ition Civil No 590 of Under Article 32 of the Constitution of India BB Sawhney for the Petitioners
GB Pai OC Mathur Ms Meera Mathur Ms Deepa Chhabra and N Misra for the Respondents
The Judgment of the Court was delivered by RANGANATH MISRA J
Under the Burmah Shell Acquisition of Undertakings in India Act 2 of 1976 hereinafter referred to as the Act  the Union of India acquired the right title and interest of Burmah Shell oil Storage and Distributing Company of India Limited hereinafter referred to as Burmah Shell in relation to its undertakings in India
Sections 3 4 and 9 of the Act are relevant
Under section 3 the right title and interest of Burmah Shell in relation to its undertakings in India stood transferred and became vested in the Central Government
In terms of section 4 the assets and liabilities were taken over by the Government of India
Under section 9 persons employed under Burmah Shell came under the employment of the 314 Government company known as Bharat Petrolium Corporation A Limited respondent No I herein Section 11 provides thus Where a provident superannuation welfare or other fund has been established by Burmah Shell for the benefit of the persons employed by it in connection with its undertakings in India the monies relatable to the employees i whose services are transferred by or under this Act to the Central Government or the Government company or ii who are in receipt of pension or other pensionary benefits immediately before the appointed day shall out of the monies standing on that day to the credit of such provident superranuation welfare or other fund stand transferred to and vested in the Central Government or the Government company as the case may be free from any trust that may have been constituted by Burmah Shell in respect thereof The detailed provisions for administration of the fund are contained in that section
This petition under Article 32 of the Constitution is by the erstwhile Burmah Shell Management Staff Pensioners who claim two reliefs 1 Extension of the benefit of restoration of commuted pension after the period of 15 years from the date of commutation as decided by this Court in the case of Common Cause  Ors
vs Union of lndia  Ors
  and 2 Adequate escalation in the pension keeping in view the loss of purchasing power of the rupee and the general rise in the cost of living
In answer to the rule nisi the respondent made its return by contending that the pension scheme of the first respondent is a funded scheme
The decision of this Court in the case of Common Cause rendered in respect of Government servants both of civil and defence services cannot be extended to a public sector undertaking
The pen 315 sion scheme of Burmah Shell was set up by Non Contributory Pension A Fund by a Trust Deed in December 1950 but effective from 1st January 1947 of which both the management staff as also the clerical staff were members
This Court on 13th of November 1987 referred two questions arising for determination for the opinion of Mr DK Lodaya Chief Actuary of the Life Insurance Corporation of India at Bombay with the consent of parties and the two questions referred to are  1 Is the pension fund actuarially solvent to bear the liability flowing from restoration of commuted portions of pensions after 13 or 15 years from the respective dates of commutation  If not the extent of additional funds necessary for the purpose may be indicated and the tax relief which will be available for such contribution of additional funds may also be indicated
2 Is the pension fund actuarially solvent to bear a enhancement of pensions and b linking pensions with the cost of living index If so the extent by which the pensions can be enhanced by utilising the existing resources of the Fund may be indicated
The report has been received and kept on record
It indicates that the additional liability on account of restoration of the commuted value of the pension on the basis of 13 years would be more that Rs 3 Crores and on the basis of 15 years would be more than Rs2 12 Crores
Counsel for the petitioners has however told us in course of the hearing that the question of restoration of the commuted value of the pension may not be adjudicated at present
In view of such submission we do not examine this issue
The writ petition is therefore confined to the only question as to the escalation of pension
Burmah Shell has a fund known as Burmah Shell India Pension Fund and it has its own rules
When Government nationalised the Petroleum industry another company known as Caltex India Ltd was also acquired and came to be known as Hindustan Petroleum Corporation
It is thus a sister concern owned by the Central Government
Petitioners relied upon the increase in the pension granted by the Hindustan Petroleum Corporation to its employees in support of their claim for the increase in the pension
While Burmah Shell had a pension fund which has been taken over by the Government company Caltex did not have such a fund The allegation made by the petitioners that the Hindustan Petroleum Corporation 316 Where there is no such fund has granted a steep escalation in the pension has not been disputed before us
Admittedly Burmah Shell is a bigger company than Hindustan Petroleum Corporation
We have been told that the total Burmah Shell management staff presently in the employment of the respondent No 1 would be around a thousand
Nothing acceptable has been placed before us from where support can be received for the argument of Mr Pai learned counsel for respondent No 1 that if the escalation admitted by Messrs Hindustan Petroleum Corporation is accepted as the basis for escalation in Burmah Shell there would be injustice or a burden would arise which the respondent Company cannot discharge
The respondent Company has an obligation to pay from its earnings into the Fund and merely because the existing fund is not adequate to bear the additional liability the claim which is otherwise justified cannot be rejected
As we have already pointed out the Company s current funds are available to supplement the pension fund
Judicial notice can be taken of the fact that the rupee has lost its value to a considerable extent
Pension is no longer considered as a bounty and is has been held to be property
