only if it is so expressed.
[777E G] Hari Vishnu Kamath vs Syed Ahmad Ishaque & Ors., ; , refterred to.
(6) Assuming that the voter in this case had expressed his intention clearly by marking the figure 1 in green ink, he did so in violation of the express provisions of the Rules which have a statutory force and hence no effect can be given to that intention.
[778D] (7) Clause (a) of sub rule (2) of Rule 37A only provides that the voter shall place on his ballot paper the figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance.
It is significant that this rule does not specifically say that the figure 1 must be placed in the column earmarked for marking the preference but only requires that the figure 1 should be placed oppo site the name of the candidate.
[781D E] (8) In the case of the three first preference votes cast in favour of respondent No. 1 the figure 1 was clearly marked opposite the name of respondent No. 1, being the candidate concerned, as required by the express provision of the said Rule 37A, and the intention of the voter was clear ly to cast the first preference in favour of respondent No. 1.
[782E] section Sivaswami vs V. Malaikannan & Ors., ; , referred to.
|
Criminal Appeal No. 359 of 1989.
From the Judgment and Order dated 29.7.1988 of the Andhra Pradesh High Court in Crl.
Petition No. 1023 of 1987.
K. Madhava Reddy and G. Prabhakar for the Appellant.
H.S. Gururaj Rao, Subodh Markandeya, Mrs. C. Markandeya, W.A. Nomani and G. Seshagiri Rao for the Respondent.
The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J.
The State of Andhra Pradesh represented by the Director, Anti Corruption Bureau, Hydera bad has filed this criminal appeal challenging the correct ness of the Order dated 29.7.1988 of the High Court of Andhra Pradesh in Crime No. 7/ACB/Cr.
II/84 dated 8.3.1984 on the file of the Special Judge for ACB & SPE quashing the First Information Report in exercise of its inherent powers under Section 482 of the Code of Criminal Procedure.
A few facts relevant to decide this case may be stated: The respondent was selected to the Indian Police Service in the year 1953 and he worked in various capacities at different places.
While he was working as Commissioner of Weights & Measures, Government of Andhra Pradesh, on a report dated 7.3.
1984 submitted by the Deputy Superintend ent of Police, Anti Corruption Bureau, a case was registered against him on 8.3. 1984 in Crime No. 7/ACB/Cr.
II/84 under Section 5(2) read with Section 5(1)(e) of the prevention of Corruption Act, 1947 on the allegations that while function ing as Commissioner of Police and later as Vice Chairman of Andhra Pradesh Housing Board during the years 1978 82, he ingulged in corrupt practices and acquired immovable assets either in his name or 749 in the name of his wife.
The Anti Corruption Bureau after completing its investigation submitted its report on 22.4.1987 to its DirectorGeneral who in turn sent the same to the Government on 17.9.
The Government accorded the necessary sanction for prosecution in G.O.Ms.
525 and 526 dated 16.9.
In the meantime, the respondent filed the criminal petition for quashing further proceedings pursuant to the registration of the First Information Re port, inter alia, contending that there had been lull in the investigation for fairly long spell causing inordinate delay and that the prosecution had not filed its report contem plated under Section 173 Cr.
P.C. till he filed the petition for quashing the proceedings in November 1987 though the case was registered even in March 1984.
The plea of the respondent was stoutly resisted by the appellant stating that the delay was occasioned on account of the dilatory tactics adopted by the respondent and the case was a complicated and timeconsuming one.
The High Court has quashed the First Information Report on the ground that there was inordinate delay in the inves tigation.
Aggrieved by that judgment, the State has pre ferred this Criminal appeal.
Mr. Madhava Reddy, learned senior counsel appearing on behalf of the appellant took an exception to the observation of the learned Single Judge of the High Court reading: " . .
I hold that wherever there is an inordinate delay on the part of the investigating agency in completing investigation, the case merits quashing of the First Infor mation Report even . . . Generally.
this Court will not quash the F.I.R. because it amounts to stopping of investigation, but where there is an inordinate delay, the same is a ground to quash even the F.I.R." and contended that the above observation is too wide a proposition and it will be detrimental to the prosecution in future under all circumstances, regardless of the reasons therefor.
Though we have decided to dispose of this appeal on some other ground, the submission of Mr. Madhava Reddy on the above extracted observation of the High Court makes it necessary to examine the ques 750 tion whether a mere delay in the investigation of a criminal proceeding will by itself serve as a sufficient ground for quashing the proceedings in pursuance of the registration of the case notwithstanding whatever may be the reasons for the delay.
This question has come up for determination in a number of cases wherein this Court has examined the right of an accused for a speedy investigation and trial in a crimi nal case in the light of Article 21 of the Constitution of India.
There is no denying the fact that a lethargic and lacka daisical manner of investigation over a prolonged period makes an accused in a criminal proceeding to live every moment under extreme emotional and mental stress and strain and to remain always under a fear psychosis.
Therefore, it is imperative that if investigation of a criminal proceeding staggers on with tardy pace due to the indolence or ineffi ciency of the investigating agency causing unreasonable and substantial delay resulting in grave prejudice or disadvan tage to the accused, the Court as the protector of the right and personal liberty of the citizen will step in and resort to the drastic remedy of quashing further proceedings in such investigation.
While so, there are offences of grave magnitude such as diabolical crimes of conspiracy or clandestine crimes com mitted by members of the underworld with their tentacles spread over various parts of the country or even abroad.
The very nature of such offences would necessarily involve considerable time for unearthing the crimes and bringing the culprits to book.
Therefore, it is not possible to formulate inflexible guidelines or rigid principles of uniform appli cation for speedy investigation or to stipulate any arbi trary period of limitation within which investigation in a criminal case should be completed.
The determination of the question whether the accused has been deprived of a fair trial on account of delayed or protracted investigation would also, therefore, depend on various factors including whether such delay was unreasona bly long or caused deliberately or intentionally to hamper the defence of the accused or whether such delay was inevi table in the nature of things or whether it was due to the dilatory tactics adopted by the accused.
The Court, in addition, has to consider whether such delay on the part of the investigating agency has caused grave prejudice or disadvantage to the accused.
The assessment of the above factors necessarily vary from case to case.
It would, therefore, follow that no general and wide proposition 751 of law can be formulated that wherever there is inordinate delay on the part of the investigating agency in completing the investigation, such delay, ipso facto, would provide ground for quashing the First Information Report or the proceedings arising therefrom.
Our above view is supported by a decision of this Court in Raghubir Singh vs State of Bihar, [1986] 4 SCC 481.
Reference may also be had to Bell vs Director of Public Prosecutions of Jamaica and another, [1985] 2 All England Law Reports 585 and the article in captioned 'The Power of the Courts to stay a Criminal Prosecution. ' It follows from the above observations that no general and wide proposition of law can be formulated that wherever there is any inordinate delay on the part of the investigat ing agency in completing the investigation, such delay is a ground to quash the F.I.R. Reverting to the present case, the respondent was placed under suspension pending enquiry into certain irregularities in the purchase of land as pointed out in the earlier part of this judgment.
The State Government on the basis of the enquiry report passed orders for stopping further action and directed re instatement of the respondent into service with immediate effect by Order dated 5th September 1984.
Accord ingly, he was re instated and allowed to function as Con troller, Weights & Measures, Andhra Pradesh.
However, by subsequent order dated 5th July 1985, the appellant (State Government) cancelled the aforesaid order dated 5th Septem ber 1984 and directed the respondent to show cause as to why the penalty of compulsory retirement should not be imposed on him.
Thereupon, the respondent filed Writ Petition No. 10670 of 1985 before the High Court of Andhra Pradesh, seeking a writ of mandamus declaring the orders of the appellant contained in G.O. Rt.
No. 2930, GA (SC.
C) Depart ment dated 5th July 1985 as arbitrary and unconstitutional, and consequently to set aside the same by holding that the appellant was bound to give effect to the Orders contained in G.O. Rt.
No. 4572, GA (SC.
C) Department dated 5th Sep tember 1984.
This writ petition was transferred to the Central Administrative Tribunal, Hyderabad Bench.
The Tribu nal allowed the petition holding that the impugned order in G.O.Rt.
No. 2930 dated 5th July 1985 is illegal and beyond the powers of the State Government.
Aggrieved by the judgment of the Tribunal, the State of Andhra Pradesh preferred a Special Leave Petition (Civil) No. 405 of 1987 752 before this Court, and this Court by its Order dated 16.11.1988 dismissed the same.
The said order reads as follows: "Having regard to the facts and circumstances of the case and specialty in view of the facts that the respondent has retired from service on attaining the age of superannuation, we do not consider it a fit case for interference.
It is accordingly dismissed.
" Admittedly, the appellant notified the date of retire ment of the respondent w.e.f. 30th April 1988 by G.O.Rt.
No. 866 dated 10th March 1988.
Accordingly, the respondent was allowed to retire peacefully from service on attaimng the age of superannuation.
The First Information Report and the consequent proceedings on the registration of the case were quashed by the High Court on 29.7.1988.
Surprisingly, the appellant accorded sanction for prosecution in G.O.Ms.
525 & 526 dated 16.9.1988 i.e. after nearly 50 days of the quashing of the First Information Report.
In view of the above facts and circumstances and the various events following the suspension of the respondent culminating in his being allowed to retire on attaining the age of superannuation, we are of the view that it is not a fit case for interference.
The appeal is accordingly dismissed.
N.P.V. Appeal dis missed.
| IN-Abs | A case was registered against the respondent, an officer of the Indian Police Service, under Section 5(2) read with Section 5(1)(e) of the Prevention of Corruption Act, 1947, on 8.3.1984 but the investigation report was submitted to the Government on 17.9.1987.
In November, 1987, the respond ent filed a criminal petition for quashing further proceed ings pursuant to the registration of the First Information Report contending that there had been inordinate delay in the investigation and that the prosecution had not filed the report as contemplated under Section 173 Cr.
P.C. till he filed the petition.
The appellant contended that the delay was occasioned on account of dilatory tactics adopted by the respondent and that the case was a complicated and time consuming one.
The High Court quashed the First Information Report and observed that wherever there was an inordinate delay on the part of the investigating agency in completing investigation, the case merited quashing of the First Infor mation Report even.
The State preferred an appeal in this Court contending that the High Court 's observation was too wide a proposition and it would be detrimental to the prosecution in future under all circumstances, regardless of reasons therefor.
Dismissing the appeal, this Court, HELD: 1.1 No general and wide proposition of law can be formulated that wherever there is inordinate delay on the part of the 747 investigating agency in completing the investigation, such delay, ipso facto, would provide ground for quashing the First Information Report or the proceedings arising there from.
[750H, 751A] 1.2 A lethargic and lackadaisical manner of investiga tion over a prolonged period makes an accused in a criminal proceeding to live every moment under extreme emotional and mental stress and strain and to remain always under a fear psychosis.
Therefore, it is imperative that if investigation of a criminal proceeding staggers on with tardy pace due to the indolence and inefficiency of the investigating agency causing unreasonable and substantial delay resulting in grave prejudice or disadvantage to the accused, the Court as the protector of the right and personal liberty of the citizen will step in and resort to the drastic remedy of quashing further proceedings in such investigation.
However, there are offences of grave magnitude which would necessari ly involve considerable time for unearthing the crimes and bringing the culprits to book.
Therefore, it is not possible to formulate inflexible guidelines or rigid principles of uniform application for speedy investigation or to stipulate any arbitrary period of limitation within which investiga tion in a criminal case should be completed.
[750B F] 1.3 The determination of the question whether the ac cused has been deprived of a fair trial on account of de layed or protracted investigation would also, therefore, depend on various factors including whether such delay was unreasonably long or caused deliberately or intentionally to hamper the defence of the accused or whether it was due to the dilatory tactics adopted by the accused.
The Court, in addition, has to consider whether such delay on the part of the investigating agency has caused grave prejudice or disadvantage to the accused.
The assessment of these factors necessarily vary from case to case.
[750G H] Raghubir Singh vs State of Bihar, [1986] 4 SCC 481, relied on.
Bell vs Director of Public Prosecutions of Jamaica and another, [1985] 2 All England Law Reports 585, referred to.
The Power of the Courts to stay a Criminal Prosecution, ' , referred to.
In the instant case, the respondent was placed under suspension pending enquiry but was reinstated on the basis of enquiry report and further action was stopped.
However, by a subsequent order dated 5th July, 1985 the earlier order was cancelled and a show cause notice for 748 his compulsory reitrement was issued.
The Central Adminis trative Tribunal held that the order dated 5th July, 1985 was illegal and beyond the powers of State Government.
This Court dismissed State 's Special Leave Petition.
In the meantime, the respondent was allowed by the appellant to retire peacefully from service on attaining the age of superannuation and the First Information Report and conse quent proceedings were quashed by the High Court.
In these circumstances, this is not a fit case for interference.
[751D, E, G, 752A, C E]
|
Criminal Appeal No. 750 of 1989.
From the Judgment and Order dated 11.4.1988 of the Gujarat High Court in Spl.
Application No. 733 of 1987.
Kapil Sibal, Additional Solicitor General, A. Subba Rao and P. Parmeshwaran for the Appellants.
Vineet Kumar and M.N. Shroff for the Respondents.
The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J.
This criminal appeal preferred by the appellants, namely, Union of India and the Additional Secretary to the Government of India is against the judgment of the High Court of Gujarat at Ahmedabad in Special Crimi nal Application No. 733 of 1987 dated 11.4.
1988 quashing the order of detention dated 19.6.
1987 passed by the second appellant in exercise of the powers under subsection (1) of Section 3 of the Conservation of Foreign Exchange and Pre vention of Smuggling Activities Act, 1974 with a view to preventing the first respondent, Vasanbharthi Jivanbharthi from engaging in transporting smuggled goods.
It seems that the first respondent (detenu) has challenged the detention on numerous grounds, one of which being that none of the members of his household had been informed of the passing of the impugned order of detention and of the fact that the detenu had been taken into custody and also of the place where the detenu was detained.
This ground was only subse quently added by an amendment with the permission of the Court.
The High Court holding that the detenu 's relatives were not informed about the detention order or about the place where the detenu was detained in compliance with the observation by this Court in A.K. Roy vs Union of India, ; , concluded that the order has been vitiated by such non compliance.
Further, the High Court has rejected the plea of 744 the appellants that the relatives of the detenu knew about the detention order as well the place of detention and stated as follows: "Hence if the relatives of the detenu have not been informed and even if from the record, it is found that the relatives had come to know about it from some source, the order of detention would most certainly be invalidated.
" In the result, the order of detention was quashed and the detenu was directed to be set as liberty.
Mr. Kapil Sibal, the learned Additional Solicitor Gener al has assailed the finding of the High Court stating that the respondent No. 1 (detenu) was already an undertrial prisoner and his relatives inclusive of his maternal uncle had visited him at the jail within two days and, therefore, that the non communication of a written intimation about the fact of passing of the order of detention and of the place of detention in pursuance of the detention order have no significance, and as such the observation made in A.K. Roy 's case can hardly by availed of by the detenu and the order cannot said to be invalidated on that ground.
This plea is taken specifically in paragraph 21 and in Grounds I & II in paragraph 23 of the Special Leave Petition.
Besides the above stand taken in the SLP, the appellants have reiterat ed.
the same in paragraph 9 of the application for ex parte stay of the Order of the High Court, the relevant portion of which reads thus: "The affidavit in opposition was filed on behalf of the Union of India that the detenu was already under trial prisoner and his relatives in fact knew that and also that the maternal uncle had immediately, within two days, visited him at the jail.
Therefore.
it was not necessary to inform the relatives of his detention and place of detention, as contemplated in the decision of the Supreme Court reported in ; K. Roy 's case).
" No counter is filed by the first respondent (detenu) in opposition to the above plea of the appellants.
In the above background, we shall now examine whether the High Court is justified in setting aside the Order for the reasons mentioned supra on the basis of the decision in A.K. Roy 's case The relevant portion of the observation in A.K. Roy 's case reads thus: 745 "In order that the procedure attendent upon detentions should conform to the mandate of Article 21 in the matter of fairness, justness and reasonableness, we consider it imper ative that immediately after a person is taken in custody in pursuance of an order of detention, the members of his household, preferably the parent, the child or the spouse, must be informed in writing of the passing of the order of detention and of the fact that the detenu has been taken in custody.
Intimation must also be given as to the place of detention, including the place where the detenu is trans ferred from time to time.
The object and purpose of the above observation, in our view, seem to be that the family members of the detenu should not be kept in darkness by withholding the informa tion about the passing of the order of detention and the place of detention thereby preventing them from having any access and from rendering any help or assistance to the detenu and similarly the detenu should not be deprived of the privilege of meeting their relations and getting any help or assistance.
Coming to the present case, we are satisfied that the family members had sufficient knowledge about the detention of the detenu by virtue of the mittimus issued as well the place of detention.
Therefore, no legitimate grievance can be made that there is contravention to the observation in A.K. Roy 's case.
Hence for the reasons mentioned above, we are unable to agree with the view taken by the High Court and accordingly we set aside the impugned Judgment and remit the matter to the High Court of Gujarat for consideration of the other contentions raised by the detenu challenging the order of detention and to dispose of the case on its merit.
We hope that the High Court will give priority to this matter and dispose of the same expeditiously.
Taking into consideration of the fact that the detenu is now enlarged consequent upon the judgment of the High Court which we have set aside, the detenu shall not be taken into custody to serve the unexpired period of detention till the matter is finally disposed of by the High Court.
The Criminal Appeal is disposed of accordingly.
P.S.S. Appeal allowed.
| IN-Abs | The respondent was taken into custody in exercise of the powers under sub section
(1) of section 3 of the with a view to preventing him from engaging in trans porting smuggled goods.
In the special criminal application preferred by him the High Court held that the detenu 's relatives were not informed about the detention order or about the place where the detenu was detained.
Consequently, the order of detention was quashed and the detenu was di rected to be set at liberty.
In this appeal by special leave, it was contended for the Union of India that the detenu was already an undertrial prisoner and his relatives had visited him at the jail within two days and, therefore, the non communication of a written intimation about the fact of passing of the order of detention and of the place of detention in pursuance of the detention order had no significance, and as such the order cannot be said to be invalidated on that ground.
Allowing the appeal, the Court, HELD: 1.
The family members of the detenu should not be kept in darkness by withholding the information about the passing of the order of detention and the place of detention thereby preventing them from having any access and from rendering any help or assistance to the detenu and similarly the detenu should not be deprived of the privilege of meet ing their relations and getting any help or assistance.
[745C D] A.K. Roy vs Union of India, ; , followed.
In the instant case, however, the family members of the detenu 743 had sufficient knowledge about his detention by virtue of the mittimus issued as well the place of detention.
The High Court was, therefore, not justified in setting aside the order.
[745D E] 2.
The matter is remitted to the High Court for consid eration of the other contentions raised by the detenu.
He shall not be taken into custody to serve the unexpired period of detention till the matter is finally disposed of.
[745F G]
|
ivil Appeal No. 823 of 1981.
738 From the Judgment and Order dated 16.10.1979 of the Punjab & Haryana High Court in Civil Revision No. 2300 of 1979.
V.C. Mahajan (NP), Ms. Urmila Kapoor, Ms. section Janani and Ms. Meenakashi for the Appellant.
M.L. Verma and P.C. Kapur for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by a tenant defendant is directed against the decree for his eviction from a shop on the ground mentioned in section 13(2)(v) of the East Punjab Urban Rent Restriction Act, 1949 (hereinafter referred to as the Act) which renders the tenant liable for eviction if he has ceased to occupy the rented premises for a continuous period of four months without reasonable cause.
The questions which are involved in this case are whether a tenant can be said to have ceased to occupy a building merely for the reason that he temporarily suspends the actual physical user there of; and whether a landlord is entitled to a decree even if the tenant has re occupied the premises before the eviction proceeding was commenced.
The landlord respondent filed the present application for eviction of the appellant before the Rent Controller in March, 1973and inter alia pleaded that for a continuous period of more than four months the appellant had ceased to occupy the shop during 1969 to 1971 and he was, therefore, liable to be ejected.
The appellant disputed the allegation, but, the Rent Controller as well as the Appellate Authority rejected the defence and accepted the plaintiff 's plea.
After unsuccessfully moving the High Court under section 15(5) of the Act, the tenant had filed the present appeal by special leave.
The grounds on which a tenant can be asked to quit are mentioned under section 13(2) of the Act, and under clause (v) thereof the Controller may pass an order for the ten ant 's eviction if he is satisfied, "13(2)(v): That where the building is situated in a place other than a hill station, the tenant has ceased to occupy the building for a continuous period of four months without reasonable cause," Mrs. Urmila Kapoor appearing in support of the appeal con tended that the appellant has all along been in possession of the shop which 739 was never vacated and merely for the reason that the shop remained closed for a temporary period he cannot be said to have ceased to occupy the same.
The argument is that the appellant 's occupation of the shop was never interrupted as it was in his effective control, although closed and secured under the appellant 's lock which nobody ever disturbed.
We do not find ourselves in a position to accept the interpre tation of the section as attempted on behalf of the appel lant.
The reason of including the clause (v) in section 13(2) is to ensure that buildings, which are scarce in number spe cially in the towns, necessitating rent control legislation, do not remain unused at the instance of tenants who do not actually need them.
A tenant who is in possession of a building in the legal sense only cannot be said to be in occupation thereof for the purpose of section 13(2)(v); otherwise a question of his eviction as envisaged in that section would not arise.
The section, by making provisions for his ejectment, assumes that he is in possession, but, still includes cessation of occupation as one of the grounds.
The clause, therefore, has to be interpreted in this background and it ,must take colour from the context.
We, therefore, hold that if a tenant stops the business which he is carry ing on in a shop and closes the premises continuously for a period of four months without a reasonable cause he will be liable for eviction.
The other point urged by Mrs. Kapoor needs more serious consideration.
The non occupation of the premises by the tenant did, not continue after 197 1, and the eviction petition was filed in 1973.
Is it permissible to hold, in this situation, that the ground mentioned in section 13(2)(v) has been made out? On behalf of the respondent it has been contended that since in a number of Rent Acts of other States a similar ground specifically requires such non occupation for a period immediately preceding the date on which the ejectment application is filed, the present Act which does not use identical language should be interpreted differently.
Reliance has also been placed on the observa tions of this Court in Gajanan Dattatraya vs Sherbanu Hosang Patel & Ors., [1976] 1 S.C.R. 535; a case arising under the ' Bombay Rents, Hotel & Lodging House Rates Control Act, 1947.
The prayer for eviction, in the above case, was rounded on a plea of subjetting, and the ground in this regard, as mentioned in section 13(1)(e), is "that the tenant has, since the coming into operation of the Act, unlawfully sublet" the premises.
The Court rejected a similar conten tion of the tenant, as in the present case, by holding that, "To accede to the contention of the appellant would mean 740 that a tenant would not be within the mischief of unlawful subletting if after the landlord gives a notice terminating the tenancy on the ground or unlawful subletting the subten ant vacates.
The landlord will not be able to get any relief against the tenant in spite of unlawful subletting.
In that way the tenant can foil the attempt of landlord to obtain possession of the premises on the ground of sublet.ting every time by getting the sub tenant to vacate the premises.
" The observations, and consequently the decision were based on the law requiring service of notice to quit before start ing an action for ejectment as assumed earlier before the decision of 7 learned Judges in V. Dhanpal Chettiar vs Yesodai Ammal; , holding otherwise was given.
The provisions of section 13 had, then, to be construed in a manner which did not render the same completely ineffec tive.
Now, that is not the position.
It is true that the Court in the former decision also observed that the tenant 's liability to eviction arose once the fact of unlawful sub letting is proved, but, the very next sentence further clarifies the position in the following words: "At the date of the notice, if it is proved that there was unlawful subletting, the tenant is liable to be evicted.
" It is significant to note that according to the decision the subletting had to continue till the date of the notice.
If the requirement of notice disappears the above observation must be read as referring to the application for eviction and not the notice.
The observations in an earlier case of this Court in Goppulal vs Thakurji Shriji Shriji Dwarkadheeshji & Anr., ; ; may be of some help in the present context.
This decision was discussed in Gajanan Dattatraya 's case (supra) and was distinguished on the ground that the Court there had no occasion to consider the question as to whether subletting to be within the mischief of the relevant statute is to subsist at the date of the suit.
It is true that the Court did not have to consider and decide directly the present controversy, but, the comment made on the lan guage of the statute concerned is helpful to the tenant.
The dispute, in that case, depended on the interpretation of section 13(1)(e) of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950 which forbids the Court to pass a decree for eviction unless inter alia "the tenant has assigned, sublet or otherwise parted with the possession" of the disputed premises.
There the words "has sublet" needed construing, while in the case before us they are 741 "has ceased to occupy".
In this background, the Court said that the use of present perfect tense contemplates a period even connecting in some way with the present time.
So far as the language of some rent Acts, specifical ly indicating that the period of non occupation should be one immediately preceding the suit, is concerned, the learned counsel is right that a comparison of the language of the present Act lends some support to his stand, but this alone does not outweigh the other relevant circumstances.
On the other hand, if the provisions of several other Acts are examined, it will be seen that the section has been phrased in a way which avoids the use of present perfect tense.
As an illustration, the provisions of the Bihar Rent Act may be seen, which forbids the eviction of a tenant "except in execution of a decree passed" for subletting (or for other grounds mentioned therein).
Besides, as pointed out in Nathia Agarwalla and Another vs Musst.
Jahanara Begum and Others, ; ; comparing statutes of 'different States is not to be commended because similarity or varia tion in the laws of different States is not necessarily indicative of a kindered or a different intention.
The reason for this view was expressed in the following lan guage: 'Enactments drafted by different hands, at different times and to satisfy different requirements of a local character, seldom afford tangible or sure aid in construction.
We would, therefore, put aside the Rent Control Acts of Madras, Bihar, Delhi and other States because in these States the problem of accommodation in relation to the availability of lands and houses and the prior legislative history and experience, cannot be same as in Assam.
On an examination of all the provisions of the Act and on taking into account the other relevant considera tions, we are of the view that the non occupation of the premises by a tenant must continue till the date of the filing of the application for his eviction on the ground covered by section 13(2)(v).
Accordingly, the appeal is allowed and the decision of the courts below is set aside.
The parties shall bear their own costs throughout.
N.P.V. Appeal al lowed.
| IN-Abs | On an application flied by the respondent landlord in March 1973 for eviction of the appellant tenant on the ground that for a continuous period of more than four months the appellant had ceased to occupy the shop during 1969 71, the Rent Controller passed a decree for eviction under Section 13(2)(v) of the East Punjab Rent Restriction Act, 1949.
The appellate authority affirmed the decree.
The High Court rejected the tenant 's appeal.
In the appeal before this Court, the appellant tenant contended that though the shop had remained closed for a temporary period, it Was in his effective control and that since the non occupation did not continue when the eviction petition was filed, the ground mentioned in Section 13(2)(v) had not been made out.
On behalf of respondent landlord, it was contended that since in a number of Rent Acts, the ground specifically required such nonoccupation for a period immediately preced ing the date on which the ejectment application was filed, the Act which did not use identical language, should be interpreted differently.
Allowing the appeal, this Court, HELD: 1.1 If a tenant stops the business which he is carrying on in a shop and closes the premises continuously for a period of four months without a reasonable cause he will be liable for eviction.
However, the non occupation of the premises by a tenant must continue till the date of.
filing of application for his eviction on the ground covered by section 13(2)(v).
[739D] 737 1.2 The reason of including clause (v) in section 13(2) is to ensure that buildings, which are scarce in number specially in the towns, necessitating rent control legislation, do not remain unused at the instance of tenants who do not actually need them.
A tenant who is in possession of a building in the legal sense only cannot be said to be in occupation thereof for the purpose ors.
13(2)(v); otherwise a question of his eviction as envisaged in that section would not arise.
The section, by making provisions for his ejectment, assumes that he is in possession, but, still includes cessa tion of occupation as one of the grounds.
The clause, there fore, has to be interpreted in this background and it must take colour from the context.
[739B C] However, the use of present perfect tense in the words 'has ceased to occupy ' contemplates a period even connecting in some way with the present time.
[741A] Goppulal vs Thakurji Shriji Shriji Dwarkadheeshji & Anr., ; , relied on.
V. Dhanpal Chettiar vs Yesodai Ammal, ; and Gajanan Dattatraya vs Sheroani Hosang Patel & Ors., [1976] 1 SCR 535, referred to.
1.3 Though a comparison of the language of the Act with that of other Rent Acts specifically indicating that the period of non occupation should be one immediately preceding the suit supports the view that the period of non occupation need not subsist at the date of the suit, that alone does not outweigh the other relevant circumstances.
If, on the other hand, provisions of several other Acts are examined it would be seen that the Section has been framed in such a way which avoids use of present perfect tense.
Besides, compar ing statutes of different States is not to be commended because similarity or variation in the laws of different States is not necessarily indicating.
of a kindered or different intention.
[741 B D] Nathia Agarwalla and Another vs Musst.
Jahanara Begum and Others, ; , followed.
In the circumstances, the decision of the courts below that the tenant is liable to be ejected is set aside.
[741G]
|
ivil Appeal No. 3678 of 1984.
From The Judgment and Order dated 5.1.1982 of the Delhi High Court in Civil Writ Petition No. 2923 of 1981.
R.B. Dattar, section Wasim Qadi for the Appellants.
V.C. Mahajan, K.K. Venugopal, G. Viswanatha lyer, R.B. Mishra, Ms. A. Subhashini, Mrs. Baby Krishnan, C.B. Vaidya nathan, K.V. Mohan, Dilip Pillai, P. Kesava Pillai and N. Sudhakaran for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
The two appellants, S/Sh.
Virendra Nath Gupta and Mohammad Aslam Kidwai are teachers in the Kerala Educa tion Society Senior Secondary School, New Delhi.
They chal lenged the appointment of T.N. Vishwanathan Nair, respondent No. 5 as VicePrincipal of the Institution by means of a writ petition before the Delhi High Court under Article 226 of the Constitution of India.
The High Court by its order dated January 5, 1982 dismissed the petition in limine.
Hence this appeal by special leave.
The Kerala Education Society (hereinafter referred to as 'the Society ') is a Society registered under the Societies Registration Act, XXI of 1960.
The Society is running the Kerala Education Society Senior Secondary School in New Delhi.
The Delhi Administration as 808 well as the Education Authorities have recognised the Insti tution as a linguistic minority school.
The Institution is aided and recognised by the Delhi Administration.
The ob jects of the Society are: (i) to provide facility for the education of children in the Union Territory of Delhi by making provision for suitable institutions; (ii) to promote the study of Malayalam.
A sizable number of persons belong ing to State of Kerala who speak Malayalam are residents in Delhi and they constitute a linguistic minority.
The Ma layalees have their own language, script and culture, and in order to preserve the same they established the Institution which is administered by the linguistic minority, with the primary purpose of promoting the study of Malayalam and also for preserving their culture, dance, music and other Kerala articles Teaching of Malayalam in the aforesaid Institution is compulsory from Classes I to V, as the medium of instruction is Malayalam.
However, Malayalam is an optional subject in VI to XII standard.
The school has 1700 students and more than 60% of parents and guardians belong to the lower income group of Malayalam speaking community.
The Institution is regulated by the provisions of the Delhi School Education Act 1973 (hereinafter referred to as the Act) and the Rules framed thereunder, namely, Delhi School Education Rules 1973 (hereinafter referred to as the Rules.) One post of Vice Principal was created in the Insti tution in the pay scale of Rs.650 1200 with effect from 1.10. 1980.
In March, 1981 a Departmental Promotion Commit tee (hereinafter referred to as DPC) was constituted to make selection for appointment to the post of Vice Principal in accordance with the recruitment rules made under Section 8(1) of the Act read with Rule 100 of the Rules issued on 25.2.
1980 and published in the Delhi gazette Extraordinary dated 7.4.
The DPC made selection from amongst the teachers of the Institution to fill up the post of Vice Principal by promotion in accordance with the aforesaid Rules.
The DPC recommended the name of T.N. Vishwanathan Nair, respondent No. 5 for promotion to the post of Vice Principal although he did not fall within the zone of con sideration as he was junior to the appellants at Sl.
No. 10 in the seniority list.
The Management of the Institution accepted the recommendation of the DPC and forwarded papers to the Director of Education for approval.
Meanwhile, the appellants made representation to the Director of Education against the selection and appointment of respondent No. 5.
The Director of Education rejected the Management 's proposal and refused to approve the selection and appointment of respondent No. 5 on the ground that he did not fall within the zone of consideration according to the Rules and further he did not possess the essential qualification of five years experience as 809 Post Graduate Teacher as required by the Recruitment Rules.
Since no suitable candidate was available for promotion within the zone of consideration the Director of education permitted the Managing Committee to advertise the post for filling the same by direct recruitment.
Thereafter, adver tisement was published on 24.9.1981 inviting applications for the post of Vice Principal.
The advertisement stated the essential qualifications being Master 's Degree with second division, five years ' teaching experience as Post Graduate Teacher or ten years ' teaching experience as Trained Gradu ate Teacher, and also ability to speak and write Malayalam.
Since the knowledge of Malayalam was prescribed as an essen tial qualification, the appellants were not eligible for selection or appointment as they could not speak or write Malayalam.
On the recommendation of the Selection Committee respondent No. 5 was appointed as a direct recruit to the post of Vice Principal and the Director of Education ap proved his appointment.
Learned counsel for the appellants assailed the validity of the appointment of respondent No. 5 on three grounds; (i) since under the Rules post of Vice Principal was a promo tional post, no direct recruitment was permissible; (ii) respondent No. 5 did not possess the essential qualification of Master 's Degree in second division; (iii) the Management malafide introduced knowledge of Malayalam as an essential qualification with a view to favour respondent No. 5 and to oust the appellants even though the Rules did not permit knowledge of Malayalam as an essential qualification.
We will deal with these submissions in seriatim.
There is no dispute that the recruitment/appointment to the post of Vice Principal in the Government aided schools and recognised schools in the Union Territory of Delhi is regulated by the Rules published on 7.4.1980, a copy of which has been placed before us, farmed under Section 8(1) of the Act read with Rule 100.
Since the Institution is an aided and recognised school the aforesaid Rules were ap plicable for the purpose of recruitment to the post of Vice Principal.
According to the Rules recruitment to the post of Vice Principal is to be made by selection.
The Rules prescribe educational and other qualifications.
The Rules provide that the post of Vice Principal should be filled by promotion failing which by direct recruitment as stated in Col. 8 of Annexure B to the Rules.
As noticed earlier the Management made attempt to fill the post of promotion and the DPC had con .
sidered the case of teachers of the Insti tution for promotion to the post ' of Vice Principal and it recommended respondent No. 5, but the same was not approved by the Director of Education.
The selection Com 810 mittee, had considered the appellants also but it did not find them suitable for promotion, instead it recommended respondent No. 5 for promotion but the recommendation of the Selection Committee was not approved by the Director of Education.
The Director of Education by his letter dated 2.5.1981 directed the Management of the Institution to fill the post by direct recruitment.
Pursuant to that direction the Management issued advertisement for making the recruit ment.
The Rules thus contain express provision for direct recruitment to the post of Vice Principal and as such we find no merit in the submission made on behalf of the appel lants.
Admittedly, respondent No. 5 did not possess Master 's Degree in second division, which was an essential qualifica tion but Column No. 5 to Annexure B to the Rules which prescribes essential qualifications, states: "Condition of second division relaxable in case of candidates belonging to the same school and also in case of Scheduled Castes/Sched uled Tribes.
" The Rules further contain a note;"Competent authority may relax the essential qualifications in excep tional cases of the candidates of the same school, after recording reasons therefor".
The Selection Committee as well as the competent authority granted relaxation to respondent No. 5 as he belonged to the same school.
Further he had ten years ' experience as .Trained Graduate Teacher and as such he was eligible for direct recruitment under the Rules.
The appellant 's plea that since the Management was interested in appointing respondent No. 5 to the post of Vice Principal, it manipulated to get his selection made for appointment to the said post, is without any foundation.
The Selection Committee consisted five members out of which three were representatives of the Education Department appointed by the Director of Education.
The Selection Committee made the selection in accordance with the Rules and found respondent No. 5 suitable for appointment to the said post.
In this view there is no merit in the second submission made on behalf of the appellants.
The third submission made on behalf of the appellants is that the additional essential qualification regarding knowl edge of Malayalam was prescribed in contravention of the Rules and this was done with a view to oust the appellants who were the senior teachers fully equipped with other essential qualifications for appointment to the post of police Principal.
While considering this question we cannot over look fact that the Institution is a linguistic minority institution, its object , to promote the study of Malayalam and to promote and preserve malayalee dance, culture and article Article 29 of the Constitution of 811 India guarantees fight of linguistic minorities having a distinct language, script and culture of their own and, it also protects their fight to conserve the same.
Article 30 of the Constitution guarantees the right of minorities whether based on religion or language to establish and administer educational institutions of their choice.
A linguistic minority has not only the right to establish and administer educational institution of its choice, but in addition to that it has further constitutional right to conserve its language, script and culture.
In exercising this fight a linguistic minority may take steps for the purpose of promoting its language, script or culture and in that process it may prescribe additional qualification for teachers employed in its institution.
The rights conferred on linguistic minority under Artides 29 and 30 cannot be taken away by any law made by the Legislature or by rule made by executive authorities.
However, the Management of a minority institution has no right to mal administer the institution, and it is permissible to the State to prescribe syllabus, curriculum of study and to regulate the appoint ment and terms and conditions of teachers with a view to maintain a minimum standard of efficiency in the educational institutions.
This is the consistent view of this Court, as held in a number of decisions where the scope and extent of minority 's fight to manage its institutions were considered.
See "In Re The Kerala Education Bill, 1957.
Reference under Article 143(D of the Constitution of India, [1959] SCR 995; The Ahmedabad St. Xaviers College Society & Anr.
vs State of Gujarat & Anr.
, ; ; Lilly Kurian vs Sr.
Lewina and Ors.
, ; ; Frank Anthony Public School Employees ' Association vs Union of India & Ors., ; ; Mrs. Y. Theclamrna vs Union of India & Ors., ; and All Bihar Christian Schools Association vs State of Bihar; , Though minority 's right under Articles 29 and 30 is subject to the regulatory power of the State, but regulatory power cannot be exercised to impair the minority 's fight to conserve its language, script or culture while administering the educational institutions.
An institution set up by the religious or linguistic minori ty is free to manage its affairs without any interference by the State but it must maintain educational standards so that the students coming out of that institution do not suffer in their career.
But if the recognised minority institution is recipient of Government aid, it is subject to the regulatory provisions made by the State.
But these regulatory provi sions cannot destroy the basic fight of minority institu tions as embodied under Article 29 and 30.
The Kerala Education Society is a recognised and aided institution, it is subject to the regulatory provisions contained in the Delhi 812 School Education Act 1973 and the Rules made thereunder.
The question is whether the Management of the Institution could validly prescribe knowledge of Malayalam as an essential qualification for the post of Vice Principal.
Admittedly, the Institution is for promotion of Malayalam language and as Malayalam is compulsory for students upto Vth standard and it is one of the optional subjects from VIth to XIIth standard, it is not only proper but desirable that the incumbent holding the office of Principal or Vice Principal being administrative in nature should have knowledge of speaking and writing Malayalam.
The requirement of knoweldge of Malayalam is closely connected with the fight of the linquistic minority to subserve its script, language and culture.
The Management of the Institution acted within its fight in prescribing an additional essential qualification regarding knowledge of Malayalam and no exception can be taken to the same as it is the constitutional right of the linguistic minority to insist on the knowledge of the lan guage, on the basis of which the linguistic minority is recognised.
The provisions of the Act and the Rules are subject to the guarantees of constitutional rights of the minorities ' institutions.
In our opinion, the Management acted within its constitutional right in insisting the knowledge of Malayalam as an essential qualification for the post of Vice Principal.
The Education Department of Delhi Administration did not raise any objection to the Manage ment 's action; on the other hand, the Selection Committee constituted by the Director of Education made its recommen dation on the basis of the qualifications prescribed in the advertisement and the Director of Education approved the appointment of respondent No. 5.
In this view we find no merit in the appellants ' submission that the knowledge of Malayalam was prescribed mala fide with a view to oust them from consideration.
In view of the above discussion we find no legal infirm ity in the appointment of respondent 'No. 5 as Vice Princi pal.
It appears that during the pendency of the appeal a vacancy arose in the post of Principal to which respondent No. 5 was promoted.
Consequently there was a vacancy in the post of Vice Principal to which K.D. Antony, another teacher of the School was appointed.
The appellants filed an appli cation for impleading K.D. Antony to the appeal but no relief was claimed against him.
The application for implead ing K.D. Antony is accordingly rejected.
The appeal fails and it is accordingly dismissed.
There will be no order as to costs.
Y. Lal Appeal dismissed.
| IN-Abs | The appellants are teachers in the Kerala Education Society Senior Secondary School, New Delhi.
They challenged the appointment of Respondent No. 5 as Vice Principal by filing a writ petition in the Delhi High Court.
The circum stances that led to the filing of writ petition are: The Kerala Education Society is a recognised and aided Society.
Its primary objects are to promote the study of Malayalam language and to provide facilities for the educa tion of children and to conserve Malayalam language, script and culture.
In furtherance of these objectives, the Society is running Senior Secondary School in New Delhi.
Delhi Administration as also the educational authorities have recognised the Institution, as a linguistic minority school.
The institution is.
regulated by the provisions of the Delhi School Education Act and the rules framed thereunder.
One post of Vice Principal was created in the school w.e.f. 1.10.80.
In March 1981, Departmental Promotion Committee was constituted to make selection for the appointment to the post of Vice Principal in accordance with the recruitment rules.
The Departmental Promotion Committee made selection from amongst the teachers of the institution to fill up the post of Vice Principal by promotion in accordance with the Rules.
The Departmental Promotion Committee recommended the name of Respondent No. 5 for promotion to the post of Vice Principal though he did not fall within the zone of consid eration being junior to the appellants.
The management of the school accepted the recommendation of the Departmental Promotion Committee and forwarded the papers to the Director of Education for necessary approval.
The appellants made representations to the Director of Education against the selection and appointment of Respondent No. 5.
The Director of Education rejected the proposal of the 806 management and declined to approve the selection and ap pointment of Respondent No. 5 on the ground that he did not fail within the zone of consideration and further that he did not possess the necessary qualification of five years experience as Post Graduate Teacher as required by the recruitment rules.
The Director of Education however permit ted the management to advertise the post for filling the same by direct recruitment.
The management then issued advertisement prescribing the necessary qualifications for the post which included Master 's Degree with second divi sion; five years teaching experience as Post Graduate Teach er or 10 years experience as trained graduate teacher and ability to speak Malayalam as an essential qualification.
The appellants were straightaway not eligible for appoint ment as they were not able to speak or write Malayalam.
On the recommendation of the selection committee, respondent No. 5 was appointed as direct recruit to the post of Vice Principal and the Director of Education approved the ap pointment.
Thereupon the appellants, as stated earlier filed writ petition in the High Court challenging the appointment of Respondent No. 5 and the writ petition was dismissed.
Hence this appeal by special leave.
Dismissing the appeal, this Court, HELD: An institution set up by the religious or linguis tic minority is free to manage its affairs without any interference by the State but it must maintain educational standards so that the students coming out of that institu tion do not suffer in their career.
But if the recognised minority institution is recipient of Government aid, it is subject to the regulatory provisions made by the State.
The regulatory provisions however cannot destroy the basic right of minority institutions as embodied under Articles 29 and 30.
[811F G] The Kerala Education Society is a recognised and aided institution.
It is subject to the reguIatory provisions contained in the Delhi School Education Act, 1973 and the rules made thereunder.
[811H] The institution is for promotion of Malayalam language and as Malayalam is a compulsory subject for students upto Vth standard and it is an optional subject for Vlth to XIIth standard.
In the circumstance it is not only proper but desirable that the incumbent holding the office of Principal or Vice Principal being administrative in nature should have knowledge of speaking and writing Malayalam.
[812B] The management of the institution acted within its right in pre 807 scribing an additional essential qualification regarding knowledge of Malayalam and no exceptional can be taken to the same as it is the constitutional right of the linguistic minority to insist on the knowledge of the language, on the basis of which the linguistic minority is recognised.
[812C] The Kerala Education Bill, 1957 Reference under Article 143 of the Constitution, [1959] SCR 995; The Ahmedabad St. Xaviers College Society and Anr.
vs State of Gujarat and Anr.
, ; ; Lilly Kurian vs Sr.
Lewina and Ors.
, ; ; Frank Anthony Public School Employees ' Association vs Union of India & Ors., ; ; Mrs. Y. Theclamma vs Union of India and Ors., ; and All Bihar Christian Schools Association vs State of Bihar, ;
|
Appeal No. 233 of 1954.
Appeal from the judgment and decree dated August 22, 1950, of the Bombay High Court in Appeal No. 80 of 1946 from original decree, arising out of the judgment and decree dated October 19, 1945, of the Court of Civil Judge, Senior Division, Dharwar, in Special Suit No. 64 of 1943.
A. V. Viswanatha Sastri and M. section K. Sastri, for the appellants.
A. section R. Chari, Bawa Shivcharan Singh and Govindsaran Singh, for respondents Nos. 2 4. 1958.
September 24.
The judgment of Imam and Kapur JJ. was delivered by Kapur J. Sinha J. agreed to the order proposed.
KAPUR J. This is an appeal against the judgment and decree of the High Court of Bombay varying the decree of the trial Court decreeing the plaintiff 's suit for possession by partition of joint family property.
The facts of the case lie in a narrow compass.
M. B. Jakati, defendant No. 1, was the Managing Director of Dharwar Urban Co operative Bank Limited which went into liquidation, and in that capacity he was receiving a yearly remuneration of Rs. 1,000.
As a result of certain proceedings taken against defendant No. 1, M. B. Jakati, by the liquidator of the Bank, a payment order for Rs. 15,100 was made by the Deputy Registrar of Co operative Societies on April 21, 1942.
In execution of this payment order a bungalow belonging to M. B. Jakati, defendant No. 1, was attached by the Collector under the Bombay Land Revenue Code on July 27, 1942.
Notice for sale was issued on November 24, 1942, and the proclamation on December 24, 1942.
The sale was fixed for February 2, 1943.
On January 16, 1943, M. B. Jakati defendant No. 1 applied for postponing the sale which was rejected.
The auction sale was held on February 2, 1943, and was confirmed on June 23, 1943, the purchaser was section N. Borkar, defendant No. 7, now respondent No. 1.
On February 10, 1944, respondent No. 1 sold the property to defendants 8 to 10 who are respondents 2 to 4.
1387 The following pedigree table will assist in understanding the case: Madhavarao Balakrishan Jakati Deft. 1 Bhimabai 2 Krishnaji Shriniwas Shantibai Indumati Plff.
1 Plff.
1(a) daughter daughter Deft.
No. 3 Deft.
No. 4 On January 15, 1943, Krishnaji a son of defendant No. 1 brought a suit for partition of the joint family property and possession of his separate share alleging inter alia that the purchase by respondent No. 1 of the bungalow was not binding on the joint family as "it was not liable to be sold for the illegal and immoral acts on the part of defendant No. 1 which were characterised as misfeasance "; that the auction sale was under section 155 of the Bombay Land Revenue Code under which only " the right, title and interest of the defaulter " could be sold and therefore the right, title and interest of only the father, defendant No. 1 was sold and not that of the other members.
The plaintiff claimed 1/4 share of the property and also alleged that he was not on good terms with his father who had neglected his interest; that he was staying with his mother 's sister and was not being maintained by his father and mother.
On January 12, 1944, appellant No. 1 filed his written statement supporting the claim for partition and claiming his own share.
He supported the claim of the then plaintiff that the sale in favour of respondent No. 1 was not binding on the joint family.
Defendant No. 2, now appellant No. 2, the mother, also supported the plaintiff 's claim and on the death of Krishnaji, she claimed his i share as his heir.
After the death of the original plaintiff Krishnaji, Shriniwas appellant No. 1 was substituted as plaintiff on June 28, 1944.
The suit was mainly contested by respondents 1 to 4.
Respondent No. 1 pleaded that plaintiff 's suit for partition was collusive having been brought at the instance of the defendant No. 1, M. B. Jakati, and it was not bona fide; that defendant No. 1 was made 1388 liable at the instance of the liquidator of the Dharwar Urban Co operative Bank Ltd., for misfeasance because he acted negligently in the discharge of his duties as managing director of the Bank; that the debt was binding on the family as defendant No. 1, M. B. Jakati, had been receiving a yearly remuneration from the Bank and the properties were sold in payment of a debt binding on the family and therefore the sale in execution of the payment order could not be challenged as the sons were under a pious obligation under the Hindu law to discharge the debts of their father; that the sale could only be challenged on proof of the debt of defendant No. 1 being for an " immoral or illegal purpose.
These pleadings gave rise to several issues.
The learned Civil Judge, held that the suit was collusive; that the liability which defendant No. 1 incurred was avyavaharika and was therefore not binding on the sons and thus appellant No. 1 would have 1/3 share in the joint family property, defendant NO.
1 1/3 and appellant No. 2 also 1/3.
He therefore declared the shares as above in the whole of the joint family property including the bungalow which is the only property in which the respondents are interested and which is in dispute in this appeal.
On appeal the High Court held that the debt was not avyavaharika as there was no evidence to support the finding of the trial Court, the order of the Deputy Registrar being in the nature of a judgment to which neither the sons nor the auction purchasers were parties and therefore it was not " evidence of anything except the historical fact that it was delivered".
In regard to the question as to what interest passed to the auction purchaser on a sale under section 155 of the Bombay Land Revenue Code, it held that the whole estate including the share of the sons was sold in execution of the payment order and therefore qua that property the sons had no interest left.
The High Court varied the decree to this extent and the plaintiffs have come up in appeal to this Court by certificate of the High Court of Bombay.
The case of the appellants is (1) that the debt was avyavaharika and therefore in an auction sale the S.C.R. SUPREME COURT REPORTS 1389 interest of the sons and other members of the joint family did not pass to the auction purchaser; (2) that even if the debt was not avyavaharika the institution of the suit for partition operated as severance of status between the members of the family and therefore the father 's power of disposition over the son 's share had come to an end and consequently in the auction sale the share of the sons did not pass to the auction purchaser; and (3) that what could legally be sold under section 155 of the Bombay Land Revenue Code was the right, title and interest of the defaulter i. e. of the father alone which could not include the share of the other members of the joint family.
The first question for decision is whether the debt of the father was avyavaharika.
This term has been variously translated as being that which is not lawful or what is not just or what is not admissible under the law or under normal conditions.
Colebrooke translated it as " a debt for a cause repugnant to good morals ".
There is another track of decision which has translated it as meaning " a debt which is not supported as valid by legal arguments ".
The Judicial Committee of the Privy Council in Hem Raj alias Babu Lal vs Khem Chand (1) held that the translation of the term as given by Colebrooke makes the nearest approach to the true conception of the term used in the Smrithis texts and may well be taken to represent its correct meaning and that it did not admit of a more precise definition.
In Toshanpal Singh vs District Judge of Agra (2) the Judicial Committee held that drawings of monies for unauthorised purposes, which amounted to criminal breach of trust under section 405 of the Indian Penal Code, were not binding on the sons, but a civil debt arising on account of the receipt of monies by the father which were not accounted for could not be termed avyavaharika.
In the case now before us the appellants have empted to prove that the debt fell within the term avyavaharika by relying upon the payment order and (1)(1943) L.R. 70 I.A. 171, 176.
(2) (1934) L.R. 61 I.A. 350.
1390 the findings given by the Deputy Registrar in thepayment order where the liabity was inter alia based on a breach of trust.
Any opinion given in the order of the Deputy Registrar as to the nature of the liability of defendant No.1, M. B. Jakati, cannot be used as evidence in the present case to determine whether the debt was avyavaharika or otherwise.
The order is not admissible to prove the truth of the facts therein stated and except that it may be relevant to prove the existence of the judgment itself, it will not be admissible in evidence.
Section 43 of the Indian Evidence Act, the principle of which is, that judgments excepting those upon questions of public and general interest, judgment in rem or when necessary to prove the existence of a judgment, order or decree, which may be a fact in issue, are irrelevant.
It was then submitted that the pleadings of respondent No. 1 himself show that the debt was of an immoral or illegal nature.
In his written statement, respondent No. 1 had pleaded that the liquidator of the Bank had charged defendant No. 1 with misfeasance because he was grossly negligent in the discharge of his duty and responsibility as managing director and that after a thorough enquiry the Deputy Registrar held misfeasance proved and ordered a contribution of Rs. 15,100 by him.
As we have said above the translation given by Colebrooke of the term avyavaharika is the nearest approach to its true concept i. e. " any debt for a cause repugnant to good morals ".
The managing director of a Bank of the position of defendant No. 1 who should have been more vigilant in investing the monies of the Bank cannot be said to have incurred the liability for a cause " repugnant to good morals ".
We are unable to subscribe to the proposition that in the modern age with its complex institutions of Banks and Joint Stock Companies governed by many technicalities and complex system of laws the liability such as has arisen in the present case could be called avyavaharika.
The debt was therefore binding on the sons.
The effect of severance of status brought aboutthe filing of the suit on January 25, 1943, made the basis of the argument that only the share of the father could be seized in execution of the payment order made against him.
This would necessitate an examination into the rights and liabilities of Hindu sons in a Mitakshara coparcenary family where the father is the karta.
In Hindu law there are two mutually destructive principles, one the principle of independent coparceiiary rights in the sons which is an incident of birth, giving to the sons vested right in the coparcenary property, and the other the pious duty of the sons to discharge their father 's debts not tainted with immorality or illegality, which lays open the whole estate to be seized for the payment of such debts.
According to the Hindu law givers this pious duty to pay off the ancestors ' debts and to relieve him of the death torments consequent on nonpayment was irrespective of their inheriting any property, but the courts rejected this liability arising irrespective of inheriting any property and gave to this religious duty a legal character.
Masit Ullah vs Damodar Prasad (1).
For the payment of his debts it is open to, the father to alienate the whole coparconary estate including the share of the sons and it is equally open to his creditors to proceed against it; but this is subject to the sons having a right to challenge the alienation or protest against a creditor proceeding against their shares on proof of illegal or immoral purpose of the debt.
These propositions are well settled and are not within the realm of controversy.
(Panna Lal vs Mst.
Naraini (2); Girdharee Lal vs Kantoo Lal and Mudhan Thakoor vs Kantoo Lal (3) ; Suraj Bansi Koer vs Sheo Prasad Singh (4); Brij Narain vs Mangla Prasad (5).
In the last mentioned case the Privy Council said: " Nothing clearer could be said than what was said by Lord Hobhouse delivering the judgment of the Board in Nanomi Babusin vs Modun Mohan (6) already quoted: " Destructive as it may be of the principle of (1) (1926) L.R. 53 I.A. 204.
(2) ; , 552, 553, 556, 5 59.
(3) (1874) L.R. 1 I.A. 321, 333.
(4) (1878) L.R. 6 I.A. 88, 101.
(5) (1923) L.R. 51 I.A. 129, 136.
(6) (1885) L.R. 13 I.A. 1, 17, 18.
177 1392 independent coparcenary rights in the sons, the decisions have for sometime established the principle that the sons cannot set up their rights against their father 's alienation for an antecedent debt, or against his creditor 's remedies for their debts, if not tainted with immorality.
On this important question of the liability of the joint estate, their Lordships think that there is no conflict of authority ".
There is no discrepancy of judicial opinion as to the pious duty of Hindu sons.
In Panna Lal vs Mst.
Naraini (1) this Court approved the following dictum of Suleman A. C. J. in Bankeylal vs Durga Prasad (2): The Hindu Law texts based the liability on the pious obligation itself and not on the father 's power to sell the sons ' share ".
So great was the importance attached to the payment of debts that Hindu law givers gave the non payment of a debt the status of sinfulness and such non payment was wholly repugnant to Hindu concept of son 's rights and liabilities.
In Bankeylal vs Durga Prasad (2) Lal Gopal Mukherji J. said at p. 896: " A perusal of text books of Smriti dealing with debts will show that under the Hindu Law the nonpayment of a just debt was regarded as a very heinous sill.
" The liability of the Hindu son based on his pious obligation again received the approval of this Court in Sudheshwar Mukherji vs Bhubneshwar Prasad Narain Singh (3), where the following observation made in Panna Lal 's case (1) (at p. 184): " The father 's power of alienating the family property for payment of his just debts may be one of the consequences of the pious obligation which the Hindu law imposed upon the sons; or it may be one of the means of enforcing it, but it is certainly not the measure of the entire obligation was reiterated.
And again at p. 183 Mukherjea J. (as he then was) said:., " It is a special liability created on purely religious (1) ; , 552, 553, 556, 559.
(2) All. 868, 896.
(3) ; , 183, 184.
1393 grounds and can be enforced only against the sons of the father and no other coparcener.
The liability, therefore, has its basis entirely on the relationship between the father and the son ".
Therefore unless the son succeeds in proving that the decree was based on a debt which was for an immoral or illegal purpose the creditor 's right of seizing in execution of his decree the whole coparcenary property including the son 's share remains unaffected because except where the debt is for an illegal or immoral purpose it is open to the execution creditor to sell the whole estate in satisfaction of the judgment obtained against the father alone.
Sripat Singh vs Tagore (1).
The necessary corollary which flows from the pious obligation imposed on Hindu sons is that it is not ended by the partition of the family estate unless a provision has been made for the payment of the just debts of the father.
This again is supported by the authority, of this Court in Pannatal 's case (2) where Mukherjea J. said at p. 559: " Thus, in our opinion, a son is liable, even after partition for the pre partition debts of his father which are not immoral or illegal and for the payment of which no arrangement was made at the date of the partition ".
The liability of the sons is thus unaffected by partition because the pious duty of the sons to pay the debt of the father, unless it is for an immoral or illegal purpose, continues till the debt is paid off and the pious obligation incumbent on the sons to see that their father 's debts are paid, prevents the sons from asserting that the family estate so far as their interest is concerned is not liable to purge that debt.
Therefore even though the father 's power to discharge his debt by selling the share of his sons in the property may no longer exist as a result of partition ' the right of the judgment creditor to seize the erstwhile coparcenary property remains unaffected and undiminished because of the pious obligation of the sons.
There does not seem to be any divergence of judicial opinion in regard (1) (1916) L.R. 44 I.A.1.
(2) ; , 552, 553, 556, 559. 1394 to the Hindu son 's liability to pay the debts of his father after partition, and by the mere device of entering into partition with their father, the sons cannot get rid of this pious obligation.
It has received the approval of this Court in Panna Lal vs Mst.
Naraini (1) and Sidheshwar Mukherji vs Bubneshwar Prasad Narain Singh (2) where Mukherjea J. observed in the latter case at p. 184: " It is settled law that even after partition the sons could be made liable for the pre partition debts of the father if there was no proper arrangement for the payment of such debts at the time when the partition was effected, although the father could have no longer any right of alienation in regard to the separated share of the sons The question then arises how the liability of the sons is to be enforced.
Another principle of Hindu law is that in a coparcenary family the decree obtained against the father is binding on the sons as they would be deemed to have been represented by the father in the suit: Kishan Sarup vs Brijraj Singh (3).
As was pointed out in Sidheshwar Mukherji 's case (2), the sons are not necessary parties to a money suit against the father who is the karta, but they may be joined as defendants.
