Appeals Nos
480 to 487 of 1960
Appeals by special leave from the judgment and order dated July 15 1960 of the Allahabad High Court in Civil Misc
Writ Nos
1554 1561 1553 1560 1556 1558 1559 and 1557 of 1960
N C Chatterjee R K Garg section C Agarwal D P Singh K K Sinha V A Seyid Muhamad and M K Ramamurthi for the appellants in C As
Nos 480 and 481 of 60
R K Garg M K Ramamurthi section C Agarwal D P Singh V A Seyid Muhamad and K K Sinha for the appellants in C As
482 to 487 of 60
G N Kunzru and I N Shroff for the respondents
January 10
The Judgment of the Court was delivered by HIDAYATULLAH J
These are eight appeals against the judgment and  decree  of the High Court of Allahabad dated July 15 1960 with special leave granted by this Court
By the writ petitions which failed before the High Court the appellants had asked that Resolutions Nos 90 94 to 96 and 99 to 102 passed by the Executive Council of the Banaras Hindu University on May 15 1960 terminating their services from June 1 1960 be quashed
The names of the appellants the posts they held and the gist of the Resolutions passed against them have been set down below  Group I 1
Dr Akshaibar Lal Reader in College of C A No 480 of 1960 Agriculture
Resolution No 100 4months  pay in lieu of notice 2
Dr Gopal Tripathi Professor of Chemi C A No 482 of 1960 cal Engineering and Principal College of Technology
Resolution No 101 4months  pay in lieu of notice 389 3
Pandit Ram Vyas Pandey  Reader and Head of C A No 486 of 1960 Department of Jyotish Sanskrit Maha vidyalaya
Resolution No 99 under cls
4 and 7 of the agreement dated March 26 1931 and Ordinance No 6 of the Ordinances of the University 6 months  pay in lieu of notice 4
Dr Gauri Shankar Tiwari  Lecturer in Chemis C A No 487 of 1960 Resolution No 102 4 months  pay in lieu of notice Group II 5
Dr Rain Deo Misra Professor and Head C A No 481 of 1960 of Department of Botany College of Science
Resolution No 94 under cls
4 and 7 of the agreement dated February 3 1959 and Ordinance No 6 of the Ordinances of the University 4 months  pay in lieu of notice 6
Mr Ganesh Prasad Singh Lecturer in Physical C A No 483 of 1960 Resolution No 95 under cls
4 and 7 of the agreement dated January 18 1946 and Ordinance No 6 of the Ordinances of the University 6 months  pay in lieu of notice 7
Mr Radhey Shyam Sharma Lecturer College of C A No 484 of 1960 Technology
Resolution No 90 under cls
4 and 9 of the agreement dated January 21 1957 and Ordinance No 6 of the Ordinances of the University 4 months  pay in lieu of notice 8
Dr Ram Yash Roy Lecturer in Botany C A No 485 of 1960 College of Science
Resolution No 96 under cls
4 and 7 of the agreement dated August 12 1932 and Ordinance No 6 of the Ordinances of the University 6 months  pay in lieu of notice
390 The cases of the appellants are very similar but fall into two groups as indicated above
The differences are not many and some of them are indicated in the gist of the resolutions noted against their names
Other differences will appear from the facts which are given below
The affairs of the Banaras Hindu University for reasons with which we are not concerned had been deteriorating and a situation had arisen which required intervention immediately
The President of India in his capacity as Visitor and in exercise of the powers conferred by section 52 of the  appointed a Committee of Enquiry known as the Mudaliar Committee consisting of 1
Dr A L Mudaliar President 2
Mr M C Mahajan 3
Dr P Subbarayan 4
Sucheta Kripalani 5
Dr Nairoji Wadia Members to enquire into and report inter alia on the general state of discipline in the University keeping in view the disturbances in some of the Institutions of the University and to suggest remedies and measures of reform for the betterment of academic life and efficient functioning of the University
The Committee made a report suggesting that a  Screening Committee  should be appointed to review the appointments made to the teaching staff and the work of the teaching staff and that action should be taken in the light of the findings of the Screening Committee
On June 14 1958 the President of India promulgated an Ordinance IV of 1958 to amend the 
By section 8 of the Ordinance the Statutes of the University were amended and in place of Statute No 30 another Statute was substituted which set up a  Screening Committee  consisting of a a person who is or has been a Judge of a High Court Chairman b the Vice Chancellor Ex officio and c a person having administrative or other experience in educational matters to examine the cases of all persons holding teaching administrative or other 391 posts in the University at the commencement of the Ordinance in respect of whom there was reason to believe that their continuance in office would be detrimental to the interests of the University and to forward its recommendations to the Executive Council to take such action as it may deem fit
The Ordinance of the President was repealed by the Banaras Hindu University Amendment Act 1958 XXXIV of 1958 which re enacted Statute No 30 as follows  30