In a welfare State as ours rise in the pension of the retired personnel who are otherwise entitled to it is accepted by the State and the State has taken the liability
If the similarly situated sister concern like Hindustan Petroleum Corporation can admit appropriate rise in the pension we see no justification as to why the respondent Company should not do so
We therefore hold that the petitioners being the management staff of the Burmah Shell would be entitled to a hike in the pension admissible at the same rate as is being given by Hindustan Petroleum Corporation
We accordingly direct respondent No 1 to give the necessary hike in the pension effective from 1st May 1988 If the amount available from the pension fund is not adequate it would obviously mean that the Government company would allocate appropriate funds to meet the demand
The additional pension should be disbursed latest by 31st of July 1988
No costs
PSS Petition allowed


Summary:
The assessee respondent had advanced a sum of Rs400000 to his partner Faizullabhai Mandlawala which sum was employed as a part of Mandlawala s capital in their partnership firm
The assessee sought to have the value of that loan excluded from his wealth on the claim that this loan was what was known to Muslim Law as Quaraza e Hasana  a debt of good faith and goodwill carrying with it no legal obligation on the part of the debtor to repay and correspondingly no right on the part of assessee to expect much less enforce a repayment
This claim was supported by debtor s declaration that the sum was received by him without any obligation and without any rate of interest and without any consideration  The Wealth Tax Officer and the Appellate Assistant Commissioner found it difficult to accept this claim
The Appellate Tribunal however accepting the assessee s claim held that the loan partook of the character of Quaraza e Hasana  with its special incidents as known to Muslim Law that the transaction was one of good faith and goodwill and lacked the concomitants of a legally enforceable claim for repayment and that therefore the amount was not a debt due to the assessee
The High Court upheld this view
It was contended on behalf of the Revenue 1 that the Tribunal as well as the High Court erroneously accepted the hypothetical incidents of a supposedly peculiar institution of the personal law of the Muslims any rule or tenet of Muslim Law respecting which had not having been established 2 that both the Tribunal and the High Court while rightly noticing that the special incidents of what was called Quaraza e Hasana  had not been established gave the benefit of doubt as to the 228 very existence of this institution of Quaraza e Hasana  to the assessee and 3 that the reliance by the High Court on the incidents of Hiba ba shart ul iwaz  a form of Mussalman gift was misplaced as this kind of gift expressly stipulated contemporaneous liability for a return
Counsel for the assessee sought to support the conclusions of the High Court on an alternative and independent ground that at all events by entering into this transaction the parties must be held not to have intended to create a legal obligation between them and that therefore the debt remained a debt of honour
It was contended that an agreement would not by itself yield legal obligations unless it was one which could reasonably be regarded as having been made in contemplation of creating legal consequences and that in this case the parties must be held to have excluded the contemplation of legal consequences flowing from the transaction
Allowing the appeal it was  HELD 1 As no authoritative text nor any principle or precedent recognised in Muslim Law was cited before the High Court or this Court establishing the nature content and incidents of the institution of Quaraza e Hasana  it was not possible to say one way or the other whether Courts could recognise and act upon such a rule of Muslim Law much less afford relief to the proponent of that rule
232G H 233A B 2 If the concept of Qard Hasan  was the same as that of Quaraza e Hasana  the obligation on the part of the debtor of the loan to repay nor the right of the creditor to repayment were excluded
The only incident appeared to be that it was interest free 
234C 3 The reliance by the High Court on the concept of mussalman gift Hiba ba shart ul Iwaz  did not help the assessee because this kind of gift stipulated liability for return
232E F 4 The debt though a passive debt  would require to be treated as due and payable to the assessee
It was not the assessee s case that the debt was bad and irrecoverable
The debtor s declaration itself established its existence
235B 5 Where as in the instant case the tax implications of large financial obligations were sought to be put an end to the burden as heavy on the assessee to establish that what would otherwise be the usual incidents of the transaction were excluded from contemplation by 229 the parties
Here one partner had lent a large sum to the other to be utilized as capital in the partnership venture
The transaction was in the context of a commercial venture
The presumption therefore was that legal obligations were intended
The onus was on the parties asserting the absence of legal obligations
The test was not subjective to the parties but an objective one
236E F 6 The non enforceability of debt was pleaded not as a part of what was permissible in law of contracts but specifically as some inexorable incident of a particular tenet peculiar to and characteristic of the personal law of the Muslims
That not having been established no appeal could be made to the principle of permissibility of exclusion of legal obligations in the law of contracts
In the instant case the admitted existence of a debt implied an obligation to repay
No legal bar of the remedy was pleaded
What was set up and was unsubstantiated was the non existence of the remedy itself
The loan would therefore become includible in the wealth of the assessee
238C E Rose and Franc Co vs JR Crompton and Bros Ltd 1923 2 KB 261 Edwards vs Skyways  Bahamas Oil Refining Co vs Kristiansands Tankraderie As and others and Shell International Marine Ltd 1978 Lloyds Law Reports 211 referred to