The result of the partition in a joint family is nothing more than a change in the mode of enjoyment and what was held jointly is by the partition held in severalty and therefore attachment of the whole coparcenary estate would not be affected by the change in the mode of enjoyment, because the liability of the share which the sons got on partition remains unaffected as also the attachment itself which is not ended by partition (section 64 C. P. C. is a useful guide in such circumstances.
Dealing with the question as to how the interest of the sons in joint family property can be attached and sold, Mukherjea J. as he then was, observed at p. 185 in Sidheshwar Mukherji 's case (2): Be that as it may, the money decree passed against the father certainly created a debt payable by (1) ; , 552, 553, 556, 559.
(2) ; , 183, i84.
(3) All. 932.
1395 him.
If the debt was not tainted with immorality, it was open to the creditor to realise the dues by attachment and sale of the sons ' coparcenary interest in the joint property on the principles discussed above.
As has been laid down by the Judicial Committee in a series of cases, of which the case of Nanomi Babuasin vs Modun Mohun (1) may be taken as a type, the creditor has an option in such cases.
He can, if he likes, proceed against the father 's interest alone but he can, if he so chooses, put up to sale the sons ' interest also and it is a question of fact to be determined with reference to the circumstances of each individual case whether the smaller or the larger interest was actually sold in execution ".
But it has contended that a partition after the decree but before the auction sale limited the efficacy of the sale to the share of the father even though the sale in fact was of the whole estate, including the interest of the sons, because after the partition the father no longer possessed the right of alienation of the whole coparcenary estate to discharge his debts.
But this contention ignores the doctrine of pious obligation of the sons.
The right of the pre partition creditor to seize the property of the erstwhile joint family in execution of his decree is not dependent upon the father 's power to alienate the share of his sons but on the principle of pious obligation on the part of the sons to discharge the debt of the father.
The pious obligation continues to exist even though the power of the father to alienate may come to an end as a result of partition.
The consequence is that as between the sons ' right to take a vested interest ' jointly with their father in their ancestral estate and the remedy of the father 's creditor to seize the whole of the estate for payment of his debt not contracted for immoral or illegal purpose, the latter will prevail and the sons are precluded from setting tip their right and this will apply even to the divided property which, under the doctrine of pious obligation continues to be liable.
for the debts of the father.
Therefore where the joint ancestral property including the share of the sons has (1) (1885) L.R. 13 I. A. 1, 17, 18.
1396 passed out of the family in execution of the decree on the father 's debt the remedy of the sons would be to prove in appropriate proceedings taken by them the illegal or immoral purpose of the debt and in the absence of any such proof the sale will be screened from the sons ' attack, because even after the partition their share remains liable.
Girdhareelal vs Kantoolal (1), Suraj Bansi Koer vs Sheo Prasad Narain Singh(2) Mussamat Nanomi Babuasin vs Modwn Mohun (3) Chandra Deo Singh vs Mata Prasad (4) which was approved by the Privy Council in Sahu Ram Chander vs Bhup Singh (5), Pannalal vs Naraini (6) and Sidheshwar Mukherji 's case (7).
Our attention was drawn to two decisions, one by the High Court of Bombay in Ganpatrao vs Bhimrao (8) that in order to make the share of the sons liable after partition they should be brought on the record and the other of the Madras High Court in Kameshwaramma vs Venkatasubba Row(9) that the creditor has to bring another suit against the sons, obtain a decree against them limited to the shares allotted to them on partition and then attach and sell their share unless the partition was not bona fide in which case the decree could be executed against the joint family property.
But the decision in these cases must be confined to their own facts.
It is true that the right of the father to alienate for payment of personal debt is ended by the partition, but as we have said above, it does not affect the pious duty of the sons to discharge the debt of their father.
Therefore where after attachment and a proper notice of sale the whole estate including the sons ' share, which was attached, is sold and the purchaser buys it intending it to be the whole coparcenary estate, the presence of the sons eonomine is not necessary because they still have the right to challenge the sale on showing the immoral or illegal purpose of the debt.
In our opinion where the pious obligation exists and partition takes place after the decree and (1) (1874) L.R. i I.A. 321.
(2) (1878) L.R. 6 I.A. 88, 101.
(3) (1885) L.R. 13 I.A. Y. (4) All. 176, 196.
(5) (1916) L.R. 44 I.A. 1.
(6) ; , 552, 553, 556, 559.
(7) ; , 183, Bom.
(9) Mad.
1397 pending execution proceedings as in the present case, the sale of the whole estate in execution of the decree cannot be challenged except on proof by the sons of the immoral or illegal purpose of the debt and partition cannot relieve the sons of their pious obligation or their shares of their liability to be sold or be a means of reducing the efficacy of tile attachment or impair the rights of the creditor.
Reliance is placed on the judgment in Khiarajmal vs Daim (1) where the Privy Council held that the sale cannot be treated as void on the ground of mere irregularity but the Court has no jurisdiction to sell the property of persons " not parties to the proceedings or properly represented on the record ".
There two such persons were Alibux and Naurex.
As against Alibux there was no decree.
He was not a party to the suit, and it was held by the Privy Council that his interest in the property " seems to have been ignored altogether ".
He was not even mentioned as a debtor in the award on the basis of which the decree, which was executed was made.
Similarly Naurez was not represented in either of the suits and therefore there was no decree against him and the sale of his property also was therefore without jurisdiction and null and void.
This case cannot apply to sons in a joint Hindu family where a father represents the family and the decree is executable against the shares of the sons while the coparcenary continues and the liability of their shares continues after partition.
Sat Narain vs Das (2) is equally inapplicable to the present case.
There the Privy Council was dealing with the father 's power of disposal of property before and after partition which power vests in the Official Assignee on his bankruptcy, the question of the right of the judgment creditor to proceed in execution against the divided shares of sons which had been attached before partition was not a point in controversy.
There was no decision on the powers of an executing court to proceed against the shares of the sons but the question related to voluntary alienations by a father for payment of his debts not incurred for an immoral or illegal purpose.
(1) (1904) L.R. 32 I.A. 23.
(2) (1936) L.R. 63 I.A. 384.
1398 In cases where the sons do not challenge the liability of their interest in the execution of the decree against the father and the Court after attachment and proper notice of sale sells the whole estate and the auction purchaser purchases and pays for the whole estate, the mere fact that the sons were eo nomine not brought on the record would not be sufficient to defeat the rights of the auction purchaser or put an end to the pious obligation of the sons.
As was pointed out by Lord Hobhouse in Malkarjun Bin Shidramappa Pasare vs Narhari Bin Shivappa (1): " Their Lordships agree with the view of the learned Chief Justice that a purchaser cannot possibly judge of such matters, even if lie knows the facts; and that if he is to be held bound to enquire into the accuracy of the Court 's conduct of its own business, no purchaser at a Court sale would be safe.
Strancers to a suit are justified in believing that the Court has done that which by the directions of the Court it ought to do.
" In Mussamat Nanomi Babuasia vs Modun Mohun Lord Hobhouse said at p. 18: " But if the fact be that the purchaser has bargained and paid for the entirely, he may clearly defend his title to it upon any ground which would have justified a sale if the sons had been brought in to oppose the executing proceedings.
" The question which assumes importance in an auction sale of this kind therefore is what did the court intend to sell and did sell and what did the auction purchaser purport to buy and did buy and what did he pay for.
One track of decision of which Shambu Nath Pandey vs Golab Singh(3) is an instance, shows when the father 's share alone passes.
In that case the father alone was made a party to the proceedings.
The mortgage, the suit of the creditor and the decree and the sale certificate all purported to affect the rights of the father and his interest alone.
It was therefore held that whatever the nature of the debt, only the father 's (1) (1900) L.R. 27 I.A. 216, 225.
(2) (1885) L.R. 13 I.A. i. (3) (1887) L.R. 14 I.A. 77.
1399 right and interest was intended to pass to the auction purchaser.
In Meenakshi Naidu vs Immudi Kanaka Rammaya Kounden(1) which represents the other track of decision, the Privy Council held that upon the documents the court intended to sell and did sell the whole of the coparcenary interest and not any partial interest.
The query in decided cases has been as to what was put up for sale and was sold and what the purchaser had reason to think he was buying in execution of the decree.
Mussamat Nanomi Babuasin vs Modun Mohun (2) (supra), Bhagbut Persad vs Mussamat Girja Koer (3), Meenakshi Naidu vs Immudi Rammaya Kounden (1) and Rai Babu Mahabir Persad vs Rai Markunda Nath Sahai (4) and Daulat Ram vs Mehr Chand (5).
In the present case the payment order was made by the Deputy Registrar on April 21, 1942, and after the order had been sent to the Collector for recovery, the property was attached on April 24, 1942, and notice of sale was issued on November 24, 1942, and was published under sections 165 and 166 of the Bombay Land Revenue Code.
The proclamation of sale was dated December 12, 1942.
The property put up for sale was plot No. 36 D measuring 6 acres and one guntha and its value was specified as 13,000 rupees.
There was a note added : " No guarantee is given of the title of the said defendant or of the validity of any of the rights, charges or interests claimed by third parties ".
The order confirming the sale also shows that the whole bungalow was sold.
It was valued at Rs. 16,000 and there was a mortgage of Rs. 2,000 against it and what was sold and confirmed by this order was the whole bungalow.
The sale certificate was in regard to the whole bungalow i. e. City Survey No. 67 D measuring 6 acres and one guntha the sale price being Rs. 13,025.
There is little doubt therefore that what was put up for auction sale was the whole bungalow 2,0.6 (1) (1888) L.R. 16 I.A. i. (3) (1888) L.R. 15 I.A. 99.
(5) (1889) L.R. 14 I.A. 187.
178 (2) (1885) L.R. 13 I.A. i. (4) (1889) L.R. 17 I.A. 11, 16.
1400 and what the auction purchaser purported to buy and paid for was also the whole bungalow and not any fractional share in it.
It is a case where not only was the payment order passed before the partition but the attachment was made and the sale proclamation was issued before the suit for partition was filed and the sale took place of the whole property without any protest or challenge by the sons and without any notice to the Collector or the judgment creditor of the filing of the suit for partition.
In such a case respondent No. 1 is entitled to defend his title upon the grounds which would have justified the sale had the appellants been brought on record in execution proceedings.
The binding nature of the decree passed on the father 's debts not tainted with immorality or illegality, and the pious obligation imposed on the sons under the Mitakshara law would be sufficient to sustain the sale and defeat the sons ' suit in the same way and on the same grounds as in the case of execution proceedings.
Nanomi Babuasin vs Modun Mohun (1).
Consequently whether the sons were made parties to the execution proceedings or brought a suit challenging the sale of their shares the points for decision are the same the nature of the debts and liability of the sons under Hindu law, and these are the determining factors in both the cases i.e. the sons being parties to the execution proceedings or their suit challenging the sale of their shares.
The effect of attachment on the severance of status by the filing of a suit by one of the members of the coparcenary whose share was liable in execution of the decree has not been debated at the bar and how exactly it would affect the rights of the parties need not therefore be decided in this case.
As a consequence it would not be necessary to discuss the pronouncements of the Privy Council in Suraj Bansi Koer vs Sheo Prasad Singh (2) ; Moti Lal vs Karrabuldin (3) Ragunath Das vs Sundar Das Khetri (4); Ananta Padmanabha Swami vs Official Receiver, Secunderabad (5).
(1) (1885) L.R. 13 I.A. i. (3) (1897) L.R. 24 I.A. 170.
(2) (1878) L.R. 6 I.A. 88, 101.
(4) (1914) L.R. 41 I.A. 251.
(5) (1933) L.R. 60 I.A. 167, 174 5.
1401 The argument based on the interpretation of the words I right, title and interest of the defaulter ' in section 155 of the Bombay Land Revenue Code was that it was only the share of the defaulter himself which was and could be put up for auction sale.
That the whole of the property was put up for sale, was sold and was purchased as such is shown by the documents to which reference has already been made viz., the notice of November 24, 1942, proclamation of sale of Decem ber 24, 1,942, the order of confirmation of sale dated June 28, 1943, and the sale certificate issued by the Collector.
The Civil Procedure Code at the time of the enactment of the Bombay Land Revenue Code required that the property sold in execution should be described as " right, title and interest of the judgment debtor " and the same words have been used in section 155 of the Bombay Land Revenue Code.
It is a question of fact in each case as to what was sold in execution of the decree.
In Rai Babu Mahabir Prasad vs Markunda Nath Sahai (1) Lord Hobhouse observed as follows at p. 16 : " It is a question of fact in each case, and in this case their Lordships think that the transactions of the 4th and 5th of January, 1875, and the description of the property in the sale certificate, are conclusive to shew that the entire corpus of the estate was sold.
" Similarly in Meenakshi Naidu vs Immudi Kanaka Rammaya Kounden (2) the whole interest of the coparcenary was held to be sold taking into consideration the evidence which had been placed on the record.
Lord FitzGerald at p. 5 pointed out the difference where only the father 's interest was intended to pass: "In Hurdey Narain 's case" (Hurdey Narain vs Rooder Perkash (3)) " all the documents shewed that the Court intended to sell and that it did sell nothing but the father 's share the share and interest that he would take on partition, and nothing beyond it and this tribunal in that case puts it entirely upon the ground (1) (1889) L.R. 17 I.A. 11, 16.
(2) (1888) L.R. 16 I.A. i. (3) (1883) L. R. 11 I. A. 26, 29. 1402 that everything shewed that the thing sold was "whatever rights and interests, the said judgment debtor had in the property " and nothing else ".
In Sripat Singh vs Tagore (1) the "right, title and interest of the judgment debtor" were sold and there also it was held to convey the whole coparcenary estate and it was remarked that it was of the utmost importance that the substance and not merely the technicality of the transaction should be regarded.
What is to be seen is what was put up for sale what the court intended to sell and what the purchaser was intending to buy and what he purported to buy.
Counsel for the appellants relied on Shambu Nath Panday vs Golab Singh(2) where it was held that right and interest of the father meant personal interest but in that case as we have pointed out, the documents produced all showed that the father 's interest alone was intended to pass.
In Mulgund Co operative Credit Society vs Shidlingappa Ishwarappa (3) it was held that the sale under the Bombay Land Revenue Code has the same effect as the sale by the Civil Court.
The language used in the Bombay Land Revenue Code and the then existing Civil Procedure Code is similar i.e. " the right, title and interest of the defaulter " in one case and " of the judgment debtor " in the other.
This is supported by the observation of the Privy Council in Rai Babu Mahabir Prasad vs Markunda Nath Sahai (4) and as to what passed under the sale does not become any different merely because the sale is held under section 155 of the Bombay Land Revenue Code rather than the Code of Civil Procedure.
The effect in both cases is the same.
We hold therefore (1) that the liability of the sons to discharge the debts of the father which are not tainted with immorality or illegality is based on the pious obligation of the sons which continues to exist in the lifetime and after the death of the father and which does not come to an end as a result of partition of the joint family property.
All that results from partition is that the right of the father to make an (i) (1916) L.R. 44 I.A. i. (3) A.I.R. 194i Bom.
(2) (1887) L.R. 14 I.A. 77.
(4) (1880) L.R. 17 I.A. 11, 16.
1403 alienation comes to an end.
(2) Where the right, title and interest of a judgment debtor are set up for sale as to what passes to the auction purchaser is a question of fact in each case dependent upon what was the estate put up for sale, what the Court intended to sell and what the purchaser intended to buy and did buy and what he paid for.
(3) The words di right, title and interest " occurring in section 155 of the Bombay Land Revenue Code have the same connotation as they had in the corresponding words used in the Code of Civil Procedure existing at the time the Bombay Land Revenue Code was enacted.
(4) In execution proceedings it is not necessary to implead the sons or to bring another suit if severance of status takes place pending the execution proceedings because the pious duty of the sons continues and consequently there is merely a difference in the mode of enjoyment of the property.
(5) The liability of a father, who is a managing director and who draws a salary or a remuneration, incurred as a result of negligence in the discharge of his duties is not an avyavaharika debt as it cannot be termed as " repugnant to good morals ".
In the result the appeal fails and is dismissed with costs.
SINHA J.
I agree to the order proposed.
Appeal dismissed.
| IN-Abs | j was the managing director of a Co operative Bank getting a yearly remuneration of Rs. 1,000.
The Bank went into liquidation and an examination of the affairs having showed that the monies of the Bank were not properly invested and that J was negligent in the discharge of his duties, a payment order for Rs. 15,100 was made by the Deputy Registrar of Co operative Societies against him.
On July 27, 1942, for the realisation of the amount, an item of property belonging to the joint family of J was attached by the Collector and brought to sale under section 155 of the Bombay Land Revenue Code, and purchased at auction by the first respondent.
This sale was held on February 2, 1943, and confirmed on June 23, 1943.
In the meantime on January 15, 1943, one of the sons of J instituted a suit for partition and separate possession of his share in the joint family properties, and contended, inter alia, that the sale in favour of the first respondent was not binding on the joint family.
The sale was challenged on the grounds (1) that the liability which J incurred was avyavaharika and therefore the interest of his sons could not be sold for the realisation of the debt, (2) that even if the debt was not avyavaharika, the institution of the suit for partition operated as severance of status between the members of the family and, therefore, the father 's power of disposition over the son 's share had come to an end and, consequently, at the auction sale the share of the ' sons did not pass to the auction purchaser, and (3) that what could legally be sold under section I55 1385 of the Bombay Land Revenue Code was the right, title and interest of the defaulter, i. e., the father alone, which could not include the share of the other members of the joint family.
The evidence consisting of the notice for sale, the proclamation of sale and the sale certificate showed that the whole of the property was sold, and not the share of the father alone.
Held, that the liability which J incurred was not avyava harika and that the sale of the joint family property, including the share of the sons, for the discharge of the debt, was valid.
Held, also, that, Colebrooke 's translation of the term avyavaharika as "any debt for a cause repugnant to good morals,", was the nearest approach to the true concept of the term as used in the Smrithi texts.
Hem Raj alias Babu Lal vs Khem Chand, (1943) L. R. 70 I. A. 171, relied on.
Per Imam and Kapur jj. (1) The liability of the sons to discharge the debts of the father which are not tainted with immorality or illegality is based on the pious obligation of the sons which continues to exist in the lifetime and after the death of the father and which does not come to an end as a result of partition of the joint family property.
All that results from partition is that the right of the father to make an alienation comes to an end.
(2) Where the right, title and interest of a judgment debtor are set up for sale, as to what passes to the auction purchaser is a question of fact in each case dependent upon what was the estate put up for sale, what the Court intended to sell and what the purchaser intended to buy and did buy and what he paid for.
(3) The words "right, title and interest " occurring in section I55 of the Bombay Land Revenue Code have the same connotation as they had in the corresponding words used in the Code of Civil Procedure existing at the time the Bombay Land Revenue Code was enacted.
(4) In execution proceedings it is not necessary to implead the sons or to bring another suit if severance of status takes place pending the execution proceedings because the pious duty of the sons continues and consequently there is merely a difference in the mode of enjoyment of the property.
(5) The liability of a father, who is a managing director and who draws a salary or a remuneration, incurred as a result of negligence in the discharge of his duties is not an avyavaharika debt as it cannot be termed as " repugnant to good morals Case Law discussed.
Panna Lal vs Mst.
Naraini, ; and Sudhashway Mukherjee vs Bhubneshwar Prasad Narain Singh, [1954] S.C.R. 177, followed.
Khiarajmal vs Daim, (1904) L.R. 32 I.A. 23 and Sat Narain vs Das, (1936) L.R. 63 I.A. 384, distinguished.
Mulgund Co operative Credit Society vs Shidlingappa Ishwa rappa, A.I.R. 1941 Bom.
381, approved. 1386
|
Criminal Appeal No. 128 of 1990.
From the Judgment and Order dated 19.8.1989 of the Patna High Court in Criminal Miscellaneous No. 2314 of 1989.
A.D. Sikri, Ranjan Mukherjee and D. Goburdhan for the Appellant.
R.K. Garg and A. Sharan for the Respondents.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
Special leave granted.
790 The legality of the order of the High Court dated 19.8.
1989 passed on an application made under section 482 Cr.
P.C. is challenged in this appeal.
In a case instituted on a private complaint by the appellant for offences under sec tions 452 and 323 I.P.C., the Judicial Magistrate First Class, Patna, in exercise of power under section 192(2) Cr.
P.C. transferred the case for enquiry under section 202 of the Code.
The Court of the Second Class Magistrate, after examining witnesses, by order dated 22.3.
1985 issued proc ess to the two accused, the respondents herein.
The order of the Magistrate issuing process was challenged by the re spondents under section 482 before the High Court.
The main ground urged before the High Court was that the First Class Magistrate had transferred the case without taking cogni zance of the offence and the subsequent proceedings were, therefore, illegal.
The High Court, by its order dated 20.8.88, dismissed the petition.
It was found that there was no such illegality.
The respondents again made Crl.
Petition 2314/89 under section 482 Cr.
P.C. before the High Court alleging, inter alia, that the record of the proceed ings on close scrutiny would indicate that the case had not been taken cognizance of before the transfer.
The learned Single Judge accepted the case of the respondents and quashed the proceedings by the impugned order.
The learned counsel for the appellant contended before us that the second application under section 482 Cr.
P.C. was not entertainable, the exercise of power under section 482, on a second application by the same party on the same ground virtually amounts to the review of the earlier order and is contrary to the spirit of section 362 of the Cr.
P.C. and the High Court was, therefore, clearly in error in having quashed the proceedings by adopting that course.
We find considerable force in the contention of the learned counsel.
The inherent power under section 482 is intended to prevent the abuse of the process of the Court and to secure ends of justice.
Such power cannot be exercised to do something which is expressly barred under the Code.
If any considera tion of the facts by way of review is not permissible under the Code and is expressly barred, it is not for the Court to exercise its inherent power to reconsider the matter and record a conflicting decision.
If there had been change in the circumstances of the case, it would be in order for the High Court to exercise its inherent powers in the prevailing circumstances and pass appropriate orders to secure the ends of justice or to prevent the abuse of the process of the Court.
Where there is no such changed circumstances and the decision has to be arrived at on the facts that existed as on the date of the earlier order, the exercise of the power to reconsider the 791 same materials to arrive at different conclusion is in effect a review, which is expressly barred under section 362.
In the present case, there had been a definite finding that the complaint was taken cognizance of by the Magistrate before he transferred the proceedings under section 192(2) for enquiry under section 202 Cr.
This finding has been arrived at after perusal of the record of the proceedings before the Magistrate and on a consideration of the report of the concerned Magistrate.
A reappraisal of the facts on record to determine whether such cognizance had been taken of in a subsequent proceeding is not, therefore, warranted.
The only ground on which relief was claimed is the alleged irregularity in the transfer of the proceedings.
It was not open to the parties to reagitate the question by a fresh application nor was the court empowered under section 482 to reconsider the matter.
Section 362 of the Code expressly provides that no court when it has signed its judgment or final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error save as otherwise provided by the Code.
Section 482 enables the High Court to make such order as may be necessary to give effect to any order under the Code or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.
The inherent pow ers, however, as much are controlled by principle and prece dent as are its express powers by statute.
If a matter is covered by an express letter of law, the court cannot give a go by to the statutory provisions and instead evolve a new provision in the garb of inherent jurisdiction.
In Superintendent & Remembrancer of Legal Affairs vs Mohan Singh, , this Court held that section 561A preserves the inherent power of the High Court to make such orders as it deemed fit to prevent abuse of the process of the Court or to secure the ends of justice and the High Court must therefore exercise its inherent powers having regard to the situation prevailing at the particular point of time when its inherent jurisdiction is sought to be invoked.
In that case the facts and circumstances obtaining at the time of the subsequent application were clearly different from what they were at the time of the earlier application.
The question as to the scope and ambit of the inherent power of the High Court vis a vis an earlier order made by it was, therefore, not concluded by this decision.
The inherent jurisdiction of the High Court cannot be invoked to override bar of review under section 362.
It is clearly stated in Sooraj 792 Devi vs Pyare Lal, ; that the inherent power of the court cannot be exercised for doing that which is specifically prohibited by the Code.
The law is therefore clear that the inherent power cannot be exercised for doing that which cannot be done on account of the bar under other provisions of the Code.
The court is not empowered to review its own decision under the purported exercise of inherent power.
We find that the impugned order in this case is in effect one reviewing the earlier order on a reconsideration of the same materials.
The High Court has grievously erred in doing so.
Even on merits, we do not find any compelling reasons to quash the proceedings at that stage.
We allow the appeal and set aside the order of the High Court.
G.N. Appeal allowed.
| IN-Abs | A case was instituted on a private complaint by the appellant for offences under Sections 323 and 452 IPC before the Judicial Magistrate First Class, who transferred the case to Second Class Magistrate for enquiry.
The Second Class Magistrate issued process to the respondents, which was challenged under Section 482 Cr.
P.C., on the ground that the First Class Magistrate transferred the case without taking cognizance and that the subsequent proceedings were illegal.
The High Court dismissed the petition.
Again the respondents approached the High Court under Section 482 Cr.
P.C. alleging that the case had not been taken cognizance of, before it was transferred.
This time the High Court accepted the plea and quashed the proceedings.
This appeal, by special leave, challenges the High Court 's order on the grounds that the second application under Section 482 Cr.
P.C. ought not to have been entertained as it amounted to review of the earlier order and it was contrary to the spirit of section 362 Cr.
Allowing the appeal, this Court, HELD: 1.1 The inherent power under Section 482 Cr.
P.C. is intended to prevent the abuse of the process of the Court and to secure ends of justice.
Such power cannot be exer cised to do something which is expressly barred under the Code.
If any consideration of the facts by way of review is not permissible under the Code and is expressly barred, it is not for the Court to exercise its inherent power to reconsider the matter and record a conflicting decision.
If there had been change in the circumstances of the case, it would be in order for the High Court to exercise its inher ent power in the prevailing circumstances and pass appropri ate orders to secure the ends of justice or to 789 prevent the abuse of the process of the Court.
Where there is no such changed circumstance and the decision has to be arrived at on the facts that existed as on the date of earlier order, the exercise of the power to reconsider the same materials to arrive at different conclusion is in effect a review, which is expressly barred under section 362.
[790F H; 791A] 1.2 Ira matter is covered by an express letter of law, the court cannot give a go by to the statutory provisions and instead evolve a new provision in the garb of inherent jurisdiction.
The inherent jurisdiction of the High Court cannot be invoked to override bar of review under Section 362 Cr.
P.C. [791E H] Sooraj Devi vs Pyare Lal, ; , relied on.
Superintendent & Rememberancer of Legal Affairs vs Mohan Singh, , referred to. 2.
In the instant case, there had been a definite find ing that the complaint was taken cognizance of by the Magis trate before he transferred the proceedings under section 192(2) Cr.
P.C. for enquiry under section 202 Cr.
This finding has been arrived at after perusal of the record of the proceedings before the Magistrate and on a consideration of the report of the concerned Magistrate.
A reappraisal of the facts on record to determine whether such cognizance had been taken in a subsequent proceeding is not, therefore, warranted.
It was not open to the parties to reagitate the question by a fresh application nor was the court empowered under section 482 to reconsider the matter.
[791 B C]
|
ivil Appeal No. 1349 of 1990 From the Judgment and Order dated 18.8.1988 of the Kerala High Court in E.S.A. No. 23 of 1987.
section Padmanabhan and R.N. Keshwani for the appellant.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Special leave granted.
An extent of 80 cents of land which is in dispute in this appeal was agreed to be sold in favour of the appellant under an agreement dated October 9, 1978.
Before the sale deed was executed, a third party in execution of a decree got the property attached on November 16, 1978.
The sale deed was executed on November 23, 1978.
The question is: Does the sale prevail over the attachment? The High Court of Kerala in the judgment under appeal has held that the sale would be subject to attachment.
This appears from the following observation: "The sale deed was executed at a time when the property was already under attachment.
It is true that even before af fecting attachment there was an agreement for sale by Saroj ini Ramakrishnan in favour of the appellant.
But the agree ment for sale will not create any interest in the property.
The fact that Ext.
A 12 Sale deed was executed on the basis of an agreement executed before the attachment will not place the appellant in any better position.
He could take the 80 cents under Ext.
A 12 only subject to the attachment.
" 834 The correctness of the view taken by the High Court has been called into question in this appeal.
We may first draw attention to some of the relevant statutory provisions bearing on the question.
Order 38 Rule 10 of the Code of Civil Procedure provides that attachment before judgment shall not affect the rights existing prior to the attachment of persons not parties to the suit.
Under Section 40 of the Transfer of Property Act, a purchaser under a contract of sale of land is entitled to the benefit of an obligation arising out of that contract and it pro vides that that obligation may be enforced inter alia against a transferee with notice.
Section 91 of the Trusts Act also recognises this principle that the transferee with notice of an existing contract of which specific performance can be enforced must hold the property for the benefit of the party to the contract.
These are equitable rights though not amounting to interest in immovable property within the meaning of Section 54 of the Transfer of Property Act which declares that a contract of sale does not create an interest in the property.
On this line of reasoning it has been held by the Madras High Court that the purchaser of an antecedent agreement gets good title despite attachment.
See Paparaju Veeraraghavayya vs Killaru Kamala Devi & Ors., AIR 1935 Mad. 193, Veerappa Thevar & Ors.
C.S. Venkataramma Aiyar & Ors., AIR 1935 Mad. 872 and Angu Pillai
M.S.M. Kasiviswa nathan Chettiar, There is a useful parallel from the decision of the Calcutta High Court in Purna Chandra Basak vs Daulat Ali Mollah, AIR 1973 Cal.
432 wherein it was observed that the attaching creditor attaches only the right, title and inter est of the debtor and attachment cannot confer upon him any higher right than the judgment debtor had at the date of attachment.
Hence, if under a contract of sale entered into before attachment, the conveyance after attachment in pursuance of the contract passes on good title inspite of the attachment.
To the same effect are the decisions of the Bombay High Court in Rango Ramachandra vs Gurlingappa Chinnappa, AIR 1941 Bom.
198 and Yashvant Shankar Dunakhe vs Prayarji Nurji Tamboli, AIR 1943 Bom.
The High Court of Travancore Cochin in Kochuponchi Varughese vs Quseph Lonan, AIR 1952 Travancore Cochin 467 has also adopted the same reasoning.
The Punjab & Haryana High Court however, has taken a con 835 trary view in Mohinder Singh and Anr.
vs Nanak Singh and Anr., AIR 1971 Pb. & Haryana 381.
It has been held that a sale in pursuance of a pre attachment agreement is a private afienation of property and must be regarded as void against the claim ot the attaching creditor.
In support of this proposition, Section 64 of the Code of Civil Procedure was relied upon which according to the High Court was intended to protect the attaching creditor against private aliena tion.
This was also the observation of the Lahore High Court in Buta Ram & Ors.
vs Sayyed Mohammad, AIR 1935 Lahore 71.
In our opinion, the view taken by the High Courts of Madras, Bombay, Calcutta and Travancore Cochin in the afore said cases appears to be reasonable and could be accepted as correct.
The agreement for sale indeed creates an obligation attached to the ownership of property and since the attach ing creditor is entitled to attach only the right, title and interest of the judgment debtor, the attachment cannot be free from the obligations incurred under the contract for sale.
64 CPC no doubt was intended to protect the attaching creditor, but if the subsequent conveyance is in pursuance of an agreement for sale which was before the attachment, the contractual obligation arising therefrom must be allowed to prevail over the rights of the attaching creditor.
The rights of the attaching creditor shall not be allowed to override the contractual obligation arising from an antecedent agreement for sale of the attached property.
The attaching creditor cannot ignore that obligation and proceed to bring the property to sale as if it remained the absolute property of the judgment debtor.
We cannot, there fore, agree with the view taken by the Punjab and Haryana High Court in Mohinder Singh 's case AIR 1971 Pb. & Haryana 381.
In the conclusion that we have reached, this appeal must beallowed and is accordingly allowed.
The order of the High Court is reversed and that of the trial court is restored.
In the circumstances of the case, we make no order as to costs.
P.S.S. Appeal allowed.
| IN-Abs | The land in dispute was agreed to be sold in favour of the appellant under an agreement.
Subsequently, a third party in execution of a decree got the property attached.
The sale deed was executed thereafter.
A question arose as to the validity of the sale.
The High Court held that the sale would be subject to attachment.
Allowing the appeal by special leave, the Court, HELD: The agreement for sale creates an obligation attached to the ownership of the property.
The attaching creditor is entitled to attach only the right, title and interest of the judgment debtor.
Hence, if an agreement for sale is entered into before attachment, the attachment cannot be free from the obligation so incurred, and the attaching creditor will not get any right higher than the judgment debtor had on the date of the attachment.
He cannot ignore that obligation and proceed to bring the property to sale as if it remained the absolute property of the judgment debtor.
[835C, 834F, 835E] Accordingly, though section 64 CPC is intended to protect the attaching creditor, but if the subsequent conveyance is in pursuance of an agreement for sale which was entered into before the attachment, the contractual obligation arising therefrom must be allowed to prevail over the rights of the attaching creditor.
The rights of the attaching creditor shall not be allowed to override the contractual obligation arising from the antecedent agreement for sale of the at tached property.
[835D E] Paparaju Veeraraghavayya vs Killaru Kamala Devi & Ors., AIR 1935 Mad. 193; Veerappa Thevar & Ors.
C.S. Venkataram ma Aiyar & Ors.
, AIR 1935 Mad. 872; Angu Pillai vs
M.S.M. Kasiviswanathan Chettiar, ; Puma Chandra Basak vs Daulat Ali Mollah, AIR 1973 Cal. 432; Rango Rama chandra vs Gurlingappa 833 Chinnappa, AIR 1941 Bom.
198; Yashvant Shankar Dunakhe vs Prayarji Nurji Tamboli, AIR 1943 Bom.
145 and Kochuponchi Varughese vs Quseph Lonan, AIR 1952 Travancore Cochin 467, approved.
Mohinder Singh & Anr.
vs Nanak Singh & Anr., AIR 1971 Pb. & Haryana 381, overruled.
The sale in the instant case would not thus be subject to the attachment.
The purchaser would get good title de spite attachment.
[833F, 834D]
|
ivil Appeal No. 2998 of 1980.
From the Judgment and Order dated 17.11.1980 of the Aliahabad High Court in S.A. No. 2954 of 1979.
M.S. Gujral and Mohan Pandey for the Appellant.
Satish Chandra, Praveen Swarup and Pramod Swarup for the Respondent.
The Judgment of the Court was delivered by 801 THOMMEN, J.
This appeal by special leave arises from the judgment of the Allahabad High Court in Second Appeal No. 2954 of 1979 whereby the learned Judges of the High Court, allowing the defendants ' appeal set aside the decrees of the courts below.
The High Court held that the suit was barred by reason of Section 49 of the U.P. Consolidation of Hold ings Act, 1953 (hereinafter referred to as 'the Act ').
Hence the present appeal by the plaintiff.
The plaintiff is an illiterate person.
Her daughter Rameshwari Devi is the wife of the 6th defendant, Yogendra Prasad Singh.
Arjun Singh and Janardan Singh, defendant Nos. 3 and 4, are the brothers of the 6th defendant.
Defendants Nos. 3 and 4 had gained the confidence of the plaintiff and she confided in them her desire to make a gift of her entire properties in favour of her daughter.
Defendant Nos. 3 and 4 readily agreed to make arangements to execute and register the necessary deed.
On 18.9.1971, these defendants took the plaintiff to the Office of the Sub Registrar.
The plaintiff paid the amount needed for expenses.
The defendants pur chased stamp papers in the name of the plaintiff.
On two deeds, which had been prepared at the instance of the de fendants, the plaintiff was made to put her thumb impres sions.
Being an illiterate person, she could not read the contents of the documents or understand their character.
She had been told, and she honestly believed, that she was executing a gift deed in favour of her daughter, as desired by her, in respect of her properties.
She had in fact exe cuted two deeds, one of which was a gift in favour of her daughter and the other a sale deed in favour of all the defendants.
The consideration for the sale shown in the document was Rs. 14,000.
This was a clear case of fraud practised upon her by the defendants.
The defendants and the Sub Registrar as well as the document writer had all con spired together to perpetrate the fraud.
The plaintiff did not know that she had executed a sale deed in favour of the defendants in respect of her property until 25th June, 1974 when she found defendant Nos. 3 and 4 interfering with her possession of the property.
They told her that she had executed a sale deed in their favour.
It was only on 2nd July, 1974 that she came to know of the full facts.
Accord ingly, she filed a suit for cancellation of the sale deed.
The suit was decreed by the trial court and that decree was confirmed in appeal by the first appellate court.
Setting aside the decree in the defendant 's second appeal, the High Court held that the plaintiff was totally deceived as to the character of the document which she executed and the docu ment was, therefore, void and of no effect whatsoever.
Accordingly, the suit was barred under section 49 of the Act under which consolidation proceedings had been pending at the time of the 802 institution of the suit in respect of the property in ques tion.
The facts are not in dispute.
It is not disputed that the documents in question came to be executed in the manner alleged by the plaintiff.
The appellant, however, contends that since it was a case of the document having been vitiat ed by fraud, the transaction was viodable, but not void, and, therefore, the suit to set aside the sale was rightly instituted by her and the bar of section 49 was not attract ed.
The appellant contends that the suit is perfectly main tainable and the High Court was wrong in holding to the contrary.
Mr. Satish Chandra, appearing for the respondents, rightly, in our view, submits that two principles enunciated by this Court in Gorakh Nath Dube vs Hari Narain Singh & Ors., ; and Ningawwa vs Byrappa & 3 Ors.; , squarely apply to the facts of this case and the document in question evidenced a void transaction, and not a mere voidable transaction, and no suit was, there fore, maintainable in view of the bar contained in section 49 of the Act.
In Gorakh Nath Dube, (supra), this Court held that the object of the relevant provision of the Act was to remove from the jurisdiction of any civil court or revenue court all disputes which could be decided by the competent author ity under the Act during the consolidation proceedings.
Questions relating to the validity of a sale deed or a gift deed and the like had to be examined in proceedings before the statutory authorities.
The Court, however, drew a dis tinction between void and voidable documents and said a voidable document was one which remained in force until set aside, and such a document could be set aside only by a competent civil court, and a suit for that purpose would, therefore, be maintainable.
On the other hand, a claim that a transaction was void was a matter which could be adjudi cated upon by the consolidation courts.
This is what this Court stated: "We think that a distinction can be made between cases where a document is wholly or partially invalid so that it can be disregarded by any court or authority and one where it has to be actually set aside before it can cease to have legal effect.
An alienation made in excess of power to transfer would be, to the extent of the excess of power, invalid.
An adjudication on the effect of such a purported alienation would be necessarily implied in the decision of a dispute involving conflicting claims to rights or interests in 803 land which are the subject matter of consolidation proceed ings.
The existence and quantum of rights claimed or denied will have to be declared by the consolidation authorities which would be deemed to be invested with jurisdiction, by the necessary implication of their statutory powers to adjudicate upon such rights and interests in land, to de clare such documents effective or ineffective, but, where there is a document the legal effect of which can only be taken away by setting it aside or its cancellation, it could be urged that the consolidation authorities have no power to cancel the deed, and, therefore, it must be held to be binding on them so long as it is not cancelled by a court having the power to cancel it.
In the case before us, the plaintiffs claim is that the sale of his half share by his uncle was invalid, inoperative, and void.
Such a claim could be adjudicated upon by consolidation courts." (emphasis supplied) In Ningawwa vs Byrappa & 3 Ors., (supra), this Court referred to the well established principle that a contract or other transaction induced or tendered by fraud is not void, but only voidable at the option of the party defraud ed.
The transaction remains valid until it was avoided.
This Court then said: "The legal position will be different if there is a fraudu lent misrepresentation not merely as to the contents of the document but as to its character.
The authorities make a clear distinction between fraudulent misrepresentation as to the character of the document and fraudulent misrepresenta tion as to the contents thereof.
With reference to the form er, it has been held that the transaction is void, while in the case of the latter, it is merely voidable.
In Foster vs Mackinon, , the action was by the endorsee of a bill of exchange.
The defendant pleaded that he endorsed the bill on a fraudulent representation by the acceptor that he was signing a guarantee.
In holding that such a plea was admissible, the Court observed: It (signature) is invalid not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signer did not accompany the signature; in other words, that he never intended to sign, and therefore in contemplation of law never did sign, the 804 contract to which his name is appended . .
The defendant never intended to sign that contract or any such contract.
He never intended to put his name to any instrument that then was or thereafter might become negotiable.
He was deceived, not merely as to the legal effect, but as to the 'actual contents ' of the instrument." (emphasis supplied) From the facts narrated above, about which, as stated earlier, there is no dispute, it is clear that this is a case where the plaintiffappellant was totally ignorant of the mischief played upon her.
She honestly believed that the instrument which she executed and got registered was a gift deed in favour of her daughter.
She believed that the thumb impressions taken from her were in respect of that single document.
She did not know that she executed two documents, one of which alone was the gift deed, but the other Was a sale of the property in favour of all the defendants.
This was, therefore, a case of fraudulent misrepresentation as to the character of the document executed by her and not merely as to its contents or as to its legal effect.
The plaintiff appellant never intended to sign what she did sign.
She never intended to enter into the contract to which she unknowingly became a party.
Her mind did not accompany her thumb impressions.
This is a case that fails within the principle enunciated in Ningawwa vs Byrappa & 3 Ors., (supra) and it was, therefore, a totally void transaction.
Accordingly, as stated in Gorakh Nath Dube (supra), the suit is not maintainable by reason of the bar contained in the Act.
The High Court has, in our view, rightly held that the remedy of the plaintiff lies in the proceedings pending before the consolidation authorities and it is open to the parties to approach them for appropriate relief.
In the circumstances, we see no merit in this appeal.
It is, ac cordingly, dismissed, but we make no order as to costs.
P.S.S. Appeal dismissed.
| IN-Abs | Section 49 of the U.P. Consolidation of Holdings Act, 1953 puts a bar on the civil and revenue courts in respect of disputes in regard to which proceedings could or ought to have been taken under the Act.
The plaintiff appellant, an illiterate lady, wanted to make a gift of her properties in favour of her daughter.
Defendant Nos. 3 and 4, who undertook to make arrangements to execute and register the necessary deed, however, prac tised a fraud on her.
They made her put her thumb impression on two documents which she had been told and she honestly believed were the gift deed in favour of her daughter.
She had in fact executed two deeds, one of which was a gift in favour of her daughter and the other a sale deed in favour of the defendants.
Later when she tame to know of the facts, she filed a suit for cancellation of the sale deed.
Consoli dation proceedings were then pending in respect of the property in question.
The suit was decreed by the trim court and that decree was confirmed in appeal by the First Appellate Court.
The High Court, however, found that the plaintiff was totally deceived as to the character of the document which she had executed and the document was, therefore, void and of no effect whatsoever.
Accordingly, it held that the suit was barred by reason of section 49 of the Act.
In the appeal by special leave it was contended for the appellant that since it was a case of the document having been vitiated by fraud, the transaction was voidable but not void and, therefore, the bar of section 49 of the Act was not attracted.
Dismissing the appeal, the Court, HELD: 1.1 A voidable document is one which remains in force 800 until set aside and such a document can be set aside only by a competent civil court.
A suit for that purpose would, therefore, be maintainable.
A claim that a transaction is void is, however, a matter which can be adjudicated upon by the consolidation authorities.
[802E F] Gorakh Nath Dube vs Hari Narain Singh & Ors., ; , referred to. 1.2 In the instant case, the plaintiff appellant was totally ignorant of the mischief played upon her.
She hon estly believed that the instrument which she executed and got registered was a gift deed in favour of her daughter.
She believed that the thumb impressions taken from her were in respect of that single document.
She did not know that she had executed two documents, one of which alone was the gift deed, but the other was a sale of the property in favour of the defendants.
This was, therefore, a case of fraudulent misrepresentation as to the character of the document executed by her and not merely as to its contents or as to its legal effect.
The plaintiff appellant never intended to sign what she did sign.
She never intended to enter into the contract to which she unknowingly became a party.
Her mind did not accompany her thumb impressions.
It was thus a totally void transaction.
[804C E] Ningawwa vs Byrappa & Ors., ; , applied.
No suit was, therefore, maintainable by reason of the bar contained in section 49 of the Act.
[804E] 2.
The remedy of the plaintiff lies in the proceedings pending before the consolidation authorities and it is open to the parties to approach them for appropriate relief.
[804F]
|
Criminal Appeal No. 197 of 1990.
From the Judgment and Order dated 15.9.1989/18.9.1989 of the Bombay High Court in Crl.
A. No. 284 of 1987.
Mr. Satish Vig for the Appellant.
Mr. A.S. Bhasme for the Respondent.
The Judgment of the Court was delivered by 857 section RATNAVEL PANDIAN, J.
Special leave granted.
The notice was issued on the Special Leave Petition limited to the question whether the High Court had jurisdic tion to enhance the sentence without issuing notice and affording to the appellant an opportunity of showing cause against such enhancement of the sentence, or in the absence of an appeal by the State for enhancement of sentence on the ground of inadequacy.
This appellant along with two others were convicted for murdering Kumari Mangala in furtherance of their common intention and causing disappearance of evidence of the said offence with the intention of screening themselves from legal punishment under Section 302 read with Section 34 IPC and under Section 201 read with Sec.
34 IPC respectively and sentenced to suffer imprisonment for life under the first count and to suffer rigorous imprisonment for a period of 3 years and to pay a fine of Rs.2,500 each with a default clause and directed both the substantive sentences to run concurrently.
They all preferred criminal appeal No. 284 of 1987 before the High Court of Bombay Bench at Aurangabad which set aside the conviction of all the convicted accused inclu sive of this appellant under Section 302 read with Sec.
34 IPC and the conviction of other two under Section 20 1 read with Sec.
34 IPC but confirmed the conviction of this appel lant under Section 201 IPC and enhanced the sentence to seven years rigorous imprisonment.
The High Court neither issued notice to the appellant nor afforded him any opportunity of showing cause against the said enhancement while enhancing the sentence.
Admitted ly, there was no appeal by the State for enhancement of sentence under Section 377 Cr.
P.C. on the ground of its inadequacy. 'Let punishment fit the crime ' is one of the main ob jects of the sentencing policy.
To achieve this object, the Code of Criminal Procedure empowers the High Court to en hance the sentence in appropriate cases where the sentence awarded by the Subordinate Courts is grossly inadequate or unconscionably lenient or 'flea bite ' or is not commensurate with the gravity of the offence.
The High Court enjoys the power of enhancing the sentence either in exercise of its revisional jurisdiction under Section 397 read with Sec.
401 or in its appellate jurisdiction under Section 37 read with Sec.
386(c) of the Criminal Procedure Code (hereinafter referred to as the 'Code ') subject to the 858 provisos (1) and (2) to Sec.
386 of the Code.
It may be stated in this connection that it is permissible for the High Court while exercising its revisional jurisdiction under Section 397 read with Sec.
401 IPC to exercise the power of a Court of Appeal under Section 386(c) for enhance ment of sentence.
This Court in Bachan Singh etc.
vs State of Punjab, [1980] 1 SCR 645 while dealing with the revisional powers of the High Court has ruled thus: "in respect of the petition which was filed under Section 401 Cr.
P.C. for the exercise of the High Court 's power of revision, it was permissible for it to exercise the power of a Court of appeal under Section 386 for enhancement of the sentence . . .
The High Court 's power of revision in the case of any proceeding the record of which has been called for by it or which otherwise comes to its knowledge, has been stated in section 401 Cr.
P.C. to which reference has been made above.
That includes the power conferred on a Court of Appeal under Section 386 to enhance or reduce the sentence." Under Section 377(1) of the Code, the State Government in any case of conviction on a trial held by any Court other than the High Court is empowered to direct the public prose cutor to present an appeal to the High Court against the sentence on the ground of its inadequacy.
Under sub section (2) of Section 377, the Central Government under the circum stances stated therein is empowered to direct the public prosecutor to present an appeal to the High Court for en hancement of sentence.
Before the introduction of this Section 377 on the recommendation of the Law Commission in its 4 1st Report, any error in sentencing could be remedied only by the exercise of the revisional power.
of the High Court.
However, the High Court notwithstanding of the exer cise of its powers under the appellate jurisdiction in an appeal preferred under Section 377 of the Code have powers to act suo motu to enhance the sentence in appropriate cases while exercising its revisional jurisdiction even in the absence of an appeal against the inadequacy of the sentence as provided under Section 377.
In Nadir Khan vs The State (Delhi Administration), [1975] 2SCC 406 wherein a question was raised that the High Court, in revision under Section 40 1 Cr.
P.C. has no juris diction or power to enhance the 859 sentence in the absence of an appeal against the inadequacy of sentence under Section 377, Goswami.
J. characterised that question as an unmerited doubt on the undoubted juris diction of the High Court in acting suo motu in criminal revision in appropriate cases and said "The attempt has to be nipped in the bud".
Dealing with that question, he ob served as follows: "It is well known and has been ever recognised that the High Court is not required to act in revision merely through a conduit application at the instance of an aggrieved party.
The High Court, as an effective instrument for administra tion of criminal justice, keeps a constant vigil and wherev er it finds that justice has suffered, it takes upon itself as its bounden duty to suo motu act where there is flagrant abuse of the law.
The character of the offence and the nature of disposal of a particular case by the subordinate court prompt remedial action on the part of the High Court for the ultimate social good of the community, even though the State may be slow or silent in preferring an appeal provided for under the new Code.
The High Court in a given case of public importance e.g. in now too familiar cases of food adulteration, reacts to public concern over the problem and may act suo motu on perusal of newspaper reports dis closing imposition of grossly inadequate sentence upon such offenders.
This position was true and extant in the old Code of 1898 and this salutary power has not been denied by Parliament under the new Code by rearrangement of the sec tions.
It is true the new Code has expressly given a right to the State under Section 377 Cr.
P.C. to appeal against inadequacy of sentence which was not there under the old Code.
That however does not exclude revisional jurisdiction of the High Court to act suo motu for enhancement of sen tence in appropriate cases.
What is an appropriate case has to be left to the discretion of the High Court . . .
Section 401 expressly preserves the power of the High Court, by itself, to call for the records without the intervention of another agency and has kept alive the ancient exercise of power when something extraordinary comes to the knowledge of the High Court.
The provisions under Section 401 read with Section 386(c)(iii) Cr.
P.C. are clearly supplemental to those under Section 377 whereby appeals 860 are provided for against inadequacy of sentence at the instance of the State Government or Central Government, as the case may be.
" See also Lingala Vijay Kumar and Others vs The Public Prosecutor, ; In Surjit Singh and Others vs State of Punjab, [1984] Supp.
SCC 5 18 the facts disclosed that the High Court while disposing an appeal preferred under Section 374 sub section (2) enhanced the sentence by imposing additional sentence of a fine of Rs. 5,000 with a default clause in addition to the sentence of life imprisonment inflicted by the Trial Court without issuing show cause notice and without affording an opportunity to be heard.
This Court while allowing the appeal held thus: "Rules of natural justice as also the prescribed procedure require that the sentence imposed on the accused cannot be enhanced without giving notice to the appellants and the opportunity to be heard on the proposed action.
" In a recent judgment in Sahab Singh & Others vs State of Haryana, JT , it has been observed: "If the High Court was minded to enhance the sentence the proper course was to exercise suo motu powers under Section 397 read with Section 40 1 of the Code by issuing notice of enhancement and heating the convicts on the question of inadequacy of sentence.
Without following such procedure, it was not open to the High Court in the appeal filed by the convicts to enhance the sentence by enhancing the fine.
The High Court clearly acted without jurisdiction.
" Section 386 of the Code deals with the power of the appellate Court in disposing of an appeal preferred under Section 374 and also in case of an appeal under Section 377 or 378 of the Code.
Under clause (b) (iii) of Section 386, the appellate Court may in an appeal from a conviction with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the same.
Under clause (c) (iii) of Section 386, the Appel late Court may in an appeal for enhancement of sentence with or without altering the finding, alter the nature or the extent or the 861 nature and extent, of the sentence so as to enhance or reduce the same.
From the above discussion, it is clear that the High Court both in exercise of its revisional jurisdiction under Section 397 read with Sec.
40 1 Cr.
P.C. and its appellate jurisdiction under Section 377 read with Sec.
386(c) of Cr.
P.C. in matters of enhancement of sentence should give the accused a reasonable opportunity of showing cause against such enhancement as comtemplated under the first proviso to Section 386 as well under Sub Section (3) of Section 377 of the Code.
As pointed out in Surjit Singh 's case, the rules of natural justice as also the prescribed procedure require issuing of notice to the appellant and affording an opportunity to be heard on the proposed action for enhancement of sentence.
In the back drop of this legal position, we may revert to the case on hand.
The High Court has enhanced the sen tence unmindful of the relevant provisions of the Code of Criminal Procedure and also the rules of natural justice and by over stepping its jurisdiction adopted a leeway enhancing the sentence from 3 years to 7 years for the conviction under Section 201 IPC which exercise of powers in violation of the prescribed procedure, is impermissible for the rea sons stated albeit.
We, therefore, set aside the order of the High Court enhancing the sentence to 7 years and restore the order of the trial Court inflicting the sentence of three years rigorous imprisonment and the fine of Rs.2,500 with the default clause.
The appeal is allowed to the extent herein indicated.
G.N. Appeal allowed.
| IN-Abs | The appellant and two others were convicted for life and 3 years rigorous imprisonment or fine of Rs.2500 each for offences under Section 302 read with Section 34 IPC and Section 201 read with Section 34 IPC, respectively.
On appeal by the accused the High Court set aside the convic tion of all of them under Section 302 read with Section 34 IPC, and also the conviction of two of them under Section 201 read with Section 34 IPC.
In respect of the appellant the High Court not only confirmed the conviction under Section 201, but also enhanced the sentence to 7 years rigorous imprisonment.
While doing so, the High Court did not issue notice to the appellant; nor did it afford an opportunity of showing cause against the proposed enhance ment of sentence.
Before the High Court, the State did not prefer an appeal for an enhancement of sentence under Sec tion 377 Cr.
P.C. on the ground of inadequacy.
Allowing the appeal, this Court, HELD: 1.1. 'Let punishment fit the crime ' is one of the main objects of the sentencing policy.
To achieve this object, the Code of Criminal Procedure empowers the High Court to enhance the sentence in appropriate cases while the sentence awarded by the Subordinate Courts is grossly inade quate or unconscionably lenient or 'flea bite ' or is not commensurate with the gravity of the offence.
The High Court enjoins the power of enhancing the sentence either in exer cise of its revisional jurisdiction under Section 397 read with Section 401 or in its appellate jurisdiction under Section 377 read with Section 386(c) of the Criminal Proce dure Code subject to the provisos (1) and (2) to Section 386 of the Code.
It is permissible for the High Court while exercising its revisional jurisdiction under Section 397 read with Section 401 IPC to exercise the power of a Court of Appeal under Section 386(c) for enhancement of sentence.
[857G H; 858A] 856 1.2.
The High Court, notwithstanding its powers under the appellate jurisdiction in an appeal preferred under Section 377 of the Code, have powers to act suo motu to enhance the sentence in appropriate cases while exercising its revisional jurisdiction even in the absence of an appeal against the inadequacy of the sentence as provided under Section 377.
[858F G] Bachan Singh etc.
vs State of Punjab, [1980] 1 SCR 645; Nadir Khan vs The State (Delhi Administration), ; and Lingala Vijay Kumar and Others vs The Public Prose cutor; , , relied on.
The High Court both in exercise of its revisional jurisdiction under Section 397 read with Section 401 Cr.
P.C. and its appellate jurisdiction under Section 377 read with Section 386(c) of Cr.
P.C. in matters of enhancement of sentence should give the accused a reasonable opportunity of showing cause against such enhancement as contemplated under the first proviso to Section 386 as well under sub section (3) of Section 377 of the Code.
The rules of natural justice as also the prescribed procedure require issuing notice to the appellant and affording an opportunity to be heard on the proposed action for enhancement of sentence.
[861A B] Surjit Singh and Others, vs State of Punjab, [1984] Supp.
SCC 518 and Sahab Singh & Others vs State of Haryana, JT , relied on.
In the instant case, the High Court has enhanced the sentence unmindful of the relevant provisions of the Code of Criminal Procedure and also the rules of natural justice and by over stepping its jurisdiction adopted a leeway in en hancing the sentence from three years to seven years for the conviction under Section 201 IPC which exercise of powers in violation of the prescribed procedure, is impermissible. ]861C D]
|
Criminal Appeal No. 453 of 1989.
From the Judgment and Order dated 8.1.1988 of the Kerala High Court in Crl.
A. No. 382 of 1986.
G. Ramaswamy, Ashok K. Sen, G. Viswanatha Iyer and R. Satish for the Appellant.
V.C. Mahajan, A. Subba Rao, P. Parmeshwaran and Mrs. Sushma Suri for the Respondent.
The Judgment of the Court was delivered by REDDY, J.
The Gold (Control) Act ws enacted in the year 1968 with the object of control of the production, supply, use and possession of and business in gold ornaments and articles of gold in the interest of economic and financial interests of the community.
Section 27 of the Act lays down that no person shall commence, or carry on, business as a dealer unless he holds a valid licence issued under the provisions of the Act and the said licence should be in the prescribed form.
Section 27(7)(b) lays down that a licensed dealer shall not carry on the business as such dealer in any premises other than the premises specified in his licence.
Section 4(h) defines 'dealer ' as one who carries on the business of making, preparing, polishing, buying, selling, supplying, processing or converting gold, whether for cash or for deferred payment or for commission, remuneration or other consideration.
795 The appellant before us was one such licensed dealer having a shop in a building, which is four storeyed, bearing Municipal No. 25/ A/1479 on the Municipal Road, Trichur (Kerala).
The showroom where the actual day to day business is conducted is in the ground floor.
On 23.9.81 Superintend ent of Central Excise, examined as P.W. 1, raided the shop of the appellant and conducted a search.
Books of accounts maintained by the appellant were verified and it was found that there was a stock of 1372 pieces of gold ornaments.
The search party found 169 pieces of new gold ornaments in the third floor of the building weighing 667.850 grams kept in a card board box.
They were seized.
On further investigation conducted by the officer it was also revealed that the appellant 's brother, his business associate, had purchased some items of jewellery from another dealer and had also kept the same in the said licensed premises.
A complaint was preferred against the appellant alleging that he has unac counted jewellery and that he was carrying on the business in the third floor which is not a licensed premises.
The trial court flamed charges under Section 27(7)(b) read with Section 85(1)(a) and Section 55(3) of The Gold (Control) Act and necessary evidence was adduced.
Failure to maintain the necessary accounts as a dealer is punishable under Section 55(3) and carrying on business in a premises other than the premises specified in the licence is punisha ble under Section 27(7)(b).
The appellant inter alia took the plea that he is carrying on the business of gold only in the ground floor and the items therein have been accounted for including the items that were found in the third floor.
He also took the plea that he sold these items to a customer and separated them and kept them in the third floor for the purpose of delivering the same to the purchaser and that the third floor also formed part of the licensed premises.
The trial court on an appreciation of the evidence, acquitted the accused holding that the prosecution has failed to prove that the accused had unaccounted jewellery and that he was carrying on business in an unlicensed prem ises.
An appeal against acquittal was filed in the High Court of Kerala and the learned Judge confirmed the finding of the trial court in respect of charge under Section 55(b).
He, however, held that the third floor does not form part of the licensed premises.
Therefore an offence punishable under Section 27(7)(b) is proved and accordingly convicted and sentenced the appellant to three months ' simple imprisonment and to pay a fine of Rs.5,000 in default to suffer a further period of two months.
Questioning the same, the present appeal by way of special leave has been filed.