1 If the Executive Council has reason to believe that the continuance in office of any person who on the 14th day of June 1958 was holding any teaching administrative or other post in the University would be detrimental to the interests of the University it may after recording briefly the grounds for such belief refer the case of any such person together with the connected papers if any in its possession to the Solicitor General to the Government of India Provided that where an allegation of the nature referred to in this subsection relates to a member of the Executive Council who was holding any teaching administrative or other post in the University on the said date the Executive Council shall without considering the allegation refer the case of such person together with a copy of the allegation to the Solicitor General to the Government of India
2 If on any such reference the Solicitor General to the Government of India is of opinion that there is a prima facie case for inquiry he shall refer the case of the person concerned to a Committee to be constituted for the purpose by the Central Government and known as the Reviewing Committee which shall consist of the following persons namely  a a person who is or has been a Judge of a High Court nominated by the Central Government who shall be the Chairman of the Committee and b two persons nominated by the Central Government from among persons who have had administrative or other experience in educational matters 392 3 It shall be the duty of the Reviewing Committee to examine the case of every person referred to it by the Solicitor General and the Reviewing Committee shall after holding such inquiry into the case as it may think fit and after giving to the person concerned an opportunity of being heard if he so desires forward its recommendations to the Executive Council
4 The meetings of the Reviewing Committee shall be convened by such person as may be appointed for this purpose by the Chairman
5 On receipt of the recommendations of the Reviewing Committee the Executive Council shall take such action thereon as it may think fit Provided that when the recommendations relate to any such person as is referred to in the proviso to sub section 1 such person shall not take part in any meeting of the Executive Council in which the recommendations are considered
6 Before taking any action against any person on the recommendations of the Reviewing Committee the Executive Council shall give him a reason
able opportunity of being heard
 Under the powers granted by this Statute and after sundry procedure the Solicitor General sent up the cases of the appellants and some others who are not before us to the Reviewing Committee
The appellants appeared before the Reviewing Committee and represented their cases
Except in the case of Mr Radhey Shyam Sharma Civil Appeal No 484 of 1960 whose case was kept pending because certain matters were sub judice the Reviewing Committee sent its findings to the University
These findings were considered in respect of the four appellants in Group I above and on February 13 1960 the Executive Council passed Resolutions Nos 436 to 439 calling upon them to show cause why their services be not terminated in view of the findings of the Reviewing Committee that the continuance in office of those appellants was detrimental to the interests of the University which the Executive Council had accepted
These four appellants showed cause on March 5 1960 No notices 393 were however sent to the four appellants in Group II above and this is one distinguishing feature in the cases
The four appellants Group I filed petitions under article 226 of the Constitution W Ps
Nos 712 to 715 of 1960 on March 91960 in the High Court of Allahabad for relief against the proposed action
On the same day D section Mathur J passed an ad interim order as follows  The respondents Nos 1 to 3 are directed until further orders not to take any further proceedings against the petitioners
 The Registrar of the University then applied to the High Court and on April 25 1960 Jagdish Sahai J made the following order  In supersession of the interim order dated 9 3 1960 I order that the proceedings before respondent No 2 Executive Council of Banaras Hindu University arising out of the recommendations of the Reviewing Committee shall remain stayed
 On May 15 1960 the Executive Council of the University passed a number of Resolutions
Resolution No 89 took into consideration the explanations sent by the four appellants Group 1 on March 5 1960 and the order of the High Court and it was resolved   that the consideration of the above cases be postponed till after the writ petitions above mentioned are disposed of by the High Court
 On the same day however Resolutions Nos
99 to 102 were passed terminating the services of the four appellants Group 1 from June 1 1960 giving to them four or six months  salary in lieu of notice
In the Resolution concerning Pandit Ram Vyas Pandey there was a mention that the action was taken under cls
4 and 7 of the agreement executed by him and Ordinance No 6 of the Ordinances of the University
In the remaining three cases it was not stated under what exercise of power the action was taken
Even earlier than the notice to show cause issued on February 13 1960 explanations were called from Pandit Ram Vyas Pandey and Dr Gopal Tripathi by Resolutions Nos 278 and 281 dated September 9 1959 and these explanations were ordered to be filed by Resolution No 103 50 394 passed on the same day
Four Resolutions were also passed terminating the services of the other appellants belonging to Group II
It was after these Resolutions were communicated that the eight petitions were filed by the appellants in the High Court of Allahabad