796 The learned counsel for the appellant submits that the High Court has misconstrued the provisions of Section 27(7)(b) and at any rate in the instant case the High Court erred in interfering in an appeal against acquittal.
It is also submitted that even if the prosecution case is to be accepted in this context what at the most can be said is that two views are possible and in such an event the inter ference in an order of acquittal is uncalled for.
It is not in dispute that the appellant obtained a licence for carrying on the business.
In the licence that was granted in the year 1975 and which was also renewed in the subsequent years upto 1977, the address of the premises is mentioed as No. 25/A/1479.
The Inspector in his cross examination admitted that the entire building bears only one municipal number and the licence was given for conducting the business in that building.
The prosecution has not led any other evidence to show that the third floor does not form part of the licensed premises.
That apart admittedly on each storey there is only a small room and the entire build ing is bearing only one municipal number and that is the premises beating that number which is mentioned in the licence.
The question is whether the mere fact that the showroom is in the ground floor does necessarily lead to an inference that the gold ornaments which are accounted for cannot be stored in any other room in that building? Section 27 reads as under: "27(1) Save as otherwise provided in this Act, no person shall commence, or carry on, business as a dealer unless he holds a valid licence issued in this behalf by the Adminis trator.
(2) A licence issued under this section (a) shall be in such form as may be prescribed.
(b) shall be valid for such period as may be specified therein.
(c) may be renewed, from time to time, and (d) shall be subject to such conditions and restrictions as may be prescribed.
797 (7)(a) The Administrator shall specify, in each licence granted to a dealer, the premises in which such dealer shall carry on business and no other person shall carry on busi ness as a dealer in the said premises.
(b) A licensed dealer shah not carry on business as such dealer in any premises other than the premises specified in his licence.
The above principal question has to be examined in the light of this provision and see whether the appellant was carrying on business in any premises other than the premises specified in the licence.
As already mentioned, the entire building is given one municipal number and there is no other evidence in support of the prosecution case that the third floor of the building does not form part of the licensed premises.
In any event under the facts and circumstances of the case one can at the most go the extent of saying that two views are possible.
In Bhagwati and Others vs The State of Uttar Pradesh, it is held: "Thus if the finding reached by the trial Judge can not be said to be unreasonable, the appellate Court should not disturb it even if it were possible to reach a different conclusion on the basis of the material on the record.
This has been held to be so because the trial Judge has the advantage of seeing and hearing the witnesses and the ini tial presumption of innocence in favour of the accused is not weakened by his acquittal.
The appellate Court therefore should be slow ' in disturbing the finding of fact of the trial Court, and if two views are reasonably possible of the evidence on the record, it is not expected to interfere simply because it feels that it would have taken a different view if the case had been tried by it.
" We are convinced that the view taken by the trial court is quite reasonable.
Therefore, viewed from any angle, we are firmly of the view that there were no grounds for the High Court to interfere with the findings of the trial court acquitting the accused.
The counsel for the State, however, pointed out that the High Court has observed at one place in the judgment that the counsel for the accused has not raised any contention that the room in the third floor also formed part of the licensed premises.
Except making this 798 bare observation, the High Court has not considered the plea taken by the accused and the finding of the trial court in this regard.
In the same paragraph, the learned Judge has, however, mentioned that the accused raised a contention in the trial court that the room in the third floor also formed part of the licensed premises and this plea found favour with the trial court.
That apart the case of the accused has throughout been that room in the third floor formed part of the licensed premises.
Therefore this observation of the appellate court that the counsel did not contend that the third floor formed part of the licensed premises does not appear to be correct.
At any rate, there is no such admis sion by the accused and nor can it be said that there was such a concession by the counsel for the accused.
For all the aforesaid reasons, the conviction and sentence awarded by the High Court are set aside.
Accordingly the appeal is allowed.
T.N.A. Appeal al lowed.
| IN-Abs | The appellant, a licensed dealer, was charged under Section 55(3) of the Gold (Control) Act, 1968 for failure to maintain the necessary accounts and under section 27(7)(b) for carrying on business in the unlicensed premises on the ground that while the show room of the licensed premises was on the ground floor and appellant had kept the gold orna ments in the third floor of the building.
The Trim Court acquitted the appellant and the Appellate Court confirmed the finding under section 55(3) but convict ed him under section 27(7)(b) holding that the third floor does not form part of the licensed premises.
In this appeal it was contended on behalf of the appel lant that (i) the High Court misocnstrued the provisions of section 27(7)(b); (ii) two views being possible of the evidence on the record the interference with the order of acquittal by the Appellate Court was uncalled for.
Setting aside the conviction and allowing the appeal, this Court, HELD: 1.
In the instant case the entire building hears only one municipal number and the licence was given for conducting the business in that building.
There is no other evidence in support of the prosecution case that the third floor of the building does not form part of the licensed premises.
[796C; 797C] 794 2.
If the finding reached by the trial judge cannot be said to be unreasonable, the Appellate Court should not disturb it even if it were possible to reach a different conclusion on the basis of the material on the record.
The Appellate Court therefore should be slow in disturbing the finding of fact of the Trial Court, and if two views are reasonably possible of the evidence on the record, it is not expected to interfere simply because it feels that it would have taken a different view ff the case had been tried by it.
[797E F] Bhagwati and Ors.
vs State of Uttar Pradesh, , followed.
The view taken by the trial court is quite reasonable and there were no grounds for the High Court to interfere with the findings of the trial court acquitting the accused.
[797G]
|
ivil Appeal No. 1350 of 1990.
From the Judgment and Order dated 9.2.
1989 of Delhi High Court in C.W. No. 1904 of 1983.
Dr. L.M. Singhvi, Dr. A.M. Singvi and D. Bhandari (N.P.) for the Appellants.
Harish N. Salve, Mrs. P. Shroff and S.A. Shroff for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
Having heard counsel for the parties and having considered the facts, circumstances and the contentions involved herein, we grant special leave and dispose of the appeal by judgment herein.
This appeal arises out of the judgment and order of the High Court of Delhi dated 9th February, 1989.
Appellant No. 1 is a partnership firm.
The other four appellants are the partners of the said firm.
The respondent is a company incorporated under the Indian and hav ing, inter alia, one of its regional offices at Janpath, New Delhi.
The appellants sought in the Writ Petition filed under Article 226 of the Constitution before the High Court a writ of mandamus against the respondent directing it to desist from denying or 821 discontinuing the supply of all kinds of lubricants to the appellant No. 1 and from ousting, black listing, coercing or pressurising the appellant No. 1 from the business of deal ing with all kinds of lubricants supplied by the respondent company to have and to continue to supply all kinds of lubricants to the appellant firm as was done in the past and for the maintenance of status quo existing on the 27th May, 1953 and for payment of necessary damages for the period from 28th May, 1983 till the date of the filing of the writ petition before the High Court or till the decision of the writ petition.
The appellant No. 1, herein referred to as the firm, is a partnership firm duly registered with the Registrar of Firms, Delhi.
The said firm had been carrying on the distri bution and sale of all kinds of lubricants and was regis tered under Sales Tax Act vide Registration No. 1636 dated 22nd October, 195 1 and has a goodwill of its own, according to the said appellants, in the entire region of Northern India with expertise and knowledge in the distribution and sale of all kinds of lubricants.
The appellants contend that in the past 32 years the appellant firm had acquired a very good reputation and has earned enviable goodwill in the trade.
As stated hereinbefore, the respondent company is a statutory body incorporated under the Indian and have been dealing throughout with the appellant firm since 1965 when the firm became, according to the appellants, its distributor.
The appellants claim that the said firm had been appointed as Lube Distributor and the appellant firm have been given the Permanent Customer Code No. 63 01 3115 1022 9 X, according to the appellant.
The appellants contend that this was done in due course.
It is the further case of the appellants that the lubricants were released by the respondent company to the said appellant firm on 25th January, 1965 by Invoice No. 146668 and there after the firm had promoted the sales of the products of the company successfully inasmuch as from February, 1965 to 27th May, 1983 and the firm had received and uplifted the supply of lubricants/goods each year and the total quantity of lubricants/goods such lifted had gone up to the extent of 1, 11,34,854 litres or kgs.
The appellants claimed that the said firm is one of the respondent company 's Lube Distribu tor in Northern India.
It was the case of the appellants before the High Court and also before this Court that the said firm had been carrying on business as the Lube distrib utor of the respondent company and had been selling all kinds of lubricants.
The appellants contend that the re spondent company had recognised the appellant firm during all this period as authorised dealer and a distributor and an agent.
822 It was the case of the appellants before the High Court and they had tried to demonstrate with reference to the various documents, annexures etc.
filed by them that the firm had been always carrying business as Lube Distributor of the Company, and has been selling all kinds of lubri cants.
The appellants further contended that the Company had recognised the firm during all this period as authorised dealer, distributor and agent.
Certain letters were written by the company directing various customers to contact the firm as an authorised Lube Distributor.
This contention was stated before the High Court as well as before us.
It iS stated that annexures A 2 to A 14 were copies of letters written by the company directing various customers to con tact the firm as an authorised Lube Distributor.
Annexure A 15 is an advertisement issued in a specially published souvenir on the occasion of All India Highway Motor Rally held in 1972 sponsored by the Company in which the firm was referred to as the Company 's authorised Lube Distributor.
Annexures A 16 to A 35 are copies of the letters written by the Company to the appellants in relation to the dealing of the appellants as Lube Distributor.
There are several other documents on which reliance was placed on behalf of the appellants.
The firm was treated as authorised dealer and agent of the respondentcompany.
It was contended that there was a change of policy by the respondent company, and cer tain documents of the year 1972 were relied upon to indicate that the supply of lubricants was stopped to those Associa tions and Dealers to whom ad hoc supplies were given, who were merely re sellers, traders and who did not have written contracts with the Company.
That was the case of the appel lant 's firm.
However, the appellants asserted, that the supply was continued to the appellant firm being a dealer and distributor of the Company.
Reliance was placed on Annexures P 28 to P 34 which are the Product Indent cum Delivery Orders for various periods issued by the Company to the firm.
It is stated that in the said Product Indent cumDelivery Order there was a note indicating "For Condi tions of Supply Please Turnover . . ".
However, in the copies filed with the rejoinder affidavit, there are no terms on the reverse side of the Product Indent cum Delivery Order.
Although the firm has been receiving continuous supply of lubricants from the Company, it was suddenly stopped on 27th May, 1983 by the Company, and it was con tended that such an action of the Company will have the effect of black listing the firm and is arbitrary and against the principles of natural justice besides being hit by the doctrine of promissory estoppel.
The appellant firm, it was contended, had made representations against the aforesaid action of the respondent company but to no use.
In that background the reliefs mentioned here in before were sought from the High Court 823 in the application filed under article 226 of the Constitu tion.
The respondent company had raised various objections to the maintainability of the Writ Petition, namely, inter alia, that the Company was not State within the meaning of Article 12 of the Constitution as the Company is registered under the , the Writ Petition was not maintainable as no writ to enforce alleged supply, according to the respondent company, was maintainable and the appro priate remedy for the appellants was to claim damages for breach of contract or relief for specific performance of contract, if any.
It was submitted, further, that the firm had not any contract and was seeking to rely on an irregular course of conduct and on an ad hoc arrangement which the company cannot perpetuate in view of the prevailing guide lines and/or directions received from the Ministry of Energy in the Department of Petroleum.
Where in fact there was an actual written agreement the Company 's contractual relation ship with its distributors was also capable of termination forthwith and was only subject to the normal contractual laws and decisions in the realm of contract could not be the subject matter of proceedings under article 226 of the Constitution, it was submitted.
The appellants case, it was urged by the responde it company, was at much lower footing.
The Company however deaied that the firm had even been black listed and it had never acted in a mala fide, or capricious or arbitrary manner or on any extraneous, or oblique or irrelevant consideration.
There was no commit ment, it was suggested, to supply a fixed quantity regular ly, made to the appellant firm at any stage.
It appears that the procedure adopted for the supply of lube oil products was that the party requiring supply would write a letter to the Company 'whereupon the Divisional Office through the Lube section would process the same and would intimate as to how much supply was possible.
Thereupon the requisition slip would be processed and a delivery challan/order would be made out.
The conditions of the Proluct Indent cum Delivery Order, inter alia, categorically provided that "IOC also reserves the right to cancel your order without any intimation or assigning any reason".
It further provided that "IOC took no responsibility of des patches/releases of stocks shall be on the basis of avail ability of stocks.
" There was no other contract in the facts and circumstances of the case, it was urged.
The letters making the requisitions, the Product Indent cum Delivery Orders, the Delivery Challans as also the payment are the only documents constituting the dealing or transactions between the parties.
The Company had categorically reserved its right to refuse and/or cancel the orders with 824 out any intimation or assigning any reason and it was per fectly within its fight to discontinue the said arrangement.
Several obligations have been provided under the arrangement including, inter alia, price controls, minimum off take of stocks, safeguards against contamination, fight to the inspection and/or unrestricted access, right of account etc.
It was asserted ' that even under the contractual transaction as entered into with the Associated Trading Company, the respondent company had fight of termination forthwith for any reason whatsoever and the Company 's fight to terminate was not lettered by the doctrine of reasonableness or doc trine of natural justice and rights of hearing etc.
as sought to be put forward on behalf of the appellants.
It is, therefore, suggested that what was not even contractually recognised should not be artifically given higher status, in the facts and circumstances of the case, as the appellants were seeking to invoke the fight flowing from an utter irregularity specially when the company had been made publi cally accountable especially when the Company does not act unless through a written contract as also when only autho rised.
It was further the case of the respondent that the company was subjected to distribution policies and guide lines of the Department of Petroleum in the Ministry of Energy, Government of India.
They are also bound by the directives to the effect that lubricants are to be sold only to consumers, to those parties who will not sell directly or indirectly to foreign oil companies and no sale should take place to old agents or distributor of foreign oil companies.
All sales of lubricants must take place to actual consumers or to such small parties who will sell actually to consumers and not to foreign oil company.
Besides this, the Ministry of Energy by the letter beating reference No. P 17011/7/82 SUP dated 21st December, 1982 under policy number 201 had communicated to all oil companies that no new distributor was to be appointed for distribution of lubricating oils and there is a ban on such appointments.
In the facts and the circumstances of the case the Company was, thus, according to the respondent, prevented by the directive/instruction/guidelines of the Ministry of Energy to appoint new dealers and distributors or to formalise any agreement constituting the dealership or distributorship.
In fact, right since 1972, 24 parties who had ad hoc arrange ment of supply of lube oils were discontinued, according to the respondent.
There was no assurance, whatsoever, nor any promise nor any contract or nor any prescribed schedule to supply any quantity of lubricants, as alleged, to the appel lant or to anybody else.
It was further asserted in the present case that in view of the ban imposed, no fresh distributors could be appointed nor the oil companies empow ered to regularise and contract afresh for 825 dealers/distributors in lubricant oils.
It was further the case of the respondent that the customer code number is given to authorised distributors/dealers only.
The position was explained that the mode and manner of computerisation of accounts set out in Annexure P 25 and the allotment of customer code number is only for the purpose of identifica tion and not for any other purpose nor to designate the firm as an authorised Lube distributor.
The Company had denied that the Code 01 was allotted only to dealers/agents as alleged.
The Code 01 was applicable to all re sellers, where a further sale is a necessary concommitment of the first sale.
Certain particulars were given how 01 is given and it was stated in the case of four parties the partnership was terminated because of the new policy.
The High Court after exhaustively dealing with the rival contentions came to the conclusion that viewed from diverse angles, the appellants had sought the specific performance of certain alleged contract.
It was also held that the said alleged contract was neither precise, nor definite nor certain nor was capable of being made certain.
It was not certain, in this case, as to how much goods were required and for how long were these required and at what considera tion, these were all uncertain and vague, it was submitted.
It was held by the High Court that for a Writ of mandamus the appellants should have a legal right to enforce the performance of alleged duty by the respondent and since no right was shown to exist by the appellants for selling the continuous supply of the lubricants whatsoever indefinitely for future and no corresponding legal duty was imposed on the respondent to supply, the Writ of mandamus was not maintainable.
In those circumstances the Writ Application was dismissed as not maintainable.
Aggrieved thereby the appellants have come up to this Court, as mentioned hereinbefore.
We have heard learned counsel Dr. L.M. Singhvi as well as Mr. Salve exhaustively.
Further affidavits were filed and documents produced before us.
It was sought to be urged by Dr. Singhvi that the respondent was an instrumentality of State and as such the question involved was whether an instrumentality of State can suddenly, arbitrarily, unrea sonably, without any relevant factors and without any notice and determination or proceeding stop supplies of products which, according to him, had been supplied more than 1 crore 11 lacs litres/kg of product continuously and uninterrupted ly over a period of more than 18 years.
Dr. Singhvi suggest ed that the respondent IOC is an instrumentality of State under Article 12 of the Constitution.
From 826 the nature of the business carried on by the appellants, it was manifest to us that the supply of the lubricants of the type with which the respondent had a monopoly, could be carried on by the appellants only as the supplier from the reSpondent.
That business was not possible otherwise.
The respondent had monopoly in that respect.
This aspect is important.
The respondent firm was supplying from 1965 to 1983 large quantities of lubricant oil and from 1983 onwards till 1989 supplies were continued on the interim order of the High Court of Delhi.
Supplies were stopped suddenly on 27th May, 1983.
There is no dispute that no intimation was given, no notice was given, no query or clarification sought for and there was no adjudication as such.
It was held that the appellant firm was not entitled to supply, the stoppage of supply in May 1983 was, therefore, bad.
The appellant further contended that the case of the respondent company IOC was never made known or revealed prior to the Counter Affidavit in the High Court of the appellants.
The conten tion urged on behalf of the appellants was that this is patent violation of all canons of natural justice, fair play and reasonableness.
It is submitted that natural justice and reasonableness of the procedure are enshrined under Article 14 of the Constitution.
It is well settled that every action of the State or an instrumentality of the State in exercise of its executive power, must be informed by reason.
In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Con stitution.
Reliance in this connection may be placed on the observations of this Court in M/s Radha Krishna Agarwal & Ors.
vs State of Bihar & Ors., appears to us, at the outset, that in the facts and circumstances of the case, the respondent company IOC is an organ of the State or an instrumentality of the State as contemplated under Article 12 of the Constitution.
The State acts in its executive power under Article 298 of the Constitution in entering or not entering in contracts with individual par ties.
Article 14 of the Constitution would be applicable to those exercises of power.
Therefore, the action of State organ under Article 14 can be checked.
See M/s Radha Krishna Agarwal vs State of Bihar, (supra) at p. 462, but Article 14 of the Constitution cannot and has not been construed as a charter for judicial review of State action after the con tract has been entered into, to call upon the State to account for its actions in its manifold activities by stat ing reasons for such actions.
In a situation of this nature certain activities of the respondent company which consti tuted State under Article 12 of the Constitution may be in certain circumstances subject to Article 14 of the Constitu tion in entering or not entering into contracts and must be reasonable and taken 827 only upon lawful and relevant consideration, it depends upon facts and circumstances of a particular transaction whether heating is necessary and reasons have to be stated.
In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest.
Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down.
Every action of the State executive authority must be subject to rule of law and must be informed by reason.
So, whatever be the activity of the public authority, in such monopoly or semi monopoly dealings, it should meet the test of Article 14 of the Constitution.
If a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unrea sonable.
In this connection reference may be made to E.P. Royappa vs State of Tamil Nadu & Anr., ; ; Maneka Gandhi vs Union of India & Anr., ; ; Ajay Hasia & Ors.
vs Khalid Mujib Sehravardi & Ors., ; ; R.D. Shetry vs International Airport Authority of India & Ors., ; and also Dwarkadas Marlaria and sons vs Board of Trustees of the Port of Bombay; , It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one.
Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non discrimination in the type of the transactions and nature of the dealing as in the present case.
The existence of the power of judicial review however depends upon the nature and right involved in the facts and circumstances of the particular case.
It is well settled that there can be "malice in law".
Existence of such "malice in law" is part of the critical apparatus of a particular action in administrative law.
Indeed "malice in law" is part the dimension of the rule of relevance and reason as well as the rule of fair play in action.
It was submitted that the respondent had continuously, uninterruptedly, consistently and repeatedly dealt with the appellant and recognised the appellant, and had treated it as a dealer.
On that 828 basis the appellants and his family had acted for 19 years.
To substantiate these assertions, certain documents and samples were referred to by the appellants.
Our attention was drawn to large number of invoices, cash memos and to the customer code No. 013115 allotted to the appellant.
It was submitted that the prefix 01 applied only to dealers, dis tributors etc.
The defence of the respondent was the absence of written contract which was the standard form and not appointment letters.
The appellant contended that the appel lants were selling IOC products without written contract.
It was further asserted that the IOC has sought to change its stand and say that it does not deal with person without contract but according to the appellants, has issued letters of appointment to some of them and these persons, according to the appellants, sell lubes.
It was submitted that this change of stand was an afterthought.
It was further stated that letters, in some cases, cannot lead to an exclusion of all others to whom letters of appointment had not been issued.
It is submitted that in the fairness IOC could have and should have issued such letter of appointment to appel lant No. 1 also and should have considered the case of the appellant firm.
It was submitted that IOC has always treated lube and non lube products on the same basis, without dis tinction.
This distinction which was sought to be urged before us, it was submitted, was an after thought and not justified.
The appellant contended that the IOC 's purported reliance upon the guidelines, was not justified.
Further more, the guidelines were not mandatory or binding.
These use directory words like "may".
More importantly, these exclude all those who are part of the existing network and apply for fresh appointment of new distributors.
The appel lant was part of the existing network and was not to be inducted as a new distributor and the appellant firm falls within the existing network and has always been so treated continuously and uninterruptedly from 1965 to 1983, it was the case of the appellants.
It was contended that the appel lant firm was entitled to relief, inter alia, on grounds of promissory estoppels, unreasonable and arbitrary exclusion, and discriminatory treatment under Article 14 of the Consti tution.
Mr. Salve on behalf of the appellants sought to urge that the appellant firm had never been appointed as a Lube Distributor.
There is no letter of intent, letter of ap pointment, much less letter at all.
Ad hoc supplies of Lube products alone had been made to the appellant from 1965 onwards.
The procedure adopted for the supply of lube products was that the appellant would write a letter to the company whereupon the Divisional Office, Lube Section would process the same.
The policy decision in December, 1982 indicated that no new 829 Distributor for Lube products would be appointed and no new products would be distributed either through the existing net work, of existing Lube Distributors or to authorised dealers of other products such as, petrol, SKO, LDO and HSD.
It was submitted that as a result of the policy it was not the appellant alone to whom the supplies were discontinued.
There was similar discontinuance of supplies to 24 other parties whose names were given in the counter affidavit.
Mr. Salve submitted that in private law field there was no scope for applying the doctrine of arbitrariness or mala fides.
The validity of the action of the parties have to be tested, it was urged on behalf of the respondent, on the basis of "right" and not "power".
A plea of arbitrariness/mala fides as being so gross cannot shift a matter tailing in private law field to public law field.
According to Mr. Salve to permit the same would result in anomalous situation that whenever State is involved it would always be public law field, this would mean all redress against the State would fall in the Writ Jurisdiction and not in suits before Civil Courts.
We are of the opinion that in all such cases whether public law or private law rights are involved, depends upon the facts and circumstances of the case.
The dichotomy between rights and remedies cannot be obliterated by any straight jacket formula.
It has to be examined in each particular case.
Mr. Salve sought to urge that there are certain cases under Article 14 of arbitrary exercise of such "power" and not cases of exercise of a "right" arising either under a contract or under a Statute.
We are of the opinion that that would depend upon the factual matrix.
Having considered the facts and circumstances of the case and the nature of the contentions and the dealings between the parties and in view of the present state of law, we are of the opinion that decision of the State/public authority under Article 298 of the Constitution, is an administrative decision and can be impeached on the ground that the decision is arbitrary or violative of Article 14 of the Constitution of India on any of the grounds available in public law field.
It appears to us that in respect of Corpo ration like IOC when without informing the parties con cerned, as in the case of the appellant firm herein on alleged change of policy and on that basis action to seek to bring to an end the course of transaction over 18 years involving large amounts of money is not fair action, espe cially in view of the monopolistic nature of the power of the respondent in this field.
Therefore, it is necessary to reiterate that even in the field of public law, the relevant persons 830 concerned or to be affected, should be taken into confi dence.
Whether and in what circumstances that confidence should be taken into consideration cannot be laid down on any straight jacket basis.
It depends on the nature of the fight involved and nature of the power sought to be exer cised in a particular situation.
It is true that there is discrimination between power and fight but whether the State or the instrumentality of a State has the right to functign in public field or private field is a matter which,in our opinion, depends upon the facts and circumstances of the situation, but such exercise Of power cannot be dealt with by the State or the instrumentality of the State without informing and taking into confidence, the party whose fights and powers affected or sought to be affected, into confi dence.
In such situations most often people feel aggrieved by exclusion of knowledge if not being taken into confi dence.
Such transaction should continue as an administrative decision with the organ of the State.
It may be contractual or statutory but in a situation of transaction between the parties for nearly two decades, such procedure should be followed which will be reasonable, fair and just, that is, the process which normally be accepted to be followed by an organ of the State and that process must be conscious and all those affected should be taken into confidence.
Having regard to the nature of the transaction, we are of the opinion that it would be appropriate to state that in cases where the instrumentality of the state enters the contractual field, it should be governed by the incidence of the contract.
It is true that it may not be necessary to give reasons but, in our opinion, in the field of this nature fairness must be there to the parties concerned, and having regard to the large number or the long period and the nature of the dealings between the parties, the appellant should have been taken into confidence.
Equality and fair ness at least demands this much from an instrumentality of the State dealing with a right of the State not to treat the contract as subsisting.
We must, however, evolve such proc ess which will work.
Therefore, we direct that the case of the respondent be put to the appellants, and let the respondent authorities consider afresh the submissions made by the appellant firm, namely, that the existing arrangement amounts to a contract by which the distributorship was continued in case of the appellant firm without any formal contract and further that the new policy of the Government introduced in December, 1982 would not cover the appellant firm and as such the 831 appellant should continue.
It will be sufficient, having regard to the nature of the claims, for the respondent authority to consider this aspect after taking the appellant firm into confidence on this aspect.
Nothing further need be stated or required to be done and we give no 'directions as to whether reasons should be recorded or hereinafter should be given.
In the facts and circumstances, it is not neces sary to give oral hearing or record the reasons as such for the decision.
The decision should be based on fair play, equity and consideration by an institution like IOC.
It must act fairly.
We direct accordingly that the present arrangement to continue until the respondent company gives the considera tion on the lines indicated above and makes the decision.
It is not our decision which is important but a decision on the above basis should be arrived at which should be fair, just and reasonable and consistent with good govern ment which will be arrived at fairly and should be taken after taking the persons concerned whose rights/obligations are affected, into confidence.
Fairness in such action should be perceptible, if not transparent.
The Judgment and the Order of the High Court are, there fore, set aside and the direction and order as aforesaid are substituted and the application made to the High Court is disposed of on the aforesaid terms.
In the facts and circum stances of the case, there will be no order as to costs.
Y. Lal Appeal al lowed.
| IN-Abs | The appellant firm had been carrying on the business of distribution and sale of all kinds of lubricants received from the respondent, a statutory corporation, since 1965.
It is the case of the appellant that it acted as Lube distribu tor of the respondent corporation and that it had been given the Customer No. during the course of business.
The appel lant claimed that from Feb. 1965 to 27th May, 1983, it had received and uplifted the supply of lubricants/goods each year and the total quantity, of lubricants/goods thus lifted had gone upto the extent of 1,11,34854 litres or kgs.
The respondent suddenly stopped the supply of lubricants to the appellant firm on 27.5.1983.
The appellant firm made several representations to the respondent against the aforesaid action of the respondent but to no use.
The appellant there upon filed a writ petition in the High Court praying for a writ of mandamns directing the respondent to desist from denying or discontinuing the supply of lubricants and there by save the appellant from being ousted from the business; claim for damages from the date the supply was discontinued was also made.
Before the High Court, it was inter alia contended by the appellant that the correspondent that passed between the appellant and respondent and the invoices issued during the long years of business would show that the respondent always treated the appellant as its agent and distributor; sudden stoppage of supply violated the principles of natural jus tice.
It therefore sought the specific performance of the alleged contract.
The respondent on the other hand ques tioned the maintainability of the petition as according to it the respondent was not 'State ' within the meaning of article 12 of the Constitution.
It further averred that there was no concluded contract by the respondent with the appel lant and that the work continued under an adhoc arrangement; that the policies of the respondent were governed by the guidelines/directions issued to it from time to time by the Ministry of 819 Petroleum whereunder it was no longer possible to give further supplies to the appellant firm.
After considering the rival contentions advanced by the parties the High Court, dismissed the writ petition.
The appellant has filed this appeal with special leave.
Allowing and disposing of the appeal with directions, this Court, HELD: Every action of the State or of an instrumentality of the State in exercise of its executive power, must be informed by reason.
In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution.
[826D] The respondent company Indian Oil Corporation is an organ of the 'State ' or an 'instrumentality of the State ' as contemplated under Article 12 of the Constitution.
[826F] The State acts in its executive power under Article 298 of the Constitution in entering or not entering in contracts with individual parties.
Article 14 of the Constitution would be applicable to those exercises of power.
Therefore, the action of the State organ under Article 14 can be checked.
[826F] Rule of reason and rule against arbitrariness and dis crimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situa tion like as in the instant case.
Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance, and reasonableness, fair play natural justice, equality and non discrimination in the type of the transactions and nature of the dealing as in the instant case.
[827E F] The dichotomy between rights and remedies cannot be obliterated by any straight jacket formule.
It has to be examined in each particular case.
[829D] Decision of the State/Public authority under Article 298 of the Constitution, is an administrative decision and can be impeached on the ground that the decision is arbitrary or violative of Article 14 of the 820 Constitution or on any of the grounds available in public law field.
It appears to us that in respect of Corporation like Indian Oil Corporation when without informing the parties concerned, as in the case of the appellant firm on alleged change of policy and on that basis action to seek to bring to an end the course of transaction over 18 years involving large amounts of money is not fair action, espe cially in view of the monopolistic nature of the power of the respondent in this field.
[829F G] E.P. Royappa vs State of Tamil Nadu and Anr.
, ; ; Maneka Gandhi vs Union of India and Anr., [1978] 1 SCC 248; Ajay Nasia and Ors.
vs Khalid Mujib Sehravardi and Ors., ; ; A.D. Shetty vs International Airport Authority of India and Ors., ; and Dwarkadas Mariatia and Ors.
vs Board of Trustees of the Port of Bom bay; , , referred to.
|
Writ Petition (Criminal) No. 468 of 1989.
(Under Article 32 of the Constitution of India.) R.K.Garg, K. Subramaniam, E.C. Agarwala, Ms. Purnima Bhatt, Mr. V.K. Pandita, A.V. Pillai and Atul Sharma for the petitioner.
K. Alagiriswamy, Adv.
General of Tamil Nadu, N. Natara jan, G. Krishnamurthy, V. Krishnamurthy and K. Rajendra Choudhury for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This petition under Article 32 of the Consti tution of India, by Mrs. P. Devaki wife of the detenu R. Thamaraikani, challenges the validity of her husband 's detention under the order of the Collector and District Magistrate of Kamarajar District Virudhunagar, Tamii Nadu dated 15.8.
1989 issued under Section 3(1) of the Tamil Nadu Prevention of Dangerous Activities of Bootleggers, Drugof fenders, Forest offenders, Immoral Traffic Offenders and Slum Grabbers Act, 1982 (Tamii Nadu Act 14 of 1982) (as amended by Act 52 of 1986 and Act 1 of 1988) (hereinafter referred to as 'the Act ').
After heating arguments of the learned counsel for the parties at length, we allowed the petition on 10.11.
1989 and issued directions for the release of the detenu forth with.
We are now giving the reasons for our Order dated 10.11.
The detenu R. Thamaraikani is a member of the All India Anna Dravida Munnetra Kazhagam Party, briefly described as AIDMK.
He has been an active social and political worker.
He was elected Member of the Tamil Nadu Legislative Assembly from Srivilliputhur Constituency in the General Elections held in 1977, 1980 and 1984.
In the General Elections held in January 1989 to the Tamil Nadu Legislative Assembly, he was defeated by the Dravida Munnetra Kazhagam Party candi date.
He continues to be Joint Secretary of the AIDMK Party for Kamrajar District in Tamil Nadu and he has been taking active part in social and political activities in the Dis trict of Kamrajar.
The petitioner has stated that there has been personal and political animosity between the detenu and Thiru Durai Murugan, Minister for Public Works and Highways in the present DMK Government.
The District 839 Magistrate issued the impugned order for the detention of her husband at the behest of Thiru Durai Murugan, the afore said Minister, respondent No. 3.
The petitioner has referred to a number of incidents and to the proceedings of the Tamil Nadu Legislative Assembly in support of her submission that there was political and personal animosity between the aforesaid Minister and her husband and the order of deten tion was made mala fide at the instance of the Minister, respondent No. 3.
The facts leading to the making of the impugned deten tion order are necessary to be noted.
On 29.7.1989 a Seminar on Irrigation was ' held at Virudhunagar at the Dry Chilly Merchants ' Association Kalai Arangam, Aruppukkotai Road, which was attended by Thiru Durai Murugan and by Pon.
Muthu ramulingam, Minister of Labour and District Magistrate, Kamarajan and other important personalities.
A number of political and social workers and agriculturists attended the Seminar.
According to the petitioner the detenu was invited to attend the Seminar although it is denied by the respond ents but there is no dispute that the detenu was present in the hall where the Seminar was held.
The petitioner has asserted that the detenu wanted opportunity to address the gathering for placing the grievances of the local people before the gathering but he was not permitted to do so.
He insisted for placing the grievances of his Party before the audience whereupon he was forcibly removed away by the Police and later a false criminal case was registered against him under Sections 147, 148, 307 read with Section 149 of the Indian Penal Code and Section 27 of the Indian Arms Act at the Virudhunagar East Police Station.
These allegations have been denied by the respondents.
According to the respondents the detenu was not invited, even then he entered the hall where seminar was being held alongwith a number of persons and created disorderly scene in the hall which disturbed the Seminar.
He threw a knife towards the Minister respondent No. 3, with an intention to kill him but he missed the target, later on, he was over powered by the Police.
The violent activities of the detenu and his men caused panick in the hall, the audience raised alarm and ran outside the auditorium and outside the hail also people got scared, they ran helter skelter, causing obstruction to traffic.
The proceedings of the Seminar came to an abrupt halt for a while.
The detenu was taken into Custody and he was enlarged on bail by the Sessions Judge on 3.8.1989.
Thereafter the District Magistrate and Collector Kamarajan, respondent No. 2, issued the impugned detention order after 17 days of the aforesaid incident under Section 3(1) of the Act, as he was satisfied that it was necessary to detain the detenu under the Act with a view to prevent him from 840 acting in any manner prejudicial to the maintenance of public order.
Pursuant to the aforesaid order of the Dis trict Magistrate the detenu was kept in detention.
Mr. R.K. Garg learned counsel for the petitioner as sailed the validity of the detention order on two grounds.
Firstly, he urged that the order of detention was illegal since it did not specify the period of detention.
Secondly, the sole ground of detention has no relevance to the mainte nance of 'public order ' as the facts set out in the grounds do not make out any case of violation of public order, at best, it may be a case of law and order only.
This petition was heard by a Division Bench consisting of two learned Judges of this Court.
After hearing counsel for the parties at length the leaned Judges referred the matter to a three Judges ' Bench, in view of the conflict of decisions of this Court in Commissioner of Police & Anr.
vs Gurbux Anandram Biryani, [1988] Supp.
SCC 568 and Ashok Kumar vs Delhi Administration and Ors., on the question of validity of detention order on its failure to specify period of detention.
That is how the petition was heard by this Bench.
The first contention is rounded on the provisions of Section 3 of the Act which read as under: "3. Power to make orders detaining certain persons (1) The State Government may, if satisfied with respect to any bootlegger or drng offender (or forest offender) or goonda or immoral traffic offender or slum grabber that with a view to prevent him from acting in any manner prejudicial to the maintenance of public order, it is necessary so to do, make an order directing that such person be detained.
(2) If, having regard to the circumstances prevailing, or likely to prevail in any area within the local limits of the jurisdiction of a District Magistrate or a Commissioner of Police, the State government are satisfied that it is neces sary so to do, they may, by order in writing, direct that during such period as may be specified in the order, such District Magistrate or Commissioner of Police may also, if satisfied as provided in sub section (1), exercise the powers conferred by the said sub section: 841 Provided that the period specified in the order made by the State Government under this sub section shall not, in the first instance, exceed three months, but the State Government may, if satisfied as aforesaid that it is necessary so to do, amend such order to extend such period from time to time by any period not exceeding three months at any one time.
(3) When any order is made under this section by an officer mentioned in sub section (2), he shall forthwith report the fact to the State Government together with the grounds on which the order has been made and such other particulars as, in his opinion, have a bearing on the matter, and no such order shall ramain in force for more than twelve days after the making thereof, unless, in the meantime, it has been approved by the State Government." Placing reliance on Section 3(2) Mr. Garg urged that since the impugned detention order did not specify the period for which the detenu was required to be detained, the order was rendered illegal.
On an analysis of Section 3 of the Act as quoted above, we find no merit in the submission.
Section 3(1) confers power on the State Government to detain a bootlegger or drug offender, or forest offender or goonda or an offender in immoral traffic or a slum grabber with a view to prevent him from acting in any manner prejudicial to the maintenance of public order.
Section 3(2) empowers the State Government to delegate its power as conferred on it under sub section (1) to District Magistrate or a Commis sioner of Police, if it is satisfied that the circumstances prevailing, or likely to prevail in any area within the local limits of the jurisdiction of the District Magistrate or the Commissioner of Police, make it necessary to delegate the power to them.
It further provides that the order of delegation shall be in writing and it shall also specify the period during which the District Magistrate or the Commis sioner of Police, are authorised to exercise the powers of the State Government under sub section (1) of Section 3.
Proviso to sub section (2) lays down that the delegation should not be for an unlimited period, instead it should not be for a period of more than three months.
If the State Government is satisfied that it is necessary to extend the period of delegation it may amend its order, extending such period from time to time but at no time the extension shall be for a period of more than three months.
Once the State Government 's power under Section 3(1) is delegated to the District Magistrate or the 842 Commissioner of Police, they are authorised to exercise that power on the grounds, specified in Section 3(1) of the Act.
Neither sub section (1) nor sub section (2) of Section 3 of the Act require the detaining authority to specify the period of detention for which a detenu is to be kept under detention.
Section 3(3) requires that where detention is made by the delegate of the State Government, namely, the District Magistrate or the Commissioner of Police, they should report the fact to the State Government together with the grounds on which the order may have been made and such other partic ulars as, in their opinion, may have a bearing on the mat ter.
A detention order made by a District Magistrate or Commissioner of Police in exercise of their delegated au thority does not remain in force for more than twelve days after the making thereof, unless in the meantime the deten tion order is approved by the State Government.
Section 8 requires the detaining authority to communicate to the detenu, grounds on which, the order is made within five days from the date of detention to enable the detenu to make representation against the order to the State Government.
Section 10 requires the State Government to place before the Advisory Board the detention order and the grounds on which such order may have been made alongwith the representation made by the detenu as well as the report of the officers made under Section 3(3) of the Act within three weeks from the date of detention.
Under Section 11 the Advisory Board is required to consider the materials placed before it and after hearing the detenu, to submit its report to the State Government within seven weeks from the date of detention of the person concerned.
In a case where the Advisory Board forms opinion, that there was no sufficient cause for the detention the State Government shall revoke the detention order but if in its opinion sufficient cause was made out, the State Government may confirm the detention order and continue the detention of the person concerned for such period not exceeding the maximum period as specified in Section 13 of the Act.
Section 13 provides the maximum period for which a person can be detained in pursuance of any detention order made and confirmed under the Act.
Ac cording to this provision the maximum period of detention shall be twelve months from the date of detention.
The State Government has, however, power to revoke detention order at any time, it may think proper.
Provisions of the aforesaid Sections are inbuilt safe guards against the delays that may be caused in considering the representation.
If the time frame, as prescribed in the aforesaid provisions is not 843 adhered, the detention order is liable to be struck down and the detenu is entitled to freedom.
Once the order of deten tion is confirmed by the State Government, maximum period for which a detenu shall be detained can not exceed 12 months from the date of detention.
The Act nowhere requires the detaining authority to specify the period for which the detenu is required to be detained.
The expression "the State Government are satisfied that it is necessary so to do.
they may.
by order in writing direct that during such period as may be specified in the order" occurring in sub section (2) of Section 3 relates to the period for which the order of delegation issued by the State Government is to remain in force and it has no relevance to the period of detention.
The Legislature has taken care to entrust the power of detention to the State Government, as the detention without trial is a serious encroachment on the fundamental right of a citizen, it has taken further care to avoid a blanket delegation of power, to subordinate authorities for an indefinite period by providing that the delegation in the initial instance will not exceed for a period of three months and it shall be specified in the order of delegation.
But if the State Government on consideration of the situa tion finds it necessary, it may again delegate the power of detention to the aforesaid authorities from time to time but at no time the delegation shall be for a period of more than three months.
The period as mentioned in Section 3(2) of the Act refers to the period of delegation and it has no rele vance at all to the period for which a person may be de tained.
Since the Act does not require the detaining author ity to specify the period for which a detenu is required to be detained, order of detention is not rendered invalid or illegal in the absence of such specification.
Mr. R.K. Garg placed strong reliance on the decision of this Court in Gurbax Biryani 's case (supra) to support his submission.
In that case the detenu had been detained under the Maharashtra Prevention of Dangerous Activities of Slum lords, Bootleggers and Drug Offenders Act 55 of 1981.
The High Court quashed the detention order on the ground that the detenu had been released in criminal prosecution under Section 8(c) read with Section 21 of the and he had been released on bail, but that fact had not been placed before the de taining authority.
On appeal by special leave a Division Bench of this Court consisting of two Judges., dismissed the appeal without going into the merits of the case on the sole ground that the detention order was bad as the period of detention was not specified in the detention order.
The Court observed as under: 844 "The order is bad on another ground, namely, the period of detention has not been indicated by the detaining authority.
The scheme of this Act differs from the provisions contained in similar Acts by not prescribing a perioed of detention but as Section 3 of the Act indicates, there is an initial period of detention which can extend upto three months and that can be extended for periods of three months at a time.
It was open to the detaining authority to detain the detenu even for a period of lesser duration than three months.
That necessitated the period of detention to be specified and unless that was indicated in the order, the order would also be vitiated.
In scores of decisions this Court has been emphasising the necessity of strict compliance with the requirements of the preventive detention law; yet authori ties on whom the power is conferred have not been complying with the requirements and even if there be merit to support the order of detention, the procedural defects lead to quashing thereof as a result of which the purpose of the Act if frustrated and the suffering in the community does not abate.
" With great respect we do not agree with the view expressed by the learned Judges.
Section 3 of the Maharashtra Prevention of Dangerous Activities of Slumlords, Bootleggers and Drug offenders Act, 198 1 is identical in terms to Section 3 of the Tamil Nadu Act.
Section 3 of Maharashtra Act does not require the State Government, District Magistrate or a Commissioner of Police to specify period of detention in the order made by them for detaining any person with a view to preventing the detenu from acting in any manner prejudicial to the maintenance of public order.
Section 3(1) which confers power on the State Government to make order directing detention of a person, does not require the State Government to specify the period of detention.
Similarly, sub sections (2) or (3) of Section 3 do not require the District Magistrate or the Commissioner of Police to specify period of detention while exercising their powers under sub section (1) of Section 3.
The obser vations made in Gurbux Biryani 's case that the scheme of the Maharashtra Act was different from the provisions contained in other similar Acts and that Section 3 of the Act contem plated initial period of detention for three months at a time are not correct.
The scheme as contained in other Acts providing for the detention of a person without trial, is similar.
In this connection we have scrutinised, the Pre 845 ventive Detention Act, 1950, the Maintenance of Internal Security Act, COFEPOSA Act, National Security Act but in none of these Acts the detaining authority is required to specify the period of detention while making the order of detention against a person.
This Court has consistently taken the view that an order of detention is not rendered illegal merely because it does not specify the period of detention.
A Constitution Bench of this Court in Ujagar Singh vs The State of Punjab, while considering validity of detention order made under Section 3 of the held that non specification of any definite period in a detention order made under Section 3 of the Act was not a material omission rendering the order invalid.
In Suna Ullah Butt vs State of Jammu & Kashmir, ; validity of detention order made under Jammu and Kashmir Preventive Detention Act 1964 was under challenge on the ground that the State Government while confirming the detention order under Section 12 of the Act had failed to specify the period of detention.
The Court held that since the State Government had power to revoke or modify the detention order at any time before the completion of the maximum period prescribed under the Act, it was not necessary for the State Government to specify the period of detention.
In Suresh Bhojraj Chela ni vs State of Maharashtra, while consider ing the validity of the detention order made under Section 3(1) of the this Court rejected simi lar submission made on behalf of the detenu that order of detention was vitiated as the Government had failed to mention the period of detention while confirming the order of detention.
The Court held that the COFEPOSA Act did not require the detaining authority to mention the period of detention in the order of detention.
When no period is mentioned in an order, the implication is that the detention is for the maximum period prescribed under the Act.
In A.K. Roy V. Union of India & Ors., ; a Constitution Bench of this Court considered the validity of the National Security Act (65 of 1980), Chandrachud, CJ (as he then was) speaking for the Bench rejected the arguments made on behalf of the petitioner that the absence of provi sion requiring the detaining authority to provide for maxi mum period of detention was illegal.
The learned C J, ob served: "There is no substance in this grievance because, any law of preventive detention has to provide for the maximum 846 period of detention, just as any punitive law like the Penal Code has to provide for the maximum sentence which can be imposed for any offence.
We should have thought that it would have been wrong to fix a minimum period of detention, regardless of the nature and seriousness of the grounds of detention.
The fact that a person can be detained for the maximum period of 12 months does not place upon the detain ing authority the obligation to direct that he shall be detained for the maximum period.
The detaining authority can always exercise its discretion regarding the length of the period of detention.
It must also be mentioned that, under the proviso to Section 13, the appropriate Government has the power to revoke or modify the order of detention at any earlier point of time.
" On the basis of the above observations validity of a deten tion order passed under Section 3 of the National Security Act was challenged before this Court in Ashok Kumar vs Delhi Administration & Ors., on the ground that the Commissioner of Police, as well as the Administrator of Delhi Administration who confirmed the detention order failed to specify the period of detention while making the order of detention.
A three 'Judge 's Bench of this Court rejected the detention and upheld the validity of the deten tion order.
A.P. Sen, J. observed: "It is plain from a reading of Section 3 of the Act that there is no obvious fallacy underlying the submission that the detaining authority had the duty to specify the period of detention.
It will be noticed that sub section (1) of Section 3 stops with the words "make an order directing that such person be detained", and does not go further and pre scribe that the detaining authority shall also specify the period of detention.
Otherwise, there should have been the following words added at the end of this sub section "and shall specify the period of such detention".
What is true of subsection (1) of Section 3 is also true of sub section (2) thereof.
It is not permissible for the courts, by a process of judicial construction, to alter or vary the terms of a Section.
Under the scheme of the Act, the period of deten tion must necessarily vary according to the exigencies of each case i.e. the nature of the prejudicial activity com plained of.
It is not that the period of detention must in all circumstances extended to the maximum period of 12 847 months as laid down in Section 13 of the Act.
" It is thus clear that the view taken in Gurbux Biryani 's case on the interpretation of Section 3 of the Maharashtra Act is incorrect.
This Court has while considering the question of the validity of the detention order made under different Acts, consistently taken the view that it is not necessary for the detaining authority or the State Govern ment to specify the period of detention in the order.
In the absence of any period being specified in the order the detenu is required to be under detention for the maximum period prescribed under the Act, but it is always open to the State Government to modify or revoke the order even before the completion of the maximum period of detention.
We are, therefore, of the opinion that the impugned order of detention is not rendered illegal on account of the detain ing authority 's failure to specify period of detention in the order.
Mr. R.K. Garg then urged that the sole ground on which the detention order is rounded does not relate to mainte nance of public order, and it exhibits non application of mind by the detaining authority.
While considering this submission it is necessary to reproduce the detention order as well as the grounds in support thereof.
The detention order is as under: "DETENTION ORDER WHEREAS, I, Thiru T.S. Sridhar, IAS, Collector and District Magistrate, Kamarajar District, Virudhunagat, am satisfied with respect to the person known as Thiru Thama raikani son of Ramaswamy Nader, residing at Singammalpuram Street, Srivilliputhur Town and Taluk that with a view to preventing him from acting in any manner prejudicial to the maintenance of public order, it is necessary to make the following order.
Now therefore in exercise of the powers con ferred by sub section (1) of Section 3 of the Tamil Nadu Prevention of Dangerous Activities of Bootleggers, Drug Offenders, Forest Offenders, Goondas, Immoral Traffic Of fenders and Slum Grabbers Act 1982 (Tamil Nadu Act 14/82) read with orders issued by the Government in G.O. Ms. No. 230, Prohibition and Excise Department, dated 23.3.1985 and subsequently amended in G.O. Ms. No. 815, Home Prohibition and Excise Department dated 13.7.1989 848 under sub section (2) of Section 3 of the said Act, I hereby direct that the said Thiru R. Thamaraikani son of Ramasamy Nader be detained and kept in Central Prison, Madurai.
S/d Collector and District Magistrate, Kamarajan, District Virudhunagar.
" The ground of detention supplied to the detenu stated that the detenu was a habitual criminal, a goonda and his activi ty had come to adverse notice in some cases reference to which was made by referring to some FIRs lodged against the detenu at the Police Station.
But the incidents referred in those FIRs have not been made ground for detention instead facts stated in paragraphs 3, 4, 5 and 6 of the grounds constitute material on which the District Magistrate formed the requisite opinion under Section 3(1) of the Act in making the order of detention.
These are as under: "(3) The ground on which the said detention order has been made as follows: On 29.7.1989, the Kamarajar District Irrigation Seminar was held at "Dry Chilly Merchants ' Association Kalai Arangam" at Arupoukottai Road, Viruthunagar Town.
Hon 'ble Minister for P.W.D. Thiru Durai Murugan and Hon 'bIe Minister for Labour Thiru Pon.
Muthumalaingam attended the Seminar which was presided over by the District Collector.
At about 12.30 p.m. while the proceedings of the Seminar were on, suddenly there was a commotion in front of the dias.
Thiru Murali, Sub Inspector of Police, Vembakottai alongwith posse of men who were on bandobust duty there, rushed up Thiru R. Thamaraikani inducing his henchmen saying "Finish Durai Murgan 's chapter today".
The same time he (Thamaraikani) also threw a dagger aimed at Hon 'ble Minister Thiru Durai Murugan shouting "Finish Durai Murgans Chapter today".
But the dagger missed the target and fell down on the stage.
At once Thiru R. Thamaraikani took out a bottle containing petrol and a match box out of a hand bag which he carried in his hand.
Instantly Thiru Murali, Sub Inspector of Police, Vembakottai and the P.C. 168 Murugesan 849 pounched and caught hold of Thiru R. Thamaraikani.
The former seized the bottle and the match box.
At the instiga tion of Thiru R. Thamaraikani, his henchmen viz. Thiru Valargal Kenna, son of Thangaraj Nader of Kammapatti, Na reeswaran, son of Smaraj Nadar of Kammapatti, Kalipandian, son of Krishna son thevar of Mall and Nagarajan, on of Paramasive Thevar of Mangeseri who accompanied him also attempted to attack the Hon 'ble Minister for P.W.D., with knives in their hands.
H.C. 829 Thiru Subbiahm P.C. 231 Thiru Subbiah and P.C. 469 Thiru Manraj duly assisted by some agriculturists surrounded and overpowered them and seized their knives.
Seeing the violent activities of Thiru R. Thamaraikani and his men, the gathering in the hall panicked.
They raised an alarm and ran outside the auditori um and the crowd outside also got scared and ran helter skelter, causing obstruction to traffic along Aruppukottai Road.
The proceedings of the Seminar also came to an abrupt halt for a while.
The Sub Inspector of Police arrested Thiru R. Thamaraikani and his four associates at about 1300 hrs.
and brought them out with the help of the Deputy Superin tendent of Police, Virudhunagar and other Police Officials who were then on duty there.
On seeing this about 10 other henchmen of Thiru R. Thamaraikani who were waiting outside the auditorium escaped, leaving behined an Ambassador Car IDR 667 and a van TCM 7797.
On searching the car, the Sub Inspector of Police found legal weapons viz. 1 sword, 4 koduvals and also 4 torch sticks, the cloths of which were doused in kerosene.
The said two vehicles along with the lethal weapons, hand bag containing bottle with petrol.
Rs. 1000 match box, papers etc., were seized under an attachi at 1330 hrs.
Then the Sub Inspector of Police, handed over the accused persons and the properties seized under a special report at Virudhunagar East Police station.
A case was registered in Cr. No. 180/89 u/ss 147, 148, 307 read with 149 I.P.C. and 27 Indian Arms Act at the Virudhunagar East Police Station.
The Inspector of Police, Law and order, Virudhunagar Rural Circle took up the investigation.
On Production before the Judicial Magistrate Court No. 1, Thiru R. Thamaraikani was remanded to judicial custody in Central Prison, Madurai on 30.7.89 and released on bail with condi tion to stay at Madurai on 3.8.89.
The case properties were deposited in the Court.
The case is still under investiga tion.
850 (4) The offence u/s 307 IPC is punishable under Chapter XVI of the IPC.
By committing the above described grave offence in public, in broad day light, Thiru R. Thamaraikani has created a sense of alarm, scare and a feeling of insecurity in the minds of the public of the area and thereby acted in a manner prejudicial to the maintenance of public order.
His unlawful, disorderly and dangerous activities on 29.7.89 are prejudicial to the maintenance of public order and have affected the even tempo of life of the community.
(5) I am aware that Thiru R. Thamaraikani is now on bail with condition to stay at Madurai since 3.8.89.
1 am satis fied that his unlawful activities warrant his detention under the Tamil Nadu Act No. 14 of 1982.
(6) I am satisfied that on the materials mentioned above, if Thiru R. Thamaraikani is left to remain at large.
he will indulge in ' further activities prejudicial to the mainte nance of public order and further recourse to normal law would not have the desired effect of effectively preventing him from indulging in activities prejudicial to the mainte nance of public order and therefore I consider that it is necessary to detain him in custody with a view to preventing him from acting in any manner prejudicial to the maintenance of public order." In substance the ground of detention states that while a Seminar was going on the detenu incited his men saying "Finish Durai Murgan 's Chapter today" and after saying that he threw a dagger aiming at Thiru Durai Murgan, Minister but the dagger missed the target and fell down on the stage.
Thereafter, the detenu took out a bottle containing petrol and a matchbox out of a hand bag which he carried in his hand.
Meanwhile, the Sub Inspector of Police, caught hold of the detenu.
seized the bottle and the matchbox.
It is fur ther stated that the detenu and those who accompanied him attempted to attack the Minister with knives in their hands but they were overpowered by the Police and the members of police.
As a result of the incident those present in the hall panicked and got scared and ran helter skelter, causing obstruction to traffic on Aruppukottai Road.
The Seminar also came to an abrupt bald for a while.
paragraph 4 of the detention order further states that the detenu by committing the aforesaid grave offence in public, in broad day light created a sense of alarm, scare and a feeling of insecurity in the minds of the public of the 851 area and thereby he acted in a manner prejudicial to the maintenance of the public order.
His unlawful, disorderly and dangerous activities on 27.7.89 were prejudicial to the maintenance of public order which affected the even tempo of life of the community.
On the aforesaid facts, the District Magistrate was satisfied that if the detenu was left to remain at 'large he would indulge in further activities prejudicial to maintenance of public order and recourse to normal law would not have the desired effect of preventing him from indulging in activities prejudicial to the mainte nance of public order.
The question which falls for consideration is whether single incident of murderous assault by the detenu and his associates on the Minister at the Seminar held at Dry Chilly Merchants ' Association Kalai Arangam Hall was prejudical to the maintenance of public order.
Any disorderly behaviour of a person in the public or commission of a criminal offence is bound to some extent affect the peace prevailing in the locality and it may also affect law and order problem but the same need not affect maintenance of public order.
There is basic difference between law and order ' and 'public order ', this aspect has been considered by this Court in a number of decisions, see: Dr. Ram Manohar Lohia vs State of Bihar, ; ; Pushkar Mukherjee & Ors.
vs The State of West Bengal, ; and Shymal Chakra borty vs Commissioner of Police Calcutta & Anr., ; In these cases it was emphasised that an act dis turbing public order is directed against individuals which does not disturb the society to the extent of causing a general disturbance of public peace and tranquillity.
1t is the degree of disturbance and its effect upon the life of the community in the locality which determines the nature and character of breach of public order.
In Arun Ghosh vs State of West Bengal, the Court held that the question whether a man has only committed a breach of |aw and order, or has acted in a manner likely to cause disturbance of the public order, is a question of degree and the extent of the reach of the act upon the society.
This view was reiterated in Nagendra Nath Mondal vs State of West Bengal, ; ; Sudhir Kumar Saha vs Commissioner of Police, Calcutta, ; ; S.K. Kedar vs State of West Bengal, ; Kanu Biswas vs State of West Bengal, ; ; Kishori Mohan vs State of West Bengal, and Amiya Kumar Karmakar vs State of West Bengal, In the instant case the detenu was placed under deten tion on the sole incident which took place on 29.7.89 and in respect of which the 852 detenu is facing criminal trial before a court of law.
The alleged attempted murderous assault made by the detenu and his associates on Thiru Durai Murugan, Minister for Public Works Department may have been made on account of political rivalry.
In fact, in his affidavit Thiru Durai Murugan has admitted that in the past the detenu had misbehaved with him even on the floor of the Legislative Assembly of Tamii Nadu while participating in discussion.
The attempted assault took place in the hail of Dry Chily Merchants ' Association Kalai Arangam where two Ministers, a number of officials including the District Magistrate, as well as members of the public were present.
It is alleged that the attempted mur derous assault on Thiru Durai Murugan created scare and a feeling of insecurity in the minds of the persons present in the hail and the detenu 's action interrupted the "proceed ings of the Seminar for a while" (emphasis supplied).
This shows that the detenu 's activity disturbed the proceedings of the Seminar for a while but the Seminar appears to have continued later on.
The incident did not and could not affect public peace and tranquillity nor it had potential to create a sense of alarm and insecurity in the locality.
How could a single murderous assault on the Minister concerned at the Seminar could prejudicially affect the even tempo of the life of the community? No doubt in paragraph 4 of the grounds the detaining authority has stated that by commit ting this grave offence in public, in broad day light, the detenu created a sense of alarm, scare and a feeling of insecurity in the minds of the public of the area and there by acted in a manner prejudicial to the maintenance of public order which affected even tempo of life of the commu nity.
Repitition of these words in the ground are not suffi cient to inject the requisite degree of quality and potenti ality in the incident in question.
A solitary assault on one individual can hardly be said to disturb public peace or place public order in jeopardy somuch as to bring the case within the purview of the Act.
Such a solitary incident can only raise a law and order problem and no more.
Moreover, there is no material on record to show that the reach and potentiality of the aforesaid incident was so great as to disturb the normal life of the community in the locality or it disturbed general peace and tranquillity.
In the absence of such material it is not possible to hold that the inci dent at the seminar was prejudicial to the maintenance of public order.
In Manu Bhusan Roy Prodhan vs State of West Bengal & Ors., ; this Court held that a solitary assault on one individual, which may well be equat ed with an ordinary murder which is not an uncommon occur rence, can hardly be said to disturb public peace and its impact on the society as a whole cannot be considered to be so extensive, widespread and forceful as to disturb the normal life of the community, thereby 853 shaking the balanced tempo of the orderly life of the gener al public.
The Court held that the detention order which had been made for preventing the petitioner from acting in a manner prejudicial to the maintenance of public order, was not sustainable in law.
On a careful consideration of the matter in all its aspects and having regard to the circum stances in which the alleged incident took place on 29.7.89, we are of the opinion that the solitary incident as alleged in the ground of detention is not relevant for sustaining the order of detention for the purpose of preventing the petitioner from acting in a manner prejudicial to the main tenance of public order.
The detaining authority, namely, the District Magistrate of Kamarajan District who was admittedly present at the Seminar, has filed his own affidavit stating that he was sitting on the dias alongwith the Minister for Public Works Department Thus the incident which is the basis for deten tion of the detenu took place in the presence of the detain ing authority.
In his affidavit the District Magistrate has, however, stated that he made the detention order against the detenu on perusal of the materials, facts and documents placed before him by the police as he was satisfied that detenu 's detention was necessary for the purpose of mainte nance of public order.
He has denied the allegation that the detention order was passed by him under the influence of the Minister.
Since the District Magistrate was present on the dias alongwith the Minister and the alleged murderous as sault is alleged to have been made by the detenu in the presence of the detaining authority, one would expect him to have witnessed the occurrence himself.
But it is interesting to note that in paragraph 23 of his affidavit, the District Magistrate has stated that though he was present on the dias but did not witness the incident as he was concentrating on the proceedings of the Seminar and preparing replies to the querries raised by Speakers at the Seminar.
It is difficult to believe the District Magistrate that he could not see the occurrence although he was seated on the dias alongwith the Minister, on whom murderous assault was allegedly made by the detenu.
He is not ready to corroborate the occurrence as presented to him by the sponsoring authority, namely, the Police.
If the detaining authority was himself present and was an eye witness to the occurrence on the basis of which detention order was made, it was imperative for the detain ing authority to have honestly and bona fide formed the requisite opinion in making the order of detention on the basis of his own knowledge and perception instead of relying more on the version of the incident as placed before him by the sponsoring authority.
In a case where the detaining authority may not be present at the 854 place of the incident or the occurrence, he has to form the requisite opinion on the basis of materials placed before him by the sponsoring authority but where the detaining authority was himself present at the scene of occurrence he should have relied more on his own observation and knowledge than on the report of the sponsoring authority.
In the instant case the detaining authority though present at the scene of occurrence does not support the incident as pre sented to him by the sponsoring authority.
In the circum stances, we are of the opinion that there was non applica tion of mind by the detaining authority in making the im pugned order of detention.
In view of the above discussion the detention order is rendered illegal and it is accordingly quashed.
R.N.J. Petition allowed.
| IN-Abs | This petition under Article 32 of the Constitution of India was filed by the wife of the detenu challenging the validity of the Detention Order dated 15.8.1989 passed against her husband by the Collector and District Magistrate of Kamarajar District Virudhunagar, Tamil Nadu on allega tions inter alia that the District Magistrate had issued the impugned order for detention of her husband, who is an active member of the All India Anna Drayida Munnetra Kazha gam party, an active social and political worker and ex member of the Tamil Nadu Legislative Assembly, at the behest of Respondent No. 3 a Minister in the present DMK Govern ment, on account of personal and political animosity between the two.
Counsel for the Detenu urged two grounds to attack the order of detention.
Firstly that the order did not specify the period of detention, and secondly that the sole ground of detention as reflected in the Grounds of Detention has no relevance to the maintenance of 'Public Order ' as the facts mentioned therein donot make out any case of violation of public order.
At best, it may be a case of law and order only which exhibits non application of mind by the detaining authority.
837 Allowing the writ petition and quashing the impugned order of detention on the ground of non application of mind by the Detaining Authority in passing the Detention order, this Court, HELD: (1) Since the Act does not require the detaining authority to specify the period for which a detenu is re quired to be detained the order of detention is not rendered invalid or illegal in the absence of such specification in the Detention order.
[843E] Commissioner of Police & Anr.
vs Gurbux Anandram Birya ni, [1988] Supp.
SCC 568 Over ruled.
Ashok Kumar vs Delhi Administration & Ors., , Ujagar Singh vs The State of Punjab, ; Suna Ullah Butt vs State of Jammu & Kashmir, ; ; Suresh Bhojraj Chelani vs State of Maharashtra, and A.K. Roy vs Union of India & Ors., ; , approved.
(2) In a case where the detaining authority may not be present at the place of the incident or the occurrence, he has to form the requisite opinion on the basis of materials placed before him by the sponsoring authority but where the detaining authority was himself present at the scene of occurrence he should have relied more on his own knowledge and observation then on the report of the sponsoring author ity.
[853H; 854A] In the instant case, the detaining authority though present at the scene of occurrence does not support the incident as presented to him by the sponsoring authority, and yet he issued the detention order on the report of sponsoring authority.
In these circumstances, there was nonapplication of mind by the detaining authority in making the order of detention.
[854B] Dr. Ram Manohar Lohia vs State of Bihar, ; ; Pushkar Mukher]ee & Ors.
vs The State of West Bengal, ; ; Shyamal Chakraborty vs Commissioner of Police Calcutta & Anr., ; ; Arun Ghosh vs State of West Bengal, ; Nagendra Nath Mondal vs State of West Bengal, ; ; Sudhir Kumar Saha vs Commissioner of Police, Calcutta, ; ; S.K. Kedar vs State of West Bengal, ; Kanu Biswas vs State of West Bengal, ; ; Kishori Mohan vs State of West Bengal, ; Amiya Kumar Karmakar vs State of West Bengal, and Manu Bhusan Roy Prodhan vs State of West Bengal & Ors.
, ; , referred to. 838
|
ivil Appeal Nos.
1402 & 1401 of 1990.
From the Judgment and Order dated 22.5.
1987 of Delhi High Court in C.W.P. No. 2687 of 1986.
N.S. Hegde, Additional Solicitor General, K. Swamy and Ms. A. Subhashini for the Appellants.
G. Ramaswamy, Rajiv Sawnney, A.K. Verma, Sukumaran, V.B. Saharya and S.D. Sharma for the Respondents.
T.C. Bhatia (In person) for the Intervener.
PUNCHHI, J. Special leave granted.
These two appeals respectively are directed by the Union of India and the Delhi Development Authority (hereinafter referred to as the DDA) against the full bench decision and order of the Delhi High Court dated May 22, 1987 declaring and by necessary implication directing that the DDA carry out and implement its resolution number 26 dated February 1, 1983, which resolution was said to have been substituted by it by a later resolution number 3 dated August 1, 1986 reiterated by another resolution dated November 3, 1986.
These resolutions related to some affairs of the Delhi Cloth Mills Limited (hereinafter referred to as the DCM), the writ petitioner before the High Court, and the official reaction thereon.
Some of the essential facts as culled out from the judgment of the High Court, and others which have come by in the meantime, would be necessary to be noticed.
The Mill has a complex over an area of about 63 acres at sites at Bara Hindu Rao and Kishan Ganj at Delhi.
The Delhi Development Act, 1956 envisages preparation by the DDA of a Master Plan for Delhi, which it did, and was enforced and one of its attributes is to assign land use.
Bara Hindu Rao is a non conforming area and the industry of the kind in which the Mill is engaged in has to be shifted out to a conforming area.
6 12 acres of land near about Narela was said to have been ear marked for conformed use of factories.
The DCM in September 1982 approached the DDA and putforth its proposal for shifting the Mill and for re developing the Mill area for group housing and flatted factories.
On February 1, 1983 the DDA by resolution number 26 agreed to the scheme as propounded by DCM as feasible for implementation in phases.
But in passing it 954 recorded a fact that the shifting of the Mill would involve a lot of working population and consequently income and products manufactured by the DCM would carefully need to be looked into by the Delhi Administration and Ministry of Industries in terms of its affectation to the economy of Delhi.
On the other hand in September 1983 the DDA turned down the request of the DCM for allotment of an alternate site measuring 150 to 200 acres of land in a conforming area for shifting having regard to the kind of industry the DCM was engaged in.
The DCM then applied to the Secretary, Labour/Labour Commissioner, Delhi Administration for permis sion to close down the Mill under the provisions of Section 25(O) of the Industrial Disputes Act.
The reasons advanced by the DCM inter alia were that the Mill could not be kept located in a non conforming area as otherwise penal conse quences would follow as also that it had run into tremendous losses, the industry being unprofitable.
On April 15, 1985, the request of the DCM was turned down by the Secretary, Labour/Labour Commissioner.
In this state of affairs when the DCM had been given no place to shift to and the closure of the Mill had been declined, the DDA reviewed the situa tion and passed a fresh resolution No. 3 dated August 1, 1986 reviewing its earlier resolution dated February 1, 1983 recalling the grant of approval with regard to the scheme propounded by the DCM.
Further it felt justified in taking such step as the Master Plan was under process of review keeping the perspective of the year 200 1 AD in view.
The DDA even reiterated its resolution of August 1, 1986, by another resolution dated November 3, 1986 during the penden cy of the writ petition in the High Court when asked to have a fresh look into the matter.
These two later resolutions, as said before, were quashed by the High Court restoring the earlier resolutions dated February 1, 1983 taking a broader view that the mill could not be kept working in a non con forming area as otherwise it would attract penal action under the law after the lapse of three years from January 18, 1986, and that.
the DDA could not justify its action as even the proposals to modify the Master Plan with the perspective of year 2001 AD in view did not contain any proposal for change of land use of the site under the DCM, and as of original, it was a site marked for group housing and flatted factories.
The reasons advanced by the Secretary, Labour/Labour Commissioner declining request of the DCM for closure of the Mill under section 25(0) of the Industrial Disputes Act as recorded were as follows: "The closure of the unit is not in public interest as this 955 would render almost 6000 workers jobless and adversely affect thousands of their families members.
Besides, trade and commercial activity associated with this Mill would be adversely affected on account of the closure.
It is in public interest that the management makes all out efforts towards the efficient functioning of this Mill.
Finally, the operations of this unit are not dangerous to the lives of the Industrial workers and the people living around the factory.
The location of the Unit in a thickly populated locality therefore does not involve any community risk.
" The DCM filed Civil Writ No. 1281 of 1985 in the High Court which was allowed by a Full Bench of the High Court on March 1, 1989 ordering closure of the Mill, though much after the decision instantly appealed against.
The Lt. Governor, Delhi Administration sought special leave vide SLP (C) No. 3630 of 1989.
Another sequential petition SLP (C) No. 3369 of 1989 was preferred 'by the DCM against the order of the Full Bench of the High Court passed two days later on March 3, 1989 extending time for grant of permission by the Lt. Governor for closure of the factory till March 30, 1989.
When these matters were called in this Court along with the SLPs, now appeals, it transpired that the DCM and its employees, ranging about 6,000 in number, had fortunately reached an agreement in the matter of closure of the factory.
The High Court also had come to the conclusion that indisputably the location of the factory in Bara Hindu Rao, within the munic ipal limits of New Delhi was not congenial from the point of view of sanitation and was otherwise hazardous.
Keeping such finding and the settlement between the DCM and its employees in view, the Full Bench judgment of the High Court dated March, 1, 1989 was left uninterfered with dismissing the special leave petition No. 3630 of 1989 on March 27, 1989, with a consequential direction: "So far as the payment of statutory compensation which forms part of the agreement, we direct that DCM shall credit the amounts payable to the individual employees by opening an account with a nationalised bank as per the time schedule indicated in the agreement by making fixed deposits for an initial period of 91 days.
Payment into the account and making over the fixed deposit receipt, so far as the dis bursement of the statutory compensation is concerned, shall be taken to have been satisfied when such fixed deposit receipt is made over to the respective employees." 956 Sequelly SLP No. 3369 of 1989 preferred by the DCM was also dismissed on the same date.
What survived on March 27, 1989, were the instant two special leave petitions, now appeals, and during the course of their hearing Mr. Nariman appearing for DCM on his own indicated that DCM was prepared to locate a community centre and a hospital to serve the requirements of the employees as also the residents of the locality.
He further.submitted that notwithstanding the pendency of those two petitions, the Delhi Administration, should proceed to process the application of DCM for requisite permission for locating the proposed flatted factories and residential accommodation for officers and workmen in accordance with the Master Plan, subject to the result of these petitions.
In these circum stances, the Municipal Corporation of Delhi, which was not a party to these proceedings (though later represented by counsel), as well as the two petitioners, Union of India and the DDA were given directions to process the applications for permission and proceed with the same in accordance with law pending disposal of the special leave petitions.
This order was later clarified on April 10, 1989 to say that processing of the applications by the three aforementioned functionaries did not include making of a final order and no final order disposing of the applications be made until the special leave petitions are finally disposed of.
It was further directed that in the matter of processing, the Master Plan and the relevant law be kept in view.
The scope of these matters is now considerably reduced and easily discernible.
The factory has been ordered to be closed and the employer and the employees have entered a settlement.
The supposed basis for reviewing or recalling resolution dated February 1, 1983 on the basis of its affec tation to the industry and economy of Delhi as also to the workmen has vanished.
On this footing and on the events which have come by, the challenge to the judgment and order of the High Court loses vigour and this does not now at least remain a case calling for interference under Article 136 of the Constitution except what we intend adding thereto to further the cause of justice.
Resolution No. 26 dated February 1, 1983 approving the scheme as given by the DCM provided that the scheme had taken all necessary safeguards and controls which would help triggering re development and rehabilitation in the congest ed areas of the central core of the capital.
The Technical Committee of the DDA assisting in the matter was even of the opinion that when permitting flatted factories, it could 957 be ensured that a reasonable percentage in the scheme is reserved for rehabilitating small industrial units presently functioning in the State in non conforming areas and that the scheme could only be implemented if it had the approval of the Delhi Administration and the Government of India.
To further that object, during the course of these proceedings upto date plans as prepared and submitted by the DCM to Municipal Corporation of Delhi, together with the sanction accorded thereon by the Standing Committee of the Municipal Corporation of Delhi vide resolution No. 1136 and 1137 dated November 24, 1989, were sent to the DDA for approval on December 6, 1989.
These had to be examined by the DDA in accordance with the assurance given to this Court by Shri G. Ramaswamy, its learned counsel and keeping in view the Master Plan.
These plans were examined vis a vis the plans earlier submitted by the DCM in 1982 83.
We have been con veyed that the objections as raised by the Municipal Corpo ration of Delhi within their own domain have been adopted by the DDA as their own objections, which are extracted below: 1.
FLATTED FACTORIES: The scheme has been formulated on a piece of land measuring 24.55 acres.
This land is earmarked for flatted factories in Delhi Master Plan and partly for widening of road.
The Master Plan provides on page 18 about the DCM site as follows: 'The Delhi Cloth Mills have to move out of this congested area to the extensive industrial districts accord ing to the time schedules given for non conforming uses.
The present site should be developed for flatted factories in gradual stages to relocate the industries now located in Ahata Kidara and other areas. ' 2.
Therefore, this site after development in stages for flatted factories is to be utilised only for providing accommodation to the existing units in the above referred areas.
The number of flatted factory units will depend upon/be related to the units located/functioning in these areas.
Therefore, in the proposed scheme of flatted factory, all these aspects have to be provided for and it should fulfil these requirements.
The Scheme has to be modified accordingly as no such details provision are indicated in the Scheme.
958 3.
Regarding the No Objection Certificate from the land use point of view, as required under bye law No. 6.2.2 which has come into force w.e.f. 2.6.83, DCM is required to obtain the NOC from the land use point.
of view from the DDA before the plans can be approved by MCD.
In the present case, no such NOC under bye law No. 6.2.2 has been applied for by the DCM. 4.
The right of way of National Highway No. 10 as per Master Plan for Delhi is 200 ft.
whereas in the Scheme, it is shown as 150 ft., the Scheme accordingly needs suitable modifica tion.
In the proposed scheme an entry/exit is provided from the proposed National Highway No. 10 which would not be techni cally feasible because of the proposed road underbridge at this point.
In the proposed scheme 2, basements have been provided equivalent to 40% of the ground coverage whereas the base ment should be equivalent to the ground coverage, provided in the scheme and should be used for essential services and for parking.
This condition has also been imposed in the NOC issued by Commissioner (Slum) under the Slum Improvement and Clearance Act, 1956.
GROUP HOUSING RESIDENTIAL COMPLEX AT KISHAN GANJ 1.
The scheme on an area measuring 39.73 acres has been formulated by the DCM in Kishan Ganj area comprising of (i) free hold land of DCM, (ii) lease hold land with DCM where Lessor is DDA measuring 11.98 acres and (iii) the DDA land encroached by the DCM, measuring 5091 sq. mtrs.
As per the terms of lease, the lessee cannot use, without permission, in writing, of the Lessor, land for any purpose other than that for which it has been given by the Lessor.
The Scheme, therefore, needs modification to exclude the lease hold land which has been included in this Scheme.
Land, measuring 5091 sq. mtrs.
has been illegally en croachedby DCM.
This land belongs to DDA which has 959 not been given on leasehold basis to the DCM.
This land has been included in the re development Scheme.
Since the owner ship of the land is with the DDA, the Scheme will have to be modified to exclude this land also.
Therefore, lands leased out and unauthorisedly occupied should be deleted and the scheme should confine to the free hold land.
The scheme needs modification.
The scheme formulated is without any distinction of the freehold, leasehold, and the unauthorisedly occupied land.
Therefore, the plan has to be modified to ensure that the scheme on the lease hold land is a separate entity because in the eventuality of permission being granted by the Lessor to allow use of the land for group housing purposes, it would be necessary as there may be occasion for determining the lease for violation of the lease terms and this will be possible only if the lease hold land has a separate identity on the ground.
As per June, 1983, Municipal Building Bye laws, under the byelaws 6.2.2 a 'no objection certificate from land use point of view from DDA is required to develop this land for residential use.
Therefore, the DCM had have to obtain 'No objection Certificate ' from land use point of view from DDA for the development of this land under the provisions of this bye law before their scheme could be considered and sanctioned by the Municipal Corporation of Delhi.
In the Scheme formulated, it is observed that some of the areas for facilities such as nursery school, shopping etc. have been included for coverage and FAR calculations as part of the group housing area; while as per Master Plan stipula tions, the area for community facilities within group.
housing scheme cannot be included for the purpose of calcu lations of coverages and EAR.
These should be left as inde pendent plots for providing such facilities.
The present Master Plan Zoning regulations prescribe a height of 80 ft. for residential group housing whereas the height provided is more than that.
The present scheme has been formulated having some of the blocks of 12 floors (ground plus 11 storeyes).
The 960 Master Plan Zoning regulations provide a maximum height of 80 ft.
i.e. ground plus 7 storeyes.
Therefore, the scheme needs notifications accordingly.
In the proposed scheme 2 basements have been provided for parking, servicing and storage whereas the basement should be provided equivalent to the ground coverage for essential services and for parking which is also one of the conditions imposed by the Commissioner (Slum) while granting NOC under the Slum Improvement and Clearance Act, 1956.
OF INDIA MIN.
OF URBAN DEVELOPMENT COMMUNI CATION THIS REGARD.
Director (DD), Min of U.D. vide his letter No. 16021/3/87 DD II/VA date 11.12.89 has stated that the land use and the proportion in which the land has to be developed for various uses, the provisions of the Master Plan of 1962 and the proposals made in PDP 2001 will have to be borne in mind.
Further, it is mentioned that a view is to be taken for the use for which the Nazul Land given on lease is to be put.
Thus, keeping in view the above communication from the Ministry, the Scheme will require modifications in the light of the proposals made in PDP 2001.
" The DDA thus requires the aforesaid objections to be first met before it could give its final approval.
It is worthy of record that under interim directions of this Court, afore referred to, its approval shall proceed after the disposal of these appeals.
And we feel that time for that purpose has arrived.
Having heard learned counsel for the parties and having taken note of the objections above referred to, we take the view that the appeals be dismissed conveying a direction that the DDA shall grant to the DCM conditional approval subject to removal of the above enumerated objections raised or such of them as are valid and tenable in law after DCM is heard by the Municipal Corporation of Delhi which the DDA has adopted and the matter be formalised forthwith by the DDA and other authorities connected therewith within eight weeks from today so that the settlement between the workers and the DCM and other matters connected do not stagnate and rather move further to the benefit of all concerned.
It appears that to the 6,000 961 workmen the grant of such approval even though conditional, would be beneficial; so are the terms of the settlement.
Saddling the order appealed against with the above direction we dismiss these appeals.
No Costs.
I.A. No. 1 of 1989 for intervention by a co sharer named Tara Chand Bhatia voicing grievance that the DCM has under valued its property at Bara Hindu Rao etc.
and that it should be ordered to be revalued, is also dismissed as it has no connection with the main issue.
Y. Lal Appeals dismissed.
| IN-Abs | The respondent Delhi Cloth Mills has a complex over an area of 63 acres at Bara Hindu Rao and Kishan Gnaj, Delhi, which is a nonconforming area and the industry of the kind in which the mill is engaged in was required to be shifted consequent upon the enforcement of Master Plan prepared by Delhi Development Authority under the Delhi Development Act, 1966, which plan amongst other things was to assign land use.
The Delhi Cloth Mills in September 1982, approached the DDA and put forth a proposal for shifting the mill and for redeveloping the Mill area for group housing and flatted factories.
The DDA by Resolution No. 26 agreed to the scheme to be implemented in phases but it took care to examine the matter further from Delhi 's economics point of view.
In September 1983, the DDA turned down the request of the respondent for allotment of an alternate site in a conform ing area for shifting the mill.
Thereupon the Mill applied to the Secretary, Labour/Labour Commissioner, Delhi Adminis tration for permission to close down the Mill under Sec.
25(D) of the Industrial Disputes Act, on the ground that the Mill could not be kept located in a non coforming area as otherwise penal consequences would follow.
On April 15, 1985, the request of the Mill was turned down by the Secre tary, Labour/Labour Commissioner.
Thereupon the Delhi Mill filed a writ petition before the High Court for direction that the DDA be directed to implement its resolution No. 26 dated Feb. 1, 1983.
It may be mentioned here that during the pendency of the writ petition before the High Court, DDA had reviewed the situation and passed a fresh resolution No. 3 dated August 1, 1986 reviewing the earlier resolution dated Feb. 1, 1983 recalling the grant of approval with regard to the scheme propounded by the DCM.
Thereafter DDA reiterated its Resolution of August 1, 1986 by another resolution dated November 3, 1986.
952 The High Court quashed the two later resolutions and re stored the resolution dated February 1, 1983.
It took the view that the Mill could not be kept working in a non con forming area as otherwise it would attract penal action under the law after the lapse of three years from Jan. 18, 1986.
Both Union of India and DDA have filed appeals in this Court by special leave against the High Court 's order.
In the meantime DCM filed a writ petition in the High Court which was allowed by a Full Bench of the High Court on March 1, 1989 ordering closure of the Mill.
Delhi Adminis tration filed special leave petition in this Court against the said order and the Mill filed another special leave petition against the order of the High Court dated 3.3.1989 extending time for grant of permission by the Lt. Governor for Closure of the factory till March 30, 1989.
When these matters reached hearing in this Court, DCM and its employees had reached an agreement in the matter of closure of the factory.
The Special Leave Petitions were therefore dis missed by this Court; and on the file of this Court remained these two appeals.
Dismissing the appeals with a direction, this Court, HELD: The factory has been ordered to be closed and the employer and the employees have entered a settlement.
The supposed basis for reviewing or recalling resolution dated February 1, 1983 on the basis of its affectation to the industry and economy of Delhi as also to the workmen has vanished.
On this footing and on the events which have come by, the challenge to the judgment and order of the High Court loses rigour.
[956F G] Resolution No. 26 dated February 1, 1983, approving the scheme is given by the DCM provided that the scheme had taken all necessary safeguards and controls which would help triggering re development and rehabilitation in the congest ed areas of the central core of the capital.[956G] Appeals dismissed conveying a direction that the DDA shall grant the DCM conditional approval subject to removal of the enumerated objections raised or such of them as are valid and tenable in law after DCM is heard by the Municipal Corporation of Delhi.
The matter be formalised forthwith by the DDA and other authorities connected therewith within eight weeks so that the settlement between the workers and the DCM and other matters connected do not stagnate and move to the benefit of all concerned.
[960G H] 953
|
ivil Appeal No. 744 of 1987.
From the Judgment and Order dated 9.10.1986 of the Industrial Tribunal Karnataka in Serial No. 1/80 in I.D. No. 26 of 1979.
Narayan B. Shetye, Vineet Kumar and Vinay Bhasin for the Appellant.
M.C. Narasimhan and Jitender Sharma for the Respondent No. 2.
The Judgment of the Court was delivered by PUNCHHI, J.
Whether "night shift allowance" forms part of "wages" in the context of section 32(2)(b) of the Indus trial Disputes Act, 1947 (hereinafter referred to as 'the Act ') is the issue which crops up for decision in this appeal by special leave against the order dated October 9, 1986 of the Industrial Tribunal, Karnataka at Bangalore in Serial No. 1 of 1980 in I.D. No. 26 of 1979.
It arises on these facts.
Bharat Electronics Limited, Bangalore, the appellant herein, is the "management" and the respondent Shri B. Sridhar, "workman" 973 was in employment with the management as a bus driver.
The establishment of the management, at the relevant time, had about 13,500 employees out of whom about 2,800 were females.
The management provided transport facilities for picking up and dropping down its employees from and at stipulated official stops.
The driver,, plying buses of the establish ment on a rotational basis, working on night shifts, used to get a variable night shift allowance.
On May 1, 1979 the workman was detailed to work in the first shift for picking up certain employees of the second shift and general shift, and for drop.
ping school children at various scheduled points.
He was also detailed to pick up female employees, who were to report for the shift commencing from 10.30 a.m. to 7.00 p.m. from the stipulated official stops.
En route the workman did not park his vehicle at one of the stipulat ed establishment bus stops but rather quite away from it, which caught the attention of Shri K.L. Balasubramaniam, a senior Engineer in the employment of the Management wanting to go the factory.
Shri Balasubramaniam went there and in the process of boarding the bus enquired whether he could go to the factory in the same bus.
He was in for a shock to see the workman indulging in sexual act with a woman in the gang way of the bus.
The sudden appearance of Shri Balasubramani am surprised the workman and he abruptly and falsely replied in the negative.
The matter was reported to the high offi cials of the Management.
He confessed his guilt before Shri M.V. Subbarayappa, Deputy Manager, Transport.
The misconduct committed by the workman became the subject matter of a domestic enquiry.
At the enquiry S/Shri Balasubramaniam and Subbarayappa appeared for the management and deposed to the aforesaid facts.
The Enquiry Officer found the workman guilty of the misconduct imputed under Standing Orders 15(1)(h) and 15(1)(r) of the Standing Orders of the Company.
The workman was thereafter dismissed from service with effect from December 31, 1979.
On that very day, the management sought approval from the Industrial Tribunal, Karnataka at Bangalore under section 33(2)(b) of the Act of the action taken and towards meeting the requirement of the provision paid to the workman before hand a sum of Rs.607.90 as wages for one month, Before the Industrial Tribunal the workman filed an objection statement raising various contentions denying inter alia the allegations made against him and challenging the validity of the domestic enquiry.
It somehow kept pend ing for over six years though under the unamended section 32(5), it was required of the Tribunal to without delay hear the application and pass such order in relation thereto as it deemed fit.
Now with effect from 21 8 1984, three months time limit is 974 fixed though extendable by an order in writing.
Anyway while that was in progress, he made an application on July 13, 1986 before the Tribunal seeking amendment of the objection petition enabling him to urge an additional ground to the effect that one month 's wages paid to him were short by Rs. 12, the monthly sum due for night shift ' allowance.
The additional objection was based on the premises that since the workman was ordinarily expected to work on night shift on a rotational basis as per the Standing Orders of the Company, such allowance should have formed part of the wages.
On that basis it was urged that since full wages had not been paid to the workman, there was a serious infraction of the provisions of section 33(2)(b) warranting the sought for approval to be declined.
The management could not, and did not, deny that factu ally the night shift allowance had not been included in one month 's wages as paid to the workman.
The management however maintained that the question of the validity of the domestic enquiry, which the Tribunal had already undertaken, should first be settled and that in any case the additional objec tion raised by the workman required leading evidence.
The management further contended that the night shift allowance was neither paid nor was payable to the workman as he could not be said to have earned it automatically as part of wages unless he had actually worked on the night shift.
It was pointed out that the said allowance was variable in nature depending upon the number of shifts in which the workman had actually performed work.
It was asserted that the night shift allowance is not payable to the workman when he does not come for work for any reason and thus was not such allowance which would automatically flow even without work ing.
Lastly it was projected that since during the pendency of the domestic enquiry the workman was under suspension there could otherwise arise no occasion for his coming on duty to earn the night shift allowance.
The Presiding Officer, Industrial Tribunal, Bangalore relying on the views expressed by an Hon 'ble Single Judge of the Karnataka High Court in Writ Petition No. 6607 of 1985 decided on August 28, 1986, titled Ramakrishnappa vs The Industrial Tribunal & Another, sustained the objection of the workman taking the view that night shift allowance should have formed part of one month 's wages and on that score went alongwith the workman in abandoning giving any finding the validity of domestic enquiry.
Consequentially for the view so taken the management was declined approval to the dismissal of the workman.
So the order of the Tribu nal taking that view is directly under attack in this appeal by special leave and indirectly at issue is the 975 correctness of the decision of the Karnataka High Court in Ramakrishnappa 's case aforementioned.
Two provisions of the Act which would require being adverted to are these.
Section 2(rr) provides the definition to the word "wages".
It reads as follows: "2. DEFINITIONS In this Act, unless there is anything repugnant in the subject or context, (rr) 'wages ' means all remunerations capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment, or of work done in such employment, and includes (i) such allowances (including dearness allowance) as the workman is for the time being entitled to; (ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles; (iii) any travelling concession; (iv) any commission payable on the promotion of sales or business or both; but does not include (a) any bonus; (b) any contribution paid or payable by the em ployer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force; (c) any gratuity payable on the termination of his service; Section 33(2)(b) as extracted reads as follows: 976 "33.
CONDITIONS OF SERVICE, ETC.
TO REMAIN UNCHANGED UNDER CERTAIN CIRCUMSTANCES DURING PENDENCY OF PROCEEDINGS (2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute for where there are no such stand ing orders, in accordance with the terms of the contract, whether express or implied, between him and the workman], (b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or other wise, that workman: Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approv al of the action taken by the employer.
" It is not disputed that section 33(2)(b) was attracted to the facts of this case.
The only point, as said before, is whether night shift allowance was to be paid to the workman as part of wages even though he had not factually worked on the night shift.
The definition of the word "wages", as given in clause (rr) of section 2 is comprehensive enough to include (vide inclusion 1) such of the allowances as the workman is for the time being entitled.
Yet, despite such comprehension, the inclusive meaning is subject to a meaningful change if there is anything repugnant in the subject or context.
The proviso to section 33(2)(b) mandates that unless the workman is paid wages for one month and an application as contem plated is made by the employer for approval of his action, no such workman can be discharged or dismissed.
The inten tion of the legislature in providing for such a contingency is not far to seek and as was pointed out by this Court in the case of Syndicate Bank Limited vs Ram Nath Bhat, [1967 68] (XXXII) FJR 490 at 497 was "to soften the rigour of unemployment that will face the workman, against whom an order of discharge or dismissal has been passed".
One month 's wages as thought and provided to be given are con ceptually for the month to 977 follow, the month of unemployment and in the context wages for the month following the date of dismissal and not a repetitive wage of the month previous to the date of dis missal.
If the converse is read in the context of the provi so to section 32(b), it inevitably would have to be read as double the wages as earned in the month previous to the date of dismissal and that would, in our view be, reading in the provision something which is not there, either expressly or impliedly.
We have thus to blend the contextual interpreta tion with the conceptual interpretation to come to the view that night shift allowance could never be part of wages, and those would be due only in the event of working.
This Court in M/s. Podar Mills Ltd. vs Bhagwan Singh and Another, ruled that the date of dismissal under section 33(2)(b) is the date when the approval application is filed, after dissmissal With effect from that date, the occasion to earn night shift allowance cannot, and will not, arise.
This Court in Bennett Coleman & Co. (P) Ltd. vs Punya Priya Das Gupta, ; was called upon to rule whether car allowance and benefit of free telephone and newspaper were such allowances, includable in wages under section 2(rr) of the Act in order to determine a claim of gratuity of a journalist.
This Court held as follows: "Since wages has not been defined in the Act, its meaning is the same as assigned to it in the .
Under section 2(rr) of that Act, "wages" means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employ ment or of work done in such employment, and includes (i) such allowances (including dearness allowance) as the work man is for the time being entitled to; (ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles; (iii) any travelling concession; but does not include any bonus and other items mentioned therein.
Mr. Ramamurthi 's argument was that the car allowance as also the benefit of the free telephone and newspapers would fall under the first part of the definition as they are remuneration capable of being expressed in terms of money.
The argument, however, cannot be accepted as neither of them can be said to be remunera tion payable in respect of emp 978 1oyment or work done in such employment.
Neither the car allowance nor the benefit of the free telephone was given to the respondent in respect of his employment or work done in such employment as the use of the car and the telephone was not restricted to the employment, or the work of the re spondent as the special correspondent.
There was no evidence that the car allowance was fixed after taking into consider ation the expenses which he would have ordinarily to incur in connection with his employment or the work done in such employment.
Even if the respondent had not used the car for conveying himself to the office or to other places connected with his employment and had used other alternative or cheap er means of conveyances or none at all, the car allowance would still have had to be paid.
So too, the bills for the telephone and the newspapers whether he used them or not in connection with his employment or his work as the special correspondent.
Therefore we have to turn to the latter part of the definition and see if the two items properly fall under.
So far as the car allowance is concerned, there was, as aforesaid, nothing to suggest that it was paid to reim burse him of the expenses of conveyance which he would have to incur for discharging his duties as the special corre spondent, or that it was anything else than an allowance within the meaning of section 2(rr) of that Act.
It would, there fore, fall under the inclusive part (i) of the definition.
Likewise, the benefit of the telephone and newspapers was allowed to the respondent and merely for the use thereof in connection with his employment or duties connected with it.
Both the car allowance and the benefit of the free telephone and newspapers appear to have been allowed to him to direct ly reduce the expenditure which would otherwise have gone into his family budget and were therefore items relevant in fixation of fair wages.
[See Hindustan Antibiotics Ltd. vs Workmen, That being the position, the two items could on the facts and circumstances of the present case be properly regarded as part of the respondent 's wages and had to be taken into calculations of the gratuity pay able to him." (Emphasis supplied) The above extract and more so the emphasised words are significant to convey that the car allowance and the bene fits of free telephone and newspapers were held allowances includable in wages in the 979 facts and circumstances of that case.
These allowances were held part of the wages of the journalist on the finding that he was entitled to them not as remuneration capable of being expressed in terms of money but as allowances within the meaning of the First inclusion.
In Dilbagh RaiJarry vs Union of India & Ors., ; this Court was required to determine whether "run ning allowance" formed part of wages for the purpose of .
That was a case in which a railway guard, who was convicted in a criminal case but later acquitted, and who in the meantime had been dismissed from service but his dismissal too had been upset by the High Court followed by his reinstatement, had asked for back wages for the period between the date of his dismissal and the date of reinstatement.
Finally he was let to this Court reiterating his claim that a running allowance was part of his wages which he would have earned while on duty.
This Court in that context observed as follows: Mr. Bishan Narain further contends that Running Allowance was a part of the pay or substantive wages.
In support of this argument he has invited our attention to rule 2003 of the Railway Establishment Code, clause 2 of which defines 'average pay '.
According to the second proviso to this clause in the case of staff entitled to running allowance, average pay for the purpose of leave salary shall include the average running allowance earned during the months immediately preceding the month in which a Railway servant proceeds on leave subject to a maximum of 75 per cent of average pay for the said period, the average running allow ance once determined remaining in operation during the remaining part of the financial year in cases of leave not exceeding one month.
The crucial words, which have been underlined, show that such Running Allowance is counted towards 'average pay ' in those cases only where the leave does not exceed one month.
It cannot, therefore, be said that Running Allowance was due to the appellant as part of his wages for the entire period of his in active service.
Travelling allowance or running allowance is eligible if the officer has travelled or run, not otherwise.
We therefore negative this contention.
" (Emphasis supplied) It is noteworthy that running allowance or travelling allow ance, as the 980 case may be, had to be earned by actually travelling or running, and not otherwise, as held in Dilbagh Rai Jarry 's case (supra).
Only a fiction was available for a limited period as per Clause 2003 of the Railway Establishment Code.
The average running allowance once determined in accordance with the Clause, afore quoted, was to remain operative during the remaining part of the financial year only in those cases where the employee had taken leave not exceeding one month, and not otherwise.
In cases of leave exceeding one month the fiction on its 'own dropped.
Now confluencing the two legal thoughts expressed in Bennett Coleman 's case (supra) and Dilbagh Rai Jarry 's case (supra), the stream of thought which inevitably gurgles up is that an allowance which from the term of employment flows as not contingent on actual working is part of wages for the purposes of section 33(2)(b) but an allowance which is earnable only by active serving is not an allowance which will form part of wages, within the meaning of the said provision.
In Ramakrishnappa 's case Hon 'ble Single Judge of the Karnataka High Court employed Bennett Coleman 's case to come to the conclusion that night shift allowance was part of the wages by observing as follows: "Therefore, I find it difficult to accede to the contention of the management that conveyance allowance, night shift allowance and turnout allowance were not wages as defined in section 2(rr) of the Act, and therefore, they were not required to be included in computing the wages of the petitioner for one month.
The decision of the Supreme Court in Bennett Coleman and Co. [1970] 37 FJR 498; AIR 1970 SC 427, though it arose in the context of quantification of gratuity, the view taken therein that the allowances given for purchase of newspapers, towards telephone and conveyance also should be calculated in computing one month 's wages for the purpose of computing gratuity, sup~ ports the construc tion placed on section 2(rr) of the Act for the petitioner, for, the Supreme Court invoked the said definition as the word "wages" had not been defined in the Working Journalists (Conditions of Service and Miscellaneous Provisions) Act, 1955.
In the Case of Jarry; , , on which the learned counsel for the second respondent relied, the ques tion decided was, whether 981 wages payable to a railway guard for the period he was kept out of service consequent on his dismissal from service till he was reinstated included the amount of running allowance, which was under the rules payable only if the railway serv ant had gone on duty, and the Supreme Court held that it was not, in view of the condition.
Section 2(rr) of the Act did not come up for consideration in that case and, therefore, not apposite to this case.
" This view, as said before, was adopted by the Tribunal to decline approval to the management.
But for reasons set out before, we are of the view that the Hon 'ble Single Judge fell into an error in enlarging the scope of Bennett Cole man 's case and dwarfing that of Dilbagh Rai Jarry 's case.
Thus the conclusion is inescapable that the workman had to earn night shift allowance by actually working in the night shift and his claim to that allowance was contingent upon his reporting to duty and being put to that shift.
The night shift allowance automatically did not form part of his wages and it was not such an allowance like in Bennett Coleman 's case which flowed to him as his entitlement not restricted to his service.
Thus we hold that the Tribunal fell into a grave error in declining the application of the management for approval on the ground of short payment of Rs. 12 on account of night shift allowance, which the workman suppos edly would have earned had he gone to report on duty, which in the circumstances he could not, or having worked rota tionally at night, which he did not, and that too fictional ly, in the month following the month and the date of the application, on which date the dismissal was to be effec tive.
We cannot refrain from expressing our concern to the manner in which the other issue before the Tribunal regard ing the validity of the domestic enquiry was side tracked.
Had there been a finding on the same, one way or the other, we could have easily finalised the matter.
For over six years the matter on that count was kept pending and the additional objection being permitted to be raised was unac countably abandoned.
The matter could have in this situation been sent back to the Tribunal but at this late stage we do not propose to do so and are inclined to close the matter, as we are otherwise satisfied that plea about the validity of the domestic enquiry was without merit and even though raised was by conduct abandoned.
Before concluding the judgment the observations in Syndicate Bank 's case, afore quoted, are again to be borne to mind.
In the facts and circumstances of this case the management paid to the workman a 982 sum of Rs.607.90 as a month 's salary "to soften the rigour of unemployment that will face the workman".
How could a short payment of Rs. 12 be said to have lessened the soften ing of such rigour is thought stirring.
Viewed in the con text, there could genuinely be a dispute, as in the present case, as to whether a particular sum was due as wages.
It is, of course, risky for the management to raise it as to pay even a paise less than the month 's wages due under section 33(2)(b), would be fatal to its permission sought.
But at the same time it needs to be clarified that it is for the management to establish, when questioned, that the sum paid to the workman under section 33(2)(b) represented full wages of the month following the date of discharge or dis missal, as conceived of in the provision and as interpreted by us in entwining the ratios in Bennett Coleman 's case (supra) and Dilbagh Rai Jarrv 's case (supra) and adding something ourselves thereto.
Thus for the foregoing reasons, we allow this appeal, set aside the judgment and order of the Industrial Tribunal, Karnataka at Bangalore and allow the application of the management under section 33(2)(b) of the without any order as to costs.
R.N.J. Appeal allowed.
| IN-Abs | Respondent workman was in employment of the Appellant management as Bus driver.
Following an incident of miscon duct committed by him, a domestic inquiry was conducted against him under Standing Orders 15(1)(b) and 15(1)(r) of the Company wherein he was held guilty by the Enquiry Offi cer and was eventually dismissed from the service w .e.f.
31.12.1979.
On that day itself the management moved an application before the Industrial Tribunal under section 33(2)(b) of the Act for approval of the action taken and towards meeting the requirements of the provisions of the act paid to the workman before hand wages for one month.
The workman filed his objection Statement to that application raising several contentions denying all the allegations made against him and challenging the validity of the domestic enquiry.
This application somehow was kept pending by the Tribunal for over six years when sometime in July, 1986 the workman moved an application before the Tribunal seeking amendment of his objection petition to urge an additional ground that one month 's wages paid to him were short by Rs. 12, being the monthly night shift allowance as he was ordi narily expected to work by rotation as per standing orders of the Company and thus as full one month 's wages had not been paid to him as required under section 33(2)(b) of the Act, the approval sought for ought to be declined.
The management contended that the night shift allowance is neither paid nor payable unless the night shift is actually performed and thus this amount cannot form part of the month 's wages automatically.
The Industrial Tribunal while abandoning giving any finding on the validity of the domes tic enquiry, upheld the additional objection taken by the workman and declined the management 's application seeking approval to the dismissal of the workman.
Hence this appeal by special leave by the management.
Setting aside the im pugned judgment and order of the Tribunal and allowing their application made under section 33(2)(b) of the , this Court in allowing the appeal, 972 HELD: The workman had to earn night shift allowance by actually working in the night shift and his claim to that allowance was contingent upon his reporting to duty and being put to that shift.
The night shift allowance did not automatically form part of his wages and it was not such an allowance which flowed to him as an entitlement of his service.
[981C] The Tribunal fell into a grave error in declining the application of the management for approval on the ground of short payment of Rs. 12 on account of night shift allowance, which the workman supposedly would have earned had he gone to report for duty.
[981D] Syndicate Bank Limited vs Ram Nath Bhat, [1967 68] (XXXX) FJR 490 at 497; M/s. Podar Mills Ltd. vs Bhagwan Singh and Another, [4974] 3 SCC 157; Bennett Coleman & Co. (P) Ltd. vs Punya Priya Das Gupta, ; and Dilbagh Rai Jarry vs Union of India & Ors., ; referred to.
|
Petition Nos.
464 & 617 of 1977.
(Under Article 32 of the Constitution of India. ) K. Parasaran, Attorney General, Shanti Bhushan, Ashwani Kumar, K.G. Bhagat, L.N. Sinha, Raja Ram Aggarwal, S.P. Gupta, H.K. Puri, V. Parthasarthy, T.C. Sharma, P.P. Singh, Ms. A. Subhashini, Mrs. Sushma Suri, G. Gopalakrishnan, O.P. Rana, A.V. Rangam and Shartha Raju for the appearing par ties.
F.S. Nariman, K.K. Venugopal, A.K. Verma, D.N. Mishra and section Kachawa for the intervener in W.P. No. 464/77.
The Judgment of the Court was delivered by THOMMEN, J.
The petitioners are owners of sugar mills operating in the State of Uttar Pradesh in areas classified for the purpose of determining the price of levy sugar as West and East Zones.
They challenge the validity of notifi cations dated 28th November, 1974 and 11th July, 1975 (Annexures 8 & 9) issued by the Central Government in exer cise of its power under sub section (3 C) of section 3 of the (Act No. 10 of 1955), as amended to date (hereinafter referred to as the 'Act ').
The petitioners do not, and cannot, challenge the validity of the subsection by reason of Article 3 lB of the Constitution of India.
By the impugned orders, the Central Government fixed the prices of levy sugar for 1974 75 production.
For the purpose of determining the prices, the country is divid ed into 16 zones, and the prices fixed for various grades of sugar in terms of section 3 (3 C) of the Act vary from ' zone to zone.
Prices are determined with reference to the geographical cum agro economic considerations and the aver age cost profiles of factories located in their respective zones.
Each State for this purpose constitutes a separate zone, while U.P. is divided into 3 zones and Bihar into 2 zones.
The petitioners contend that these orders are ultra vires the Act and violative of their fundamental fights as the prices of levy sugar have been determined arbitrarily with reference to the average cost profiles of factories grouped together in zones without regard to their individual capacity and cost characteristics.
Such prices do not re flect the actual manufacturing cost of sugar incurred by producers like the petitioners or secure to them reasonable returns on the capital employed by them.
Geographical zon ing, for the purpose of price fixation, they point out, is an irrational ' and discriminatory system of (1) Published in the Gazette of India Extraordinary dated 28.11.1974 and 11.7.1975.
919 averaging wide cost disparities amongst producers of widely varying capacity.
Cost of manufacture of sugar depends on a number of factors, such as recoveries from the sugarcanes, duration of the crushing season, crushing capacity of the plant, the sugarcane price paid and the capital employed in the manufacture of sugar.
These factors vary from factory to factory.
Fixation of the levy sugar prices on zonal basis without regard to these divergent factors and the compara tive cost profiles gives the owners of bigger factories an undue advantage over producers like the petitioners whose factories are comparatively of lower crushing capacity and whose manufacturing cost is consequently higher.
Clubbing of the petitioners ' factories with dissimilar factories in the same zones for the purpose of price fixation is discrimina tory, arbitrary and unreasonable.
The petitioners point out that the system of geographical zoning for the purpose of price determination has been severely criticised by the Bureau of Industrial Costs & Prices (The "BICP") who have strongly recommended the division of the sugar industry into groups of units having similar cost characteristics with particular reference to recovery, duration, size and age of the unit and capital cost per tonne of output, and irrespec tive of their location.
The respondents, on the other hand, contend that the classification of sugar industry into 15 zones (now 16) was upheld by a Constitution Bench of this Court in Anakapalle Co operative Agricultural & Industrial Society Ltd. etc.
vs Union of India & Ors.
, ; The conten tion that the zonal system was discriminatory and violative of constitutional principles was pointedly urged, but cate gorically rejected by this 'Court.
The method adopted by the Government in fixing the price of levy sugar is fully sup ported by the recommendations of various expert bodies.
The Tariff Commission in its 1973 Report recommended division of the country into 16 zones for this purpose.
The price of sugar is fixed with reference to the Cost Schedule recom mended by that body.
These recommendations are based on various factors such as cost and output of individual la bour, cane price (accounting for about 70 per cent of the cost of sugar production), quality of sugarcane, taxes on sugarcane, cost of other material, transport charges, cost of storing the sugar produced, cane development charges and other overhead expenses, selling expenses etc.
These factors are almost identical for the entire zone.
The cost of manufacturing sugar, the respondents con tend, depends not only on recovery from the sugarcane, duration of crushing season, crushing capacity of the plant, the sugarcane price paid and the capital employed, as stated by the petitioners, but also to a consider 920 able extent on the condition of the plant and machinery, quality of management, investment policy, relations with cane growers and labour, financial reputation etc.
They say: "It is evident from the Tariff Commission Report of 1959, as also the Official Directory of the Bombay Stock Exchange, that the petitioner Company has been consistently diverting huge amounts for investments running into several lakhs elsewhere instead of ploughing back the same into the peti tioner 's sugar industry in question.
Thus, the petitioner Company has been neglecting the sugar factory and for such neglect of their own they cannot blame the Zonal System." Mr. Shanti Bhushan, appearing for the petitioners, does not object to the factories being grouped together on the basis of factors common to them with a view to fixing the prices applicable to them as a class of producers.
He does not advocate fixation of price separately for each unit.
He says that the sugar factories must be grouped together, not on the basis of their geographical location, but similarity in cost characteristics.
He relies upon the 1976 Report of the BICP.
The present system of fixing prices according to the regions, where the factories are located, he says, is based on "averaging wide cost disparities" as a result of which manufacturers like the petitioners incurring a high cost of production and others incurring a low cost of pro duction are treated alike.
Such a system works to the disad vantage of the former and to the advantage of the latter.
This, Mr. Shanti Bhushan contends, is an unreasonable and invalid classification and violative of constitutional principles.
While this line of argument is supported by Mr. Raja Ram Agarwal, Mr. S.P. Gupta appearing for the interven er in Civil Writ Petition No. 464 of 1977 advocates aboli tion of zonal classification or grouping of any kind and supports fixation of price for each individual factory with reference to its cost and regardless of any other considera tion.
Such unit wise determination alone, according to him, satisfies the requirements of Section 3(3 C).
Any system of zoning or grouping for determination of price, he contends, will fail to meet the norms of that sub section.
Mr. M .M. Abdul Khader, on the other hand, submits that while averag ing and costing with reference to a representative cross section may ordinarily be an appropriate method for deter mining the fair price, such a method is inappropriate for a small zone like Kerala where there are only three manufac turing units.
In respect of such a zone, he says, unit wise fixation of price is the only just and proper method.
921 Mr. K.K. Venugopal, counsel for Indian Sugar Mills ' Association (ISMA), on the other hand, supports the zoning system.
He says that, except for a few producers like the petitioners, all the rest of them in the country have ac cepted the principle of zoning.
In his written submissions, Mr. Venugopal states as follows: "As was seen during the course of hearing only 2 or 3 per sons have come forward challenging zoning.
There are 389 sugar factories in the country and the present intervener has 166 members.
Besides there are 220 members with the cooperative sector.
Their Association being National Federa tion of Cooperative Sugar Factories Ltd., has also inter vened in these petitions and have adopted the arguments of ISMA.
Hence almost the entire industry has supported zoning and only a handful of people who also factually are not high cost units have opposed zoning." Mr. Venugopal submits that the present case is squarely covered by the decisions of this Court in Anakapalle Cooper ative Agricultural & Industrial Society Ltd. etc.
vs Union of India & Ors.
, ; and The Panipat Cooperative Sugar Mills vs The Union of India, [1973] 2 SCR 860.
He says that the petitioners have not made out a case for reconsideration of these two decisions.
He refers to T. Govindaraja Mudaliar etc.
vs The State of Tamil Nadu & Ors., ; at 228 to 230 and submits that this Court would not reexamine an earlier decision merely because certain aspects of the question had not been noticed in that decision.
Mr. Venugopal, however, advocates neutralisation of the high cost incurred by the old units having lower crushing capacity by giving them an incremental levy price as recommended by the High Level Committee in 1980.
Before we examine the provisions of section 3(3 C) in the context of the general scheme of the Act, we shall briefly refer to the observations of this Court in Anaka palle; , and Panipat, [1973] 2 SCR 860.
Grover, J. speaking for the Bench in Anakapalle (supra) states ': "The system of fixing the prices, according to certain regions or zones, is not a new one.
The Tariff Commission in 1959 favoured the formation of four zones.
In the report of the Sugar Enquiry Commission 1965 it was pointed out that the Government had actually fixed the prices for 22 922 zones which meant that from four zones the number had been increased to twenty two or more.
The Commission was of the view that there should be five zones only in addition to Assam.
The Tariff Commission, 1969 however recommended the constitution of fifteen zones largely on State wise basis with an exception only in case of Uttar Pradesh and Bihar.
Uttar Pradesh was divided into three zones and Bihar into two.
The Tariff Commission had been specifically requested to inquire into the working of the zonal system, the main point for inquiry being the zones into which the sugar producers should be grouped having regard to the basis of classification to be recommended by the Commission.
The view of the Commission was that on the whole the number of price zones should be fifteen which would reduce, though not eliminate, the inter se anomalies in the cost structure without resorting to the extreme of the fixation of price for each unit or a single or at the most two, one for the sub tropical and other for the tropical one.
The Tariff Commission hoped that in the course of time conditions would be created making the operation of the second alternative feasible." Rejecting the contention that it was the zonal system that caused the losses allegedly incurred by some of the sugar producers, Grover, J. says that ordinarily these units ought to have made profits.
The reasons for incurring losses can be many, such as inefficiency, failure to pursue the right policy, poor management and planning etc., but these reasons have no relation to the zonal system.
That system by and large has led to efficiency and provides an incentive to cut down the cost.
Healthy competition among the units in the same zone should in the normal.
course result in reduc tion of cost and greater efficiency in the operation of the units.
It is proper management and planning that would lead to the success of any commercial venture.
The contention of the producers that they have been incurring losses on ac count of the zonal system is opposed to the evidence pro duced by them.
The Court has rejected the extreme contention that prices should be fixed unitwise, i.e., on the basis of actual cost incurred by each unit.
Referring to this conten tion, this Court observes: "Apart from the impracticability of fixing the prices for each unit in the whole country, the entire object and pur pose of controlling prices would be defeated by the adoption of such a system.
" 923 Grover, J. states that, during the earlier period of price control, it was on an all India basis that the price was fixed.
That is still the objective.
If such an objective is achieved, it would undoubtedly be conducive to conferring proper benefit on the consumers.
The objective of the Tariff Commission is to have only two regions for the whole coun try, viz., sub tropical and tropical.
The Court has rejected as baseless the criticism against the principle of weighted average adopted in the fixation of price in each zone.
Such a principle is well recognised and acted upon by various Sugar Enquiry Commissions.
A proper cost study is intended to do justice to the weak and strong alike.
There is abundant justification for continuing and sustaining the zonal system.
The varying climatic conditions of each State have been taken into account.
For the same reason, Bihar is divided into 2 zones and U.P. into 3 zones, while, in the case of many other States, each State is treated as a single zone.
This system of zoning is thus adopted with special reference to climatic and agro economic conditions.
Rejecting the contention that the zonal system has resulted in discriminatory treatment, this Court states: "We are unable to hold that while classifying zones on geographical cum agro economic consideration, any discrimi nation was made or that the price fixation according to each zone taking into account all the relevant factors would give rise to such discrimination as would attract Article 14 of the Constitution.
" Even if there is no price control, the uneconomic units would be at a great disadvantage.
The Court states: "Even if there is no price control each unit will have to compete in the market and those units which are uneconomic and whose cost is unduly high will have to compete with others which are more efficient and the cost of which is much lower.
It may be that uneconomic units may suffer losses but what they cannot achieve in the open market they cannot insist on where price has to be fixed by the govern ment.
The Sugar Enquiry Commission in its 1965 report ex pressed the view that "cost plus" basis of price fixation perpetuates inefficiency in the industry and is, therefore, against the long term interest of the country.
" Considering the general principle involved in price fixa tion, the Court states: 924 "It is not therefore possible to say that the principles which the Tariff Commission followed in fixing the prices for different zones are either not recognised as valid principles for fixing prices or that simply because in case of some factories the actual cost was higher than the one fixed for the zone in which that factory was situate the fixation of price became illegal and was not in accordance with the provisions of sub section (3 C).
It has not been denied that the majority of sugar producers have made prof its on the whole and have not suffered losses.
It is only some of them which assert that their actual cost is far in excess of the price fixed.
That can hardly be a ground for striking down the price fixed for the entire zone provided it has been done in accordance with the accepted principles . . ".
The Court concludes: "When prices have to be fixed not for each unit but for a particular region or zone the method employed by the Commis sion was the only practical one and even if some units because of circumstances peculiar to them suffered a loss the price could not be so fixed as to cover their loss.
That cannot possibly be the intention of the Parliament while enacting sub section (3 C) of section 3 of the Act.
If that were so the price fixation on zonal or regional basis would have to be completely eliminated.
In other words, the entire system of price control which is contemplated wilt break down because fixation of price for each unit apart from being impractical would have no meaning whatsoever and would not be conducive to the interest of the consumer. ' ' This Court has thus in Anakapalle (supra) rejected the argument that the alleged loss incurred by certain sugar producers is attributable to fixation of price on a zonal basis; or the zonal system has led to inefficiency or lack of incentive, or it has resulted in unequal or unfair treat ment.
On the other hand, the zonal system has encouraged a healthy competition amongst the units in the same zone.
Unit wise fixation is impracticable.
The Tariff Commission is the best judge in selecting units for cost study to determine the average cost.
The fair price has to be deter mined with reference to the conditions of a representative cross section of the industry.
For all these reasons, there is ample justification in continuing and sustaining the zonal system for 925 the purpose of price fixation.
Price has to be fixed for each zone and necessarily it varies from zone to zone.
There is no discrimination in the classification of zones on a geographical cum agro economic consideration and any such classification is perfectly consistent with the principle of equality.
In Panipat, [1973] 2 SCR 860, Shelat, J. speaking for the same Constitution Bench that has decided Anakapalle; , , referes to the norms adopted in sub sec tion (3 C), viz., (a) determination by the Government of the "price of sugar", and (b) payment of "an amount" to the manufacturer, and states that the concept of fair price which is what is referred to in sub section (3 C) as "price of sugar" does not by any account mean the actual cost of production of every individual manufacturer.
Such price has to be arrived at by a process of costing with reference to a representative cross section of the manufacturing units.
He states: "The basis of a fair price would have to be built on a reasonably efficient and economic representative crosssec tion on whose workings cost schedules would have been worked out and the price to be determined by Government under sub section (3 C) would have to be built." So stating, Shelat, J. rejects the contention that such price has to be determined unit wise.
Any such fixation of price, he points out, would be contrary to the concept of partial control postulated by the subsection and would perpetuate inefficiency and mismanagement.
But, of course, any such price, he hastens to add, has to be fixed reasona bly and on relevant considerations.
Referring to the policy of partial control, Shelat, J. states: " . . the Central Government was confronted with two main problems (a) deterioration in the sugar industry, and (b) the conflicting interests of the manufacturer, the consumer and the cane grower.
The floor price of cane fixed by Government was intended to protect the farmer from ex ploitation, but that was found not to be an incentive enough to induce him to increase his acreage.
A device had to be found under which a price higher than the minimum could be paid by the manufacturer of sugar.
The consumer, on the other hand, had also to be protected against the spiralling of sugar price and his needs, growing as they were, had to be satisfied at some reasonable price.
" 926 Shelat, J. emphasises the need to modernise the factories which alone would yield a reasonable return.
This is what he states: 'Both these and a larger production of sugar would not be possible unless there was a reasonable return which would ensure expansion, which again would not be possible unless new machinery for such expansion was brought in and facto ries, particularly in U.P. and Bihar, were modernised and renovated.
A fair price for sugar, therefore, had to be such as would harmonise and satisfy at least to a reasonable extent these conflicting interests.
" Significantly, the BICP 's recommendation to group indi vidual units having homogenity in cost, irrespective of their location, was not accepted by the Central Government, particularly because the Tariff Commission itself had con sidered the question and reached the conclusion that geo graphical cum agro economic considerations demanded the grouping of factories with reference to State zones, or subzones as in the case of U.P. and Bihar.
To group them on the basis of their location in various regions of the coun try for the purpose of price fixation is a rational method reflecting economic realities.
This is particularly so as conditions generally vary from State to State as regards the availability and quality of sugarcane, labour conditions and other factors, whereas within the same region like facili ties are generally available to all factories.
If the cost structure varies from factory to factory, such variation is not necessarily caused by the non availability, or the poor quality of raw material, or the labour conditions, but probably for reasons unconnected with them, such as the age of the plant, availability of finance, management ability, etc.
There is great force in the submission of the respond ents that to group together factories having a high cost profile and to determine a price specially applicable to them is, as recognised by this Court in Panipat (supra) and Anakapalle (supra), to put a premium on incompetence, if not mismanagement.
The history of control over sugar has been set out at length in Panipat (supra) and we do not wish to burden this judgment with a narration of the circumstances which have led to the introduction of partial control under which 60% of the output of sugar is acquired and the balance left for free sale.
It is in implementation of this policy that sub section (3 C) of section 3 was inserted2 Before we examine the 2.
For an illuminating discussion of this aspect, See A.M. Khusro, Price Policy, Lancer International (1987), p. 62 63: 927 provisions of that sub section under which the impugned notification have been issued, we shall refer to the statu tory scheme.
The Act was, as stated in the preamble, enacted by Parliament "to provide, in the interest of the general public, for the control of the production, supply and dis tribution of, and trade and commerce in, certain commodi ties".
The entire Act is devoted to the cause of the general public with a view to achieving equitable distribution of essential commodities at fair prices.
Section 3 of the Act confers wide power upon the Central Government to control production, supply, distribution, etc., of essential commodities.
It reads: "3.
Powers to control production, supply, distribution, etc., of essential commodities (1) If the Central Govern ment is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regu lating or prohibiting the production, supply and distribu tion thereof and trade and commerce therein.
" Sub section (2) of section 3 says that, without preju dice to the generality of the powers conferred by sub sec tion (1), an order made "After many years of adverse experience a new strategy of dual pricing was introduced in sugar.
The mills were asked to deliver to the public distribution system about 60 per cent of their output say at Rs.2 per Kg.
and were allowed to sell the balance of 40 per cent in the free market at say Rs.6 per kg.
The mills were delighted to do so as they got very much enhanced receipts from their flee market sales.
With larger receipts they offered in the following season a higher price to the farmer (the sugarcane grower) who, in turn, grew and offered more cane.
In other words, the law of supply which had been held captive, as it were, was freed from bondage.
With a higher price offer from the mills, the cane growers brought more land under sugar cane, diverted land from other crops to cane, used more inputs, produced and delivered to the mills more cane and in fact diverted cane deliveries from the open pan system to the mill system.
Having thus obtained much more cane, the mills produced much more sugar and sold 30 40 per cent of it in the free market.
Within a year or two, the free market price of sugar fell from Rs.6 to Rs.3 or even Rs.2.50.
At this rate consumers began to buy more in the free market, millions of ration cards remained unused and the demands on the public distribution declined substantially.
Prolonged shortages of sugar got converted into a relative abundance.
" 928 under that sub section may provide for the matters specified in subsection (2).
One of them is what is contained in clause (f) of sub . section (2) which empowers the Central Government to require any person dealing in any essential commodity to sell the whole or a specified part of such commodity to the Central Government or the State Government or to a nominee of such Government.
It reads: "(2) Without prejudice to the generality of the powers conferred by sub section (1), an order made thereunder may provide (a). . . . . . . . . . . . . . . . . . (f) for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling of any essential commodity , (a) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or (b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a speci fied part of such commodity when produced or received by him, to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order.
" The power contained in sub section (1) or sub section (2) is exercisable by an order.
An 'order ' is defined under section 2 to include a direction issued thereunder.
Any order made under section 3 by the Central Government or by an officer or authority of the Central Government is re quired by sub section (6) of section 3 to be laid before both Houses of Parliament, as soon as may be, after it is made.
Any order made under section 3 which is of a general nature or affecting a class of persons has to be notified in the official gazette.
[Subsection (5) of section 3].
929 Sub section (3) of section 3 provides that where any person has sold any essential commodity (sugar being such a commodity) in compliance with an order made with reference to clause (f) of sub section (2), he shall be paid the price of the goods purchased from him as provided under clauses (a), (b) and (c) of sub section (3).
This subsection oper ates only where an order has been made under sub section (1) with reference to clause (f) of sub section (2).
While clause (a) of the sub section postulates an agreed price, consistently with the controlled price, if any, clause (b) speaks of a price calculated with reference to the con trolled price, if any, when no agreement is reached.
Where neither clause (a) nor clause (b) applies, either because there is no agreement or because there is no controlled price, the seller has to be paid, as per clause (c), a price calculated at the market rate prevailing in the locality at the date of the sale.
Sub section (3 A) empowers the Central Government to regulate in accordance with the provisions of the sub sec tion the price of any foodstuff sold in a locality in com pliance with an order made with reference to clause (f) of sub section (2).
This power is exercisable by a direction which has to be duly notified in the official Gazette.
The power to issue the direction is notwithstanding anything contained in sub section (3).
Before issuing the notifica tion, the Central Government has to form an opinion that the price of any foodstuff (including sugar) has to be regulated for the purpose of cotrolling the rise in its prices or preventing its hoarding in any locality.
Any such notifica tion will remain in force for any specified period not exceeding 3 months.
The price payable in such cases is either the agreed price consistently with the controlled price, if any, or where no such agreement is possible, the price calculated with reference to the controlled price, if any, or where neither of these two methods is applicable, the price calculated with reference to the average market rate prevailing in the locality during the period of 3 months immediately prior to the date of the notification.
The average market rate will be determined by an officer authorised by the Central Government and the rate so deter mined by him is not liable to be questioned in any court.
Sub section (3 C) which is the crucial provision, was inserted in 1967.
It reads: "(3 C).
Where any producer is required by an order made with reference to clause (f) of sub section (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Govern 930 ment or to any other person or class of persons) and either no notification in respect of such sugar has been issued under sub section (3 A) or any such notification, having been issued, has ceased to remain in force by efflux ot time, then, notwithstanding, anything contained in sub section (3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to (a) the minimum price, if any, fixed for sugarcane by the Central Government under this section; (b) the manufacturing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar.
Explanation For the purposes of this sub section, "produc er" means a person carrying on the business of manufacturing sugar." (emphasis supplied) Sub Section (3 C) is attracted whenever any producer is required to sell sugar by an order made with reference to sub section (2)(f) and no notification has been issued under sub section (3 A) or any such notification, having been issued, has ceased to be in force.
Whenever sub section (3 C) is attracted, it operates notwithstanding anything con tained in sub section (3).
This means the compensation payable to the seller in the circumstances attracting sub section (3 C) is not the price postulated in sub section (3).
Nor is it the price mentioned under sub section (3A), for that sub section cannot be in operation when sub section (3 C) is attracted.
What is payable under sub sectin (3 C) is an "amount" calculated with reference to the "price of sugar" determined in the manner indicated in that sub sec tion.
931 Construing sub section (3 C), this Court in Panipat [1973] 2 SCR 860,870 says: "Sub section 3C, with which we are presently concerned was inserted in sec.
3 by sec.
3 of Act 36 of 1967.
The sub section lays down two conditions which must exist before it applies.
The first is that there must be an order made with reference to sub section 2 cl.
(f), and the second is that there is no notification under sub section 3A or if any such notification has been issued it is no longer in force owing to efflux of time.
Next, the words "notwithstanding anything contained in sub section" suggest that the amount payable to the person required to sell his stock of sugar would be with reference to the price fixed under the subsection and not the agreed price or the market price in the absence of any controlled price under sub sec.
The sub section then lays down two things; firstly, that where a producer is required by an order with reference to sub sec.
2(f) to sell any kind of sugar, there shall be paid to that producer ' an amount therefore, that is for such stock of sugar as is required to be sold, and secondly, that such amount shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to the four factors set out in cls.
(a), (b), (c) and (d).
Unlike the preceding three sub sections under which the amount payable is either the agreed price, or the controlled price, or where neither of these prices is applicable at the market or average market price, the amount in respect of sugar required to be sold is to be calculated at the price determined by th Central Government . " What is specially significant is that sub section (3 C) postulates payment of an amount to the producer who has been required to sell sugar in the circumstances mentioned there in.
What is required to be paid to him is not the price of sugar, but only an amount.
That amount has to be calculated with reference to the price of sugar.
The "price" is deter mined by the Central Government by means of an order which, as required by sub sections (5) and (6), has to be notified in the official gazette and laid before both Houses of Parliament.
The order notifying the "price of sugar" is of general application and it is the rate at which the actual "amount" payable to each seller is calculated.
The price of sugar must be determined by the Central Govern 932 ment having regard to the factors mentioned in clauses (a) to (d) of sub section (3~C).
This is done with reference to the industry as a whole and not with reference to any indi vidual seller.
In contradistinction to the "price of sugar", the "amount" is calculated with reference to the particular seller.
The Central Government is authorised to determine different prices for different areas or for different facto ries or for different kinds of sugar.
Whether factories are required to be grouped together for a rational determination of the prices according to their location or their size, age and capacity or by any other standard is a matter for deci sion by the Central Government on the basis of relevant material.
What is contemplated by the legislature in dele gating such wide discretion to the Central Government is that it must apply its mind to the manifold questions rele vant to the determination of prices and with due regard to the norms laid down in the sub section.
What is required by sub section (3 C) is the adoption of a valid classification of factories having a rational nexus to the object sought to be achieved, viz., determination of a fair price of sugar with reference to which the actual amounts payable to the producers, in the circumstances attracting the sub section, are calculated.
Referring to the legislative background of sub section (3 C), this Court in Panipat (supra) observes: "In order to appreciate the meaning of cls.
(a), (b), (c) and (d), it must be remembered that ever since control on sugar was imposed, Government had set up expert committees to work out cost schedules and fairprices.
Starting in the beginning with an All India cost schedule worked out on the basis of the total production of sugar, the factories were later grouped together into zones or regions and different cost schedules for different zones or regions were con structed on the basis of which fair prices were worked out at which sugar was distributed and sold.
The Tariff Commis sion in 1958 and the Sugar Enquiry Commission in 1965 had worked out the zonal cost schedules on the basis of averaged recovery and duration, the minimum and not the actual price of cane, the averaged conversion costs and recommended a reasonable return on the capital employed by the industry in the business of manufacturing sugar.
This experience was before the legislature at the time when subsec.
3C was inserted in the Act.
The legislature therefore incorporated the same formula in the new sub section as the basis for working out the price.
The purpose behind 933 enacting the new sub section was three fold, to provide an incentive to increase production of sugar, encourage expan sion of the industry, to devise a means by which the cane producer could get a share in the profits of the industry through prices for his cane higher than the minimum price fixed and secure to the consumer distribution of at least a reasonable quantity of sugar at a fair price. ' ' Clauses (a) to (d) of sub section (3 C) postulate that the price of sugar must be determined having regard to the minimum price, if any, fixed for sugarcane by the Central Government, the manufacturing cost of sugar, the duty or tax applicable in the zone, and the securing of a reasonable return on the capital employed in the business of manufac turing sugar.
Referring to clause (d) of sub section (3 C), this Court observes in Panipat (supra): "It is clear from the reports of the Tariff Commission that a reasonable return recommended by that body at a fixed amount of Rs. 10.50 per quintal which worked out in 196667 at 12.5% per annum was not in respect of levy sugar only but on the whole, so that even if such a return was not obtain able on levy sugar but was obtainable on the whole, it would meet the requirement of cl.
In this conclusion we derive a two fold support, firstly, from the language used in cl.
(d) itself, viz., a reasonable return on the capital employed in the business of manufacturing sugar, which must mean the business as a whole and not the business of manu facturing levy sugar only, and secondly, from the fact of the Commission having all along used the same phraseology while recommending Rs. 10.50 per quintal as an addition by way of a reasonable return on the capital employed in the industry.
The cost schedules prepared by these bodies were for determining a fair price in relation to the entire sugar produced by the industry and the return which should be granted to it on the capital employed in the industry and not with respect to that stock only required to be sold under sub sec.
This is clear from the heading of Ch.
9 of the Tariff Commission 's report, 1969, "Cost Structure and Price Fixation".
" The petitioners contend that although the Government has the discretion to fix different prices for different areas or for different 934 factories, or for different kinds of sugar, such wide dis cretion has to be reasonably exercised.
It is, of course, a well accepted principle that any discretion conferred on the executive has to be reasonably exercised.
Nevertheless, it is a discretion which the Court will not curtail unless the exercise of it is impeachable on well accepted grounds such as 'ultra vires ' or 'unreasonableness '.
The petitioners further contend that the Act requires the Government to have regard to clauses (a) to (d) and, therefore, it is mandatory on the part of the Government to act strictly in compliance with the provisions of those clauses in determining the prices.
According to them, "having regard to" is a mandatory requirement demanding strict compliance with the provisions to which reference is made by the legislature.
They say that the ingredients of clauses (a) to (d) must be examined with reference to each producer as a condition precedent to the determination of the price of sugar.
We may in this connection point out that the petitioners have not furnished any data to show that the prices deter mined by the Government would have been different had the ingredients of clauses (a) to (d) of the sub section been examined with reference to each individual producer instead of a representative cross section of manufacturing units.
Be that as it may, the expression "having regard to" must be understood in the context in which it is used in the stat ute.
See Union of India vs Kamlabhai Harjiwandas Parekh & Ors., ; at 471.
These words do not mean that the Government cannot, after taking into account the matters mentioned in clauses (a) to (d), consider any other matter which may be relevant.
The expression is not "having regard only to" but "having regard to".
These words are not a fetter; they are not words of limitation, but of general guidance to make an estimate.
The Government must, of course, address itself to the questions to which it must have regard, and, having done so, it is for the Government to determine what it is empowered to determine with refer ence to what it reasonably consider to be relevant for the purpose.
The Judicial Committee in Commissioner of Income Tax vs Williamson Diamonds Ltd., , 49 observed with reference to the expression "having regard to": "The form of words used no doubt lends itself to the sugges tion that regard should be paid only to the two matters mentioned, but it appears to their Lordships that it is impossible to arrive at a conclusion as to reasonableness by considering the two matters mentioned isolated from other 935 relevant factors.
Moreover, the statute does not say "having regard only" to losses previously incurred by the company and to the smallness of the profits made.
No answer, which can be said to be in any measure adequate, can be given to the question of "unreasonableness" by considering these two matters alone . " See Commissioner of Income tax, West Bengal, Calcutta vs Gungadhar Banerjee and Co. (P) Ltd., ; at 444 45.
See also Saraswati Industrial Syndicate Ltd. etc.
vs Union of India; , at 959.
In State of Karna taka and Anr. etc.
vs Shri Ranganatha Reddy & Anr.
; , at 657 58 this Court stated: "The content and purport of the expressions "having regard to" and "shall have regard to" have been the subject matter of consideration in various decisions of the Courts in England as also in this country.
We may refer only to a few.
In Illingworth vs Welmsley, it was held by the Court of Appeal, to quote a few words from the judgment of Romer C.J. at page 144: "All that clause 2 means is that the tribunal assessing the compensation is to bear in mind and have regard to the average weekly wages earned before and after the accident respectively.
Beating that in mind, a limit is placed on the amount of compensation that may be awarded . . "In another decision of the Court of Appeal in Perry vs Wright (etc. etc.), Cozens Hardy M.R. observed at page 451: "No mandatory words are there used; the phrase is simply "regard may be had".
The sentence is not grammatical, but I think the meaning is this: Where you cannot compute you must estimate, as best as you can, the rate per week at which the workman was being remunerated, and to assist you in making an estimate you may have regard to analogous cases.
" It is worthwhile to quote a few words from the judgment of Fletcher Moulton L.J. at page 458.
Under the phrase "Regard may be had to" the facts which the Court may thus take cognizance of are to be "a guide, and not a fetter".
This Court speaking through one of us (Beg, J., as he then was), has expressed the same opinion in the case of Saraswati Industrial Syndicate Ltd. etc.
vs Union of India; , Says the learned Judge at page 959: "The expression "having regard to" only obliges the Government to consider as relevant data material to which it must have regard".
" 936 In State of U.P. & Ors.
vs Renusagar Power Co., ; , one of us (Mukharji, J., as he then was) observed: "The expression "having regard to" only obliges the govern ment to consider as relevant data material to which it must have regard . . ".
In O 'May and Ors.
vs City of London Real Property Co. Ltd., at 665 (H.L.), Lord Hailsham stated: "A certain amount of discussion took place in argument as to the meaning of 'having regard to ' in section 35.
Despite the fact that the phrase has only just been used by the draftsman of section 34 in an almost mandatory sense, I do not in any way suggest that the court is intended or should in any way attempt to bind the parties to the terms of the current tenancy in any permanent form . . ".
The words "having regard to" in the sub section are the legislative instruction for the general guidance of the Government in determining the price of sugar.
They are not strictly mandatory, but in essence directory.
The reasona bleness of the order made by the Government in exercise of its power under sub section (3 C) will, of course, be tested by asking the question whether or not the matters mentioned in clauses (a) to (d) have been generally considered by the Government in making its estimate of the price, but the Court will not strictly scrutinise the extent to which those matters or any other matters have been taken into account.
There is sufficient compliance with the sub section, if the Government has addressed its mind to the factors mentioned in clauses (a) to (d), amongst other factors which the Government may reasonably consider to be relevant and has come to a conclusion, which any reasonable person, placed in the position of the Government, would have come to.
On such determination of the price of sugar, which, as stated in Panipat (supra) is the fair price, the sub section postu lates the calculation of an amount, with reference to such price, for payment to each producer who has complied with an order made with reference to sub section (2)(f).
The "price of sugar", unlike the "amount" is arrived at by a process of costing in respect of a representative cross section of manufacturing units, beating, of course, in mind the legis lative instruction contained in clauses (a) to (d).
The Attorney General submits that orders determining the 937 prices of sugar in terms of the sub section are of general application and, therefore, legislative in character.
Omis sion, if any, to consider the peculiar problems of individu al producers is not a ground for judicial review.
The peti tioners ' counsel as well as Mr. Venugopal appearing for the intervener (ISMA), do not agree.
They submit that the sub section contemplates only administrative or quasi judicial orders of particular application and the impugned orders are not legislative.
They rely upon a certain observation of this Court in Union of India & Anr.
vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720.
Mr. Venugopal, however, hastens to add that his client does not seek personal heating before prices are determined.
Mr. B.R.L. Iyengar, supporting the contentions of the petitioners, points out that the expres sion 'determine ' used in sub section (3 C) indicates that the order to which that expression refers is quasi judicial.
Judicial decisions are made according to law while administrative decisions emanate from administrative policy.
Quasi judicial decisions are also administrative decisions, but they are subject to some measure of judicial procedure, such as rules of natural justice.
To distinguish clearly legislative and administrative functions is "difficult in theory and impossible in practice".3 Referring to these two functions, Wade says: 'They are easy enough to distinguish at the extremities of the .spectrum: an Act of Parliament is legislative and a deportation order is administrative.
But in between is a wide area where either label could be used according to taste, for example where ministers make orders or regula tions affecting large numbers of people . . ,, .4
Wade points out that legislative power is the power to prescribe the law for people in general, while administra tive power is the power to prescribe the law for them, or apply the law to them, in particular situations.
A scheme for centralising the electricity supply undertakings may be called administrative, but it might be just as well legisla tive.
Same is the case with ministerial orders establishing new towns or airports etc.
He asks: "And what of 'directions of a general character ' given by a minister to a nationa lised industry? Are these various orders legislative or administrative?" Wade says that the correct (3) Comd. 4060 (1932), p. 73; see H.W.R. Wade Adminis trative Law, 6th ed., p. 47 (4) Ibid p. 848.
938 answer would be that they are both.
He says:" . . there is an infinite series of gradations, with a large area of overlap, between what is plainly legislation and what is plainly administration".5 Courts, nevertheless, for practi cal reasons, have distinguished legislative orders from the rest of the orders by reference to the principle that the former is of general application.
They are made formally by publication and for general guidance with reference to which individual decisions are taken in particular situations.
According to Griffith and Street, an instruction may be treated as legislative even when they are not issued formal ly),, but by a circular or a letter or the like.
What mat ters is the substance and not the form, or the name.
The learned authors say: ".
. where a Minister (or other authority) is given power in a statute or an instrument to exercise executive, as opposed to legislative, powers as, for example, to requisition property or to issue a licence and delegates those powers generally, then any instructions which he gives to his delegates may be legisla tive".6 Where an authority to whom power is delegated is entitled to sub delegate his power, be it legislative, executive or judicial, then such authority may also give instructions to his delegates and these instructions may be regarded as legislative.
However, as pointed out by Denning, L.J., (as he then was) a judicial tribunal cannot delegate its functions except when it is authorised to do so express ly or by necessary implication ' see Bernard and Ors.
vs National Dock Labour Board and Ors., ; at 40.
Kenneth Culp Davis says: "What distinguishes legislation from adjudication is that the former affects the rights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely touched by it; while adjudica tion operates concretely upon individuals in their individu al capacity".7 Justice Holmes ' definition, which is what is called the "time test" and which Davis describes as one which has produced many unsatisfactory practical results, reads: "A judicial inquiry investigates, declares, and enforces liabilities as they stand on present or past facts and under laws supposed already to exist.
That is its purpose and end.
Legislation, on the other hand, looks to the future and (5) Ibid.
(6) Principles of Administrative Law, 5th ed.
, p. 65 (7) Administrative Law Text, 3rd ed., p. 123 24.
939 changes existing conditions by making a new rule, to be applied thereafter to all or some part of those subject to its power.
The establishment of a rate is the making of a rule for the future, and therefore is an act legislative, not judicial .
Prentis vs Atlantic Cost Line Co., ; ,226.
The element of general application is often cited as a distinct feature of legislative activity.
In the words of Chief Justice Burger, "rule making is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class"? Bernard Schwarts says: "an adjudication, on the other hand, applies to specific individuals or situations.
Rule making affects the fights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely affected; adjudication operates concretely upon individuals in their individual capacity ' '9 According to Schwartz, the "time test" and the "applicability test" are workable in most cases although in certain situations distinctions are indeed difficult to draw.
A statutory instrument (such as a rule, order or regula tion) emanates from the exercise of delegated legislative power which is the part of the administrative process resem bling enactment of law by the legislature.
A quasi judicial order emanates from adjudication which is the part of the administrative process resembling a judicial decision by a court of law.
This analogy is imperfect and perhaps unhelp ful in classifying borderline or mixed cases which are better left unclassified .10
If a particular function is termed legislative rather than judicial, practical results may follow as far as the parties are concerned.
When the function is treated as legislative, a party affected by the order has no fight to notice and heating, unless, of course, the statute so re quires.
It being of general application engulfing a wide sweep of powers, applicable to all persons and situations of a broadly identifiable class, the legislative order may not be vulnerable to challenge merely by reason of its omission to take into account individual peculiarities and differ ences amongst those falling within the class.
(8) Quoted by Bernard Schwartz in 'Administrative Law ' (1976), p. 144.
(9) Ibid (10) See Davis, Administrative Law Text, p. 123 940 In Union of India & Anr.
vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720 at 734 35, Chinnappa Reddy, J. referring to the earlier decisions of this Court states: " . . legislative action, plenary or subordinate, is not subject to .rules of natural justice.
In the case of Parlia mentary legislation, the proposition is self evident.
In the case of subordinate legislation, it may happen that Parlia ment may itself provide for a notice and for a hearing . .
But where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity . .
It is true that, with the proliferation of delegated legislation, there is a tendency for the line between legislation and administration to vanish into an illusion.
Administrative, quasi judicial decisions tend to merge in legislative activity and, con versely, legislative activity tends to fade into and present an appearance of an administrative or quasi judicial activi ty".
Stating that rule making is of general application to all members of a broadly identifiable class while adjudication is applicable to specific individuals or situations, the learned Judge observes: "A price fixation measure does not concern itself with the interests of an individual manufacturer or producer.
It is generally in relation to a particular commodity or class of commodities or transactions.
It is a direction of a general character, not directed against a particular situation.
It is intended to operate in the future.
It is conceived in the interests of the general consumer public.
The right of the citizen to obtain essential articles at fair prices and the duty of the State to so provide them are transformed into the power of the State to fix prices and the obligations of the producer to charge no more than the price fixed.
Viewed from whatever angle, the angle of general application, the prospectiveness of its effect, the public interest served, and the rights and obligations flowing therefrom, there can be no question that price fixation is ordinarily a legisla tive activity".
The learned Judge emphasises: 941 "Price fixation may occasionally assume an administrative or quasi judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals.
Such situations may arise when the owner of property or goods is compelled to sell his property or goods to the government or its nominee and the price to be paid is directed by the legislature to be determined accord ing to the statutory guidelines laid down by it.
In such situations the determination of price may acquire a quasiju dicial character".
These observations have been cited with approval by one of uS (Sabyasachi Mukharji, J., as he then was) in Renusagar (supra).
In Saraswati Industrial Syndicate Ltd. etc.
vs Union of India; , at 961, this Court states: "Price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material.
It could not, there fore, give rise to a complaint that a rule of natural jus tice has not been followed in fixing the price".
In Prag Ice & Oil Mills & Anr. etc.
vs Union of India; , at 317, Chandrachud, J., as he then was, speaks for the majority: "We think that unless, by the terms of a particular statute, or order.
price fixation is made a quasi judicial function for specified purposes or cases, it is really legislative in character in the type of control order which is now before us because it satisfies the tests of legislation.
A legisla tive measure does not concern itself with the facts of an individual case.
It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class".
See also the observation of Megarry, J., as he then was, in Bates vs Lord Hailsham of St. Marylebone & Ors., at 1024.
The impugned orders, duly published in the official gazettes notifying the prices determined for sugar of var ious grades and pro 942 duced in various zones, and applicable to all producers of such sugar, can, in our view, be legitimately characterised as legislative.
These orders are required by Sub section (6) to be laid before both Houses of Parliament.
The notified prices are applicable without exception to all persons falling within well defined groups.
The prices are deter mined in accordance with the norms postulated in the sub section.
It is with reference to such predetermined prices of sugar that the "amount" payable to each producer, who has sold sugar in compliance with an order made with reference to clause (f) of sub section (2), is calculated.
The calcu lation of such amount is, in contradistinction to the deter mination of "price of sugar", a non legislative act.
Thus, while individual consideration is relevant to the calculation of the "amount", it is not so for the determina tion of the "price of sugar" which is the rate at which the amount is calculated.
That price, as stated in Panipat (supra) is to be arrived at by a process of costing with reference to a reasonably efficient and economic representa tive cross section of manufacturing units.
In this connection, we must point out that at first blush a certain observation of Chinnappa Reddy, J. in Cyna mide, [1987] 2 SCC 720 at 741, on which much reliance is placed by the petitioners ' counsel, appears to be inconsist ent with what we have now stated.
The learned Judge says: "The Order made under Section 3(2)(c), which is not in respect of a single transaction, nor directed to a particu lar individual is clearly a legislative act, while an Order made under Section 3(3 C) which is in respect of a particu lar transaction of compulsory sale from a specific individu al is a non legislative act".
It would appear that what the learned Judge had in mind was an order by which the "amount" was calculated in terms of sub section (3 C) in respect of each individual producer and not an order determining the "price of sugar".
While the former is non legislative, the latter, by the very test adopted by the learned Judge, is legislative in character.
We, therefore, understand the observation of the learned Judge on this point as applicable only to the individual order fixing the "amount" in terms of the sub section and not to orders determining the "price of sugar" which are what the impugned orders are.
Any other construction of the sub section would conflict with what was adopted by the Constitution Bench in Panipat (supra) and would, therefore, be unsustainable.
943 The individual orders, calculating the "amounts" payable to the individual producers, being administrative, orders rounded on the machanics of price fixation, they must be left to the better instructed judgment of the executive, and in regard to them the principle of audi alteram partem is not applicable.
All that is required is reasonableness and fair play which are in essence emanations from the doctrine of natural justice as explained by this Court in A.K. Krai pak & Ors. etc.
vs Union of India & Ors., See also the observation of Mukharji, J., as he then was, in Renusagar, , 105.
Price fixation is in the nature of a legislative action even when it is based on objective criteria rounded on relevant material.
No rule at natural justice is applicable to any such order.
It is nevertheless imperative that the action of the authority should be inspired by reason.
Saras wati Industrial Syndicate Ltd.; , , 961, 962.
The Government cannot fix any arbitrary price.
It cannot fix prices on extraneous considerations: Renusagar, (supra).
Any arbitrary action, whether in the nature of a legis lative or administrative or quasi judicial exercise of power, is liable to attract the prohibition of Article 14 of the Constitution.
As stated in E.P. Royappa vs State of Tamil Nadu & Anr., ; , "equality and arbi trariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch.
" Unguided and unrestricted power is af fected by the vice of discrimination: Mrs. Maneka Gandhi vs Union of India & Anr., [1978] 1 SCC 248 at 293 294.
The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative, executive, or quasi judicial: Ramana Dayaram 'Shetty vs The International Airport Authority of India & Ors., ; at 1042; Ajay Hasia & Ors.
vs Khalid Mujib Sehravardi & Ors. ; and D.S. Nakara & Ors.
vs Union of India, ; Power delegated by statute is limited by its terms and subordinate to its objects.
The delegate must act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts.
All his decisions, whether characterised as legislative or administrative or quasi judicial, must be in harmony with the Constitution and other laws of the land.
They must be "reasonably related to the purposes of the enabling legislation".
See Leila Mourn ing vs Family Publications Service; , , If they are manifestly unjust or oppressive or outra geous or directed to an unauthorised end or do not tend in some degree to the accomplishment of 944 the objects of delegation, courts might well say, "Parlia ment never intended to give authority to make such rules; they are unreasonable and ultra vires".
per Lord Russel of Killowen, C.J. in Kruse vs Johnson, [1988] 2 Q.B. 91, 99.
The doctrine of judicial review implies that the reposi tory of power acts within the bounds of the power delegated and he does not abuse his power.
He must act reasonably and in good faith.
It is not only sufficient that an instrument is intra vires the parent Act, but it must also be consist ent with the constitutional principles: Maneka Gandhi vs Union of India, [1978] 1 SCC 248, 314 315.
Where a question of law is at issue, the Court may determine the rightness of the impugned decision on its own independent judgment.
If the decision of the authority does not agree with that which the Court considers to be the right one, the finding of law by the authority is liable to be upset.
Where it is a finding of fact, the Court examines only the reasonableness of the finding.
When that finding is found to be rational and reasonably based on evidence, in the sense that all relevant material has been taken into account and no irrelevant material has influenced the deci sion, and the decision is one which any reasonably minded person acting on such evidence, would have come to, then judicial review is exhausted even though the finding may not necessarily be what the Court would have come to as a trier of fact.
Whether an order is characterised as legislative or administrative or quasi judicial, or, whether it is a deter mination or law or fact, the judgment of the expert body, entrusted with power, is generally treated as final and the judicial function is exhausted when it is found to have "wanant in the record" and a rational basis in law: See Rochester Tel.
Corp. vs United States, ; , See also Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; As stated by Lord Hailsham of St. Marylebone L.C., (H.L.) in Chief Constable of the North Wales Police vs Evans; , at 1160 61: "The function of the court is to see that lawful authority is not abused by unfair treatment and not tO attempt itself the task entrusted to that authority by the law . .
The purpose of judicial review is to ensure that the indi vidual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter 945 which it is authorised by law to decide for itself a conclu sion which is correct in the eyes of the court".
In the same case Lord Brightman says: "Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made".
A repository of power acts ultra vires either when he acts in excess of his power in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissi ble purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness.
See Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; In the words of Lord Mac naghten in Westminster Corporation vs London and North Western ' Railway, , 430: " . .
It is well settled that a public body invested with statutory powers such as those conferred upon the Corporation must take care not to exceed or abuse its pow ers.
It must keep within the limits of the authority commit ted to it.
It must act in good faith.
And it must act rea sonably.
The last proposition is involved in the second, if not in the first. .".
In The Barium Chemicals Ltd. & Anr.
vs The Company Law Board & Ors., [1966] Supp.
SCR 311, this Court states: " . .
Even if (the statutory order) is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers, since the Authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extra neous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation.
In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts".
In Renusagar; , , 104, Mukharji, J., as he then was, states: 946 "The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary.
Similarly, if the power has been exercised on a non consideration or non application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous.
If a power (whether legislative or administra tive) is exercised on the oasis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated".
The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it The impugned orders are undoubtedly based on an exhaus tive study by experts.
They are fully supported by the recommendations of the Tariff Commission in 1969 and 1973.
It is true that these recommendations in some respects were the subject matter of criticism by a subsequently appointed expert body, viz., the BICP.
Apart from the fact that the BICP 's criticism has not been accepted by the Government, that criticism is not relevant in so far as the impugned orders are concerned because the latter are in regard to an earlier period.
These orders are fully supported by the relevant material on record.
The conclusions reached by the Central Government in exercise of its statutory power are expert conclusions which are not shown to be either discrim inatory or unreasonable or arbitrary or ultra vires.
The (11) See the observation of Lord Russel in Kruse vs Johnson, and that of Lord Greene, M.R. in Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; ; See also Mixnam Properties Ltd. vs Chertsey U.D.C., ; Commissioners of Customs and Excise vs Cure and DeeIcy Ltd. [1962] 1 Q.B. 340; McEldowney vs Forde, [1971] AC 632 (H.L.); Carltona Ltd. vs Commissioners of Works, , 564; Point of Ayr.
Collieries Ltd. vs Lloyd George, ; Scott vs Glasgow Corporation, , 492; Robert Baird L.D.v.
City of Glasgow, , 42; Manhattan General Equipment Co. vs Commissioner, ; , 134; Yates (Arthur) & Co. Pty. Ltd. vs Vegetable Seeds Committee, ; ; Bailey vs Conole, ; ; Boyd Builders Ltd. vs City of Ottawa, ; Re Burns and Township of Haldimand, 14 and Lynch vs Tilden Produce Co. 15,320 322.
947 material brought to our notice by the petitioners does not support the arguments at the bar that the Central Government has not applied its mind to the relevant questions to which they are expected to have regard in terms of the statute.
That the sugar factories for the purpose of determining the price of sugar in terms of sub section (3 C) should be grouped on the basis of their geographical location is a policy decision based on exhaustive expert conclusions.
Factories are classified with due regard to geographi cal cumagro economic considerations.
Fair prices for differ ent grades of sugar are determined for each zone with refer ence to a reasonably efficient and economic representative cross section of the manufacturing units.
Such classifica tion, as held in Panipat (supra) and Anakapalle (supra) cannot, in the absence of evidence to the contrary, be characterised as arbitrary or unreasonable or not rounded on an intelligible differentia having a rational nexus with the object sought to be achieved by subsection (3 C).
The person assailing such classification "carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences" Federal Power Commission vs Hope Gas Co., ; , 602 (1944).
If the petitioners nevertheless incur losses, such losses need not necessarily have arisen by reason of geographical zoning, but for reasons totally unconnected with it, such as the condition of the plant and machinery, quality of management, investment policy, labour relations, etc.
These are matters on which the petitioners have not furnished data, and, in any event judicial review is hardly appropriate for their consideration.
In this connection we would recall the observations of Chinnappa Reddy, J. in Union of India and Anr.
vs Cynamide India Ltd. andAnr., [1987] 2 SCC 720 at p. 736: "We do not agree with the basic premises that price fixation primarily affects manufacturers and producers.
Those who are most vitally affected are the consumer public.
It is for their protection that price fixation is resorted to and any increase in price affects them as seriously as any decrease does a manufacturer, if not more." In M/s. Gupta Sugar Works vs State of U.P. and Ors., [1987] Supp.
SCC 476 at p. 48 1 one of us (Jagannatha Shetty, J .) stated: "In this view of the matter, the primary consideration in the fixation of price would be the interest of consumers 948 rather than that of the producers." The Court has neither the means nor the knowledge to reevaluate the factual basis of the impugned orders.
The Court, in exercise of judicial review, is not concerned with the correctness of the findings of fact on the basis of which the orders are made so long as those findings are reasonably supported by evidence.
In the words of Justice Frankfurter of the U.S. Supreme Court in Railroad Commission of Texas vs Rowan & Nichols Oil Company, 311 US 570 577, 85 L. ed.
358,362: "Nothing in the Constitution warrants a rejection of these expert conclusions.
Nor, on the basis of intrinsic skills and equipment, are the federal courts qualified to set their independent judgment on such matters against that of the chosen state authorities . .
When we consider the limit ing conditions of litigation the adaptability of the judi cial process only to issues definitely circumscribed and susceptible of being judged by the techniques and criteria within the special competence of lawyers it is clear that the Due Process Clause does not require the feel of the expert to be supplanted by an independent view of judges on the conflicting testimony and prophecies and impressions of expert witnesses".
This observation is of even greater significance in the absence of a Due Process Clause.
Judicial review is not concerned with matters of econom ic policy.
The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either.
The Court does not supplant the "feel of the expert" by its own views.
When the legislature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonable~ ness.
In all such cases, judicial in quiry is confined to the question whether the findings of fact are reasonably based on evidence and whether such findings are consistent with the laws of the land.
As rated by Jagannatha Shetty, J. in M/s. Gupta Sugar Works, (supra): "the court does not act like a chartered accountant nor acts like an income tax officer.
The court is not concerned with any individual case or any particular problem.
The court 949 only examines whether the price determined was with due regard to considerations provided by the statute.
And wheth er extraneous matters have been excluded from determination." Price fixation is not within the province of the courts.
Judicial function in respect of such matters is exhausted when there is found to be a rational basis for the conclu sions reached by the concerned authority.
As stated by Justice Cardozo in Mississippi Valley Barge Line Company vs United States of America; , 292 US 282 290, , 1265: "The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the Commis sion by training and experience is qualified to form . .
It is not the province of a court to absorb this function to itself . .
The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body".
It is a matter of policy and planning for the Central Government to decide whether it would be on adoption of a system of partial control, in the best economic interest of the sugar industry and the general public that the sugar factories are grouped together with reference to geographi cal cum agro economic factors for the purpose of determining the price of levy sugar.
Sufficient power has been delegated to the Central Government to formulate and implement its policy decision by means of statutory instruments and execu tive orders.
Whether the policy should be altered to divide the sugar industry into groups of units with similar cost characteristics with particular reference to recovery, duration, size and age of the units and capital cost per tonne of output, without regard to their location, as recom mended by the BICP, is again a matter for the Central Gov ernment to decide.
What is best for the sugar industry and in what manner the policy should be formulated and imple mented, bearing in mind the fundamental object of the stat ute, viz., supply and equitable distribution of essential commodity at fair prices in the best interest of the general public, is a matter for decision exclusively within the province of the Central Government.
Such matters do not ordinarily attract the power of judicial review.
We would, in this connection, recall the words of Jus tice Frankfurter in Secretary of Agriculture, etc.
vs Cen tral Roig Refining Com 950 pany, etc.
, , "Congress was . . confronted with the formula tion of policy peculiarly with its wide swath of discretion.
It would be a singular intrusion of the judiciary into the legislative process to extrapolate restrictions upon the formulation of such an economic policy from those deeply rooted notions of justice which the Due Process Clause expresses . . ".
"Suffice it to say that since Congress fixed the quotas on a historical basis it is not for this Court to reweigh the relevant factors and, perchance, substitute its notion of expediency and fairness for that of Congress.
This is so even though the quotas thus fixed may demonstrably be disadvantageous to certain areas or persons.
This Court is not a tribunal for relief from the crudities and inequities of complicated experimental economic legislation".
It is important to remember that the division of the industry on a zonal basis for the purpose of price determi nation has been accepted without question by almost all the producers with the exception of a few like the petitioners.
Even if it is true that the petitioners as individuals are at a disadvantage and have suffered losses on account of the present system an assertion which has not been established and which by its very nature is incapable of determination by judicial review that is not sufficient ground for inter ference with the impugned orders.
We are not satisfied that the decisions of this Court in Anakapalle; , and Panipat, [1973] 2 SCR 860 require reconsideration in any respect.
We see no merit in the challenge against the im pugned orders.
The civil writ petitions are, in the circum stances, dismissed.
However, we do not make any order as to costs.
P.S.S. Petitions dismissed.
| IN-Abs | Clause (f) of sub section
(2) of the empowers the Central Government to require any person dealing in any essential commodity to sell the whole or specified part of such commodity to it or the State Government or to a nominee of such Government.
Sub section (3) provides for payment to such a seller (a) the price agreed upon consistently with the controlled price, if any, fixed under the section; (b) the price calculated with reference to the controlled price, if any; and (c) where none of these applies, a price calculated at 910 the market rate prevailing in the locality at the date of the sale.
Subsection (3 A) deals with orders made with a view to controlling the rise in prices or preventing the hoarding of any foodstuff in any locality and determination of price for payment to the seller, notwithstanding anything contained in sub s.(3).
Sub section (3 C) lays down that where any producer is required by an order made with refer ence to cl.
(f) of sub section
(2) to sell any kind of sugar and either no notification in respect of such sugar has been issued under sub section
(3 A) or any such notification having been issued has ceased to remain in force by efflux of time, then notwithstanding anything contained in sub section
(3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may, by order, determine having regard to (a) the minimum price, if any, fixed for sugarcane by Central Government under this section; (b) the manufac turing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar.
The Central Government by notifications dated 28th November, 1974 and 11th July, 1975 issued in exercise of the power under sub section
(3 C) of section 3 of the Act fixed the prices of levy sugar for 1974 75 production.
The petitioners, owners of sugar mills operating in the State of Uttar Pradesh in areas classified for the purpose of determining the price of levy sugar as West and East zones, challenged the validity of the said orders on the grounds that they were ultra vires the Act and violative of their fundamental rights as the prices of levy sugar had been determined arbitrarily with reference to the average cost profiles of factories grouped together in zones without regard to their individual capacity and cost characteris tics; that although the Government has the discretion to fix different prices for different areas or for different facto ries, or for different kinds of sugar, such wide discretion has to be reasonably exercised, that the words 'having regard to ' occurring in sub section
(3 C) is a mandatory require ment demanding strict compliance with clauses (a) to (d); that the ingredients of the said clauses should, therefore, have been examined with reference to each producer as a condition precedent to the determination of the price of sugar; that the Central Government had not applied its mind to the relevant questions to which they were expected to have regard to in terms of thesub section; and that the expression 'determine ' used in sub section (3 C) indicates 911 that the order to which that expression referred to is quasi judicial amenable to judicial review.
For the inter veners it was contended that the cost incurred by units having lower crushing capacity should be neutralised by giving them an incremental levy price.
For the respondents it was contended that the division of the country into zones and the method adopted by the Government in fixing price of levy sugar was fully supported by the recommendations of various expert bodies and the Tariff Commission and was upheld in Anakapalle Co op.
Agri cultural & Industrial Society Ltd. Etc.
vs Union of India & Ors.
, ; and the Panipat Co op.
Sugar Mills".
The Union of India, [1973] 2 SCR 860; that the cost of manufacturing sugar depends not only on recovery from the sugarcane, duration of crushing season, crushing capacity of the plant, the sugarcane price paid and the capital em ployed, but also to a considerable extent on the conditions of the plant and machinery, quality of management, invest ment policy, relations with cane growers and labour, finan cial reputation etc.; that to group together factories having a high cost profile and to determine a price special ly applicable to them is to put a premium on incompetence, if not mismanagement; and that the orders determining the price of sugar in terms of sub section (3 C) were of general application and, therefore, legislative in character and the omission, if any, to consider the peculiar problems of individual producers was not a ground of judicial review.
Dismissing the writ petitions, the Court HELD: 1.
The notifications dated 28th November, 1974 and 11th July, 1975 issued under sub section
(3 C) of section 3 of the are intra rites the Act.
There is no merit in the challenge.
[950F, 918F G] 2.1 Sub section (3 C) is attracted whenever any producer is required to sell sugar by an order made with reference to sub section
(2)(f) and no notification has been issued under sub section
(3 A) or any such notification, having been issued, has ceased to be in force.
It operates notwithstanding anything contained in sub section
This means the compensa tion payable to the seller in the circumstances attracting sub section
(3 C) is not the price postulated in sub section
Nor is it the price mentioned under sub section
(3 A), for that sub section cannot be in operation when sub section
(3 C) is attract ed.
What is payable under sub section
(3 C) is an amount calcu lated with reference to the price of sugar.
[930F H] 912 The Panipat Cooperative Sugar Mills vs The Union of India, [1973] 2 SCR 860, referred to.
2.2 The price of sugar is determined by the Central Government having regard to the factors mentioned in cls.
(a) to (d) of sub section
(3 C).
This is done with reference to the industry as a whole by a process of costing in respect of a representative cross section of manufacturing units and not with reference to any individual seller.
The order notifying the price is required by sub sections
(5) and (6), to be notified in official gazette and laid before both Houses of Parliament.
[931H, 932A, 936G, 931G] 3.
The words 'having regard to ' in sub section
(3 C) are the legislative instruction for the general guidance of the Government in determining the price of sugar.
They are not strictly mandatory, but in essence directory.
They do not mean that the Government cannot, after taking into account the matters mentioned in cls.
(a) to (d), consider any other matter which may be relevant.
The expression is not "having regard only to" but "having regard to".
These words are not a fetter, they are not words of limitation.
[936D, 934E] Union of India vs Kamlabhai Harjiwandas Parekh & Ors., ; ; Commissioner of Income Tax vs Williamson Diamonds Ltd., ; Commissioner of Income Tax, West Bengal, Calcutta vs Gungadhar Banerjee & Co. (P) Ltd., ; ; Saraswati Industrial Syndicate Ltd. etc '.
vs Union of India; , ; State of Karnata ka & Anr. etc.
vs Shri Ranganatha Reddy & Anr.
; , ; State of U. P. & Ors.
vs Renusagar Power Co., ; and O 'May & Ors.
vs City of London Real Property Co. Ltd., , referred to.
4.1 In considering the reasonableness of the order made by the Government ' in exercise of its power under sub section
(3 C) the Court will not strictly scrutinise the extent to which matters mentioned in cls.
(a) to (d), or any other matters have been taken into account by the Government in making its estimate of the price.
There is sufficient com pliance with the sub section if the Government has addressed its mind to the factors which it may reasonably consider to be relevant, and has come to a conclusion, which any reason able person placed in the position of the Government, would have come to.
[936E F] 4.2 In the instant case, the material brought to the notice of the Court does not support the arguments at the bar that the Central Government had not applied its mind to the relevant questions to which 913 they were expected to have regard in terms of the statute.
Nor any data has been furnished to show that the prices determined by the Government would have been different had the ingredients of cls.
(a) to (d) of the sub section been examined with reference to each individual producer instead of a representative cross section of manufacturing units.
[947A, 934D] 5.1 Judicial decisions are made according to law while administrative decisions emanate from administrative policy.
Quasi judicial decisions are also administrative decisions emanating from adjudication but they are subject to some measure of judicial procedure, such as rules of natural justice.
Legislative orders can be distinguished from rest of orders by reference to the principle that the former are of general application.
They are made formally by publica tion and for general guidance with reference to which indi vidual decisions are taken in particular situations, [937C, 939E, 938A B] H.W.R. Wade. ' Administrative Law, 6th ed., 47, referred to.
5.2 An instruction may be treated as legislative even when it is not issued formally but by circular or a letter or the like.
What matters is the substance and not the form, or the name.
Where an authority to whom power is delegated is entitled to sub delegate his power, be it legislative, executive or judicial, then such authority may also give instructions to his delegates and these instructions may be regarded as legislative.
However, a judicial tribunal cannot delegate its functions except when it is authorised to do so expressly or by necessary implication.
[938B C, D E] Griffith and Street. ' Principles of Administrative Law, 5th ed., p. 65 and Bernard & Ors.
vs National Dock Labour Board & Ors., ; at 40, referred to.
5.3 What distinguishes legislation from adjudication is that the former affects the rights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely touched by it; while adjudication operates con cretely upon individuals in their individual capacity.
[938F] Davis. ' Administrative Law Text, 3rd ed., p. 123, referred to.
5.4 A statutory instrument such as a rule, order or regulation emanates from the exercise of delegated legisla tive power which is a 914 part of the administrative process resembling enactment of law by the legislature.
It affects the rights of individuals in the abstract.
[939D E, C] Bernard Schwartz. ' Administrative Law [1976] p. 144 and Davis: Administrative Law Text, p. 123, referred to.
5.5 When the function is treated as legislative, a party affected by the order has no right to notice and bearing unless, of course, the statute so requires.
It is neverthe less imperative that the action of the authority should be inspired by reason.
It being of general application engulf ing a wide sweep of powers, applicable to all persons and situations of a broadly identifiable class, the legislative order may not be vulnerable to challenge merely by reasons of its omission to take into account individual peculiari ties and differences amongst those failing within the class.
[939F, 943C, 939F G] Union of India & Anr.
vs Cynamide India Ltd. & Ant., [1987] 2 SCC 720 and Saraswati Industrial Syndicate Ltd., vs Union of India; , , referred to.
5.6 The orders in the instant case, duly published in the official gazettes notifying the prices determined for sugar of various grades and produced in various zones, and applicable without exception to all producers failing within well defined groups can be legitimately characterised as legislative.
No rule of natural justice is applicable to any such order.
[941H, 942A, 943B C] Union of India & Anr.
vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720; State of U.P. & Ors.
vs Renusagar Power Co., ; ; Saraswati Industrial Syndicate Ltd. etc.
vs Union of India; , ; Prag Ice & Oil Mills & Anr. etc.
vs Union of India; , and Bates vs Lord Hailsham of St. Marylebone & Ors., , referred to.
It is with reference to predetermined prices of sugar that subsection (3 C) postulates the calculation of the amount payable to each producer who has sold sugar in compliance with an order made with reference to cl.
(f) of sub section
The calculation of such amount is in contradis tinction to the determination of price of sugar, a non legislative act.
The individual orders to that effect being administrative orders rounded on the mechanics of price fixation, they must be left to the better instructed judg ment of the executive, and in regard to them the principle of audi alteram partem is not applicable All that is 915 required is reasonableness and fair play which are in es sence emanations from the doctrine of natural justice.
[942B, 936F G, 943A B] The Panipat Cooperative Sugar Mills vs The Union of India, [1973] 2 SCR 860; A.K. Kraipak & Ors.
vs Union of India & Ors., and State of U.P. & Ors.
vs Renusagar Power Co.; , , referred to.
Union of India & Anr.
vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720, distinguished.
7.1 Any Act of the repository of power, whether legisla tive or administrative or quasi judicial, is open to chal lenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it.
[946C] E.P. Royappa vs State of TamilNadu & Anr.
, ; ; State of U.P. & Ors.
vs Renusagar Power Co., ; ; Saraswati Industrial Syndicate Ltd. vs Union of India, ; ; Mrs. Maneka Gandhi vs Union of India & Anr., [1978] 1 SCC 248; Ramana Dayaram Shetry vs The International Airport Authority of India & Ors., ; ; Ajay Hasia & Ors.
vs Khalid Mujib Sehravardi & Ors., ; ; D.S. Nakara & Ors.
vs Union of India, ; ; The Barium Chemicals Ltd. & Ant.
vs The Company Law Board & Ors., [1966] Supp.
SCR 311; Leila Mourning vs Family Publications Service, ; , 36 L. Ed.
2d 318; Kruse vs Johnson, [1988] 2 Q.B. 91; Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; ; Westminster Corporation vs London and North Western Railway, ; Mixnam Properties Ltd. vs Chertsey U.D.C., ; Commissioners of Customs ney vs Forde, [1971] AC 632 (H.L.); Carltona Ltd. vs Commis sioners of Works, ; Point of Ayr.
Col lieries Ltd. vs Lloyd George, ; Scott vs Glasgow Corporation, ; Robert Baird L.D.v.
City of Glasgow, ; Manhattan General Equipment Co. vs Commissioner, ; ; Yates (Arthur) & Co. Pty Ltd. vs Vegetable Seeds Committee, ; ; Bailey vs Conole, ; ; Boyd Builders Ltd. vs City of Ottawa, ; Re Burns & Township of Haldimand, and Lynch vs Tilden Produce Co., ; , referred to.
916 7.2 Where a question of law is at issue, the Court may determine the rightness of the decision of the authority on its own independent judgment.
If the decision does not agree with that which the Court considers to be the right one, the finding of law by the authority is liable to be upset.
Where it is a finding of fact, the Court examines only the reason ableness of the findings.
When the finding is found to be rational and reasonably based on evidence then judicial review is exhausted even though the finding may not neces sarily be what the Court would have come to as a trier of fact.
[944C E] 7.3 Whether an order is characterised as legislative or administrative or quasi judicial, or, whether it is a deter mination of law or fact, the judgment of the expert body, entrusted with power, is generally treated as final and the judicial function is exhausted when it is found to have warrant in the record and a rational basis in law.
[944E F] Rochester Tel. Corp. vs United States, [1939] 307 U.S. 125, ; Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; and Chief Constable of the North Wales Police vs Evans, ; at 1160, referred to.
7.4 The orders, in the instant case, are undoubtedly based on an exhaustive study by experts.
They are fully supported by the recommendations of the Tariff Commission in 1969 and 1973 and are not shown to be either discriminatory or unreasonable or arbitrary or ultra vires.
[946D E] 8.1 Judicial review is not concerned with matters of economic policy.
Nor is price fixation within the province of the Courts.
The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either.
The Court does not supplant the "feel of the experts" by its own views.
When the legis lature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonableness and are consistent with the laws of the land.
[948F, 949B, 948F G] M/s. Gupta Sugar Works vs State of U.P. & Ors., [1987] Supp.
SCC 476; Railroad Commission of Texas vs Rowan & Nichols Oil Company, 311 US 570 577, 85 L. ed.
358 and Mississippi Valley Barge Line Company vs United States of America, 2.92 US 282 290; , , referred to.
917 8.2 In the instant case, sufficient power has been delegated to the Central Government by sub section
(3 C) to formulate and implement its policy decisions by means of statutory instruments and executive orders.
Classification of sugar factories with due regard to geographical cum agro economic considerations for the purpose of determining the price of sugar in terms of the said sub section is a policy decision based on exhaustive expert conclusions.
Such clas sification, cannot, in the absence of evidence to the con trary, be characterised as arbitrary or unreasonable or not rounded on an intelligible differentia having a rational nexus with the object sought to be achieved by sub section (3 C).
[949E, 947B D] The Panipat Cooperative Sugar Mills vs The Union of India, [1973] 2 SCR 860 and T. Govindaraja Mudaliar etc.
vs The State of TamilNadu & Ors., ; , applied.
Federal Power Commission vs Hope Gas Co., ; ; Union of India & Anr.
vs Cynamide India Ltd. &Anr., [1987] 2 SCC 720 and M/s. Gupta Sugar Works vs State of U.P. & Ors., [1987] Supp.
SCC 476, referred to.
8.3 If the petitioners nevertheless incur losses, such losses need not necessarily have arisen by reason of geo graphical zoning, but for reasons totally unconnected with it, such as the condition of the plant and machinery, quali ty of management, investment policy, labour relations, etc.
These are matters on which they have not furnished data.
The decisions in Anakapalle; , and Panipat, [1973] 2 SCR 860 do not require reconsideration.
[947D E, 950E F] 8.4 Whether the policy should be altered to divide the sugar industry into groups of units with similar cost char acteristics with particular reference to recovery from sugarcane, duration of the crushing season, size and age of units and capital cost per tonne of output, without regard to their location, is a matter for the Central Government to decide.
What is best for the sugar industry and in what manner the policy should be formulated and implemented, bearing in mind the fundamental object of the statute, is again a matter for decision exclusively within the province of the Central Government.
Such matters do not ordinarily attract the power of judicial review.
[949E G] Secretary of Agriculture, etc.
vs Central Roig Refining Company etc., , 94 L. ed.
391 392, referred to.
|
Appeals Nos. 278 and 279 of 1956.
Appeal from the judgment and order dated November 14, 1950, of the Allahabad High Court in Incometax Miscellaneous Case No. 12 of 1950.
47 A. V. Viswanatha Sastri and A. N. Kirpal for the appellant.
C. K. Daphtary, Solicitor General of India, Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the respondent.
October 3.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
These are appeals by special leave and they arise from the assessment proceedings taken against the appellant 's husband Seth Ganga Sagar Jatia in respect of his income for the assessment years 1943 44 and 1944 45.
The said Seth Ganga Sagar died on September 22, 1944, leaving behind him his widow the appellant Shrimati Indermani Jatia.
After the death of her husband, the appellant continued the assessment proceedings as his representative and administrator of his estate.
The appellant as well as her husband were residents and ordinarily residents in British India for the relevant years.
The sources of the assessee 's income for the purposes of income.tax assessment were his business, his house property and the dividends earned by him.
This business was carried on by the appellant after his death at Khurja and Aligarh which are part of India and at Chistian in the Indian State of Bahawalpur now a part of Pakistan.
The central set of accounts of the assessee,s business were kept at Khurja.
In this set of accounts income received by the assessee from all sources were incorporated.
For the accounting year relevant to 1943 44 assessment, the interest account in the said books showed credit entries of Rs. 17,132/ as interest received on capital invested in the shop at Cliistian).
Similarly for the accounting period relevant to 1944 45 assessment Rs. 47,029/ had been credited in the said books.
The Income Tax Officer took the view that these two amounts represented the assessee 's taxable income in India and accordingly he levied tax on them.
The appellant filed appeals before the Appellate Assistant Commissioner against the said assessment orders for the assessment years 1943 44 and 1944 45; 48 and on her behalf the Income Tax Officer 's decision about the chargeability to tax of the aforesaid two amounts was challenged.
The appellate authority, however, rejected the appellant 's contention and confirmed the order under appeal.
The appellant then filed appeals before the Income Tax Appellate Tribunal.
The tribunal agreed with the view taken by the income tax authorities, confirmed their conclusion and dismissed the appeals preferred by the appellant.
In the assessment for 1943 44, the appellant had claimed that Rs. 7,512/ , which had been spent in litigation, was an admissible expenditure but this claim was disallowed by the Income Tax Officer and his decision was confirmed by the appellate authority and by the tribunal.
At the instance of the appellant, the tribunal stated the case and referred the following two questions to the High Court at Allahabad under section 66(1): (1) Whether, in the circumstances of the case, the sum of Rs. 17,132/ for 1943 44 and Rs. 47,029/for 1944 45 could be legally deemed to have been received in British India and were liable to tax under section 4(1) of the Act ; (2) Whether, in the circumstances of the, case, the expenditure of Rs. 7,5121 incurred in connection with a criminal litigation was admissible expenditure within the meaning of section 10(2)(xv) of the Act ? The reference was heard by Malik C. J. and V. Bhargava J. on November 14, 1950, and both the questions were answered against the appellant.
The application made by the appellant under section 66A of the Act for leave to appeal to the Supreme Court was dismissed by the High Court on April 23, 1954.
Thereupon the appellant applied for and obtained special leave on December 10, 1954.
That is how these appeals have come to this Court.
Mr. Viswanatha Sastri, for the appellant, did not challenge before us the correctness of the view taken by the High Court on the second question in respect of the expenditure of Rs. 7,512/ .
He conceded that the finding recorded by the income tax authorities 49.
against the appellant on this point is a finding of fact.
and, having regard to the material on the record, the correctness of the said finding cannot be effectively challenged.
He, however, urged that the answer, given by the High Court on the first question referred to it was erroneous in law.
The High Court has held that the two amounts of interest credited in the books of the appellant were liable to tax under section 4(1) of the Act as they must be deemed to have been received by the appellant in British India.
Mr. Sastri argues that the expression " deemed to be received " means, deemed by the relevant provisions of the Act to be received.
It is not disputed that though income may not have been received by the assessee in reality, it can be deemed to be received under the relevant provisions of the Act; and this constructive receipt can be con veniently described as statutory receipt under the Act.
Taxes deducted at source or annual accretion to an employee participating in a recognized firm, for instance, are deemed to be received under section 18(4) and section 58(e) of the Act respectively.
The argument is that there is no relevant provision of the Act under which the two amounts in question can be properly deemed to have been received by the appellant.
No provision has been mentioned in the judgment of the High Court nor has any such provision been cited by the income tax authorities either.
In our opinion, this argument is technically correct.
It must be conceded that the present Proceedings disclose some confusion in the mind of the appellant in the presentation of her case at all stages hereto, in the findings recorded by the income tax authorities, in the form of the question raised by the tribunal, and in the answer given to it by the High Court.
In law and in substance, what the department has done is to tax the said two amounts not because they are deemed to have been received by the appellant during the relevant years, but because they have been actually received by her or treated by her as so received.
In other words, the case against the appellant under section 4(1)(a) is that the amounts of interest constitute her income which is received or treated as received by her.
7 50 Dealing with the question on this basis, Mr. Sastri contends that the inference about the receipt of income by the appellant drawn from her books of account is not valid and should be rejected.
He does not dispute the fact that the books of account are kept by the appellant on mercantile basis.
It was conceded by the appellant 's lawyer in the proceedings before the tribunal that the appellant as the creditor had a right to enforce the payment of interest in British India, and that the liability of the Chistian shop had been extinguished to the extent of the interest paid by it to the head office.
The concessions made by the appellant before the tribunal clearly show that the sum advanced by the appellant 's head office in British India to her shop at Chistian was liable to pay interest and that the credit entry in respect of the two amounts had been made according to the mercantile method of keeping accounts.
It is well known that the mercantile system of accounting differs substantially from the cash system of book keeping.
Under the cash system, it is only actual cash receipts and actual cash payments that are recorded as credits and debits; whereas, under the mercantile system, credit entries are made in respect of amounts due immediately they become legally due and before they are actually received; similarly, the expenditure items for which legal liability has been incurred are immediately debited even before the amounts in question are actually disbursed.
Where accounts are kept on mercantile basis, the profits or gains are credited though they are not actually realised and the entries thus made really show nothing more than an accrual or arising of the said profits at the material time.
The same is the position with regard to debits made.
This position is not disputed by Mr. Sastri.
He,, however, contends that the entries in respect of the receipt Of interest are nevertheless merely book entries and it would not be reasonable to infer actual receipt of the said amount merely from these entries.
In support of this argument, Mr. Sastri invited our attention to the decision of the House of Lords in Gresham Life Assurance Society Ltd. vs Bishop (Surveyor of 51 Taxes)(1).
This was a case of life assurance society which carried on business at home and abroad with its head office in London.
At the head office accounts and balance sheets were made.
up, the profits ascertained and the dividends paid.
The interest upon the society 's foreign securities paid abroad was received by the agents and part of it was applied abroad for the purposes of the society.
All the interest on foreign securities was, however, taken into account in the balance sheets upon which the profits were ascertained.
It was held that taking the interest into account was not equivalent to a receipt in the United Kingdom and that income tax was not chargeable upon that part of the interest which was not remitted to the United Kingdom.
The Fourth Case falling under Schedule I which fell to be considered in this case referred to sums " which have been or will be received in Great Britain during the year for which the duty is payable ".
Under this provision, the locality of the receipt is naturally very important.
As Lord Lindley has observed that " what has been done, and all that has been done, is that the Gresham Company, in making up its account with a view to ascertain what profits it could divide in a particular year, entered on its asset side the sum of pound 43,483/ as money received during the year.
This was obviously right; for the object was not to ascertain the profit made in any particular country but the profit made by the company on all its transactions all over the world ".
In fact no account was forthcoming to show that the sum had ever been treated as remitted to the United Kingdom so as to justify the inference that in any commercial sense the same had been received in the United Kingdom as distinguished from other countries.
It is thus clear that the decision turned upon the special features of accounting which is usually adopted in preparing and presenting balance sheets of companies and it shows that an entry in a balance sheet is not receipt of money at the place where the balance sheet is prepared.
In our opinion, there is no analogy between the balance sheet of a (1) ; 52 company and the accounts 'kept by the appellant in respect of her individual business activities.
The principle laid down by the House of Lords in the case of Gresham Life Assurance Society Ltd. (1), appears to have been substantially reproduced in explanation (1) to section 4(1).
The argument that the principle thus statutorily recognized in respect of balance sheets should be extended to private books of account kept according to mercantile system cannot, in our opinion, be accepted.
Mr. Sastri has also invited our attention to the decision of Keshav Mills Ltd. vs Commissioner Income tax, Bombay (2).
In this case a non resident company manufactured textile goods in Petlad outside British India and sold the goods ex mills.
The firm of R. & Co., guaranteed the sale price of goods sold ex mills by the assessee company to purchasers at Ahmedabad within British India.
The assessee maintained its accounts according to the mercantile system and so debited R. & Co. with the price of goods sold and credited the sales account of the bills.
R. & Co. collected the amounts of the bills from the purchasers on behalf of the assessee and credited the sums realised in the assessee 's account with banks at Ahmedabad and also disbursed them to creditors of the assessee in British India.
During the relevant accounting year, the assessee thus received Rs. 12,68,418/ .
The asses.
see also received Rs. 4,40,878/ from sales to purchasers in British India.
The question which arose for decision was whether these two sums were sale proceeds of goods sold by the assessee to merchants in British India and whether they were received in British India and could be included in the assessable income of the assessee in British India.
It was held by this Court that the said amounts were not received by the assessee nor could be deemed to have been received by it when the entries were made in the books of account at Petlad but that they had merely accrued or arisen to the assessee there; that they were first received by R. & Co. and by the banks through whom the railway receipts were negotiated on behalf (1) ; (2) ; 53 of the company in British India and as such were liable to tax under section 4(1)(a) of the Act as having been received in British India on its behalf.
We do not see how this decision can assist the appellant 's case before us.
We are dealing with the appellant who is a resident in British India and the argument that the credit entries made in his books of account should not be treated as income received or treated by her as, received cannot be supported by the decision in Keshav Mills Ltd. (1) or even by any of the observations made by Bhagwati J. who delivered the majority judgment.
Reliance was also placed by Mr. Sastri on the decision of the Full Bench of the Punjab High Court in Sunder Das vs The Collector of Gujrat (2).
This case merely decided that, where the assessee had earned and received income in British Baluchistan (which Province was exempt from the operation of the Act except as to salaries) and had subsequently brought it into Punjab, it was not liable to income tax for the reason that the said income had not been received in the Punjab within the meaning of section 3, sub section
(1) of the Income tax Act.
In other words, this decision shows that the assessee cannot receive the same income twice in two different places but this principle has no application to the present case.
The decision of the Full Bench of the Madras ']High Court in Commissioner of Income tax, Madras vs A. T. K.P.L.S.P.
Subramaniam Chettiyar (3), on the other hand, supports the contention of the department.
In this case the Madras High Court has held that credit entries made on account of interest due by debtor in foreign places to the assessee must be treated as payments though that interest was not actually paid %in British India.
The assessee had a business of his own in Rangoon carried on by an agent and lie was also interested with another or others in a money lending business in Penang in which he was a chief partner.
From the Rangoon business a sum of Rs. 78,768/ and odd was transferred in cash to the Penang business (1) (2) Lah.
(3) Mad.
54 under the orders of the assessee.
In the books of the Rangoon business a sum of Rs. 12,174/. was entered as interest on that money from Penang and the assessee had been assessed in respect of this interest under section 4, sub section
(1) of the Act as income accruing, arising or received in British India.
It was admitted that the assessee kept his books according to the mercantile method of book keeping.
What the assessee sought to do was to treat the relevant entries of interest on cash basis though he adopted the mercantile basis in regard to other entries in the interest account.
This attempt did not succeed because the High Court held that the assessee 's own accounts were " dead against his contention " and they precluded him from arguing that the interest in question is income arising outside British India and not received in British India because in law the transfer called in the assessee 's books an advance to the Penang firm cannot be a loan.
The court came to the conclusion that once the assessee had adopted the mercantile basis of accountancy it was upon that basis and that basis alone that lie had to be assessed.
Thus this decision would show that the effect of making a credit entry in the interest account would be to treat that amount as income or profits received by the assessee or treated by him as received for the purposes of the tax provided the assessee keeps the accounts according to the mercantile method of book keeping.
We are, therefore, not prepared to accept Mr. Sastri 's argument that, despite the concessions made by his client before the tribunal, it would still be open to her to contend that the relevant entries in her books of account did not justify the inference that the appellant has received the amounts in question by way of interest during the relevant period.
Realising the infirmity in his argument on this point, Mr. Sastri contended that the main objection which he wanted to urge before us against the validity of the conclusion reached by the income tax authorities was fundamental and it went to the root of the matter.
Indeed, it was this aspect of the matter which Mr. Sastri seriously sought to press before us.
He contends 55 that the view taken by the Madras High Court in the case of Subramaniam Chettiyar (1), like the conclusion of the income tax authorities against the appellant in the present case, is based on the erroneous assumption that a person can trade with himself.
He urges that it is a rule of universal application that no person can trade with himself and make profit out of dealings with himself; and so his case is that, whatever may be the effect of the other entries made in the appellant 's books in the interest account, the relevant entries in respect of the interest alleged to have been received from the appellant 's own shop at Chistian in law cannot mean the receipt of any income by the appellant.
How can the appellant be tier own creditor and how can she receive interest in respect of the advance made by her to her own shop at Chistian, asks Mr. Sastri.
He concedes that this point bad not been raised by the appellant at any stage in the proceedings so far but, according to him, it is a Pure question of law and he should be allowed to argue it before us.
It was as early as 1887 that Palles C. B. observed in Dublin Corporation vs M 'Adam (Surveyor of Taxes) (2) that " no man, in my opinion, make, in what is its true sense or meaning, taxable profit by dealing with himself ".
In this case, a city corporation had been empowered by its Water works Act to supply waters beyond the city boundaries.
Any income thus arising had to be put into a consolidated account of the corporation for all the purposes of the Act.
It was held that the excess of receipts over expenditure in respect of the extra municipal supply constitutes profits chargeable to income tax.
Distinction was made between the extra municipal supply of water and supply within the limits of the municipality; and it was held that it was only the excess of receipts over expenditure in respect of the former that constitutes profits chargeable to income tax.
The argument that the income received from the rate payers residing within the limits of Dublin Municipality should be taken into account was repelled on the ground that (1) Mad. 765.
(2) 56 the corporation cannot be treated as in any sense a body distinct from the inhabitants of Dublin.
It was also observed that what was intended to be raised from the citizens was what is enough to pay for the expenses of the water supply and no more and that there was no intention that the corporation should in any sense make a profit from those rate payers.
The said principle has been enunciated very succinctly by Viscount Simon in Ostime (H. M. Inspector of Taxes) vs Pontypridd and Rhondda Joint Water Board (1) when he said that "if the undertaker is a rating authority and the subsidy is the proceeds of rates imposed by it or comes from a fund belonging to the authority, the identity of the source with the recipient prevents any question of profits arising ".
In The Carlisle and Silloth Golf Club vs Smith (Surveyor of Taxes) (2), Buckley L. J. has adverted to the same rule and has observed that a man cannot make profits or loss out of himself and that was the ground of the decision in New York Life Insurance Company vs Styles (Surveyor of Taxes) (3).
In support of the same proposition Mr. Sastri has also relied upon the decision of this Court in Sir Kikabhai Premchand V. Commissioner of Income tax (Central), Bombay (4).
In this case, the assessee carried on business in bullion and shares and kept his accounts in the mercantile system; the method adopted by him for ascertaining his profit,,; was to value stock at the beginning and close of each year at cost price.
In the accounting year he withdrew some silver bars and shares from the business and settled them in trusts, and in the accounts of the business he valued them at the close of the year at cost price.
According to the majority decision, the assessee was entitled to value the silver bars and shares in question at cost price and he was not bound to credit the business with the market price at the close of the year for ascertaining his assessable profits for the year.
Bhagwati J., however, dissented from this view and held that the assessee 's business was entitled to be credited (1) , 278.
(3) (2) (4) 57 with the market value of the assets withdrawn as on the date it was withdrawn whatever be the method employed by the assessee for the valuation of the stock in trade on hand at the close of the year.
Mr. Sastri placed reliance on the observations made by Bose J., who delivered the judgment for the majority view that " disregarding technicalities it is impossible to get away from the fact that the business was owned and run by the assessee himself.
In such circum stances it would be unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non existent ".
Mr. Sastri also contended that the decision of the Allahabad High Court in Ram Lal Bechairam vs Commissioner of Income tax (1) supported the same view.
On the other hand, the Solicitor General contends that the principle on which Mr. sastri relies can no longer be regarded as inflexible and universal; and according to him, permissible invasion of this principle has been recently recognized by the House of Lords in Sharkey (Inspector of Taxes) vs Wernher (2).
In this case Lady Zia carried on a stud farm, an activity which was admittedly husbandry and taxable under Schedule ' D '; she also carried on a separate activity, racing stables, which gave rise to no liability to tax being a " recreational " enterprise.
Horses were bred at the stud farm for the racing stables.
On the transfer of five horses in the relevant year of assessment from the stud to the stables it was held by the House of Lords (Lord Oaksey dissenting) that " where a person carrying on a trade disposes of part of his stock in trade not by way of sale in the course of trade but for his own use, enjoyment, or recreation, he must bring into his trading account for income tax purposes the market value of that stock in trade at the time of such disposition, and that, accordingly, the amount to be credited to the stud farm accounts on the transfer of the horses was their market value and not the (1) A.I.R. 1946 All. 8.
(2) 8 58 cost of breeding them ".
It would be noticed that this decision proceeds on the fictional or notional assumption that the transfer of the five horses from the stud farm of the assessee to her racing stables was a commercial transaction; and that, according to the Solicitor General, is a clear case where an exception is recognized to the general rule that a person cannot trade with himself.
In his speech, Viscount Simonds observed that " if there are commodities which are the subject of a man 's trade but may also be the subject of his use and enjoyment, I do not know how his account as a trader can properly be made up so as to ascertain his annual profits and gains unless his trading account is credited with a receipt in respect of those goods which he has diverted to his own use and enjoyment ".
Then Viscount Simonds referred to the change in law which made the farmer liable to tax under Scheduled ' instead of under Schedule 'B ' and to section 10 of the Finance Act of 1941 and observed that " these provisions emphasize the artificial dichotomy which the scheme of income tax law in many instances imposes.
Lord Radcliffe, dealt with the question at length.
He cited the proposition stated by Palles C. B. and observed that later decisions have shown that this simple proposition may cover what are to be regarded as two separate questions, whether a man can trade or deal with himself, whether a man can make taxable profit by so doing.
In his opinion, " it must now be said that people can carry on trade or business with themselves, as by way of mutual insurance, but that, if they do, a resulting surplus from the operations is not a profit from a trade for the purposes of income tax, or, put another way, their operations do not for the same purposes constitute a trade from which a profit can result ".
Lord Radcliffe referred to the case of Watson Brothers vs Hornby (1) which explicitly decided that it must be necessary for a proper assessment of trade profits under Case I of Schedule d ' to treat a man who supplies himself in his own trade as trading with himself on ordinary commercial (1) 59 terms and stated that the said decision which was given in 1942 laid down a principle that must continuously affect a great many taxpayers and it was only in 1955 that it was said that the case was wrongly decided.
The learned law Lord also considered the decision in Back (Inspector of Taxes) vs Daniels (1) and referred to the observations of Mr. Justice Rowlatt about the assessees ' admission that " in addition to their liability to income tax under Schedule ' B ' the assessees may be liable to income tax on a sum in the nature of a commission to themselves for selling their own potatoes, in the same way as they sell other people 's potatoes in London on the market ".
The assessees in the case before Rowlatt J. were a firm of wholesale potato merchants who carried on business in London where they sold all the potatoes raised by them on land in Fen District.
The effect of the decision was that Schedule ' B ' assessment on the profits of occupation prevented any assessment under Schedule ' D ' in respect of the profit the firm made when they sold the potatoes as wholesale merchants in London.
The assessees admitted their liability, to pay the tax on the commission in question ; but the admission did not seem, a strange one to Mr. Justice Rowlatt whose only comment was "but that, on the whole, is the limit of their liability ".
In regard to this decision, Lord Radcliffe has remarked that the limit mentioned by Rowlatt J. required the assessees to include in the receipts of their London business a commission from themselves which of course they never paid for selling themselves their own potatoes.
From the decisions examined by him, Lord Radcliffe drew the inference that they afford instances of the disintegration for tax purpose of a profitable business carried on by a taxpayer in two departments.
The respondent 's argument is that having regard to the decision of the House of Lords in the case of Sharkey vs Wernher (2) it would be necessary for a larger Bench of this Court to reconsider the view expressed by the majority decision in the case of Anglo French (1) (2) 60 Textile Co., Ltd. vs Commissioner of Income tax, Madras (1).
It is urged that the minority view expressed by Bhagwati J. appears to be more consistent with the decision of the House of Lords.
Besides, the Solicitor General has argued that though he is prepared to meet on the merits the new point raised by Mr. Sastri for the first time in appeal before us, he would be entitled to contend that, having regard to the special circumstances of this case, Mr. Sastri should not be permitted to raise the said point.
We are inclined to accept this contention raised by the Solicitor General and so we do not propose to decide the interesting point raised by Mr. Sastri.
We have already indicated that the appellant 's contention throughout has been that the relevant entries do not justify the inference that the amounts in question have been received by her during the years in question as income or profit; and this contention naturally raised the short and simple question as to the effect of the said entries made in the books of account which are admittedly kept on the mercantile basis of bookkeeping.
It is true that the confusion introduced by the appellant 's contention was shared b y the income tax authorities and it persisted throughout the present proceedings until they reached this Court.
That is why even the material question framed by the tribunal and answered by the High Court does not properly disclose the real controversy between the parties.
The reference to the deeming provisions of the Act which is presumably implied in the question as framed by the tribunal and answered by the High Court is clearly out of place; but the fact still remains that the appellant never raised the contention that the two entries in the interest.
account cannot in law show profits received by her because the appellant could not trade with herself.
If the appellant wanted to rely upon this principle the point should have been urged at the earlier stage of the proceedings.
Besides, there are some other factors which would introduce complications in case the point raised by Mr. Sastri were to be upheld.
The business con (1) , 61 ducted by the appellant in the shop at Chistian attracted the provisions of section 14(2)(c) of the Act which was then in force; and so no tax was payable by the appellant in respect of the income, profits or gains accruing or arising to her from the said shop unless such income, profits or gains were received or deemed to be received in or brought into British India in the previous year by or on behalf of the appellant.
In other words, though the appellant is a resident in the taxable territories and her income wherever received would be normally taxable, she would be entitled to the benefit of the exception prescribed by the pro visions of section 14 (2)(c).
Nevertheless the appellant 's profits from her shop at Chistian would be relevant for the purpose of determining the rates at which income tax was payable by the appellant.
They would also be relevant in deciding which part of the profits were received or could be deemed to be received within the meaning of section 14(2)(c).
If it is held that the entries in respect of the two items of interest in question do not represent in law any profits received by the appellant, then appropriate changes would have to be made in the appellant 's account books kept at Khurja as well as at Chistian.
The appellant has been keeping accounts on the mercantile basis for all the years; and it is very unlikely that the two entries before us are the only ones which may be affected if it is held that the appellant could not have traded with herself.
It is clear that the profits made by the appellant in her shop at Chistian have been determined all these years on the basis of credit and debit entries by the appellant according to the mercantile system; and so the question as to the amounts remitted by the appellant from Chistian to herself at Khurja would be affected by making necessary adjustments of all relevant entries, and that would mean reopening the whole enquiry into the appellant 's liability to pay the tax.
In this connection we may refer to the fact that for the assessment year 1943 44 the Income Tax Officer had determined the assessee 's income at Chistian at Rs. 74,982.
He had also held that out of the said profits the appellant had remitted Rs. 51,879 to 62 British India; and so, in the assessment, he added this amount as income in British India on remittance basis and, after giving the statutory allowance of Rs. 4,500, took the balance of Rs. 18,603 as income on accrual basis to be considered for rate purposes only.
On this question the ultimate decision was that no amount could be taxed on remittance basis.
In the supplementary assessment proceedings the appellant proved that a sum of Rs. 7,19,660 was sent to Chistian shop and Rs. 4,17,636 was received from the Chistian shop.
That is why, in the result, the entire income in Bahawalpur State was taken on an accrual basis for income tax.
Having regard to the method adopted by the appellant in keeping her books of account, it seems clear that, if the appellant 's present contention is accepted, the decision as to remittances from Chistian to Khurja as well as the decision as to the rates at which the tax were to be levied on the appellant may have to be reopened.
That is why we think, in the special circumstances of this case, we should not, allow Mr. Sastri to raise the point that the appellant cannot trade with herself and so the relevant entries cannot justify the inference that the appellant has received income even though the entries are made in the accounts kept on mercantile basis.
In the result the appeals fail and must be dismissed with costs.
Appeals dismissed.
| IN-Abs | The assessee, who was ordinarily resident in British India, carried on business at Khurja and Aligarh in India and at Chistian in the Indian State of Bahawalpur.
He kept a central set of accounts of the business at Khurja, which were maintained on the mercantile system.
Under the said system credit entries are made in respect of amounts due immediately they become legally due and even before they are actually received.
In his account books the income received by the assessee from all sources was shown, and the interest account showed credit entries of amounts received as interest on capital invested in the shop at Chistian.
The assessee conceded that as creditor he had the right to enforce the payment of, interest in British India and that liability of the Chistian shop had been extinguished to the 46 extent of the interest paid by it to the head office.
The Income Tax Authorities included these amounts in the assessee 's taxable income in India and levied tax on them.
The assessee contended that the entries in respect of the receipt of interest were merely book entries and that the authorities had wrongly treated these amounts as having been actually received.
Held, that the relevant entries in the books of account did justify the inference that the assessee had actually received the amounts by way of interest.
Where an assessee Keeps accounts according to the mercantile method of book keeping the effect of making a credit entry in the interest account would be to treat that amount as income or profits received by the assessee or treated by him as received for the purposes of the tax.
Commissioner of Income tax vs A.T.K.P.L.S.P. Subramaniam Chettiar, Mad. 765, approved.
Gresham Life Assurance Society Ltd. vs Bishop, (1902) A.C. 287; Keshav Mills Ltd. vs Commissioner of Income tax, Bombay, ; ; Sunder Das vs The Collector of Gujrat, Lah. 349, referred to.
The assessee sought to raise a new point that it was a rule of universal application that no person could trade with himself and that accordingly the interest alleged to have been received from his own shop at Chistian could not amount to receipt of any income by him, and referred to: Dublin Corporation vs M 'Adam, ; Ostime vs Pontypridd and Rhondda joint Water Board, (1944) 28 Tax Cas. 261 ; Caylisle and Silloth Golf Club vs Smith, ; New York Life Insurance Company vs Styles, ; ; Sir Kikabhai Premchand vs Commissioner of Income tax (Central) Bombay, and Ram Lal Bechairam vs Commissioner of Income tax, A.I.R. (1946) All.
The respondent contended that the principle was not inflexible or universal and that the new point having been raised for the first time in appeal ought not to be permitted to be raised.
Sharkey vs Wernher, (1956) A. C. 58, referred to.
Held that, the new point could not be allowed to be raised as that would mean the re opening of the whole enquiry into the question as to the remittances from Chistian to Khurja as well as the rates at which the tax were to be levied on the assessee.
If the assessee wanted to rely upon this principle the point ought to have been urged at the earlier stage of the proceedings.
|
No. 105 of 1973.
(Under Article 32 of the Constitution of India) Kapil Sibal, A.K. Sen, P.C. Jain, Ranbir Chandra, A. Minocha and Ms. Indu Goswami for the Petitioners.
Kuldip Singh, Additional Solicitor General, M.M. Abdul Khadar, L.N. Sinha, V.C. Mahajan, R.B. Dattar, A.K. Gangu|i, R.B. Misra, Ms. A. Subhashini, D.N. Mukharjee, R.P. Gupta, T.V.S.N. Chart, Mrs. Binu Tamta, Mrs. B. Sunita Rao, Ms. Manjula Gupta and Badrinath for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The petitioner company obtained mining leases from the Government of Assam to extract sillimanite in the Khasi and Jaintia Hills District.
In pursuance there of, three lease deeds were executed by the State Government in favour of the petitioner.
The first was a lease deed dated 25.4.1952 for a period of 15 years in respect of an area of 129.60 hectares at Lalmati.
The second, dated 10.4.1963, was for a period of 15 years in respect of an area of 986 777.60 hectares at Nongmawait.
The third one dated 8.6.1967 was for a period of 15 years and covered an area of 363 hectares at Wamsophi.
The three lease deeds were to expire on 26.5.77, 9.4.78 and 7.6.82 respectively but there was a clause for further renewal.
The petitioner company had also established a refractory Plant in 1961 near Ramgarh in District Hazaribagh.
It ap pears, however, that petitioner faced a number of difficul ties in operating the refractory plant and was explaining its difficulties to the State of Maghalaya which was formed in 1970.
Between 1970 to 1972, the Union of India, through its public sector companies, Hindustan Steel Ltd. and Bokaro Steel Ltd. negotiated with the petitioner for the purchase of its refractory plant and also for having the mining leases transferred to them.
Though the refractory plant was not functioning properly and was on the verge of closure, the petitioner was not willing to transfer its mining leases to the public sector companies but was willing to supply the required quantity of sillimanite to the Bakaro Steel Plant.
It is also stated that some negotiations took place as a result of which the petitioner was planning to re open the factory on 6.11.
However, in the meantime on the 2nd of November, 1972, the Central Government took over the management of the refractory plant under section 18 AA of the Industries Development & Regulation Act, 1951.
Posses sion of the plant as well as its management was also taken over by the Hindustan Steel Ltd. on the same day.
This take over was challenged by the petitioner company but its chal lenge was repelled by the Delhi High Court and a Special Leave Petition was filed, which is pending in this Court.
We are not concerned with this issue in the present case.
On 12.9.1972, the Mines and Minerals (Regulation and Development) Act, 1951, was amended by Act No. 56 of 1972.
By this amendment, section 4 A was introduced in the Act, which reads as follows: "(1) Where the Central Government, after consultation with the State Government is of opinion that it is expedient in the interest of regulation of mines and mineral development so to do it may request the State Government to make a premature termination of a Mining Lease in respect of any mineral other than a minor mineral, and, on receipt of such request, the State Government shall make an order making a premature termination of such mining lease and 987 granting a fresh mining lease in favour of such Government Company or Corporation owned or controlled by Government as it may think fit.
(2) Where the State Government, after consultation with the Central Government, is of opinion that it is expedient in the interest of regulation of mines and mineral development so to do, it may, be an order, make premature termination of a mining lease in respect of any minor mineral and grant a fresh lease in respect of such mineral in favour of such Government Company or Co operation owned or controlled by Government as it may think fit." This amendment came into effect in September 1972.
At this juncture it may be mentioned that Act 37 of 1986 has further amended the 1951 Act and substituted section 4A by the following section, which insofar as it is relevant for our present purposes reads as follows: "4A (1) Where the Central Government, after consultation with the State Government, is of opinion that it is expedi ent in the interest of regulation of mines and mineral development, preservation of natural environment, control of floods, prevention 'of pollution, or to avoid danger to public health or communications or to ensure safety of buildings, monuments or other structures or for conservation of mineral resources or for maintaining safety in the mines or for such other purposes, as the Central Government may deem fit, it may request the State Government to make a premature termination of a prospecting licence or mining lease in respect of any mineral other than a minor mineral in any area or part thereof, and, on receipt of such re quest, the State Government shall make an order making a premature termination of such prospecting licence or mining lease with respect to the area or any part thereof.
(2) Where the State Government, after consultation with the Central Government, is of opinion that it is expedient in the interest of regulation of mines and mineral development, preservation of natural environment, control of floods, prevention of pollution or to avoid danger to public health or communications or to ensure safety 'of buildings, 988 monuments or other structures or for such other purposes, as the State Government may deem fit, it may, by an order, in respect of any minor mineral, make premature termination of a prospecting licence or mining lease with respect to the area or any part thereof covered by such licence or lease: Provided that the State Government may, after the premature termination of a prospecting licence or mining lease under sub section (1) or sub section (2), as the case may be, grant a prospecting licenee or mining lease in favour of such Government company or corporation owned or controlled by Government as it may think fit. '(3) No order making a premature termination of a prospect ing licence or mining lease shall be made except after giving the holder of the licence or lease a reasonable opportunity of being heard.
In pursuance of the 1972 amendment, the State Government passed an order terminating the mining leases granted to the petitioner and granted fresh leases over the same areas in favour of M/s. Hindustan Steel Ltd., a Government company, fully owned by the Central Government.
The order, made in the name of the Governor, reads as follows: Dated, Shillong 7th Dec., 1972.
No. MG.
133/72: Whereas the Central Govt., having consulted the Govt.
of Meghalaya, is of opinion that it is expedient in the interest of mineral regulation and development that the mining leases of sillimanite mentioned below held by M/s. Assam Sillimanite Ltd. (having its Registered Office at 13 A.T. Road, Gauhati) in Meghalaya are terminated forth with; And, whereas, in terms of Sec.
4A of the Mines and Minerals (Regulation & Development) Act, 1957, as amended by the Mines and Minerals (Regulation & Development) Amended Act, 1972, the Central Govt.
has requested the Govt.
of Meghalaya to make a premature .
termination of the said mining leases held by M/s. Assam Sillimanite Ltd.; 989 Now, therefore, the Govt.
of Meghalaya in exercise of the powers conferred by Sec.
4A(1) of the Mines and Minerals (Regulation & Development) Act, 1957, as amended by the Mines & Minerals (Regulation & Development) Amendment Act, 1972 hereby terminates prematurely the mining leases of sillimanite mentioned below held by M/s. Assam Sillimanite Ltd. with immediate effect and grants fresh mining leases over the same areas in favour of M/s. Hindustan Steel Ltd., a Government Company, fully owned by the Central Government.
Lease Locality Area in Period of Date of No. hecteres Lease expiry 5.
Lalmati 129.60 15 years 24.4.1977 6.
Nongmawait 777.60 do 9.4.1978 7.
Wamsophi 363.00 do 7.6.1982" The petitioner filed a writ petition in the Gauhati High Court against the order dated 7.12.
1972 but it was not able to obtain any ex 'parte interim orders.
The petition was withdrawn from the Gauhati High Court and the present peti tion under Article 32 has been filed in this Court.
On 5.3.
1973, this Court issued rule nisi and also directed the maintenance of the status quo pending notice.
It, however, appears that Hindustan Steel Ltd. had taken possession of the properties in question and the interim stay was also vacated on 20th of January, 1987.
The present position, therefore, is that the mining leases have been granted to the Hindustan Steel Ltd. and they have also been operating the mines for the past several years.
Though several objections have been raised to the action of the State Government in the writ petition, including a challenge to the validity of section 4A, the arguments before us were restricted by Shri P.C. Jain to only two aspects.
He submitted that, admittedly, no notice had been issued by the State Government before terminating the leases prematurely.
This, according to him, amounts to denial of natural justice and vitiates the order dated 7.12.
The second contention is that the order does not fulfil the requirements specified in section 4 A justifying the prema ture termination of leases in pursuance thereof.
990 This writ petition came up for hearing on earlier occa sions but it was adjourned from time to time as the same issue was pending decision in this Court in the case of State of Haryana vs Ram Kishan & Ors., Civil Appeals Nos.
1472 77 of 1987.
Our task in the present writ petition has been considerably simplified because the above civil appeals have been disposed of by this Court by its judgment dated 6th May, 1988, which is reported in ; Shri P.C. Jain, learned counsel for the petitioner company submits that the first point raised by him has been squarely decided in his favour in the above case and that, therefore, he is entitled to succeed in the present writ petition.
Learned counsel also referred to a decision of the Delhi High Court reported in Dharam Veer vs Union of India, AIR 1989 Delhi 227, which has followed the decision in Ram Kishan 's case.
In that case, a similar order of premature termination was set aside by the High Court and the lessees were directed to be put back in possession of the leased premises which had been taken away from them in pursuance of their unlawful order.
Learned counsel submits that, in the present case, having regard to the comparatively long peri ods of leases and the lapse of time, be would not pray for the petitioner being put back in possession of the leased premises but he contends that the least that could be done is to award compensation to the petitioner company for, (what has now to be held to be), the wrongful premature termination of the leases.
He submits that the petitioner is willing to have this aspect of the matter referred to arbi tration by any arbitrator appointed by this Court.
On the other hand, Shri R.B. Datar, learned counsel for the Union of India submits that, in the State of Haryana vs Ram Kishan and Others, ; , the Central Government had expressed its willingness to reconsider the matter after hearing the parties concerned and that, there fore, the decision of this Court in that case is distin guishable.
He sought to contend, on the strength of observa tions made by this Court in The Barium Chemicals Ltd. and Anr.
vs Company Law Board and Others, [1966] Suppl.
S.C.R. 311 as well as the decision in R.S. Dass vs Union of India and Others, that rules of natural justice can be statutorily excluded either expressly or by necessary implication.
In the present case, he submits that it became expedient in the interest of regulation of mines and mineral development, to have the mining operations in respect of raw materials necessary for the production of iron and steel entrusted to public sector companies and a policy decision to this effect had been taken by the Govern ment.
In this context, he submits, the grant of an opportu nity to the lessee would be totally meaningless and futile.
He 991 says that the object and purpose of the statute clearly excludes the provision of an opportunity to the lessees before termination of the leases.
If at all, he submits, it will be open to a lessee, whose lease is prematurely termi nated under section 4 A, to challenge the order of premature termination, after it was passed, on the ground that it did not satisfy the conditions set out in section 4 A but that the section should not be construed as envisaging a hearing of the lessees before an order of premature termination is made.
Referring to the amendment of section 4 A in 1986, which specifically provides for an opportunity of hearing under sub section (3), Shri Datar says that this provision became necessary because the grounds for premature termina tion set out in the new sub section (1) of section 4 A were made wider and made more comprehensive.
Under the new sub section, premature termination of leases was permissible in various other circumstances, such as: preservation of natu ral environment, control of floods, prevention of pollution, avoidance of danger to public health or communications, ensuring of safety of buildings, monuments and other struc tures, conservation of mineral resources, maintenance of safety in mines and such other purposes as the Central Government may deem fit.
These were purposes in respect of which an opportunity of hearing to the lessee would be really needed and helpful but that, in the context of earli er sub section, which was much narrower, no such opportunity of hearing was at all contemplated.
We do not propose to reconsider this matter as, in our opinion, the contention raised by Shri P.C. Jain is directly and squarely concluded by the decision in Ram Kishan 's case (supra).
It is no doubt true that in that case the Central Government appears to have been willing to reheat the par ties but the court did not proceed on the basis of any concession.
The court discussed the provisions of section 4 A at great length and held that there was no suggestion in the section to deny the right of the affected persons to be heard and that the section must be interpreted to imply that the person who may be affected by such a decision should be afforded an opportunity to prove that the proposed step would not advance the interest of mines and mineral develop ment.
Not to do so, it was held, would be violative of the principles of natural justice.
The court concluded that the lessee respondents were entitled to be heard before a deci sion to prematurely terminate their leases was taken and that, since it was not done, the High Court was right in quashing the order passed under section 4 A.
In our opinion, the decision in Ram Kishan 's case fully covers the present case and should be followed by us.
In fact, we think that the 992 subsequent amendment in 1986 lends support to the plea of the petitioners.
Though it is true that the scope of section 4 A (1) has been widened, the insertion of sub section (3) clearly reflects a statutory intention that an opportunity of hearing must be given before the order of termination is passed, presumably as such an order widely affects the rights of the lessees.
We are not able to agree with Shri Datar that under section 4 A, as it stood before 1986, no useful purpose would have been served by the giving of such an opportunity.
Several situations and circumstances can be conceived of where, given an opportunity of hearing, the lessee may be able to either dissuade the Government from terminating the leases prematurely or in persuading the government to do it subject to certain safeguards for its benefit.
For example, the lessee may be able to show that the public sector corporation to whom it is proposed to entrust the working of the mines is not yet adequately equipped to exploit the mines and that, atleast for some more time the status quo should continue; or, again, if there is only a short period before the leases are to expire in the normal course, the lessee may be able to persuade the Government that no great advantage would be derived by premature termination of the lease.
These are only illustra tive.
Several such other situations can be thought of.
It is very difficult, therefore, to accept the contention that because an order under section 4 A is to be passed in order to give effect to a policy of the Government, it is not necessary or useful to provide the lessees, whose leases are about to be terminated, an opportunity of hearing.
We, therefore, hold, respectfully following the decision in Ram Kishan 's case (supra), that the order passed under section 4 A dated 7.12.1972 is null and void as it violated the principles of natural justice and was passed without giving an opportunity to the lessees of being heard.
The next question is regarding the relief to be granted to the petitioner.
Shri Datar submits that in the writ petition the only prayer made by the petitioners is for the quashing of the order dated 7.12.
1972 and that no further claim has been made in the writ petition.
He submits that if the petitioners are aggrieved because of the premature termination of the leases, it is open to them to file a suit or take other appropriate remedies for obtaining compensa tion in respect of the unlawful termination.
We do not think that this a fair course to be adopted in this case.
The writ petition was filed by the petitioner company as early as in February 1973 and has been pending in this Court for about 17 years.
It is true that the petitioner could have filed a suit for the same purpose with a prayer for additional relief by way of compensation or damages.
But we do not think that it should now be 993 asked to go back to file a suit for compensation or damages which may be barred by limitation.
After the lapse of such a long time, in our opinion, the proper course is to adopt some method for deciding the quantum of relief that could be granted to the petitioner by way of compensation and dam ages, which can at once be simple and expeditious and which will avoid further unnecessary litigation.
We think that the request of the learned counsel that the matter may be re ferred to arbitration is a fair one and indeed this course is also not seriously resisted by the respondents.
The short question that remains to be decided is whether the petition ers have suffered any damages as a result of the premature termination of the three leases in their favour either in the shape of loss of profits for the unexpired periods of the leases or in any other material respect.
We, however, direct that, having regard to the circumstances of the case, the compensation/damages should be restricted to a period of five years from the date of termination of the leases or upto the date of expiry of the original lease deeds referred to above whichever is less and not for the entire unexpired period of all the leases.
We refer this issue to arbitra tion.
Shri Justice section Natarajan, retired Judge of this Court, is appointed as Arbitrator to decide the above issue.
The Union of India has promised to place the services of a mining engineer/expert at the disposal of the arbitrator to assist him on the technical aspects of the matter.
The name of the nominee should be communicated to the arbitrator within four weeks from today.
It will be open to the arbi trator to avail himself of the services of such nominee.
Parties may settle the terms of arbitration with the arbi trator.
The company and Union of India should, however, deposit Rs. 10,000 each with the arbitrator as soon as the terms are settled to enable him to start the proceedings without delay.
The Arbitrator may enter upon the reference within four weeks of the date of communication of this order to him.
He may make his award within a period of four months thereafter.
He will not be obliged to give reasons for his conclusions.
A copy of this order may be sent to the learned Arbitrator by the Registry.
The writ petitions disposed of in the above terms.
In the circumstances, we make no order as to costs.
R.S.S. Petition disposed of.
| IN-Abs | The petitioner company had obtained three mining leases from the Government of Assam to extract sillimanite in the Khasi and Jaintia Hills District, for a period of 15 years.
Negotiations between the Union of India and the peti tioner for having the mining leases transferred to the public sector companies, Hindustan Steel Ltd. and Bokaro Steel Ltd., having failed, the Government of Meghalaya, on the request of the Central Government, passed an order dated 7th December, 1972 prematurely terminating the mining leases in terms of section 4 A(1) of the Mines and Minerals (Regu lation & Development) Act, 1957 as amended by the Mines & Minerals (Regulation and Development) Amendment Act, 1972.
Thereupon, the petitioner company filed the present petition under Article 32 of the Constitution.
On behalf of the petitioner it was inter alia contended that since no notice had been issued by the State Government before terminating the leases prematurely, it amounted to denial of natural justice thus vitiating the order of termi nation.
State of Haryana vs Ram Kishan & Ors., [1988] 3 S.C.C. 416, relied upon.
It was further submitted that having regard to the comparatively long periods of leases and the lapse of time, the petitioner would not pray for being put back in posses sion of the leased premises but would be content with an award for compensation for wrongful premature termination, to be determined by any arbitrator appointed by the Court.
On behalf of the respondents it was submitted that the decision of 984 this Court in Ram Kishan 's case was distinguishable; that the rules of natural justice could be statutorily excluded either expressly or by necessary implication; that grant of an opportunity to the lessee would be totally meaningless and futile; that the object and purpose of the statute clearly excluded the provision of an opportunity to the lessee before termination of the leases; that amendment of section 4 A of 1986 specifically providing for an opportuni ty of hearing became necessary because the grounds for premature termination set out in the new subsection (1) of section 4 A were made wider and more comprehensive; that in the writ petition the only prayer made was for quashing the order of premature termination; and that it was open to the petitioner to file a suit or take other appropriate remedies for obtaining compensation in respect of the unlawful termi nation.
The Barium Chemicals Ltd. and Anr.
vs Company Law Board and Others, [1966] Supp.
S.C.R. 311 and R.S. Dass vs Union of India and Others, [1985] Supp.
S.C.C. 617, referred to, Disposing of the writ petition, this Court, HELD: (1) The order dated 7.12.1972 passed under section 4A of the Act whereby the leases were terminated prematurely was null and void as it violated the principles of natural justice and was passed without giving an opportunity to the lessee of being heard.
State of Haryana vs Ram Kishan & Ors., ; , followed.
Dharam Veer vs Union of India, AIR (1989) Delhi 227, re ferred to.
(2) Though it is true that the scope of section 4 A (1) has been widened, the insertion of sub section 4 A(3) clear ly reflects a statutory intention that an opportunity of hearing must be given before the order of termination is passed, presumably as such an order widely effects the rights of the lessees.
[992A] (3) It is difficult to accept the contention that be cause an order under section 4 A is to be passed in order to give effect to a policy of the Government, it is not neces sary or useful to provide the lessees, whose leases are about to be terminated, an opportunity of hearing.
[992D] (4) It is true that the petitioner could have filed a suit or taken 985 other appropriate remedies for obtaining compensation in respect of the unlawful termination.
But, in the facts and circumstances of this case, it is not fair to ask the peti tioner to go hack and file a suit for compensation or dam ages which may be barred by limitation.
The writ petition was filed by the petitioner company in 1973 and has been pending in this Court for about 17 years.
After a lapse of such a long time the proper course is to adopt some method for deciding the quantum of compensation and damages, which can at once be simple and expeditious and which will avoid further unnecessary litigation.
[992G H; 993A] (5) The request made on behalf of the petitioner that the matter may be referred to arbitration is a fair one and indeed this course is also not seriously resisted by the respondents.
The issue of compensation/ damages is accord ingly referred to Arbitration.
[993B] (6) Having regard to the circumstances of the case, the compensation/damages should be restricted to a period of five years from the date of termination of the leases or upto the date of expiry of the original lease deeds whichev er is less and not for the entire unexpired period of all the leases.
[993C]
|
it Petition (Civil) No. of 1990.
(Under Article 32 of the Constitution of India) N.D.R. Ramachandra Rao and Vineet Kumar for the petitioner.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is a petition under article 32 of the Constitution of India.
The petitioner claims to be "a public spirited individual".
He further claims to be a person aggrieved and seeks to assail the constitutional validity of the State of Karnataka and the Union of India not promoting, enforcing and carrying out the policy of prohibition i.e. manufacturing, sale and consump tion of intoxicating drinks and drugs throughout the coun try India Bharat, and also assails the constitutional validity of clause (b) of sub rule 1 of rule 3 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 as amended by the Karnataka Excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989 which came into fore on 10th September, 1989.
The petitioner refers to the Preamble to the Constitution which, 3 according to him, explains the general purpose behind the general provisions of the Constitution.
He refers to Mahatma Gandhi and his commitment to prohibition.
According to the petitioner, manufacture, sale and consumption of intoxicat ing drinks and drugs have become a stumbling block and a dangerous dragon to the progress and stability of the nation as a whole.
The petitioner states that unless this dragon is completely destroyed the country could never think of achieving the objects of the Constitution and justice social, economic and political.
People are flouting the laws of this country, therefore, the petitioner objects that the State should take upon the business of selling liquors.
He has asserted that the State of Karnataka instead of bringing total prohibition in the State, has evinced interest in taking up the responsibility of selling liquors to the general public.
Hence, it is bad and contrary to the Constitution, and he challenges the amendment which pre scribes the licence for sale shall be issued to only such company owned or controlled by the State Government as the State Govt.
may specify.
According to the petitioner, such a rule is unconstitutional.
He draws our attention to Article 47 of the Constitution of India which indicates directive principles.
In the aforesaid view of the matter he claims that this Court should direct the Union of India and other State Governments to enforce the policy of total prohibition throughout the country including the State of Karnataka and to impose restrictions on manufacture, sale and consumption of intoxicating drinks and to declare rule 3 of the these rules as void and unconstitutional.
We are unable to entertain this writ petition under article 32 of the Constitution.
The petition of the peti tioner is that the policy of prohibition is not being imple mented as enjoined by article 47 of the Constitution.
In our opinion, it is not entertainable.
Article 47 of the Consti tution, which is part of our Directive Principles of State Policy enjoins that the State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.
Article 47 is in Part IV of the Constitution which contains Directive Principles of State Policy.
Article 37 enjoins that the provisions of this Part shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the gover nance of the country and it shall be the duty of the State to apply these principles in making laws.
It has to be borne in mind that Article 4 32 of the Constitution gives the Supreme Court the power to enforce rights which are fundamental rights.
Fundamental rights are justifiable, Directive Principles are not.
Direc tive Principles are aimed at securing certain values or enforcing certain attitudes in the law making and in the administration of law.
Directive Principles cannot in the very nature of things be enforced in a court of law.
See in this connection the observations of this Court in Akhil Bharatiya Soshit Karamchari Sangh vs Union of India, ; Whether a law should be made embodying the prin ciples of Directive Principles depends on the legislative will of the legislature.
What the petitioner seeks to achieve by this application is to inject a sense of priority and urgency in that legislative will.
Determining the choice of priorities and formulating perspective thereof, is a matter of policy.
Article 32 is not the machinery through which policy preferences or priorities are determined and this Court is not the forum where the conflicting claims of policies or priorities should be debated.
See the observa tions of this Court in Rustom Cavasjee Cooper vs Union of India, ; at p. 584.
We find no direct or casual violation of any fundamental right of which the petitioner can legitimately claim en forcement in this application.
To make the State accept a particular policy, desirable and necessary as the policy might be is not the function of Article 32 of the Constitu tion.
Article 32 of the Indian Constitution is not the nest for all the bees in the bonnet of 'public spirited persons '.
In the aforesaid view of the matter, we decline to entertain this application and the same is accordingly dismissed.
P.S.S. Petition dismissed.
| IN-Abs | Clause (b) of sub rule (11) rule 3 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 as amended by the Amendment Rules, 1989, requires the State Government to issue distributor licence only to such company owned or controlled by it as may be specified.
The petitioner assailed the constitutional validity of clause (b) on the ground that the policy of prohibition was not being implemented as enjoined by Article 47 of the Constitution inasmuch as the State of Karnataka instead of bringing total prohibition in the State, had evinced inter est in taking up the responsibility of selling liquors to the general public, and sought a direction to the Union and other State Governments to enforce the policy of total prohibition.
Dismissing the writ petition, the Court, HELD: 1.
There is no direct or casual violation of any fundamental right of which the petitioner can legitimately claim enforcement.
Article 47 is in Part IV of the Constitution which contains Directive Principles of State Policy.
Article 37 enjoins that the provisions of this part shall not be en forceable by any court.
Article 32 gives the Supreme Court the power to enforce rights which are fundamental rights.
Fundamental rights are justifiable, Directive Principles are not.
2 Directive Principles are aimed at securing certain values or enforcing certain attitudes in the law making and in the administration of law.
Directive Principles cannot in the very nature of things be enforced in a court of law.
Akhil Bharatiya Soshit Karamchari Sangh vs Union of India, ; , referred to.
Whether a law should be made embodying the principles of Directive Principles depends on the legislative will of the legislature.
In the instant case, what the petitioner sought to achieve by his application was to inject a sense of priority and urgency in that legislative will.
Determin ing the choice of priorities and formulating perspective thereof, is a matter of policy.
Article 32 is not the ma chinery through which policy preferences or priorities are determined.
It is not the nest for all the bees in the bonnet of 'public spirited persons '.
Rustom Cavasjee Cooper vs Union of India, , referred to.
|
ition Nos.
4146 of 1978 and 546 47 of 1983.
(Under Article 32 of the Constitution of India .) Rajinder Sachhar, Govind Das, T.S. Krishnamurthy lyer, A.K. Sanghi, Ravinder Bana, R.B. Misra, Miss A. Subhashini, Bhisamber Lai and Miss Gitanjali Mohan for the appearing parties.
The Judgment of the Court was delivered by SAWANT, J.
These three petitions raise some common issues, and hence they are being disposed of by this common judgment.
W.P. No. 4146of 1978.
This petition is filed by the promotee Income Tax Offi cers Group A seeking to challenge the Seniority Rules of 1973 on the ground that they were framed pursuant to a direction given by ,this Court in Bishan Sarup vs Union of India & Ors., decided on August 16, 1972.
According to the petitioners, the said direction was given because for want of sufficient material, the Court had come to the conclusion that the quota for recruitment of the direct recruits and the promotees had broken down as the promotees were appointed in excess of their entitlement in the quota.
According to the petitioners, the requisite material showing the contrary was in the possession of the Government but did not come forth, then.
The said material shows that in fact the appointments of the promotees were short of their quota.
The petitioners, therefore, claim that not only the 999 Seniority Rules of 1973 should be set aside, but the ap pointments of the promotees be made and their seniority be fixed, according to the Rules prevailing prior to the said Rules.
The relevant facts necessary to dispose of the peti tion are as follows.
Pursuant to the Rules propounded in their letter of September 29, 1944, the Government reorganised the existing Income Tax services into Class I and Class II.
The Rules, among other things, laid down that the recruitment to the cadre of Income Tax Officers Group A will be from two sources, viz., direct recruitment and promotion, the quota for the two being 80% 20% respectively.
In 1945, the Government framed fresh Recruitment Rules for the said cadre of Class I and Class II ITOs.
Rule 3 of the said Rules reiterated that the recruitment to the said cadre will be from the two sources, viz., direct recruitment and promotion.
Rule 4 of the said Rules, however, provided that the recruitment from the said sources will be made as per the discretion of the Government.
This provision had the effect of virtually keeping in abeyance the recruitment quotas for the direct recruits and the promotees laid down in the Recruitment Rules of September 29, 1944.
On September 9, 1949, the Government framed Seniority Rules.
Rule 1(f)(iii) thereof provided that the promotees who had been certified by the Federal Public Service Commis sion in any calendar year shall be senior to all direct recruits who completed their probation during that year or after, and are confirmed with effect from the date in that year or after.
On January 1, 1950, the Seniority Rules were revised and the aforesaid Rule 1(f)(iii) was amended as follows: "(f) The seniority of direct recruits recruited on the results of the examinations held by the Federal Public Service Commission in 1944, and subsequent years, shall be reckoned as follows: (i) Direct recruits of an earlier examination shall rank above those recruited from subsequent examination.
(ii) Direct recruits of any one examination shall rank inter se in accordance with the ranks obtained by them at that examination.
1000 (iii) The promotees who have been certified by the Commis sion in any calendar year shall be senior to all direct recruits who complete their probation during that year or after and are confirmed with effect from a date in that year or after.
Provided that a person initially recruited as Class II Income Tax Officer, but subsequently appointed to Class I on the results of a competitive examination conduct ed by the Federal Public Service Commission shall, if he has passed the departmental examination held before his appoint ments to Class I service, be deemed to be promotee for the purpose of seniority.
By its letter of October 18, 1951, the Government revised the quotas of direct recruits and promotees (which was earlier laid down in their letter of September 29, 1944), from 80% and 20% to 66 2/3% and 33 1/3%.
On September 5, 1952 the Government also revised further the Seniority Rule 1(f)(iii) of January 24, 1950 as follows: "(f) The seniority of direct recruits recruited on the results of the examinations held by the Federal Public Service Commission in 1944, and subsequent years, shall be reckoned as follows: (i) Direct recruits of an earlier examination shall rank above those recruited from a subsequent examination.
(ii) Direct recruits of any one examination shall rank inter se in accordance with the ranks obtained by them at that Examination.
(iii) Officers promoted in accordance with the recommenda tion of the Departmental Promotion Committee before the next meeting of the Departmental Promotion Committee shall be senior to all direct recruits appointed on the results of ' the examinations held by the Union Public Service Commission during the calendar year in which the Departmental Promotion Committee met and the three previous years.
" It will thus be clear that this revision,,among other things, gave to the promotees, a weightage of three years in seniority.
These Rules continued to operate till 1959.
1001 4.
It appears that between 1959 and 1960, about 114 posts were upgraded to those of Income Tax Officers Group A, and the promotees were appointed to the said posts during the relevant period.
One Jaisinghani, a direct recruit challenged the constitutional validity of Seniority Rule 1(f)(iii) and (iv) of 1952 Seniority Rules which had in effect given three years ' weightage to the promotees in the matter of fixation of their seniority, and also the improper implementation of the quota by the Government, by filing a writ petition before the Punjab High Court.
The High Court rejected the writ petition, and in the appeal filed against the said decision, this Court, by its decision in S.G. Jaisinghani vs Union of India & Ors., ; held that the quota was fixed by the Government by its letter of October 15, 1951 in exercise of the power given to it under Rule 4 of the Recruitment Rules of 1945 and hence it was valid and proper.
The Court also upheld the weightage given to the promotees under the Seniority Rules of 1952.
The Court, however, directed that for future years, the roster system should be adopted by framing an appropriate rule for working out the quota between the direct recruits and the promotees, and that a roster should be maintained indicating the order in which appointments are made by direct recruitment and by promotion, in accordance with the percentage fixed under the statutory Rules for each source of recruitment.
The Court gave these directions because the Court came to the conclu sion that the promotees were in excess of the prescribed quota for each of the years 1951 to 1956 and onwards, and that they had been illegally so promoted.
The Court further held that the appellant Jaisinghani was entitled to a writ commanding the respondents to adjust the seniority of the appellant and other officers similarly placed like him, and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to 1956 and onwards, in accordance with the quota rule prescribed in the Government letter of October 18, 1951.
The Court, howev er, made it clear that the said order would not affect such Class II officers who had been appointed permanently as Assistant Commissioners of Income Tax.
Pursuant to the direction given by the Court, the Government prepared a Seniority List on July, 15, 1968.
This Seniority List was challenged in Delhi High Court in two separate writ petitions, one filed by one B.S. Gupta, a promotee of 1962 and another by one M.C. Joshi, a direct recuit.
The Delhi High Court by its decision of July 29, 1970 dismissed Gupta 's petition and substantially allowed Joshi 's petition and gave directions to prepare a fresh seniority List.
Against the 1002 decision in both the petitions, Gupta filed two separate civil appeals.
By its decision dated August 16, 1972 in the said appeals in B.S. Gupta case (supra) briefly known as 1st Gupta case, this Court held that the Seniority List was valid with regard to the promotions made upto January 15, 1959, since it was prepared on the basis of the quota rule of October 18, 1951 and the Seniority Rule 1(f)(iii) of 1952 Seniority Rules.
The Court, however, held that the said List would not be valid for the period thereafter.
The Court, therefore, set aside the said list to the extent it con cerned the period from 16.1.
1959 onwards and directed the Department to prepare a fresh seniority list, in the light of the observations made in the judgment.
The Court also directed that the seniority list from January 15, 1959 should be prepared in accordance with a seniority rule to be framed afresh by the Government.
The Court observed that the proceedings will have to be kept pending till such seniority list was prepared and filed before the Court.
It is neces sary to state here that the Court had given the said direc tion because it had come to the conclusion that with the upgrading of a large number of posts and the appointments of the promotees made to them, the quota rule had collapsed, and with that, the seniority Rule giving weightage to the promotees had also collapsed.
The decision to upgrade 100 posts was taken in January 1959 and the remaining 114 posts in the year 1960.
The Court, therefore, held that the quota rule came to an end on January 16, 1959 when sanction to upgrade 100 temporary posts was given by the President and with that went the seniority Rule.
In pursuance of the above direction, the Government framed the impugned Seniority Rules of 1973, and prepared a fresh seniority list on February 9, 1973, giving retrospec tive effect to the said Rules from January 15, 1959.
The gist of the 1973 Seniority Rules was that the seniority of the direct recruits and promotees appointed on and from January 16, 1959 was to be fixed as follows: First promotee and then direct recruit and so on.
The result of these Rules was that not only the seniority Rule but also the quota of the direct recruits and the promotees was changed from 66 2/3% and 33.1/3% to 50% and 50% or 1: 1.
It may be mentioned here that the new seniority list was prepared by fixing the seniority upto 15th January, 1959 according to the old Seniority Rules, and the seniority from 16th January 1959 on the basis of the new Rules.
However, 73 of the promotees who were promoted in excess of their quota between 1956 58 could not be accommodated as per the earlier quota rule, in the list of seniority prepared upto 15th January, 1959, and hence the seniority of the said 73 promotees was fixed according to the new seniority Rules which 1003 applied to the appointments made from 16th January, 1959.
Both the new Rules and the new Seniority List were filed in this Court as per the earlier direction.
The same Shri B.S. Gupta challenged both the validity of the new Seniority Rules of 1973 and as well as the new Seniority List.
This Court by its decision dated 16th April, 1974 in Bishan Sarup Gupta etc.
vs Union of India & Ors. etc.
; , , known as 2nd Gupta case, upheld both the Seniority Rules as well as the Seniority List.
It further appears that one Kamal Kanti Dutta and others had also filed an independent writ petition challeng ing the Seniority List of February 9, 1973.
It was dismissed by this Court by its decision dated 23rd April, 1980 in Kamal Kanti Dutta & Ors.
vs Union of India & Ors., ; upholding the validity of the said Seniority List.
While disposing of the said writ petition, this Court made the following observations on which a strong reliance is placed by the present petitioners: "It shall have been noticed that we have refused to recon sider our decisions not so much because of the view taken in the various cases cited by the learned Solicitor General, like Sajjan Singh vs State of Rajasthan, ; , 947,948 that this Court should not review its decisions too readily, as because on merits, we see no justification for reconsidering the judgment already rendered by this Court.
No fresh facts are brought to our notice by way of discovery of new and important evidence which would justify reconsid eration of the decisions already rendered by this Court after the most careful examination of the competing conten tions.
The Report of the Rajya Sabha Committee on petitions shows, as already indicated that the relevant files are still 'not traceable" That judgment was by a majority with Justice D.A. Desai delivering a dissenting judgment.
Since the petitioners here are relying also upon some observations made in the dissent ing judgment, we may reproduce them here: "In the light of the materials now placed especially the files which were withheld from the Court and the Committee, the only view that I express is that enough compelling and 1004 necessary material has been placed on record making out a strong case for reconsideration of these decisions.
" The Committee referred to in the aforesaid observation is the Rajya Sabha Petition Committee.
The present petition had also come to be dismissed erroneously along with the Writ Petition of Kamal Kanti Dutta (supra).
It was restored for hearing on September 9, 1980.
On July 28, 1982, the Parliamentary Committee on Subordinate Legislation published its 12th Report wherein it referred to a letter of February 4, 1976 from the Minister of State for Finance.
The Committee stated that the Seniori ty Rules of 1973 were unfair and hence they should be scrapped with effect from January 15, 1959 and that fresh equitable seniority rules be framed.
The Committee recom mended that the artificial distinction between the ITO Group A and Group B should be abolished as they were per forming identical functions and were working on interchange able posts.
The Committee also recommended the grant of the same weightage in seniority to the promotees from 15th January, 1959 as was available to them before that date.
The Committee, further recommended an increase in the quota of promotions from Group B to Group A on account of an unprece dented stagnation of Group B service, as a direct result of the Seniority Rules of 1973.
It does not appear that these recommendations were accepted.
We are referring to these recommendations of the Committee because the petitioners have made a reference to them and not because they are legally binding.
Thereafter, on February 16, 1983, the accompanying Writ Petitions, viz., Nos.
546 47 of 1983 were filed chal lenging (i) the validity of Section 117 of the Income Tax Act, 1961, (ii) the classification of Income Tax Officers in GroUp A and Group B Officers, (iii) the Seniority Rules of 1973 and (iv) the Seniority List prepared on their basis.
The last two reliefs claimed in the said petitions are common to the present petition and hence they will be dis posed of along with the judgment in the present case.
The first two reliefs and the reliefs claimed incidental thereto will be dealt with separately.
It is further necessary to note that while admitting the accompanying petitions, the Court had passed the follow ing order: 1005 "Subject to the specific condition that the petitioners shall not be permitted to reopen whatever classification was made in the cadre of ITOs, in the past as also inter se seniority between direct recruits and promotees which had been upheld by the decisions of this Court in S.C. Jaising hani, B.S. Gupta and KK Dutta 's case, rule nisi limited to the question whether the classification of ITOs, into Group A and Group B section 117 of the IT Act, 1961 is viola tive of Articles 14 and 16 of the Constitution.
Even if the issue is answered in affirmative, the petitioners will be entitled to the relief, if any, only prospectively for future implementation of the decisions from the date of the judgment in the Petition.
This order will not preclude any contention that can and may be raised in the Writ Petition No. 4 146/78 H.K. Sajnani vs UOI & Ors., to be examined on merits.
On May 3, 1983, this Court passed an order in CMP Nos.
13200 and 6762 of 1983 in both the present and the accompanying writ petitions as follows: "In allowing prayer (i) of CMP No. 6762/83, we direct Writ Petition Nos.
546 47/83 be heard alongwith Writ Petition No. 4146/78 and that the grounds challenging the validity of seniority rule 1973 as taken in Writ Petition Nos.
546 47/ 83 are allowed to be taken in Writ Petition No. 4146/78 in so far as the prayer (iii) of CMP is concerned, we direct the Government to file a statement in this Court before July 15, 1983 as to the result of the examination of the recom mendation of the Committee on Subordinate Legislation and decision and other measures taken by the Government thereon.
On February 27, 1985, the Court gave direction to the Government in CMP No. 1903 of 1983 in the present Writ Petition to allow the petitioners inspection of the files relating to the vacancies.
The inspection was completed on October 7, 1985 which according to the petitioners shows the following facts: (i) that the relevant record is available and was always available with the Government and that its production was deliberately withheld from this Court, (ii) that the promotions were all within quota and that there was no excess.
Rather there was a deficiency in promotions, (iii) that the quota rule was adhered to from year to year right from the year 1951 upto the date of the judgment in the 1st Gupta case (supra), (iv) that the quota rule did 1006 not collapse on 15.1.1959, (v) that as required by the exigencies of the service, the quota rule was amended/re laxed in the years 1958 and 1959, (vi) that in applying the quota rule in pursuance of the man~ damus, the Government did not follow the principles decided by this Court in 1st Gupta case (supra) and committed the following errors: (a) The Government did not apply the quota to the vacancies existing at a particular point of time.
Instead of doing so.
it misinterpreted the quota rule of 66 2/3% and 33.1/3% as if it required that a ratio of 2:1 had to be maintained in the cadre of Income Tax Officers and as if there had to be one promottee against every 2 direct recruits.
This erroneous interpretation was applied in clear breach of the principle laid down by this Court in the 1st Gupta case (supra).
(b) Another error committed by the Government in applying the quota rule in violation of the principles decided by this Court in the 1st Gupta Case (supra) was that the sub stantive vacancies in the temporary posts which were a regular part of the cadre and which eventually became perma nent were not taken into account while applying the quota rule, with the result that the promotees were denied their share in such vacancies.
The most harmful thing done by the Government was that it did not take into account substantive vacancies in temporary posts till 1963 for applying the quota rule and worked out the excess in promotions ignoring such vacancies.
But, they started taking into account those very vacancies for direct recruitment from 1963 onwards.
If such vacancies were taken into account prior to 1963 and the quota rule was applied to them, there would have been no excess in promotions as was erroneously worked out.
On the contrary, there was a deficiency in promotions because of the incorrect application of the quota rule.
(c) The promotees were not given their full quota even in the permanent vacancies which should have bee given to them inrespective of whether the direct recruitment was made in full.
There was under utilisation of quota of direct re cruits with the result that the promotees were denied their legitimate share even in permanent vacancies.
In these circumstances, the actual appointments were taken as vacan cies and were bound to result inevitably into excess of promotions.
On the basis of these facts, which according to the petition 1007 ers were revealed in their inspection, their case is that their allegation, that the relevant files were available and yet were not produced before the Court and the further allegation that there were no excess promotions were borne out.
This shows that the direction given in the 1st Gupta case (supra) to frame new rules and, hence, the new Seniori ty Rules of 1973 framed pursuant to these directions, were unwarranted, unjust and illegal.
The petitioners further contend that the principle that the vacancies mean those the Government wants to fill is not compatible with the principle laid down in the 1st Gupta case (supra) that the promotees should get their share of the quota irrespective of whether the direct recruits ' quota is filled, or not.
But in the present case, the con trary has happened, viz., the promotees ' quota is calculated on the basis of the appointments of the direct recruits causing thereby injustice to the promotees by depriving so many of them of their chances of promotion which were other wise available.
It is also the contention of the petitioners that in fact, there were vacancies and the Government wanted to fill those vacancies.
This is evidenced by the fact that when new posts were created for the purpose of assessment work, the direct recruits were not available and hence, the promotions were made from Group B to Group A, and even Group B Officers were appointed against Group A posts and they performed identical functions as of Group A Officers.
This contention has also a bearing on the issue involved in Writ Petitions Nos.
546 47 of 1983 and we will deal with it in that con text, later.
While these petitions were pending, the Government on January 24, 1988 amended the Income Tax Act, 1961 with effect from April 1, 1988 and, among other things, changed the designation of Income Tax Officers and Assistant Commis sioners as follows: Pre Amendment Post Amendment (a) Income Tax Officers Income Tax Officers (Group B) (b) Income Tax Officers Assistant Commissioners (Group A) (c) Assistant Commisioners Deputy Commissioner.
The amendment also substituted Sections 116, 117, 118 and 120 with 1008 effect from the same date, i.e., April 1, 1978 and autho rised the Central Board of Direct Taxes to issue notifica tions authorising Chief Commissioners and Commissioners of Income Tax to classify the work of newly designated Income Tax Officers and Assistant Commissioners, and to provide for the jurisdiction of the Income Tax Officers and Assistant Commissioners on the basis of quantum of income.
According to the petitioners, this was done to destroy the cause of action Writ Petition Nos.
546 47 of 1983.
On May 12, 1988, the Government framed New Rules of Recruitment, among other things, providing for quota of 50% each to the promotees and direct recruits.
In consequence, an application for amendment of Writ Petitions Nos.
546 47 of 1983 was filed raising additional grounds.
It will thus be apparent that the whole foundation of the case of the petitioner promotees in the present petition is that the Seniority Rules of 1973 were made by the Government pursuant to the direction of this Court in the 1st Gupta case (supra) on August 16, 1972 and that direction was given by this Court because on the basis of the material produced by the Government, this Court had come to the conclusion that the promotees were promoted in excess of their quota.
According to them, however, the new material which they have discovered shows that in fact there were not only no excess promotees but in fact there was a shortfall in their promotions as per their entitlement in the quota.
Both on behalf of the Government as well as the respondent Union of India and the direct recruits, it is pointed out to us that the so called new material produced on behalf of the petitioner promotees far from proving their allegation, supports the conclusion to which this Court had arrived at in the 1st Gupta case (supra).
In this connec tion, it is pointed out that admittedly, there were at the relevant time Class I and Class II posts of Income Tax Offi cers corresponding to Group A and Group B posts.
Class I or Group A consisted of Grade I and Grade II Officers whereas Class II or Group B consisted of Grade II Officers.
Group B Officers were entitled to be promoted first to Group A Grade II posts.
Hence, the vacancies available for promotion to the promotees which ought to be taken into consideration at any point of time are the vacancies in Grade II posts of Class I or Group A.
However, it is obvious from page 32 of Volume II of their petition, that the petitioner promotees have taken into consideration vacancies not only in Grade II posts but also in Grade I posts to show 1009 that in fact not only they were not promoted in excess but their promotions were short of the vacancies which were available to them in their quota.
We may reproduce herein below the relevant table of the sanctioned strength, the vacancies, the quota for promotees, the actual number of promotions made and their deficit or excess in the quota since 1951 to 1958 as calculated by the petitioners on the said page 32.
According to the petitioners, the figures in the table are taken from the newly discovered files: VACANCY POSITION FROM 1951 1958 Year Total Working Total Quota Actual Def Sanctioned Strength Vacancies of pro No. of icit Strength Gr.
II motions promo ( ) tions.
or Grade I Grade II Exc ess(+) 1951 216+200 = 416 77 + 98 = 175 241 80 1952 224+221 = 445 83 +113 = 196 249 83 49 ( ) 34 1953 224+221 = 445 130 +129 = 259 186 62 38 ( ) 24 1954 224+221 = 445 169 +157 = 326 119 40 31 ( ) 9 1955 224+221 = 445 154 +217 = 371 74 25 24 ( ) 1 1956 224+221 = 445 187 +214 = 401 44 15 25 (+) 10 1957 287+248 = 535 224 +184 = 408 127 42 26 ( ) 16 1958 290+248 = 538 213 +202 = 415 123 41 28 ( ) 13 97 10=87 Net Deficiency 23.
It is clear from the above table that the petition er promotees have calculated the posts in the sanctioned strength not only in Grade II posts but also in Grade I posts.
When the posts available to them for promotion were only in Grade II.
Hence, their further calculations of the working strength, the vacancies and the quota available to them in the vacancies and of the deficiencies or the excess in the quota are erroneous.
On behalf of the Government, the following calculations have been made for the relevant period from 1951 to 1958 on the basis of the actual vacan cies in the sanctioned strength of Grade II posts of Group A (Class I).
These calculations show that in fact during the said period, the promotees were promoted to Grade II posts of Group A (Class T) in excess to the extent of 93.
There fore, the deficiency of 97 which they have shown in their appointments during the said period is obviously wrong.
The said table first handed over to us by Shri Govind 1010 Das, Counsel for the Government is prepared on the basis of the very same figures on page 32 of the Writ Petition.
It, now, forms an annexure to the additional affidavit dated 23rd January, 1990 filed by one Ravi Kumar, Under Secretary, Department of Revenue, Ministry of Finance.
The table is as follows: Year Sanctioned Working Vacancies Quota Actual Excess Grade II Strength of pro promo Class I Gr.
II,Cl.
I motion tion as 33% stated at 32.
1951 200 98 102 34 1952 221 113 108 36 49 13 1953 221 129 92 31 38 7 1954 221 157 64 21 31 10 1955 221 217 4 1 24 23 1956 221 214 7 2 25 23 1957 248 184 64 22 26 4 1958 248 202 46 15 28 13 93 24.
The figures shown in the above table are self explanatory.
Confronted with these figures, the petitioners came out with another .
chart the relevant extract of which is as follows: Total Vacancies Direct Recruits Promotees Year Sanc Work Va Quo Actu Excess/ Quota Act Exce tion ing can ta als Shortage tual ss/ ed Stren cies pro Shor in Gr.
in Gr.
in Gr.
motio tage II II II ns. 1 2 3 4 5 6 7 8 9 10 1952 221 113 108 72 33 ( )39 36 49 (+) 13 1953 221 129 92 61 28 ( )33 31 38 (+) 7 1954 221 157 64 43 52 (+) 9 21 31 (+) 10 1955 221 217 4 3 53 (+)50 1 24 (+) 23 1956 221 214 7 5 48 (+)43 2 25 (+) 23 1957 248 184 64 43 27 ( )16 21 26 (+) 5 1958 248 202 46 31 99 (+)68 15 28 (+) 13 385 258 340 + 82 127 221 + 94 1011 By producing this chart the attempt of the petitioners, is to show that the direct recruits were appointed in excess of their quota to the extent of 82 during the relevant period.
The interesting feature of this chart, however, is that the petitioners admit that they were also appointed in excess of their quota during the period to the extent of 94 as against 93 shown in the chart prepared on behalf of the respondent Union of India (the difference of one being on account of the calculation of the excess as 5 for the year 1957 as against 4 calculated by the respondents for the same year).
On the basis of this chart, it is contended that in view of the fact that both direct recruits and promotees were ap pointed in excess of their quota, it could not be said that the quota had broken down.
In the first instance, the chart prepared by the petitioners themselves shows that the conclusion which was arrived at by this Court in the 1st Gupta case that the promotees were appointed in excess of their quota is cor rect, and demolishes the very foundation of their case in the present petition namely, that the newly discovered material shows that not only they were not appointed in excess of their quota, but were in fact short of it.
Second ly, assuming that their figures of the appointment of direct recruits during the relevant period are correct (since so far, it was never their contention that the direct recruits were appointed in excess of their quota and, therefore, the respondents had no opportunity to meet it), that only strengthens the conclusion of this Court in the 1st Gupta case that the quota rule had broken down.
The quota rule does not collapse only when the appointments from one source alone are disproportionately deficient or in excess.
It was then contended on behalf of the petitioners that the Government 's method of working out the vacancies was wrong.
It is not necessary for us to go into this alle gation and to find out the correct way of working out the vacancies.
This is so because firstly, the petitioners have come to this Court by the present petition on the basis of the vacancies worked out by the Government but which vacan cies according to the petitioners, were suppressed.
Second ly, their own chart shows that the vacancies were worked out by the Government by deducting the annual working strength from the sanctioned strength, every year.
The quota of the promotees shown by the petitioners in their chart is further on the basis of the vacancies so arrived at and is not on the basis of the appointment of the direct recruits as is alleged by them which allegation is the basis of their other contention in the petition.
Thirdly, it is to be remembered that in the present petition it 1012 is the petitioners ' contentions that the new figures of the deficiencies in the promotions have been worked out by the petitioners on the basis of the notings made in the missing files which were not available at the time this Court decid ed the 1st Gupta case (supra).
Hence, even assuming that these notings have an intrinsic evidentiary value to prove the annual vacancies available on the relevant dates, the petitioners ' contentions stand disproved even on the basis of the said notings.
Lastly, and this according to us is an equally damaging fact as far as the petitioners ' present case is concerned, the figures of the sanctioned strength and the vacancies which are worked out by this Court in the 1st Gupta case (supra) are almost identical with the figures shown by the petitioners themselves in their new chart with only a negligible difference at some points.
This fact strikes at the very root of the present petition because the only ground on which the petitioners have approached this Court by way of this petition is that the figures of the annual vacancies were suppressed by the respondents from this Court and it is this suppression which had led this Court to come to the conclusion that the promotees were in excess of their quota and to give a direction to frame the new Seniority Rule and to prepare the fresh Seniority List.
The so called new material, on the other hand, proves that the directions given in the 1st Gupta case (supra) were based on proper calculations and were justified.
It is also not correct to say that this Court had given the direction in question only because there was an absence of material to show the annual vacancies in a year.
This is clear from the following passage in the decision in the 1st Gupta case (supra) at pp 501 502: "In the absence of any material which gives us the actual vacancies in a year, we think that in order to imple ment the mandamus as far as it can possibly be done, it would be reasonable to accept the figures of appointments in those years as substantially representing the actual vacan cies.
There is ' also a subsidiary reason why those figures may reasonably be accepted.
It is true that the quota rule refers to vacancies but the vacancies are those vacancies which the Government wants to fill.
It is the prerogative of the Government, reflected further in Rule 4 referred to above, whether any vacancy may be filled at all or not.
Even if there are 100 vacancies in a particular year the Govern ment is not bound to fill all those vacancies.
It may fill only 90 of them and nobody can insist that the Government shall fill up all the vacancies.
Therefore, when 1013 the quota rule refers to vacancies it is implicit in the rule that the vacancies are vacancies which the Government wants to fill, whatever may be the actual number of vacan cies.
The actual appointments are, therefore, in the absence of any evidence to the contrary, the correct measure of the vacancies which the Government wanted to fill.
From that point of view also it will be permissible to proceed on the footing that the actual appointments represent the actual vacancies which the Government wanted to fill.
For example, if in the year 1953, 53 posts were filled by direct recruits and 38 by promotees the total vacancies sought to be filled would be 91 in which case the promotees would be entitled to 30 vacancies.
That is how the Government has proceeded to determine the excess for each year from 1953 to 1957 as shown at Annexure 'N ' (p. 26 Vol. 1 in C.A. No. 2060(n) 1971).
In our opinion the procedure adopted by the depart ment in determining the excess number of promotees appointed in the several years is substantially correct.
Annexure 'N ' begins with the year 1953.
It should begin with the year 1952 and not 1953.
Indeed the 5 year period starts from 1951 and ends with 1956 but since there was no promotion in 1951 the question of excess in that year does not arise.
For the purposes of the mandamus the seniority list will have to be resettled from the year 1952 showing not merely the excess from the years 1953 to 1956 but from 1952 to 1956.
At the end of 1956 the progressive total of the excess over the quota will be known and this excess, as already pointed out, is liable to be absorbed in the quota of the years succeed ing 1956." (Emphasis supplied) This is apart from the fact that as we have shown earli er, in fact the actual vacancies worked out by the Court approximated the actual appointments.
And in any case, the quota for the promotees worked out on the basis of the said vacancies and the calculation of the excess of promotions on the basis of the said quota was very nearly correct and the so called new material would not have made any difference to the conclusion which was arrived at in that case.
The other contention of the petitioners, namely, that while calculating the vacancies, the Government had calculated only the permanent posts and not the temporary posts has also no substance in it.
It is not suggested that the figures of the sanctioned and the working 1014 strength of and the vacancies in Grade II posts of Group A (Class I) shown by the petitioners on page 32 of their petition or in the new chart do not include temporary posts.
What is more, in fact in the 1st Gupta case (supra) one of the contentions of the direct recruits was that the quota rule should relate to vacancies only in permanent posts and not temporary posts.
That contention was not accepted in that case either by the promotees or the Government.
The court also pointed out in that case that there was nothing in the Rules of 1945 or the quota Rule of 1951 which said that the vacancies must be vacancies in permanent posts.
The Court observed that indeed the whole cadre had consisted of permanent and temporary posts for years, and there was a difference between permanent vacancies in permanent and temporary posts on the one hand and the permanent and tempo rary posts on the other.
It was also pointed out that a11 the direct recruits from 1948 onwards were initially ap pointed against temporary posts.
The Court had, therefore, rejected in that case the direct recruits ' contention that the vacancies referred to in the quota Rule were vacancies only in the permanent posts.
This shows that the Government had always counted the vacancies both in the permanent and the temporary posts and the promotees had accepted this as a fact then.
There is no material placed before us to show that this was not so then.
On the contrary, whatever materi al the petitioners have annexed to their petition and to which our attention was invited shows that in fact the Government had always calculated the vacancies on the basis of the sanctioned strength of both the permanent and tempo rary posts.
We may refer only to two Annexures in this connection.
The extract from File No. 20(22)56/Ad.
VI which is Annexure 7 on page 125 of the petition shows that as on 1st July, 1956 the total sanctioned strength of Grade II posts of ITO (Class I) were calculated as 248 consisting of 207 permanent and 41 temporary posts.
So also the nothing from File No. 22/4/58/Ad.
VI which are Annexure 11 on page 155 of the petition mention the actual strength of Grade II posts of ITO (Class I) as 248 which consists of 207 perma nent and 41 temporary posts.
Both the charts produced by the petitioners which we have discussed earlier show the sanc tioned strength of the said cadre for the years 1957 and 1958 each as 248.
The vacancies and the quota of the direct recruits and promotees have also been worked out by the petitioners on the basis of this strength in both the said charts.
This material, therefore, belies the petitioners ' contention that the Government had not taken into considera tion the temporary posts for working out the vacancies during the relevant period.
In his affidavit dated January 31, 1967 filed in Jaisinghani case 1015 (supra), Shri R.C. Dutta, the then Finance Secretary had further clearly stated that the vacancies were calculated with reference to the following information: (i) addition to cadre strength, temporary or permanent as the case may be, and (ii) vacancies arising during a particular period as a result of death, retirement, promotion, resignation, removal etc.
of the officers in particular posts.
This has been the stand of the respondent Union of India from the beginning, and beyond making a bare allegation to the contrary, the petitioners have not placed any material in support of their said contention.
The Chart produced by them on the contrary proceeds on the footing that the vacancies in both the temporary and the permanent posts had to be calculated.
Much has also been made of the fact that the Parlia mentary Committee on Subordinate Legislation had, as pointed out above, recommended the reconsideration of the Seniority Rules and the Seniority List of 1973, as allegedly they had done injustice to the promotees.
Apart from the fact that the said recommendations have not legally binding effect, they were also not accepted by the Government.
In his letter of October 31, 1976 addressed to the Chairman of the Commit tee on Subordinate Legislation, the then Minister of Finance had stated as follows: "I have gone through the Eighth Report of the Committee on Subordinate Legislation submitted to the Lok Sabha on 7th May, 1986.
I am afraid, however, there is hardly any scope for the Government to take any significant action in the matter as the alleged grievances of the promotee officers of the Income tax Department are unreal and imaginary.
In the past, the prospects, position and power enjoyed by the promotees happened to be better only because of a systematic and persistent violation of Rules.
The said violation of Rules itself led to prolonged litigation which repeatedly went upto the Supreme Court.
It was finally laid to rest in B.S. Gupta 's case when the Supreme Court approved the Seniority Rules, 1973 and Seniority List.
These Rules and the Seniori ty List were prepared in accordance with the Supreme Court 's own directive and were approved by it after giving ample opportunities to both the sides to present their case.
These Rules were declared by the Supreme Court to be 'just and fair '.
It is significant that 1016 the promotees themselves admittedly could not propose a better alternative.
The Seniority Rules, therefore, call for no change.
As for quota, originally the promotees were given only 20% of the Group 'A ' vacancies.
Unfilled vacancies were to be carned over as part of direct recruitment quota for the subsequent year.
The intention obviously was to maintain certain standard of quality in the personnel sanctioned to the service.
Between 1951 to 1958 the quota was raised to 1/3rd in favour of the promotees.
In 1973, the promotion quota was raised to 30% which is the highest in any service under the Central Government.
The question of weightage is inextricably linked with that of quota.
The weightage allowed to the promotees earli er was in view of the low quota of 20% or 33 1/2% available to them at that time.
When the Rules were revised and thee quota of promotees was enhanced to 50% the weightage given in the matter of promotion was simultaneousIy withdrawn.
The Supreme Court itself upheld its abolition and observed that the promotees could not "after obtaining the benefit of a higher percentage of recruitment to Class I service, legiti mately object to the abolition of weightage enjoyed formerly in the matter of seniority.
" The letter is annexed to the additional Affidavit of Ravi Kumar (supra).
It will thus be seen that even the Government had inde pendently come to the conclusion as early as in 1986 that neither the Rules of Seniority nor the Seniority List of 1973 had done injustice to the promotees.
In fact, the Rules of 1973 had raised the quota of the promotees from 33 1/3% to 50%.
The seniority of the promotees was adjusted upto 15th January, 1959 on the basis of the earlier quota Rule and the seniority of those who were appointed later and of those who were found in excess of their quota upto that date, were adjusted according to the new Rules.
Two other contentions advanced on behalf of the petitioners on the basis of the alleged new material were that firstly, while calculating the vacancies in the post of Grade II Officers in Group A, the vacancies in all the posts above the said post were not taken into 1017 account, and secondly, the number of vacancies should not have been equated with the number of posts the Government filled but should have been calculated on the basis of their actual existence.
According to the petitioners, if both these factors had been taken into consideration at the time of the decision in the 1st Gupta case (supra), the Court would not have found promotees in excess of their quota.
To some extent these contentions are interlinked.
The first contention proceeds firstly on the basis that the notings in the relevant files made by the Officer con cerned have an intrinsic evidentiary value to prove the actual vacancies in the different categories and secondly presumes that the number of vacancies as calculated in Grade II posts of Group A there did not already reflect the vacancies in the higher posts.
In the absence of sufficient material before us, it is not possible to accept such pre sumption.
The second contention need not even be considered in the present case, for as has been pointed out earlier, the actual vacancies approximated the appointments made during the relevant period.
Hence, whether the quota was calculated on the basis of the actual vacancies or on the basis of the appointments made, it would have made no difference to the conclusion that this Court had arrived at in the 1st Gupta case (supra) that the promotions were in excess of the quota.
What is more, even this argument has been answered by this Court in that case as shown above, and we see no reason to differ from the view taken there on the point.
There appears to be an obvious confusion on the part of the peti tioners with regard to what this Court has stated in the earlier part of the judgment in the 1st Gupta case (supra).
Read with the passage which we have quoted from the said judgment, what this Court wanted to convey in the earlier part of the judgment was that when the Government decides to fill in the vacancies, it is not necessary to defer the appointments from one source pending the appointments from the other source.
But that is when the Government decides to fill in the vacancies and not before it.
In the result, we find no substance in the petition and dismiss the same.
The Rule stands discharged.
In the circumstances, however, there will be no order as to costs.
WRIT PETITION NOS.
546 47 OF 1983.
As stated earlier while narrating the facts of the earlier petition, these petitions are filed by two Income Tax Officers for them 1018 selves and as the representatives of the All India Federa tion of Income Tax Gazetted Service Association.
The Federa tion represents all the Group B ITOs and all ITOs in Group A, Assistant Commissioners and Commissioners promoted from Group B. Among the parties to the petitions is respondent No. 4 the Indian Revenue Service Association representing directly recruited Group A Officers and Assistant Commis sioners and Commissioners promoted from directy recruited Group A ITOs.
The main grievance of the petitioners is that the classification of ITOs into two classes, namely, Group A and Group B is discriminatory and violative of Articles 14 and 16 of the Constitution because (a) the classification is not made on an intelligible differentia and (b) the differentia has no relationship to the object sought to be achieved by the Income Tax Act, 1961 inasmuch as the Officers belonging to the two Groups do identical work and perform identical functions.
It is also the contention of the petitioners that their work and posts are interchangeable, and in practice they form one cadre.
By maintaining the differentiation, allege the petitioners, the Government in effect is denying equal opportunity, equal pay and equal status to Officers doing identical work and performing identical functions.
To attack the classification, the petitioners had also chal lenged the constitutional validity of Section 117 of the Income Tax Act, 1961 before its amendment by the Direct Tax Laws (Amendment) Act, 1987.
After the amendment of the said section by the amending Act of 1987, they have amended their petition and have challenged not only the amended provision of the said section but also the amendment made to Section 116, 118 and 120, and the Recruitment Rules of 1988 and the notifications, circulars and orders issued pursuant thereto.
The attack against the amended sections and the Rules of 1988, notifications etc.
is on the ground that they are violative of Articles 14 and 16 of the Constitution.
In addition, they have also challenged the amended provisions on the ground that they are mala fide and are enacted to destroy the cause of action in their petition.
In this context, they have also attacked the Seniority Rules and Seniority List of 1973.
In support of their contention that the amended provisions of the Act are mala fide they contend that by amending the Act, the Government took the power to itself to frame the new Recruitment Rules of 1988 and to issue the relevant notifications, circulars and orders whereby the classification of the Income Tax Officers in Class I and Class II could be justified.
In this connection, it is pointed out that it is by virtue of these new powers that the Government for the first 1019 time got an authority to demarcate the jurisdiction of the powers of Class A and Class B ITOs and thus to justify the said classification.
In the absence of the amendment and the Rules, Notifications, Circulars and Orders issued pursuant thereto, the said classification was unjustifiable in law and was liable to be struck down.
It is, therefore, also contended that the said classification assuming it is justi fied, can only act prospectively from 1st April, 1988 from which date it is brought into operation, and would not justify the classification of Officers prior to the said date, and hence those Officers who belonged to Group B on the day prior to the coming into operation of the amended provisions, should be treated as belonging to Group A. 35.
We are not impressed by this contention.
In the first instance, the presumption underlying this contention is that the provisions of the Act prior to its amendment by the amending Act of 1987 did not permit such classification, which presumption is patently incorrect.
While the provi sions of sub section (1) of Section 117 prior to its amend ment gave power to the Central Government to appoint, among others, the Income Tax Officers of Class I service, the provisions of sub section (2) thereof vested power in the Commissioner to appoint as many ITOs of Class II service as might be sanctioned by the Central Government.
It was, however, contended that in spite of these clear provisions of sub sections (1) and (2) of the unamended Section 117, they had to be read down to deny the power to appoint ITOs of Class II or Group B.
This was so because, according to the petitioners, the provisions of Sections 116, 118 and 124 as they stood then, only referred to Income Tax Officers as one class and did not make a distinction between them as Class I and Class II Officers.
In the first instance, it is an elementary rule of the interpretation of Statutes that no provision of a statute should be read as redundant.
No reason is ascribed by the petitioners to ignore the specific provisions of Section 117(1) and (2) except that the two classes of officers mentioned therein were not referred to in the other provisions of the Act.
Secondly, when the legislature had made a special provision for the two classes vesting in two different authorities the power to appoint them, it must be presumed that the legislature had a defi nite objective in view.
While making the provision for Class II ITOs, the legislature seemed to be aware of the fact that there may be different categories of assessees and assessments requiring different standards of equipment, skill and talent to deal with them, and it was therefore necessary to invest the Central Government with the power to appoint and to sanction the appointment of the different classes of officers to meet the requirement.
This power vested by the legislature to appoint different classes 1020 of officers carried with it also the power to demarcate the duties, functions and responsibilities of the two.
Whether in fact there is such a division of powers, functions and responsibilities or not, has nothing to do with the validity of the power to make the classification.
If in spite of such classification, the different classes in fact exercised the same powers and performed the same duties and functions, it may invite abolition of the classification.
But it cannot invalidate the power to classify.
Hence, we are not im pressed by the contention that the legislature had no power to classify the Income Tax Officers into two classes under the unamended provisions of the Act.
If therefore the legislature had itself classified the Officers into two grades or categories and given the power to the Government to appoint, and/or to sanction their appointments, as the case may be, under the unamended provi sions of the Act, it can hardy be argued that the amending Act was passed mala fide to destroy the cause of action in the present petitions.
This is apart from the fact that no legislation can be challenged on the ground that it is mala fide.
Hence the challenge to the amended provisions of the Act and the Rules, notifications, circulars and orders issued pursuant to it, must fail.
1t is not further suggest ed that the Rules, notifications, circulars, orders etc.
are ultra vires the Act.
There is, therefore, no merit in this attack.
Coming now to the second contention 'which is the main foundation of the present petitions, namely, that the Officers of the two classes in fact perform the same func tions and duties, and exercise the same powers and have the same jurisdiction and, therefore, there is no justification for the said classification, it is first necessary to exam ine the facts relied upon by the petitioners in support of this contention.
According to the petitioners, the Officers of the two classes were always performing the same duties and function, and exercising the same power and jurisdic tion.
Their posts were also interchangeable.
In fact, many of the Officers belonging to Group B functioned as Officers belonging to Group A. Even after the amendment, which has demarcated the jurisdiction of the two classes on the basis of income, the basic function of making the assessment remain the same and there is no change in the nature of job performed by them.
It is also submitted that once a case comes under the jurisdiction of an Income Tax Officer, the Officer continues to exercise his jurisdiction over the said case even if in subsequent years the same assesee files a return of higher income.
Hence, the very classification of Officers based on the return of income is totally arbitrary and violative of the petitioners ' fundamental rights under Articles 14 and 16 of the Constitution.
It is 1021 further pointed out that in fact the number of regular promotions from Group B to Group A during the period 1973 to 1982 were only 585 as against the ad hoc promotions of 1197 during the same period.
Similarly, during the period 1982 to 1985, the number of regular promotions were 262 as against the further ad hoc promotions of 200 during the same period.
This shows that the Income Tax Officers of Group B were doing the work of Officers belonging to Group A in a large number though on an ad hoc basis.
This further shows that although there was a need for regular promotion of the Officers from Group B to Group A, the Government was using Group B Officers in a large number to perform the duties of Group A Officers without giving them regular promotion and was thus maintaining an artificial distinction between the two groups without justification.
As has been stated in the affidavit filed on behalf of respondents 1 & 2, although both Group A and Group B Officers have equal powers, the ITOs of Group A are general ly placed in charge of important wards and cases carrying higher responsibilities, whereas the Officers belonging to Group B are normally entrusted with less important wards and cases.
A large majority of them have to deal with summary assessments only.
It is further pointed out that under the Act, prior to its amendment of 1987, the power to appoint the Officers belonging to Group A, i.e. Class I was vested in the Central Government while the power to appoint Offi cers belonging to Group B, i.e., Class II was vested in the Commissioner of Income Tax.
The same distinction in the appointing authorities continues even after the amendment.
The Assistant Commissioner, i.e., the former ITOs of Group A are appointed by the Central Government whereas the power to appoint Income Tax Officers, i.e., the former Group B Offi cers, can be vested by the Central Government in the Board or a Director General or a Chief Commissioner or a Director or Commissioner.
The respondents further deny that there was ever an interchangeability of the two posts, and contend that they always remained separate.
They point out that in fact, the post of Group A. Officers has two grades, i.e., Grade I and Grade II.
Grade II post of Group A has always been a promotional post for Group B Officers.
Their scales of pay have also been different and have been fixed keeping in view the distinction between the two Groups which belong to two different cadres.
This Court had in fact in K.M. Bakshi vs Union of India, AIR 1962 SC 1139 gone into the matter pertaining the distinction between the two Groups of Officers, and had upheld the said classification.
There is further no dispute that the posts of Income Tax 1022 Officer Group A junior scale or Grade II, are filled 50% by direct recruitment through the Civil Service Examination held by the Union Public Service Commission and 50% by promotion on the basis of selection by the Departmental Promotion Committee from Income Tax Officers Group B who have rendered not less than 5 years ' service in that post.
The appointments to the posts of Income Tax Officers Group B are made 100% by promotion from Income Tax Inspectors who belong to Grade C or Class I11 service.
The appointment to the posts of Income Tax Inspectors are made 33 1/3% by direct recruitment and 66 2/3% by promotion from the lower group of Class C service.
The result has been that the present strength of about 2,500 ITOs of Group B consists of all but 185 promotees (who were recruited ad hoc only in one year, i.e., in 1969) from the lower GroupC posts.
What is more, as pointed out above, the Income Tax Officers Group B, and Income Tax Officers Group A junior scale, belong to two different cadres and not to the same cadre of Income Tax Officer.
Hence those who joined the lower Group C service cannot claim equality in conditions of service with Group A Officers who are either recruited directly on the basis of the Civil Services Examination or are promoted from Group B on the basis of seniority cum merit.
It is also pointed out on behalf of the respondents that after changing the designation of the Income Tax Au thorities and designating the former ITOs of Group A and Group B as Assistant Commissioners and ITOs respectively, their jurisdictions have been regulated.
The basic principle followed in demarcating the jurisdiction of the two classes of Officers is the quantum of the return of income/loss as on 1st April of the Financial Year.
If the return of income/loss is of Rs.5 lakhs and above, it goes to the Deputy Commissioner; if of Rs.2 lakhs and above but below Rs.5 lakhs, it goes to the Assistant Commissioner (i.e., the former Group A Officers); and if it is below Rs.2 lakhs, it goes to the Income Tax Officers (the former Group B Offi cers).
It is also pointed out that the Government has since issued a notification on March 30, 1988 making the Income Tax Officers and Tax Recovery Officers subordinate to the Assistant Director or Assistant Commissioner.
Further, whereas Assistant Commissioners of Income Tax (former ITOs of Group A) are now empowered to writ off a sum upto Rs. 1,000 if they are convinced that the amount is irrecovera ble, in similar circumstances, the ITOs, i.e., former Offi cers belonging to Group B, are empowered to writ off an amount upto Rs.500 only.
When the assessment is made under sub section (3) of Section 143 or Section 147 for the rele vant assessment year, the power to issue notice under Sec tion 148 is vested only in an Assessing Officer of the rank of 1023 Assistant Commissioner or Deputy Commissioner.
Section 274(2) of the Act prescribes monetary limits regarding the powers of the Income Tax Officer and Assistant Commissioner for imposing penalty.
That provision shows that Income Tax Officer (i.e., the former Group B Officer) has authority to impose penalty upto Rs. 10,000, whereas the Assistant Com missioner (former Group A Officer) has the authority to impose penalty upto Rs.20,000 without the prior approval of the Deputy Commissioner.
The material placed on record by the respondents, thus, shows that the distinction between Group A and Group B Officers has been in existence from the very beginning.
The distinction has been maintained statutorily with distinct powers and jurisdiction, hierarchical position and eligibil ity qualifications.
The sources of their appointment and the authorities vested with the power to appoint them have also been different.
The distinction between the two further has been made on the basis of the class of work and the respon sibility entrusted to each.
The work which is of more than a routine nature and which involves a detailed investigation either on account of the class of the assessees or of the complexities of the returns filed, is entrusted to the Officers belonging to Group A (now Assistant Commissioners) while the assessment work of a summary or routine nature or of the assessees filing routine returns or returns involving simple transactions is entrusted to Officers belonging to Group B (now ITOs).
Although, therefore, apparently the outfit of the function and its procedural part is the same, in practice the assessments differ from assessees to asses sees, summoning different degrees of knowledge, application of mind, resourcefulness, acumen and taken to scrutinize them.
Hence, merely because sometimes, on account of the exigencies of work the Officers belonging to Group B were entrusted with the work of the Officers of Group A, it cannot be claimed that the two posts are of an equal rank.
The handling of the higher category of work may entitle an Officer of the lower rank to emoluments of the higher post.
But that cannot obliterate the distinction between the two posts.
To accept the plea of the petitioners to equate the two posts or to merge them on that account, is to negate the whole statutory scheme and also to ignore the fact that the Group B post (i.e., the present post of the ITO) is an intermediate post between that of the Income Tax Inspector and the Group A post (i.e, the present post of Assistant Commissioner) which is a promotional post for Officers belonging to Group B.
The Group A post is further a selec tion post and the promotee has to satisfy certain qualifica tions to be eligible for being considered for the said post.
The two posts, therefore, always belonged to 1024 two different cadres carrying different scales of pay and other service conditions.
Thus, this is not a case of the two posts being equal in status or of belonging to the same class.
The distinction between the two is ordained by the Statute and is necessary for its proper implementation.
By the very nature of the operation involved, the administra tion has to have the power to classify the work and to appoint personnel with different skill and talent to execute the different types of work.
The legislature being mindful of this need has deliberately created the two classes of officers as is evident from the provisions of Section 117 even prior to its present amendment.
Even after the amend ment the said distinction has been maintained.
The fact that this distinction has all along been real and not nominal is clear from the difference in the power and jurisdiction statutorily vested in the two classes of Officers.
Hence, the intention of the legislature to have the two classes of Officers to discharge different types of work is manifest and in practice the distinction has always been maintained.
It is only when the exigencies of the work required that some officers belonging to Group B were promoted on ad hoc basis to the posts of Group A officers.
Such exigencies occur in every organisation, and to cope up with them the authorities have to improvise.
That, however, cannot equate the two unequal posts.
The very same argument for equating these two class es of Officers was advanced in K.M. Bakshi vs Union of India, (supra).
It was pointed out by this Court in that case that the Income Tax services were reconstituted by an order of the Government of India dated September 29, 1944, and later on in 1953, Section 5 of the Income Tax Act was amended to give effect to this reconstitution.
One of the features of the reconstitution was that in place of one class of Income Tax Officers two classes came into exist ence, namely, Class I and Class II ITOs.
Class I Officers were eligible to be promoted to the higher post of Commis sioners and Assistant Commissioners, and Class II Officers could obtain such promotion only after having first reached the status of Class I Officers.
A percentage of the vacan cies in the posts of Class I Officers was to be filled by promotion of Class II Officers, and the rest by direct recruitment.
It was also pointed out that Class I post being a promotional post for Class II Officers, the two posts were not equal.
Dealing with the argument of equal pay for equal work, the Court pointed out that if that argument were to be accepted literally, even the incremental scales of pay fixed dependent upon the duration of an Officer 's service could not be justified.
It appears that in that case the Court was called upon to deal with a bland assertion that the two posts were equal and it was not contended that 1025 the duties and functions discharged by them were equal in nature and hence the Court had no occasion to deal with the said contention.
We have already pointed out above that there is a difference in the nature, scope and responsibili ty of the duties entrusted to the two Officers justifying the differentiation.
This is apart from the fact that the matter has now been set at rest by the Rules, notifications, circulars and orders which have been issued demarcating clearly the functions and jurisdiction of the two.
As has been held in Federation of All India Customs and Central Excise Stenographers (Recognised) & Ors.
vs Union of lndia & Ors.
; , the differentiation in two classes can be justified on the basis of "the nature and the type of the work done . .
The same amount of physical work may entail different quality of work, some more sensitive, some requiring more tact, some less it varies from nature and culture of employment.
The problem about equal pay cannot always be translated into a mathemat ical formula.
If it has a rational nexus with the object sought for . . a certain amount of value judgment of the administrative authorities who are charged with fixing the pay scales has to be left with them and it cannot be interfered with by the Court unless it is demonstrated that either it is irrational or based on no basis or arrived mala fide either in law or in fact".
The Court there found that in the light of the averments made and the facts point ed out, it was not possible to say that the differentiation there was based on no rational nexus with the object sought to be achieved.
The Court noted that the differentiation was justified on the dissimilarity of the responsibility, confi dentiality and the relationship with public etc.
though there was similarity in the functional work.
The court further observed there that often the difference in the functions and the responsibilities is a matter of degree and the administration is required to make a value judgment while classifying the posts and fixing the different condi tions of service for them.
So long as the value judgment is made bona fide, it is not questionable.
The same view has been reiterated by this Court in V. Markendeya & Ors.
vs State of Andhra Pradesh & Ors.
, ; 44.
At the cost of repetition, we may state that in the present case the distinction between the two posts is made by the statute itself and that distinction has been in existence since long.
The appointing authorities of the two posts are different.
In fact, the Group A post (the present post of the Assistant Commissioner) had two grades, viz., Grade I and Grade II, and Grade II post was a promotional post for 1026 officers belonging to Group B (the present ITO).
The nature of work entrusted to the two classes of posts, the responsi bility which goes with it and the power and jurisdiction vested in them vary.
The mere fact that some Group B offi cers are capable of performing the work of Group A officers and in fact on some occasions in the past they were appoint ed ad hoc or otherwise, to discharge the work of Group A officers cannot equate the two posts.
Such a demand, to say the least, is irrational for if this contention is accepted, in no organisation the hierarchy of posts can be justified.
After the 1987 Amendment, further, the situation has changed and the duties, functions, jurisdiction and power of the officers have been rationalised clearly demarcating the spheres of work of the two.
In an organisation of this kind, with contrywide offices dealing with various categories of assessees and incomes, some dislocation, functional overlap ping and want of uniformity in the assignment of work during some period is not unexpected; and it does appear that during some period, the situation in the Department was out of joint.
That is why steps were taken to straighten it out by amending the Act and making the rules and issuing the relevant notifications.
circulars and orders.
If during this period on account of the exigencies of service, some ad hoe appointments of Group B officers were made to Group A posts, Grade II or Group B officers were required to perform the same functions and discharge the same duties as Group A officers, they can at best claim the emoluments of Group A officers, but certainly not the equalisation of the two posts on that account.
Since the alleged equality of posts was the founda tion of the other contentions raised in the petitions, the said contentions must also fail and need not be dealt with separately.
The contentions which are common to the earlier petition have already been dealt with.
In the circumstances, we find no substance in these petitions.
The petitions are, therefore, dismissed and the rule granted in each is discharged with no order as to costs.
Before parting with these petitions, we cannot help observing that although the issues raised in a11 these petitions were set at rest by this Court conclusively earli er, the petitioners thought it necessary to tax the precious time of the Court by approaching it once again on grounds which were least justified.
We hope and trust that this decision puts a final lid on the alleged grievances of the petitioners and no new pretexts are found hereafter to take up the same contentions under other garbs.
Y.LaI Petitions dismissed.
| IN-Abs | The main petition has been filed by the Income tax Officers Group A, challenging the Seniority Rules of 1973, which were framed by the Department pursuant to the direc tions given by this Court in an earlier case B.S. Gupta vs Union of India, [1975] Supp.
SCR 491.
The circumstances that led to the filing of the instant petitions may be stated thus: The Government by virtue of the Rules propounded in its letter dated 29th September 1944, re organised the Income tax services into Class I and Class II.
The said Rules inter alia laid down that recruitment to the cadre of Income tax Officers Group A shall be from two sources i.e. direct recruitment and promotion, the quota for the two being 80% and 20% respectively.
In 1945, the Government framed fresh recruitment rules wherein it was provided that the recruit ment from the said sources will be made as per the direc tions of the Government, in effect, keeping the recruitment quotas in abeyance.
In September, 1949, the Government framed Seniority Rules and it was laid down that the promo tees who had been certified by the Federal Public Commis sion, in any calendar year, shall be senior to all direct recruits who completed their probation during that year or after and are confirmed with effect from the date in that year or after.
In the year 1950, the Seniority Rules were again revised and the concerned Rule 1(f)(iii) was amended.
By its letter dated 18.10.1951, the Government revised the quotas of direct recruits and promotees, in that, in the case of direct recruits the quota was reduced from 80% to 66 2/3% while in the case of promotees, the quota was en hanced from 20% 10 33 1/3% and also amended the Rule 1(f)(iii) of 1950 Rules.
This revision, in effect, gave 3 years ' weightage in seniority to the promotees.
These rules continued to 995 operate till 1959.
Between 1959 and 1960, 114 posts were upgraded to those of Income Tax Officers Group 'A ' and the promotees were appointed to the said posts during that period.
One Jaisinghani, a direct recruit challenged the consti tutional validity of Rule 1(f)(iii) and (iv) of 1952, Sen iority Rules by means of a writ petition in the High Court, which gave 3 years ' weightage to the promotees in the matter of fixation of their seniority and the implementation of quota.
The High Court rejected the writ petition.
In appeal, this Court held that the quota having been fixed by the Government in exercise of the powers conferred on it under Rule 4 of the 1945 Rules, the same was valid.
The Court also upheld the weightage given to the promotees under the 1952 Rules.
The Court further directed that roster system should be adopted by framing an appropriate rule for working out the quota system between the direct recruits and promotees.
It may be mentioned that the court gave this direction because it was of opinion that the promotees were in excess of the prescribed quota for each of the years 1951 to 1956, and that they had been illegally appointed.
It was therefore directed that the seniority of Jaisinghani and others simi larly placed be re adjusted and the Government should pre pare a fresh seniority list in accordance with law.
Pursuant to the direction given by the Court, the gov ernment prepared seniority list which was challenged in the Delhi High Court by two separate writ petitions one by B.S. Gupta, a promotee of 1962 and another by M.C. Joshi, a direct recruit.
The High Court dismissed the writ petition of Gupta but substantially allowed the one filed by Joshi.
In appeal this court by its order dated 16.8.1972 in Gupta 's case AIR 1972 SC 262, held that seniority list was valid with regard to the promotions made upto January 15, 1959 but the same was not valid for the period thereafter.
The court accordingly set aside the list to the extent it concerned the period from 16.1.1959 and directed the Department to prepare a fresh seniority list in accordance with the obser vations and directions of this Court.
The court came to the conclusion that with the upgrading of large number of posts and appointments of the promotees, the quota rule had col lapsed and with that seniority rule giving weightage to the promotees had collapsed.
The court held that quota rule came to an end on 16.1.1959.
In pursuance of the aforesaid direc tion, the government frame the impugned 1973 Rules and prepared a fresh seniority List on February 1973, giving retrospective effect to the Rules from 15.1.1959.
The Gov ernment also challenged the quota of direct recruits and promotees, making it 50% for each of them i.e. 1:1.
Seniori ty of officers upto 15.1.59 was fixed as per old Rules and the 996 seniority from 16.1.1959 was fixed as per new rules; 73 promotees though promoted between 1956 58 could not be accommodated under the old rules, their seniority was fixed under the new rules.
In the present petitions, the petitioners contend that this Court gave its direction in Gupta 's case ; ; because for want of sufficient material the court had come to the conclusion that the quota for recruitment of direct recruits and promotees had broken down as the promo tees were appointed in excess of their entitlement though the requisite material showing the contrary was in posses sion of the government, which was suppressed.
It is asserted by them that the material shows that in fact the appointment of the promotees was short of their quota.
Hence they claim that not only the 1973 Rules be set aside but the appoint ments of the promotees be made and their seniority be fixe daccording to the rules prevailing prior of the said Rules.
In the connected writ petitions, besides these contentions, validity of amendment of Sec. 117 of the Income Tax Act; and classification of Income Tax Officers in Group A and Group B officers have also been questioned.
Dismissing the writ petitions this Court held: HELD: It is clear from the table that the petitioners promotees have calculated the posts in the sanctioned strength not only in Grade II but also in Grade I Posts when the posts available to them for promotion were only in grade I1.
Hence, their further calculations of the working strength, the vacancies and the quota available to them in the vacancies and of the dificiencies or the excess in the quota are erroneous.
[1009F] Even the Government had independently come to the con clusion as early as in 1986 that neither the Rules of sen iority nor the Seniority List of 1973 had done injustice to the promotees.
In fact, the Rules of 1973 had rised the quota of the promotees from 33 1/3% to 50%.
The seniority of the promotees was adjusted upto 15th January, 1959 on the basis of the earlier quota Rule and the Seniority of those who were appointed later and of those who were found in excess of their quota upto that date, were adjusted accord ing to the new Rule.
[1016F G] What this Court wanted to convey in the earlier part of its judgment was that when the Government decides to fill in the vacancies, it is not necessary to defer the appointments from one source pending the appointments from the other source.
But that is when the Government 997 decides to fill in the vacancies and not before it.
[1017F] Power is vested in the legislature to appoint different classes of officers and this carries with it also the power to demarcate their duties, functions and responsibilities.
Whether in fact there is such a division of powers, func tions and responsibilities or not, has nothing to do with the validity of the power to make the classification.
[1019H; 1020 A] The distinction between Group A and Group B Officers has been in existence from the very beginning.
The distinction has been maintained statutorily with distinct powers and jurisdiction, hierarchical position and eligibility qualifi cations.
The sources of their appointment and the authori ties vested with the power to appoint them have also been different.
The distinction between the two further has been made on the basis of the class of work and the responsibili ty entrusted to each.
The work which is of more than a routine nature and which involves a detailed investigation either on account of the class of assessees or of the com plexities of the returns filed, is entrusted to the officers belonging to Groups Group A (now Assistant Commissioners) while the assessment work of a summary nature or of returns involving simple transactions is entrusted to Officers belonging to Group B (now ITOs).
[1023C E] By the very nature of the operation involved, the admin istration has to have the power to classify the work and to appoint personnel with different skill and talent to execute the different types of work.
The legislature being mindful of this need has deliberately created the two classes of officers as is evident from the provisions of Section 117 even prior to its present amendment.
Even after the amend ment the said distinction has been maintained.
After 1987 amendment the situation has further changed and the duties, functions, jurisdiction and powers of the officers have been rationalised clearly demarcating the spheres of work.
In an organisation of this kind, with country wide offices dealing with various categories of assessees and incomes, some dislocation functional overlapping and want of uniformity in the assignment of work during some period is not unexpected; and it does appear that during some period, the situation in the Department was out of joint.
That is why steps were taken to straighten it out by amending the Income Tax Act and making the rules and issuing the relevant notifications, circulars and orders.
[1024B; 1026B C] If during this period on account of the exigencies of service, some ad hoc appointments of Group B officers were made to Group A posts, 998 and Grade 1I or Group B officers were required to perform the same functions and discharge the same duties as Group A officers, they can at best claim the emoluments of Group A officers, but certainly not the equalisation of the two posts of that account.
[1026D E] S.G. Jaisinghani vs Union of India and Ors., ; ; B.S Gupta etc.
vs Union of India and Ors/ etc.
; , ; Kamal Kanti Dutta and Ors.
vs Union of India and Ors.
, [1980] 3 SCR III; K.M. Bakshi vs Union Of India, AIR 1962 SC 1139; Federation of A11 India Customs and Central Excise Stenographers (Recognised) and )rs.
vs Union of India and Ors.
, ; ; V. Markandeya and Ors.
vs State of Andhra Pradesh and Ors.
, ; , referred to.
|
Special Leave Petition (Civil) Nos. 4973/89 and 12763/89.
From the Judgment and Order dated 31.1.1989 of the Kerala High Court in O.P. No. 3218/88 and dated 25.3.82 of the Income Tax Appellate Tribunal, Cochin in I.T.A. No. 302/Coch/1977 78.
K.K. Venugopal and K.R. Nambiar for the Petitioner.
Soli J. Sorabjee, Attorney General, section Ganesh and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is a petition under arti cle 136 of the Constitution for leave to appeal against the orders of the tribunal and the High Court.
The High Court vide its order dated 31st January, 1989 had dismissed the application for reference.
There is also an order of the tribunal refusing to make a reference under section 256(1) of the Income Tax Act, 1961 (hereinafter called 'the Act ').
This petition also seeks leave to appeal directly from the said order of the tribunal.
7 However, in order to appreciate the controversy in this case the facts reiterated by the High court of Kerala in its said judgment and order are important, it had observed as follows: "For the assessment year 1969 70 the petitioner filed a return declaring a total income of Rs.9,571.
In completing the assessment the assessing authority proceeded on the basis that the assessee was the owner of the gold seized on 9.11.68 and confiscated by the Customs authorities worth Rs.20 lakhs and accordingly the Income tax Officer treated the sum of Rs.20 lakhs as income from undisclosed source applying the provisions of Section 69 A of the Income tax Act, 1961.
On appeal, the Appellate Assistant Commissioner held that the assessee was not the owner of the contraband gold seized by the Central Excise Authority and therefore reduced the assessee 's total income by Rs.20 lakhs.
The Revenue filed a second appeal before the Appellate Tribunal, Cochin Bench.
After going through the evidence the Tribunal came to the conclusion that the car belonged to the assessee and the special places of concealment had been provided by design in the car.
Further the assessee himself was driving the car in which the gold was found.
The assessee also has not attributed the ownership to anybody else.
The assesee also has not established that the gold was given to him by any third party.
In view of all these, the addition of Rs.20 lakhs made by the Incometax Officer but deleted by the Appellate Asstt.
Commissioner was restored.
The additional ground raised by the Revenue that the appeal is not main tainable before the Appellate Asstt.
Commissioner was re jected.
The assessee thereafter filed a Miscellaneous Peti tion for rectification of the order of the Tribunal.
The rectification sought to be made are : (1) Business loss to the tune of Rs.20,00,000 incurred by the assessee due to investment in gold and the confiscation of the gold by the Customs authorities be allowed for the assessment year 1969 70, in view of the decision of the Supreme Court in CIT vs Piara Singh, decided on 8 5 1980 and reported in , (2) the income tax and special surcharge amounting to Rs. 16, 19,395, Rs.20,00,000 and 8 (3) as the tax has already been collected from the amount of Rs. 20,00,000 no interest was payable.
" The High Court noted that the tribunal could not accede to the requests of the petitioner as these could not be considered as mistakes apparent from records.
The points had not been raised by way of cross appeal or cross objections.
Thereafter, the assessee filed a petition u/s 256 of the Act seeking reference of the following questions of law: "1.
Whether the Tribunal is right in law in its view that the right to file an application under Section 254(2) of the Income tax Act, 1961 is open to be exercised only by the applicant and not by the respondent in the appeal before it? 2. Whether the Tribunal is right in law in rejecting the application under Section 254(2) on the ground that the applicant was not the appellant before it and that he had also not filed any memo of Cross objections in the appeal against him? 3.
Whether on the facts and in the circumstances of the case the assessee was bound to raise before the Tribunal, at the stage when he was only supporting the order appealed against him, of his case for deduction which he was legally entitled to claim in case of allowance of the appeal against him? 4.
Whether on facts and circumstances of the case the Tribu nal was right in law in holding that the claim of loss on account of confiscation of the gold was not the subject matter of the appeal?" The tribunal dismissed the petition holding that none of the questions sought to be raised was decided by the tribu nal and as such did not arise out of the order of the tribu nal.
Aggrieved by these two orders, one being refusal by the tribunal to refer the question as aforesaid u/s 256(1) and the other of the High Court directing the tribunal to refer the questions and state the case to the High Court, the petitioner has come up to this Court.
We find that it can legitimately be argued in the facts and the circumstances of the case that the question which essentially arose, which had to be borne in mind and which 9 was argued before the tribunal was, whether the sum of Rs.20 lakhs could be subject to taxation in the context as found by the tribunal as the income of the assessee.
The asses see 's further contention was that in view of the decision of this Court in C.I.T. Patiala vs Piara Singh, even if Rs.20 lakhs could be treated as the income of the asses see inasmuch as this has been ordered to be confiscated, there was a business loss as held in the said decision of this Court.
Therefore, this question should have been gone into which was sought to be raised by a MiscellaneOus Appli cation before the tribunal after disposal of the appeal by the tribunal.
The principle by which this should be determined has been fairly laid down by this Court in C.I.T., Bombay vs Scindia Steam Navigation Co. Ltd.; , wherein this Court at page 612 had observed as follows: "Section 56(1) speaks of a question of law that arises out of the order of the Tribunal.
Now a question of law might be a simple one, having its impact at one point, or it may be a complex one, trenching over an area with approaches leading to different points therein.
Such a question might involve more than one aspect, requiring to be tackled from different standpoints.
All that section 66(1) requires is that the question of law which is referred to the court for decision and which the court is to decide must be the question which was in issue before the Tribunal.
Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal.
It will be an over refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of section 66(1) of the Act.
That was the view taken by this Court in Commissioner of Income tax vs Ogale Glass Works Ltd., and in Zoraster & Co. vs Commissioner of Income tax, , and we agree with it.
As the question on which the parties were at issue, which was referred to the court under section 66(1), and decided by it under section 66(5) is whether the sum of Rs.9,26,532 is liable to be included in the taxable income of the respondents, the ground on which the respondents contested their liability before the High Court was one which was within the scope of the question, and the High Court rightly entertained it.
10 It is argued for the appellant that this view would have the effect of doing away with limitations which the Legislature has advisedly imposed on the right of a litigant to require references under section 66(1), as the question might be framed in such general manner as to admit of new questions not argued being raised.
It is no doubt true ' that sometimes the questions are framed in such general terms that, construed literally, they might take in questions which were never in issue.
In such cases, the true scope of the reference will have to be ascertained and limited by what appears on the statement of the case.
In this connec tion, it is necessary to emphasise that, in flaming ques tions, the Tribunal should be precise and indicate the grounds on which the questions of law are raised.
Where, however, the question is sufficiently specific, we are unable to see any ground for holding that only those conten tions can be argued in support of it which had been raised before the Tribunal.
In our opinion, it is competent to the court in such a case to allow a new contention to be ad vanced, provided it is within the framework of the question as referred." Mr. Venugopal, appearing for the petitioner, drew our attention to the observations of Justice Shah, as the learned Chief Justice then was, at p. 617 which are to the following effect: "The source of the question must be the order of the Tribu nal; but of the question it is not predicated that the Tribunal must have been asked to decide it at the hearing of the appeal.
It may very well happen and frequently cases arise in which the question of law arises for the first time out of the order of the Tribunal.
The Tribunal may wrongly apply the law, may call in aid a statutory provision which has no application, may even misconceive the question to be decided, or ignore a statutory provision which expressly applies to the facts found.
These are only illustrative case: analogous cases may easily be multiplied.
It would indeed be perpetrating gross injustice in such cases to restrict the assessee or the Commissioner to the questions which have been raised and argued before the Tribunal and to refuse to take cognisance of question which arise out of the order of the Tribunal, but which were not argued, because they could not (in the absence of any indication as to what the 11 Tribunal was going to decide be argued." As mentioned hereinbefore, this is an application for leave to appeal from the decisions of the tribunal and the High Court under Article 136 of the Constitution.
The real and substantial question posed and canvassed before the tribunal in its appellate order and in the appeal, as is manifest from the facts stated before, was, whether a sum of Rs.20 lakhs could in the facts and the circumstances be considered as part of the income of the assessee and as such suffer taxation.
Now the question sought to be raised is, whether in view of the decision of this Court in Piara Singh 's case (supra) the amount of Rs.20 lakhs could be treated as legitimate business loss of the assessee.
It is possible to take the view that this is substan tially a different question, namely, whether an amount is a business loss even assuming that it was the income.
It is possible and conceivable to consider two different ques tions, namely, whether a certain sum of money is the income of the assessee, and secondly, whether even assuming that such was the income, was that income liable to be deducted in view of the provisions of the Act.
It is possible to take the view that these are substantially different questions and not merely different aspects of the same question.
Considerations which go into determination of whether an amount should be treated as income and the considerations which are relevant to determine whether even assuming that, that was the income the amount was deductible, are differ ent.
The question in this form was not canvassed before the tribunal at any point of time in the alternative.
It may be reiterated that the Central Excise Officers at Valayar check post seized gold weighing 16,000 gms.
from Car No. MYX 9432, which was being driven by the petitioner along with the documents and took the petitioner into custody.
The Collector of Central Excise, Madras had confiscated the gold in question and found that the petitioner was in possession of the gold.
The assessment of the petitioner for the year in question was originally completed at a total income of Rs. 1,571.
Subsequent to the completion of the original assessment, the petitioner filed a return declaring a total income of Rs.9,57 1.
The Income Tax Officer issued notice under section 148 of the Act.
The Tribunal ultimately had accepted the revenue 's contention, restored the addition of Rs.20 lakhs made by the assessing authority, inter alia, holding that the onus was on the petitioner to prove that the 12 gold was not owned by him which onus the petitioner had failed to discharge.
The Tribunal had gone into and adjudi cated the question substantially raised by the petitioner that the confiscated gold could not be treated as the income of the petitioner.
The Tribunal rejected the application of the petitioner on the ground that the claim of loss on account of the confiscation of the gold was not the subject matter of the appeal.
The principles of law have been discussed by this Court in Scindia Steam Navigation Co. Ltd 's case (supra).
In the facts and the circumstances of the case, the Tribunal and the High Courts have taken the view that wheth er certain sum of money can be treated as the income of an assessee and whether that sum of money could be deducted as loss are different question of law and not different aspects of the same question.
The Tribunal and the High Court have taken a particular view.
They have borne in mind the correct principles that are applicable in the light of the law laid down by this Court in Scindia Steam Navigation 's case (supra).
In the background of the facts and the circumstances of the case, as mentioned hereinbefore, if the aforesaid view of the Tribunal and the High Courts is a possible view, we are not inclined to interfere with that view under Article 136 of the Constitution in the light of the facts and the circumstances of this case.
We are not prepared to say that injustice has been done to the petitioner.
The view taken by the Tribunal and the High Courts is a possible view.
The Tribunal and the High Courts have borne in mind the princi ples of law laid down by this Court.
In the aforesaid view of the matter, ' in the facts and the circumstances of the case, this application is rejected and accordingly dismissed.
R.N.J. Petition dismissed.
| IN-Abs | On November 11, 1968 the Petitioner was apprehended carrying contraband gold in a Maruti Car driven by him.
He was taken into custody and the seized gold was confiscated.
For the assessment year 1960 70 the Petitioner had filed a return declaring total income of Rs.9,571.
In finalising the assessment the Income Tax Officer added Rs.20 Lakhs being the price of the confiscated gold as income from undisclosed source.
The Petitioner went in appeal before the Appellate Assistant Commissioner who reduced the income by that amount holding that the assessee was not the owner of the confis cated gold.
On second appeal by the revenue the Tribunal restored the order of the I.T.O.
The Petitioner then moved a Misc.
Application under section 254(1) for amendment for treating Rs.20 Lakhs as business loss which was rejected by the Tribunal.
The Petitioner then moved a Petition u/s 256(1) of the Income Tax Act seeking reference to the High Court raising certain questions, which was turned down by the Tribunal holding that none of the questions sought to be raised was decided by the Tribunal and ' as such did not arise from its order.
The High Court also declined the application to direct the Tribunal to refer the questions and to state the case to it.
Hence this special leave petition directed against both the order of the Tribunal as well as the High Court.
Dis missing the Special Leave Petition, the Court, HELD: The real and substantial question posed and can vassed before the Tribunal in its appellate order and in the appeal was whether the sum of Rs.20 Lakhs be considered as part of the income of the 6 assessee and as such suffer taxation.
The question sought to be raised is whether in view of the decision of the Court in Piara Singh 's case this amount could be treated as legiti mate business loss of the assessee.
It is possible to take the view that this is substantially a different question, family whether an amount is a business loss even assuming that it was he income.
It is possible and conceivable to consider two different questions, namely whether a certain sum of money is the income of the assessee and secondly, whether even assuming that such was the income, was that income liable to be deducted in view of the provisions of the Act.
Considerations which go into determination whether an amount should be treated as income and considerations which are relevant to determine whether even assuming that, that was the income the amount was deductible, are differ ent.
The question in this form was not canvassed before the Tribunal.
The view taken by the Tribunal and the High Court is a possible view and they have borne in mind the princi ples of law laid down by the Court in Scindia Steam Naviga tion 's case.
[1 lB E; 12E] C.I.T., Patiala vs Piara Singh, 2 and C.I.T., Bombay Scindia Steam Navigation Co. Ltd., , referred to.
|
vil Appeal Nos.
4447 48 of 1988.
From the Judgment and Order dated 10.11.
1987 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/Stay/No.
45/87 A & E/Appeal No. 188 of 1987 A. (Order No. 681 & 682 of 1987 A. Soli J. Sorabjee, Attorney General, Ms. Nisha Bagchi and Mrs. Sushma Suri for the Appellant.
Debi Pal and P.K. Chakraborty for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an appeal under section 35L(b) of the Central Excises & Salt Act, 1944 (hereinafter called 'the Act ').
The appeal by the appellant before the tribunal was dismissed on the ground that provisions of rule 9(2) of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 had not been complied with.
The documents which are to accompany the memorandum of appeal are prescribed by rule 9 of the said rules which provides as follows: "9(1) Every memorandum of appeal shall be filed in quadru plicate and shall be accompanied by four copies (at least one of which shall be a certified copy) of the order ap pealed against and where such order is an order passed in appeal or revision, four copies (at least one of which shall be a certified copy) of the order appealed against and where such order is an order passed in appeal or revision, four copies (at least one of which shall be a certified copy) also of the order of the adjudicating authority.
(2) In an appeal filed under the direction of the Collector or the Administrator, the memorandum of appeal shall also be accompanied by an attested copy of the order containing such direction.
" The tribunal was of the opinion that the purpose and the spirit of rule 9(2) aforesaid was to ensure that the appeal was authorised by the collector to be filed.
Our attention was drawn to the authority in the instant case, which was annexed to the further affidavit filed in these proceedings.
The said authority dated 24th September, 1986 read as fol lows: 1029 "I hereby authorise Assistant Collector (Tribunal & Review, Collectorate of Central Excise, Calcutta II, Calcutta, to act on my behalf in the matter of filing appeal/ applica tions/cross objections/statement of reference before the Customs, Excise & Gold (Control) Appellate Tribunal/Collec tor (Appeals) in terms of Section 35B(2) and 35B(4), 35B(5), 35E(2), 35E(4), 35G(1) and 35G(2) of the Central Excises & Salt Act, 1944 and Section 81(3), 81(5), 81(6), 82(2), 82(4) and 823(1) & 823(2) of Gold (Control) Act, 1968.
" Pursuant to this authority the appeal was filed, and our attention was also drawn to the orders passed by the Collec tor in respect of this specific appeal.
The relevant portion of the same may be noted from the Order sheet.
The note dated 4th December, 1986 reads as follows: "Under the O/A date 14.8.86 as at page 19/C, Collector (Appeals) has set aside the O/O) of the Divisional A.C. (Vide P 197/C of linked file marked F/A).
In the O/O) the AC, CE, Howrah, South Division has disallowed abetment on account of I) Special Rebate on Addl.
Trade Discount and 2) cost of secondary packing purported to be used for protec tion and to facilitate transportation for reasons stated in detail in the adjudication order.
Collector (Appeals) has, however, allowed the assessee 's appeal on the ground that arguments put forward by the Asstt.
Collector for disallowing the party 's claim as not tenable.
In view of Supreme Court 's Judgment dated 7.10.83 in the case of M/s. Bombay Tyre International vs U.O.I. and clari ficatory Order date 14/15.11.83, it appears that the O/A passed by the Collector (Appeals) is not legal and proper and appeal to CEGAT against the same may be considered.
The arguments advanced by the Asstt.
Collector in her O/O dated 28.2.86 (pages 16 1 197/C of linked file) portions marked 'X ' & 'Y ' at Pages 17 1 173 & 163 165/ C of linked file may very well form our grounds of appeal as well.
Submitted for consideration please.
" 1030 Thereafter, it appears that the Collector desired to have a look on the judgment in Godfrey Philip 's case, and following are the orders noted by the Collector: "Godfrey Philips Judgment of the Supreme Court may be pe rused in ELT placed below.
(P=306 of Oct. 1985 issue).
" "Seen the judgment.
This judgment covers a different materi al namely cigarette.
For a classification from CEGAT.
We can appeal on this issue.
However, Collector may kindly see the side linked portions of page 323 of the book. ' ' The tribunal was of the opinion that there was nothing in the rules to justify acceptance of the kind of general authorisation or the notesheet orders which authorised filing of appeal without referring to a specified officer as being in consonance with rule 9(2) of the said rules.
Having regard to the purpose of these rules as we con ceive it, namely, to ensure that there was an application of mind to the points in respect of which the question for filing an appeal arose and that the appeal was duly autho rised by the Collector, and was filed by the person autho rised by the Collector in order to ensure that frivolous and unnecessary appeals are not filed, we are of the opinion that in the present context and in view of the terms of the rules and the purpose intended to be served, the appeal was competent and was duly filed in compliance with the proce dure as enjoined by the rules.
It has to be borne in mind that the rules framed therein were to carry out the purposes of the Act.
By reading the rules in the manner canvassed by Dr. Pal, counsel for the respondent, before us which had prevailed over the tribunal, in our opinion, would defeat the purposes of the rules.
The language of the relevant Section and the rules as we have noticed, do not warrant such a strained construction.
In the aforesaid view of the matter we are of the opin ion that the tribunal was in error in dismissing the appeal on the ground that it did.
In the premises, the judgment and order of the tribunal cannot be sustained.
We accordingly set aside the judgment and order of the tribunal dated 10th November, 1987.
In as much as, however, the tribunal has not disposed of the appeal on merits, we remand the matter to the tribunal for consideration of the appeal on merits and in accordance with law.
The appeal herein is disposed of as aforesaid.
T.N.A. Appeal dis posed of.
| IN-Abs | Rule 9(2) of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 provides that an appeal filed under the direction of the Collector or the Administrator shall be accompanied by an attested copy of the order containing such direction.
Pursuant to a general authority and an order of the Collector (on the file note sheet) the appellant filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal which dismissed it by holding that it was not in consonance with Rule (2).
Hence this appeal by the Revenue.
Setting aside the order of the Tribunal and disposing the appeal, this Court, HELD: 1.
Having regard to the purpose of the rules namely, to ensure that there was an application of mind to the points in respect of which the question for filing an appeal arose and that the appeal was duly authorised by the Collector, and was filed by the person authorised by the Collector in order to ensure that frivolous and unnecessary appeals are not filed, it must be held that in the present context and in view of the terms of the rules and the pur pose intended to be served, the appeal was competent and was duly filed in compliance with the procedure as enjoined by the rules.
The rules were to carry out the purposes of the Act.
Therefore, the Tribunal was in error in dismissing the appeal.
[1030D F, G] 2.
The matter is remanded to the Tribunal for considera tion of the Appeal on merits.
[1030H] 1028
|
ivil Appeal No. 764 (N) of 1975.
From the Judgment and Decree dated 30.11.1973 of the Kerala High Court in A.S. No. 365 of 1969.
R.F. Nariman, Mrs. A.K. Verma and D.N. Mishra for the Appellant.
Ramamurthi (Not Present) for the Respondents.
The Judgment of the Court was delivered by 889 K.N. SAIKIA, J.
The first respondent M/s. Shanmughavilas Cashew Industries, QuiIon purchased from East Africa 350 tons of raw cashewnuts which were shipped in the vessel SS Steliosm chartered by the appellant M/s. British India Steam Navigation Co. Ltd., incorporated in England, pursuant to a contract of affreightment evidenced by 3 bills of lading issued to the shipper for the 3 loads of cashewnuts.
Out of 4445 bags containing the nuts carried in the said vessel only 37 12 bags were delivered at Cochin, there being thus short landing of 733 bags.
The first respondent sued the appellant in suit No. O.S. 18/1965 in the Court of the Subordinate Judge, Cochin seek ing damages for the shortage of 733 bags of raw cashewnuts amounting to Rs.44,438.03.
The suit having been decreed with interest @ 6% per annum from 17.7.
1964, for the sum total of Rs.46,659.93, the appellant preferred therefrom appeal A.S. No. 365 of 1969 in the High Court of Kerala which was pleased by its Judgments and decree dated 16.8.
1973 and 30.11.
1973, to dismiss the appeal and affirm that of the Subordinate Judge.
Aggrieved, the appellant has preferred this appeal by special leave.
In the courts below the main contentions of the appel lant, inter alia, were that it was a mere chatterer of the vessel which was owned by section Matas & Compnay c/o Lucas Matas & Sons, Piraeus, Greece; that there was a charterparty executed between the first respondent and M/s. Victorial Steamship Company as agents of the said owner of the vessel in London on 27.1.
1964; that as per clause 3 of the bill of lading the court at Cochin had no jurisdiction and only English courts had jurisdiction; and that as per the char terparty and clause 4 of the bill of lading the reined.? of the first respondent, if any, was against the owner who alone was liable and not against the appellant charterer of the vessel.
Exhibit D 1 is the photostate copy of the char terparty concluded in London on 27.1.
1964 and Exhibit P 1 to P3 are the 3 bills of lading in the transaction.
The first respondent denied that the appellant was only a char terer and not liable for the shortage.
It also denied that only English Courts had jurisdiction in the matter.
Mr. R.F. Nariman the learned counsel for the appellant first submits that the appellant is an English company registered in England carrying on business in England, and it does not carry on any business in India.
It is submitted, as the carrier under clause 3 of the bill of lading, only the appellant has an option either to sue or be sued in England, or in Cochin, which is a port of destination but the shipper 890 had no option to sue at Cochin.
In its written statement it was clearly stated that it had appeared under protest and without prejudice to the contention regarding jurisdiction which contention it had also pressed at the time of the argument, and, therefore, it could not be said to have submitted to the jurisdiction of Cochin court; and it never made any submission or raised any objection as to the fact of short landing.
According to counsel the High Court has held clause 3 of the bill of lading to be bad on two errone ous grounds, namely, that it offends section 28 of the Contract Act and that it gives an unfair advantage to the carrier which advantage is not given to the consignee.
Section 28, according to counsel, is not applicable and clause 3 was not bad on the ground of having given an unfair advantage to the carrier in giving him the option to sue or be sued either in England or at the port of destination and that even if it was bad, only the offending portion could be struck off, the rest of the clause would still be applicable and only the English court would have jurisdiction.
Records show that in the written statement the appellant as defendant in para B stated that the contract evidenced by the bills of lading was governed by English law and the parties had agreed that the disputes were to be determined in England according to English law to the exclusion of the jurisdiction of the courts of any other country and that the institution of the suit at Cochin was in violation of that agreement, and hence the Court had no jurisdiction to try the suit and the plaint should be returned for presentation to proper court.
In the Replication filed by the plaintiff it was said: "The objection regarding jurisdiction raised in clause B of written statement is not tenable.
The cause of action for the suit has arisen within the local limits of the jurisdic tion of this Court.
The defendant is also residing and carrying on business within this court 's jurisdiction.
It is now well settled that the parties cannot be consent confer or oust the jurisdiction of a Court.
The plaintiffs deny the agreement mentioned in clause B and no agreement can oust the jurisdiction of the Court when the Court possesses the jurisdiction.
" Issue No. 1 was: "Whether the suit is properly filed in this Court?" The trial court in its judgment dated 29.3.
1968 held: "This issue has been considered by this Court on 28.2.
1966 891 and it has been found that this Court has jurisdiction to try the suit.
The said finding has been confirmed by the Hon 'ble High Court on 6.4.1967 in C.R.P. 977/66.
" That judgment is not before us.
In the memo of appeal to the High Court apart from the general grounds that the judgment and decree of the Court below were wrong in law and fact; that the Court below should have held that the suit was not maintainable in law and should have finally dismissed the suit as the owners of the vessel 'Steliosm ' a necessary party, as he alone was liable, was not impleaded and pro ceeded against, no specific ground about jurisdiction was taken and consequently we do not find any direct discussion on the point in the High Court judgments.
Even so, this being a question of jurisdiction going to the root of the matter we allowed the appellant to make his submissions.
The appellant 's submission that the courts at Cochin had no jurisdiction is based on clause 3 of the Bills of Lading which reads as follows: "3.
JURISDICTION: The contract evidence by this bill of lading shall be governed by English law and disputes deter mined in England or, at the option of the Carrier, at the port of destination according to English law to the exclu sion of the jurisdiction of the Courts of any other country.
" If the above clause was binding on the first respondent, without anything more, there could be no doubt that the suit claim arising out of the contract of affreightment evidenced by the bills of lading will have to be determined in England or, at the option of the carrier, that is the appellant, at the port of destination, that is, Cochin, to the exclusion of the jurisdiction of the courts of any other country.
Is the first respondent bound by this clause of the Bill of Lading? Clause 29 of both the bills of lading Exhibit P 1 and P2 runs as follows: "Finally in Accepting This Bill of lading.
The shipper, Consignee, and Owner of the goods, and the Holders of this Bill of Lading, expressly accept and agree to all its stipu lations, exceptions, and conditions whether written, print ed, stamped or incorporated, as fully as if they were all signed by such Shipper, Consignee, Owner or Holder.
" 892 The first respondent is the consignee and holder of the bills of lading and ex facie should be bound by this clause.
No doubt the bills of lading were issued to the shipper from whom it was received by the first respondent.
There is no evidence to show that the shipper has repudiated the stipu lations in the bills of lading in any manner.
Under these circumstances would it be open to the first respondent to repudiate clause 3 of the bills of lading? It is a settled principle of Private International Law governing bills of lading that the consignee or an endorsee thereof derives the same rights and title in respect of the goods covered by the bill of lading as the shipper thereof had.
For the purpose of jurisdiction the action of the first respondent is an action in personam in Private International Law.
An action in personam is an action brought against a person to compel him to do a particular thing.
If clause 3 of the bills of lading is held to be binding on the first respondent the choice of law by the parties would also be binding.
English courts would perhaps use their own Private International Law to decide the dispute.
In the event of the English Court alone having the jurisdiction, the application of Indian statutes and the jurisdiction of the Indian courts would be, to that extent, inapplicable.
Until the Bills of Lading Act, 1855 was passed in Eng land the endorsement of a Bill of Lading would not affect the contract evidenced in it, and the endorsee could not sue or be sued on such contract, though he was the person really interested in goods, the subject of the contract.
By section 1 of the Bills of Lading Act, 1855, in England "every con signee of goods named in a Bill of Lading, and every endor see of a Bill of Lading to whom the property of goods shall pass, upon or by reason of such consignment or endorsement shall have transferred to and vested in him all rights of suit and be subject to the same liabilities in respect of such goods as if the contract contained in the Bills of Lading had been made with himself." In Sewell vs Burdick, (85, 104) it is held that section 1 is to be given effect in any proceeding in the English Court regardless of the proper law governing the transfer of the bill of lading.
The property passes by reason of consignment or endorsement and the right to sue passes with it.
The consignee or endorsee may lose his right or liability under the Act by such further endorsement of the bill of lading as divests him of the property.
Such a vesting of rights and liabilities on endorsement of a bill of lading does not in any way affect the shipowners ' rights against the original shippers or owners of the goods for the freight or the shipper 's rights under the bill of fading or the liability 893 Of the consignee or indorsee by reason of his being such consignee or indorsee or of his receiving the goods in consequence of such consignment or endorsement, or any right of stoppage in transit.
The Indian Bill of Lading Act, 1856 was based on the English Bills of Lading Act, 1855 (18 and 19 Vict. C. 111) (Act IX of 1856).
Under section 1 of the also every consignee of goods named in a bill of lading and every endorsee of a bill of lading to whom the property in goods therein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.
The bill of lading is the symbol of the goods, and the right to possess those passes to the transferee of the bill of lading.
In other words, its transfer is symbolic of the transfer of the goods themselves and until the goods have been delivered, the delivery of the duly endorsed bill of lading operates as between the transferor or transferee, and all who claim through them, as a physical delivery of the goods would do.
The bill of lading is a negotiable instru ment in the sense of carrying with it the right to demand and have possession of the goods described in it.
It also carries with it the rights and liabilities under the con tract, where the property in the goods also is transferred.
However, a bill of lading is not a negotiable instrument in the strict sense of the transferee deriving better title than the transferor.
The transferee of a bill of lading gets no better title than the transferor himself had.
Mere pos session of the bill of lading does not enable the holder to sue a person at a place where the tranferor himself could not have done.
Where the negotiation of a bill of lading is by the person who had a right to sue on it, mere possession of it does not enable the holder to sue any person who was not liable under it and not to sue another who was liable under it to make good the claim.
He cannot also sue at a place not intended by the parties when intention has been expressed.
It would also be relevant to consider whether English courts would be likely to entertain the instant suit if instituted in England in terms of the bills of lading so that the first respondent is not likely to be without a remedy.
Dicey & Morris in the Conflict of Laws 1 1th Ed.
have given the following general principles as to jurisdiction in actions in personam: 894 "Rule 28, Sub rule 4: The court may assume jurisdiction if, in the action begun by the writ, the claim is brought to enforce, rescind, dissolve, annul or otherwise affect a contract, or to recover damages or obtain other relief in respect of the breach of a contract, being (in either case) a contract which (i) was made in England, or (ii) was made by or through an agent trading or residing in England on behalf of a principal trading or residing out of England, or (iii) is by its terms or by implication governed by English law, or (iv) contains a term to the effect that the court shall have jurisdiction to hear and determine any action in respect of the contract.
" Rule 34 deals with jurisdiction clauses and it says: "(1) Where a contract provides that all disputes between the parties are to be referred to the jurisdiction of the Eng lish courts, the court normally has jurisdiction to hear and determine any action in respect thereof.
(2) Subject to clause (3) of this Rule, where a contract provides that all disputes between the parties are to be referred to the exclusive jurisdiction of a foreign tribu nal, the English court will stay proceedings (or, as the case may be, refuse to give leave to serve the writ out of the jurisdiction) instituted in England in breach of such agreement, unless the plaintiff proves that it is just and proper to allow them to continue.
(3) Where the case falls within the scope of the 1968 Con vention, unless the defendant submits to the jurisdiction, the court has no jurisdiction to determine a dispute.
(a) if one or more of the parties is domiciled in a Con tracting State and the parties have agreed in accordance with Article 17 of the 1968 Convention 895 that the courts of a Contracting State other than the United Kingdom are to have jurisdiction to settle any such dispute; or (b) if none of the parties is domiciled in a Contracting State and the parties have agreed in accordance with Article 17 of the 1968 Convention that the courts of a Contracting State other than the United Kingdom are to have jurisdiction to settle any such dispute and the courts chosen have not declined jurisdiction." According to the authors the parties to a contract in international trade or commerce may agree in advance on the forum which is to have jurisdiction to determine disputes which may arise between them.
The chosen court may be a court in the country of one or both the parties, or it may be a neutral forum.
The jurisdiction clause may provide for a submission to the courts of a particular country, or to a court identified by a formula in a printed standard form, such as a bill of lading referring disputes to the courts of the carrier 's principal place of business.
It is a question of interpretation, governed by the proper law of the con tract, whether a jurisdiction clause is exclusive or non exclusive, or whether the claim which is the subject matter of the action fails within its terms.
If there is no express choice of the proper law of the con.tract, the law of the country of the chosen court will usually, but not invaria bly, be the proper law.
It is accordingly unlikely that the first respondent would be without any remedy if the terms of clause 3 of the bills of lading are faithfully observed.
The question of jurisdiction in this case ought not ,to be determined by the High Court on the basis of the provi sions of section 28 of the Indian Contract Act in the absence of a specific provision making it applicable to transactions in international trade.
The effective operation of statutes of a country in relation to foreigners and foreign property, including ships, is subject to limitations.
In general, a statute extends territorially, unless the contrary is stat ed, throughout the country and will extend to the territori al waters, and such places as intention to that effect is shown.
A statute extends to all persons within the country if that intention is shown.
The Indian Parliament therefore has no authority to legislate for foreign vessels or for eigners in them on the high seas.
Thus a foreign ship on the high seas, or her foreign owners or their agents in a for eign country, are not deprived of 896 rights by our statutory enactment expressed in general terms unless it provides that a foreign ship entering an Indian port or territorial waters and thus coming within the terri torial jurisdiction is to be covered.
If the Parliament legislates in terms which extend to foreign ships or for eigners beyond the territorial limits of its jurisdiction, the Indian court is of course bound to give effect to such enactment.
However, no such provision has been referred to in the impugned judgments.
Without anything more Indian statutes are ineffective against foreign property and for eigners outside the jurisdiction.
The Privy Council in Sirdar Gurdyal Singh vs Rajah of Faridkote, (684) decided that no territorial legislation can give jurisdiction in personal action which any foreign court should recognize against absent foreigners owing no allegiance or obedience .to the power which so legislates.
Lore Selborne said: "In a personal action to which none of these causes of jurisdiction apply, a decree pronounced in absentem by a foreign court, to the jurisdic tion of which the defendant has not in any way submitted himself, is by international law an absolute nullity.
He is under no obligation of any kind to obey it; and it must be regarded as a mere nullity by the courts of every nation except (when authorised by special local legislation) in the country of the forum by which it was pronounced.
" There may however be submission to the .jurisdiction of an Indian court by litigating in India.
The question then is what would amount to submission to jurisdiction.
Cheshire & North 's Private International Law 11th Ed., on submission to jurisdiction says: "Despite the fundamental principle that the court cannot entertain an action against a defendant who is absent from England, it has long been recognised that an absent defendant may confer jurisdiction on the court by submitting to it.
This may be done in a variety of ways, such as by the defendant acknowledging service before actual service of the writ, or instructing a solicitor to accept service on his behalf; Commencing an action as a plaintiff will give the court jurisdiction over a counter claim.
Although a defendant who appears and con tests the case on its merits will be held to have submitted to the jurisdiction, an appearance merely to protest that the court does not have jurisdiction will not constitute submission, even if I the defendant also seeks a stay of proceedings pending the outcome of proceedings abroad.
" The authors go on to say that any person may contract, either expressly or impliedly, to submit to the jurisdiction of a court to which he would not otherwise be subject.
In case of an international contract it is common practice for the par ties, to agree that 897 any dispute arising between them shall be settled by the courts of another country even though both the parties are not resident of that country.
In such a case having consent ed to the jurisdiction one cannot afterwards contest the binding effect of the judgment.
The defendant out of the jurisdiction of the country may be deemed to have been served by service on his agent within the jurisdiction.
However, parties cannot by submission confer jurisdiction on the court to entertain proceedings beyond its authority.
The jurisdiction of the court may be decided upon by the parties themselves on basis of various connecting factors.
Wastlake says in his Treatise on Private International Law, at page 5: "The principal grounds for selecting a particular national jurisdiction in which to bring an action are that the subject of the action, if a thing, is situate, if a contract, was made, or was to be performed, if a de lict, was committed, within the territory: hence the forum situs, or rei sitae, contractus, delicti, the two latter of which are classed together as the forum special obligatio nis.
Or that the jurisdiction is that in which all the claims relating to a certain thing or group of things ought to be adjudicated on together, the forum concursus, or that to which the defendant is personally subject, the forum rei.
" In the instant case the appellant submits that as de fendant it appeared before the Indian court to protest its jurisdiction and put forth its defences subject to that protest.
The appellant, it has been stated in para 2 of the judgment under appeal, dated 30.4.1973, had not filed any objection to the findings as to damages.
Did it then amount to submitting to the jurisdiction of the Indian court in which the shipper or the first respondent had no right to sue? In Williams & Glyn 's Bank PLC vs Astro Dinamico Compania Naviera S.A. & Anr., The Weekly Law Reports Vol.
(1) 1984 438, where the plaintiff bank sought to enforce its securi ties against the defendants by instituting proceedings in England in reliance of clause 7 of the guarantees, whereby each of the defendants were expressed to submit irrevocably to the jurisdiction of the English courts.
The respondents (defendants) made an application disputing the jurisdiction of the English courts and had also simultaneously applied for stay of the action.
It was contended on behalf of the appellants (plaintiffs) that the respondents (defendants) either had waived any objection to the jurisdiction because they had taken a step in the action by applying for a stay or that they would waive any objection if they persisted with 898 their application in priority to disputing the jurisdiction.
Lord Fraser observed that it would surely be quite unrealis tic to say that the respondents had waived their objection to the jurisdiction by applying for a stay as an alternative in the very summons in which they applied for an order giving effect to their objection to the jurisdiction.
That the summons made it abundantly clear that they were object ing and the fact that they asked for a decision upon their objection to be postponed until the outcome of the Greek proceedings was known, was not in any way inconsistent with maintaining their objection.
There was no reason in princi ple or in common sense why the respondents should not be entitled to say: "We object to the jurisdiction of the English courts, but we ask for the proceedings necessary to decide that and the other issues to be stayed pending the decision of the proceedings in Greece.
" Reference was made to Rein vs Stein, , where it was said at page 471: "It seems to me that, in order to establish a waiver, you must show that the party alleged to have waived his objection has taken some step which is only necessary or only useful if the objection has been actually waived, or if the objection has never been entertained at all." In Dulles ' Settlement (No.2) ( ; the question was whether a father, who was an American resident outside England, had submitted to the jurisdiction of the English courts in a dispute about payment of maintenance to his child in Eng land.
He had been represented by counsel in the English court, who argued that he was not subject to their jurisdic tion.
Denning LJ (as he then was) said at page 850: "I cannot see how anyone can fairly say that a man has voluntarily submitted to the jurisdiction of a court, when he has all the time been vigorously protesting that it has no jurisdiction.
If he does nothing and lets judgment go against him in default of appearance, he clearly does not submit to the jurisdiction.
What difference in principle does it make, if he does not merely do nothing, but actually goes to the court and protests that it has no jurisdiction? I can see no distinction at all.
" The judgment of the court of appeal which held that the application for a stay involved assumption that the court had jurisdiction to entertain the action and therefore the question of jurisdiction must be decided first, was set aside in appeal, and the appeal therefrom was dismissed by the House of Lords.
In the instant case the question is of initial jurisdiction on the 899 basis of claues 3 of the bills of lading.
We have to ask the question whether the shipper could or could not have the right to sue at Cochin under the bills of lading.
If he could not have done so, the appellant 's appearance to pro test about jurisdiction would not cure that defect of juris diction.
However, we find that in the Memo.
of appeal before the lower appellate court no specific ground as to jurisdic tion was taken through there were grounds on non maintain ability of the suit.
Even in the Special Leave Petition before this Court no ground of lack of jurisdiction of the courts below has been taken.
We are, therefore, of the view that the appellant has to be held to have either waived the objection as to jurisdiction or to have submitted to the jurisdiction in the facts and circumstances of the case.
The defence that the suit was not maintainable in the absence of the owner of the ship could in a sense be said to have been on the merits of the case.
The submission as to lack of jurisdiction is, therefore, rejected.
Clause 3 of the bills of lading also contains the selec tion of law made by the parties.
The contract is governed by English law and disputes are to be determined according to English Law.
Is the selection of law binding? In Cheshire & North 's Private International Law 1 th Ed., page 495,, while discussing about the interpretation of contracts the authors say: "When the stage has been reached where an obligation, formally and essentially valid and binding on parties of full capacity, has been created, then in the further matters that may require the intervention of the Court, there is, speaking generally, no reason in principle why the parties should not be free to select the governing law.
" The express choice of law made by parties obviates need for interpretation.
In the absence of an express choice the question of the proper law of contract would arise.
The parties to a con tract should be bound by the jurisdiction clause to which they have agreed unless there is some strong reason to the contrary.
Dicey & Morris in the Conflict of Laws formulate the following rule on proper law of contract as Rule 180: "The term "Proper law of a contract" means the system of law by which the parties intended the contract to be governed, or, where their intention is neither expressed nor to be inferred from the circumstances, the system of law with which the transaction has its closest and most real connec tion." 900 Sub rule 1: "When the intention of the parties to a contract, as to the law governing the contract, is expressed in words, this expressed intention, in general, determines the proper law of the contract.
" Sub rule 2: "When the intention of the parties to a contract with regard to the law governing the contract is not expressed in words, their intention is to be inferred from the terms and nature of the contract, and from the general circumstances of the case, and such inferred intention determines the proper law of the contract .
" There can, therefore, be no doubt that the instant contract of affreightment evidenced by the bills of lading will be governed by English law.
As the law has been chosen, the proper law will be the domestic law of England and the proper law must be the law at the time when the contract is made throughout the life of the contract and there cannot be a "floating" proper law.
It has been recognised since Gienar vs Meyer, [1796] 2 Hy B 1608, that the the time of making the contract the parties may expressly select the law by which it is to be governed and they may declare their common intention by a simple statement that the contract shall be governed by the .law of a particular country.
This has been settled by a long line of decisions, as 'Rex vs Internation al Trustee for the Protection of Bondholders AG, (529); Vita Food Products Inc. vs Unus Shipping Co. Ltd., (289 90); James Miller and Partners Ltd. vs Whitworth Street Estates (Manchester) Ltd., (603); Mackender vs Feldia AG, ; Com pagnie d ' Armement Maritime SA vs Compagnie Tunisienne de Navigation SA, and Acrow (Automation) Ltd. vs Rex Chainbelt Inc., [1971] 3 All E.R. 1175.
It is true that in English law there are certain limita tions on freedom to choose the governing law.
The choice must be bona fide and legal, and not against public policy.
It may not be permissible to choose a wholly unconnected law which is not otherwise a proper law of contract.
English courts, it has been said, should, and do, have a residual power to strike down for good reasons, choice of law clauses, totally unconnected with the contract.
Where there is no express 901 choice of the proper law, it is open to Court to determine whether there is an implied or inferred choice of law in the parties contract.
The next question to be decided is whether the appellant would be liable for the suit claim.
This would naturally depend on the contract of affreightment.
It is an accepted principle that the bill of lading is not the contract of affreightment, for that has been made before the bill of lading was signed and delivered, but it evidences the terms of that contract.
The bill of lading serves as a receipt and also as a document of tittle and may be transferred by endorsement and delivery.
Article III(3) of the Hague Rules says that a bill of lading is prima facie evidence of the receipt by the carrier of the goods described therein.
The Hamburg Rules define a bill of lading under Article 1(7) as follows: "Bill of lading" means a document which evidences a contract of carriage by sea and the taking over or loading of the goods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document.
A provision in the document that the goods are to be delivered to the order of a named person, or to order, or to bearer, constitutes such an undertaking.
" The Hague Rules say that after the goods are taken into his charge, the carrier or his agent shall issue to the shipper, if he so demands, a bill of lading, showing among other things the particulars of the goods.
The contract of affreightment need not necessarily be expressed in writing.
The bill of lading is evidence of the terms of the contract which can also be ascertained from the charterparty where one exists.
Dr. Justice T. Kochu Thommen in his book of Bills of Lading in International Law and Practice at page 25 writes: "As between the shipowner and the shipper, the bill of lading is not conclusive evidence of the terms of the con tract and parties to the contract are entitled to prove that the stipulations in the bill of lading are at variance with the agreed terms of the contract, as expressed or evidenced in other documents.
In practice, however, the terms of the bill of lading govern the contractual relations between the shipowner and the shipper, and the booking note generally states that the carrier 's regular forms of bill of lading shall 902 be used and all the terms thereof shall form part of the contract.
The bill of lading assumes the character of con clusive evidence once it has passed into the hands of a consignee or indorsee and evidence may not be given which varies or contradicts it.
The position is, however, differ ent when the ship is under charter and stipulations in the charterparty are expressly and clearly incorporated in the bill of lading.
In such a case the bill of lading, even after it has passed in to the hands of a consignee or indor see, has to be read subject to the charterparty stipula tions.
In the hands of a charterer, the bill of lading is only a receipt and the charterparty is the governing docu ment as far as the shipowner ' and the charterer are con cerned.
" Apart from the question of the charterparty having been proved or not according to law the question in the instant case is whether clause 4 of the charterparty as to responsi bility of the shipowner in respect of the goods carried would form part of or be incorporated in the bills of lad ing.
How far the charterparty clauses laying down the re sponsibility and liabilities between the charterer and the shipowner can be attributed to the consignee under the bill of lading? It is an accepted principle that if certain clauses of the charterparty are referred to in the bill of lading those should be referred to in specific terms so as to bind the shipper and the consignee.
A general reference may not be sufficient under all circumstances.
Thus in T.W. Thomas & Co. Ltd. vs Portsea Steamship Co. Ltd., in the bill of lading there was also a marginal clause in writing as follows: "Deck load at shipper 's risk, and all other terms and condi tions and exceptions of charter to be as per charterparty, including negligence clause.
" The question was whether the arbitration clause in the charter~ party was incorporated by the reference in the bill of lading.
Lord Loreburn L.C. answering this question wheth er an arbitration clause found in the charterparty was applicable to the contract evidenced by the bill of lading, and to disputes arising between the shipowners and the holders of the bill of lading under that document, replied in the negative.
Lord Atkinson observed that when it was sought to introduce into a document like a bill of lading a negotiable instrument a clause such as the arbitration clause, not germane to the receipt, carriage, or delivery of the cargo or the payment of freight, the proper subject matters with which the bill of lading is conversant, that should 903 be done by distinct and specific words, and not by such general words as those written in the margin of the bill of lading in that case.
In Vita Food Products, Incorporated vs Unus Shipping Co. Ltd., , the bill of lading set out in detail the terms and conditions of the contract "which are hereby mutually agreed upon as follows".
Clause 7 contained a general exemption in respect of the goods carried from liability for all damage capable of being covered by insur ance and from liability above a certain value per package unless a special declaration was made.
The same clause also provided that "these contracts have been governed by English Law." While determining what was the proper law of the contract the Privy Council held that the expressed words of the bill of lading must receive effect with the result that the contract was governed by English Law.
It was said: "It is now well settled that by English Law (and the law of Nova Scotia is the same) the proper law of the contract is the law which the parties intended to apply.
That intention is objectively ascertained, and, if not expressed, will be presumed from the terms of the contract and the relevant surrounding circumstances.
" In that case the goods were shipped in Newfoundland under bills of lading which did not contain the statement required by section 3 of the Carriage of Goods by Sea Act, 1932 which incorporated the Hague rules subject to certain modifications but the bill of lading contained a general clause that the contracts "shall be governed by English Law" and applying that law the Shipowner was held to be within the exceptions which exempted him from liability.
In Rex vs
International Trustee for the protection of Bondholders, , it was held that the inten tion of the parties would be ascertained from what is ex pressed in the contract, which will be conclusive.
Repelling the contention that the transaction which was one relating to the carriage on a Nova Scotian ship of goods from New foundland to New York between residents in those countries, contained nothing to connect it in any way with English law, and that choice could not be seriously taken, their Lord ships held that connection with English law was not as a matter of principle essential.
The , which is based on the Bills of Lading Act of 1855 of England in its preamble says: "Whereas by the custom of merchants a bill of lading of goods being transferable by endorsement, the property in the goods may thereby pass to the indorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner, and it is 904 expedient that such rights should pass with the property.
" Section 1 of the Act provides that fights under bills of lading are to vest in consignee or endorsee.
It says: "Every consignee of goods named in a bill of lading and every endorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself." Thus a bill of lading is intended to provide for the rights and liabilities of the parties arising out of the contract of affreightment.
If the consignee claims the goods under a bill of lading he is bound by its terms.
The property in the cargo passes to the consignee or the endorsee of the bill of lading but the contract whereunder the consignment or en dorsement is made has always to be taken into consideration.
Thus the consignee or an endorsee gets only such rights as its consignor or endorser had in respect of the goods men tioned in the bill of lading.
This is in conformity with Private International law applicable to the case.
The Indian Carriage of Goods by Sea Act, 1925 (Act XXVI of 1925) is an Act to amend the law with respect to carriage of goods by sea.
It was passed after accepting the recommen dations of the International Conference on maritime Law held at Brussels in October, 1922 and accepting the rules con tained in the Draft Convention held at Brussels meeting in October, 1923 amending the rules to give the rules the force of law with a view to establish the responsibilities, li abilities, rights and amenities attaching to carriers on the bills of lading.
But the Rules of the act are not applicable to this case.
The High Court rejected the contention of the appellant that it could not be made personally liable for claim on the grounds that the bills of lading were issued in the printed forms of the appellant company bearing its name at the top and that beyond what appeared at the bottom over the signa ture and seal, there was nothing at all to indicate that the appellant company was issuing the bills of lading for and on behalf of any owners of the vessel.
However, the conditions printed on the reverse of the bills of lading itself could not have been avoided.
Clause 4 Agency Clause said: "If the vessel is not owned by or chartered by demise to the company or Line by whom this bill of lading is issued (as may be the case notwithstanding anything that appears to 905 the contrary) this bill of lading shall take effect only as a contract with the owner or demise chatterers as the case may be as principal made through the agency of the said company or Line who act solely as agents and shall be under no personal liability whatsoever in respect thereon." This clause ex facie establishes a privity of contract between the owner or demise charterer of the vessel on the one hand and the shipper to whom the bill of lading has been issued by the appellant company as the charterer otherwise than by demise.
The High Court construed this clause to be one relieving or lessening the carrier 's liability without considering whether it was otherwise than as provided in the Rules under the Carriage of Goods Act, 1924 of England.
In Halsbury 's Laws of England 4th edn.
43, para 401, it is said.
"A contract for the carnage of goods in a ship is called in law a contract of affreightment.
In practice these con tracts are usually written and most frequently are expressed in one or other of two types of document called respectively a charterparty and a bill of lading." In para 402 we read that a contract by charterparty is a contract by which an entire ship or some principal part of her is let to a mer chant, called 'the charterer ', for the conveyance of goods on a determined voyage to one or more places, or until the expiration of a specified period.
In the first case it is called a "voyage charterparty", and in the second a "time charterparty".
Such a contract may operate as a demise of the ship herself, to which the services of the master and the crew may or may not be added, or it may confer on the charterer nothing more than the right to have his goods conveyed by a particular ship, and, as subsidiary to it, to have the use of the ship and the services of the master and crew.
Thus for the purposes of ascertaining the responsibili ty of a charterer in respect of the cargo shipped and land ed, it would be necessary to know not only the stipulations between the shipper i.e. the owner of the cargo and the charterer, evidenced by the bill of lading and also those between the charterer and the owner of the ship.
If the charter is by way of demise the problem would be simple inasmuch as the bill of lading will be purely between the shipper and the charterer.
In cases of a 'voyage charter ' or a 'time charter ' one has to find out the actual terms of the charter to ascertain whether they operated as charter by demise or made the charterer only as an agent 906 of the shipowner and if so to what extent so as to ascertain the extent of privity established between the shipper, and the shipowner as stipulated in the bill of lading.
Charterparties by way of demise, says Halsbury, at para 403, are of two kinds: "(1) charter without master or crew, or "bareboat charter", where the hull is the subject matter of the charterparty and (2) charter with master and crew, under which the ship passes to the charterer in a state fit for the purposes of mercantile adventure.
In both cases the charterer becomes for the time being the owner of the ship; the master and crew are, or become to all intents and pur poses, his employees, and through them the possession of the ship is in him.
The owner, on the other hand, has divested himself of all control either over the ship or over the master and crew, his sole fight being to receive the stipu lated hire and to take back the ship when the charterparty comes to an end.
During the currency of the charterparty, therefore, the owner is under no liability to third persons whose goods may have been conveyed upon the demised ship or who may have done work or supplied stores for her, and those persons must look only to the charterer who has taken his place.
" In para 404 Halsbury said: "Although a charterparty which does not operate as a demise confers on the charterer the temporary right to have his goods loaded and conveyed in the ship, the ownership remains in the original owner, and through the master and crew, who continue to be his employees, the possession of the ship also remains in him.
Therefore, the existence of the char terparty does not necessarily divest the owner of liability to third persons whose goods may have been conveyed on the ship, nor does it deprive him of his rights as Owners.
" Whether a charterparty operates as a demise or not depends on the stipulations of the charterparty.
The princi pal test is whether the master is the employee of the owner or of the charterer.
In other words where the master becomes the employee of the charterer or continues to be the owner 's employee.
Where the charterparty is by way of demise, the charterer may employ the ship in carrying either his own goods or those of others.
Where the charterparty does not operate as a demise, the charterer 's right vis a vis the owner depends upon the terms of the contract.
"The contract of carnage is personal to the 907 charterer, and he cannot call upon the shipowner to under take liabilities to third persons or transfer to third persons his own liabilities to the shipowner unless the contract so provides.
" A charterparty has to be construed so as to give effect, as far as possible, to the intention of the parties as expressed in the written contract.
The stipu lations of charterparty may be incorporated in a bill of lading so that they are thereby binding on the parties.
It is an accepted principle that when stipulations of the charterparty are expressly incorporated, they become terms of the contract contained in the bill of lading, and they can be enforced by or against the shipper, consignee or endorsee.
The effect of a bill of lading depends upon the circumstances of the particular case, of which the most important is the position of the shipper and of the holder.
Where there is a bill of lading relating to the goods, the terms of the contract on which the goods are carried are prima facie to be ascertained from the bill of lading.
However, if a shipper chose to receive a bill of lading in a certain from without protest he should ordinarily be bound by it.
Thus, it cannot be said that the bill of lading is not conclusive evidence of its terms and the person execut ing it is not necessarily bound by all its stipulations, unless he repudiates them on the ground that, as he did not know, and could not reasonably be expected to know, of their existence, his assent to them is not to be inferred from his acceptance of the bill of lading without objection.
Where there is a charterparty, the bill of lading is prima facie, as between the shipowner and an indorsee, the contract on which the goods are carried.
This is so when the indorsee is ignorant of the terms of the charterparty, and may be so even if he knows of them.
As between the shipowner and the charterer the bill of lading may in some cases have the effect of modifying the contract as contained in the char terparty, although, in general, the charterparty will pre vail and the bill of lading will operate solely as an ac knowledgement of receipt.
In the instant case we find from Exts.
P 1 to P3 that the following has been prominently printed just below the signature 'For the Master and Owners ' in the bills of lad ing.
SEE CONDITIONS OF CARRIAGE AND OTHER CONDITIONS OF REVERSE.
It can not therefore be said that the shipper, whose knowledge will be attributed to the first respondent did not know of the conditions of carriage printed on the reverse , there being no other conditions printed elsewhere in the bills of lading.
None of the parties having repudiated the bills of lading in this case, the High Court ought not to have ac cepted the submission of .the first respondent that clause 4 of the bills of lading offended the provisions of the Car riage of Goods by Sea Act, 1924 and therefore bad.
908 The Carriage of Goods by Sea Act, of 1924 of England was on the Hague Rules which were amended by Brussels protocol 1968 which is now embodied in the Carriage of Goods by Sea Act 1971 which came into force in 1977.
The Indian Carriage of Goods by Sea Act 1925 (Act XXVI of 1925) which is an Act to amend the law with respect to the carriage of goods by sea was passed after the International Conference on Maritime Law held at Brussels in October 1922 and Brussels meeting in October 1923.
Under Section 2 of that Act which deals with application of rules it is provided: "Subject to the provi sions of this Act, the rules set out in the Schedule (here inafter referred to as "the Rules") shall have the effect in relation to and in connection with the carriage of goods by sea in ships carrying goods from any port in India to any other port whether in or outside India." To apply the Rules to a case, the port of origin has to be an Indian Port.
Unless the starting point or the port of loading is a port in India the Rules are inapplicable.
These Rules have no application when goods are not carried from any Indian port.
As in the instant case goods were shipped in Africa and carried to Cochin, this Act obviously was not applicable.
There is nothing to show that the charterparty was by way of demise.
Pacta dant legem contractui the stipulations of parties constitute the law of the contract.
Agreements give the law to the contract.
Clause 4 having been a stipu lation in the contract evidenced by the bills of lading the parties could not resile therefrom.
It is not clear whether the English Carriage of goods by Sea Act, 1924 or the Indian Carriage of Goods Act 1925 was applied by the High Court.
The Articles and the Rules referred to are to be found in the Schedule to the Indian Act the Rules whereunder were not applicable to the facts of the case.
The dispute could not have been decided partly according to municipal law and partly according to English law.
The English law was not proved before the court according to law.
The result is that this appeal must succeed.
We accordingly allow this appeal, set aside the impugned judgments and remand the case to the trial court for disposal according to law after giving opportunity to the parties to amend their pleadings and adduce additional evidence, if they are so advised, in light of the observations made hereinabove.
In the facts and circumstances of the case we make no order as to costs.
R.S.S. Appeal allowed.
| IN-Abs | The first respondent, M/s Shanmughavilas Cashew Indus tries, shipped 4445 bags of raw cashewnuts from East Africa to Cochin in the vessel Steliosm chartered by the appellant M/s British India Steam Navigation Co. Ltd., incorporated in England, pursuant to a contract of affreightment evidenced by three bills of lading.
But only 3712 bags were delivered at Cochin, there being thus short landing of 733 bags.
The first respondent sued the appellant in the Court of the Subordinate Judge, Cochin, seeking damages.
The Subordi nate Judge decreed the suit with interest.
The appellant 's appeal to the High Court failed.
In the courts below the main contentions of the appel lant were that it was a mere charterer of the vessel; that there was a charterpar? executed between the first respond ent and the agent of the owner in London; that as per clause 3 of the bill of lading the Court at Cochin had no jurisdic tion and only English Courts had jurisdiction; and that as per the charterparty and clause 4 of the bill of lading the remedy of the first respondent, if any, was against the ' owner who alone was liable and not against the appellant charterer of the vessel.
The first respondent had denied that the appellant was only a charterer and not liable for the shortage.
It had also denied that only English Courts had jurisdiction in the matter.
885 Before this Court, on behalf of the appellant it was submitted that the appellant was an English company regis tered in England carrying on business in England, and it did not carry on any business in India; as the carrier under clause 3 of the bill of lading, only the appellant had an option either to sue or be sued in England, or in Cochin, which was a port of destination, but the shipper had no option to sue at Cochin; in its written statement it was clearly stated that it had appeared under protest and with out prejudice to the contention regarding jurisdiction which contention it had also pressed at the time of the argument, and, therefore, it could not be said to have submitted to the jurisdiction of Cochin court as it never made any sub mission or raised any objection as to the fact of short landing; and that the High Court has held clause 3 of the bill of lading to be bad on two erroneous grounds, namely, that it offends section 28 of the Contract Act and that it gives an unfair advantage to the carrier which advantage is not given to the consignee.
Allowing the appeal and remanding the case to the trial Court it was, HELD: (1) A bill of lading is the symbol of the goods, and the right to possess these passes to the transferee of the bill of lading, and the right to sue passes with it. ]893C] Sewell vs Burdick, [1884] 10 App.
Cases 74 (85, 104), re ferred to.
(2) A bill of lading is intended to provide for the rights and liabilities of the parties arising out of the contract of affreightment.
If a consignee claims the goods under a bill of lading, he is bound by its terms.
[904C] (3) The property in the cargo passes to the consignee or the endorsee of the bill of lading but the contract whereun der the consignment or endorsement is made has always to be taken into consideration.
Thus the consignee or endorsee gets only such rights as its consignor or endorser had in respect of the goods mentioned in the bill of lading.
[904C D] (4) The jurisdiction of the Court may be decided upon the parties themselves on the basis of various connecting factors, and the parties should be bound by the jurisdiction clause to which they have agreed unless there is some strong reason to the contrary.
[897B; 899F] (5) The first respondent is the consignee and holder of the bills of 886 lading and ex facie should be bound by clause 3 thereof in regard to jurisdiction.
1892A] (6) If clause 3 of the bills of lading is held to be binding on the first respondent the choice of law by the parties would also be binding.
[892C] (7) In the event of the English Court alone having the jurisdic ion, the application of Indian statutes and the jurisdiction of the Indian court would be, to that extent, inapplicable.
[892D] (8) There may, however, be submission to the jurisdic tion of an Indian Court by litigating in India.
[896E] Sirdar Gurdyal Singh vs Rajah of Faridkote, (684), referred to.
(9) The question of jurisdiction in this case ought not to have been determined by the High Court on the basis of the provisions of section 28 of the Indian Contract Act in the absence of a specific provision making it applicable to transactions in international trade.
[895F] (10) Where the negotiation of a bill of lading is by the person who had a right to sue on it, mere possession of it does not enable the holder to sue any person who was not liable under it and not to sue another who was liable under it, to make good the claim.
He cannot also sue at a place not intended by the parties when intention has been ex pressed.
[893E F] (11) Although a defendant who appears and contests the case on its merits will be held to have submitted to the juris diction, an appearance merely to protest that the court does not have jurisdiction will not constitute submission, even if the defendant also seeks stay of proceedings pending the outcome of proceedings abroad.
[896F G] Williams & Glyn 's Bank PLC vs Astro Dinamico Compania Navi era S.A. & Anr.
The Weekly Law Reports Vol.
(1) 1984 438 and Rein vs Stain, , referred to.
(12) In the instant case, in the Memo.
of appeal before the lower appellate court no specific ground as to jurisdic tion was taken though there were grounds on non maintain ability of the suit.
Even in the Special Leave Petition before this Court no ground of lack of jurisdiction of the courts below has been taken.
The appellant has, therefore, to be 887 held to have either waived the objection as to jurisdiction or to have submitted to the jurisdiction, in the facts and circumstances of the case.
The defence that the suit was not maintainable in the absence of the owner of the ship could in a sense be said to have been on the merits of the case.
[899B C] 13) Clause 3 of the bills of lading also contains the selection of law made by the parties.
The contract is gov erned by English law and disputes are to be determined according to English Law.
[8991] (14) As the law has been chosen, the proper law will be the domestic law of England and the proper law must be the law at the time when the contract is made, throughout the life of the contract, and there cannot be a "floating" proper law.
[900D] Gienar vs Meyer, [1796] 2 Hy BI 603; Rex vs Internation al Trustee for the Protection of Bondholders AG, [1937] AG 500 (529); Vita Food Products Inc. vs Unus Shipping Co. Ltd., (289 90); James Miller & Partners Ltd. vs Whirworth Street Estates (Manchester) Ltd., (603); Mackendar vs Feldia AG, ; Com pagnie d 'Armement Maritime SA vs Compagnie Tunisienne de Navigation SA, and Acrow (Automation) Ltd. vs Rex Chainbelt Inc., [1971] 3 All E.R. 1175, referred to.
(15) The bill of lading is not the contract of af freightment, for that has been made before the bill of lading was signed and delivered, but it evidences the terms of that contract.
[901B] (16) If certain clauses of the charterparty are referred to in the bill of lading those should be referred to in specific terms so as to bind the shipper and the consignee.
A general reference may not be sufficient under all circum stances.
[902E] T.W. Thomas & Co. Ltd. vs Portsea Steamship Co. Ltd., ; Vita Food Products, Incorporated vs Unus Ship ping Co. Ltd., and Rex.
vs International Trustee for the Protection of Bondholders, , referred to.
(17) For the purpose of ascertaining the responsibility of a charterer in respect of the cargo shipped and landed, it would be necessary to know not only the stipulations between the shipper i.e. the owner of the cargo and the charterer evidenced by the bill of lading, but 888 also those between the charterer and the owner of the ship.
If the charter is by way of demise the problem would be simple inasmuch as the bill of lading will be purely between the shipper and the charterer.
In cases of a 'voyage char ter ' or a 'time charter ' one has to find out the actual terms of the charter to ascertain whether they operated as charter by demise or made the charterer only as an agent of the ship owner, and if so to what extent so as to ascertain the extent of privity established between the shipper and the ship owner as stipulated in the bill of lading.
[905G H; 906A] (18) Whether a charterparty operates as a demise or not depends on the stipulations of the charterparty.
The princi pal test is whether the master is the employee of the owner or of the charterer.
[906G] (19) It cannot be said that the bill of lading is not conclusive evidence of its terms and the person executing it is not necessarily bound by all its stipulations, unless he repudiates them on the ground that, as he did not know, and could not reasonably be expected to know, of their exist ence, his assent to them is not to be inferred from his acceptance of the bill of lading without objection.
[907D] (20) Where there is a charterparty, the bill of lading is prima facie, as between the ship owner and an indorsee, the contract on which the goods are carried.
This is so when the indorsee is ignorant of the terms of the charterparty, and may be so even if he knows of them.
As between the ship owner and the charterer the bill of lading may in some cases have the effect of modifying the contract as contained in the charterparty, although, in general, the charterparty will prevail and the bill of lading will operate solely as an acknowledgement of receipt.
[907E F]
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