The High Court by a common judgment which is under appeal dismissed all the petitions with costs
The case of the appellants broadly stated is that the Executive Council could not take recourse to the provisions of Ordinance No 6 of the Ordinances of the University having started action under Statute No 30 that Ordinance No 6 was subordinate to Statute No 30 and could not prevail where Statute No 30 applied that action against the four appellants in Group I was stayed by the High Court and Resolution No 89 and that any action thereafter under the agreement or Ordinance No 6 was incompetent
The action of the Executive Council was characterised as mala fide and a fraud upon the University Act and Statute No 30
The High Court did not accept any of these contentions
Before us the same points have been urged again and in reply the University contends that the Executive Council could take action Under the terms of the agreements where such agreements existed or under Ordinance No 6 or Statute No 30 at its Option and that where alternative remedies were provided by law all or any
of the remedies could be invoked
Before we deal with these arguments it is necessary to examine closely the powers of the Executive Council of the University as they can be gathered from the  the Statutes and Ordinanaces framed under it
The Act was passed in 1915 XVI of 1915 but it was amended in 1930 1951 and 1958
Originally the Act provided for the framing of Statutes and Regulations by the University  but in 1951 the existing Regulations were deemed to be the first Ordinances under section 182 of the amended Act
A further power to make Regulations was conferred by section 19
Thereafter there were Regulations in addition to the University Act Statutes and Qrdinances We 395 are not concerned with the Regulations and no reference need be made to them except to say that they ranked below the Ordinances and had to be consistent with the Act the Statutes and the Ordinances
In the Act the word Statute was defined to  mean  the Statutes for the time being in force  and  there was an analogous definition of the word  Ordinances 
Section 172 of the Act enacted that  the first Statutes shall be those set out in Schedule I 
The power to frame Statutes was conferred on the Executive Council by section 173 but was subject to the previous approval of the Visitor
This sub section as it was amended by section 4 of the Banaras Hindu University Amendment Act 1958 read as follows  The Executive Council may from time to time make new or additional Statutes or may amend or repeal the Statutes but every new Statute or addition to the Statutes or any amendment or repeal of a Statute shall require the previous approval of the Visitor who may sanction disallow or remit it for further consideration
Section 4A of the Act invested the University with powers and sub sections
7 and 13 may be quoted here  7 to institute professorships readerships lectureships and other teaching posts required by the university and to appoint persons to such professorships readerships lectureships and other posts 13 to create administrative ministerial and other necessary posts and to make appointments thereto
 Section 7 of the Act named the officers and authorities of the University but power was reserved to the University to declare by statutes other officers and authorities of the University
In addition to being an authority of the University the Executive Council was appointed the executive body of the University
Sub section 2 of section 10 of the Act laid down  The Executive Council shall exercise such powers and perform such duties as may be vested in it by the Statutes
 Section 17 of the Act provided how the statutes were to be framed and what they were to contain
We 396 have already referred to the first Statutes of the Uni versity which were placed in Schedule of the Act and the power of the Executive Council to make new or additional Statutes or to amend or repeal existing Statutes subject to the prior approval of the Visitor
Section 17 provided  171
Subject to the provisions of this Act the Statutes may provide for all or any of the following matters namely c the appointment powers and duties of the officers of the University
 From the above analysis it is clear that the Act created the Executive Council as an authority and the executive body of the University but its powers were conferred and its duties were created by the Statutes
The source of power and duties in respect of the Executive Council was thus the Statutes under the authority of the Act
Section 18 of the Act as amended in 1951 provided  181
Subject to the provisions of this Act and the Statutes the Ordinances may provide for all or any of the following matters namely Ordinances emoluments and terms and conditions of service of teachers of the University
 The Ordinances were thus made subordinate to the Act and the Statutes and could not go beyond them or derogate from them
One more provision of the Act as amended in 1951 may be read here
It is s19Awhich provided  19A 1 Every salaried officer and teacher of the University shall be appointed under a written con
tract which shall be lodged with the University and a copy of which shall be furnished to the officer or teacher concerned
2 Any dispute arising out of a contract between the University and any of its officers or teachers shall at the request of the officer or teacher concerned or at the instance of the University be referred to a Tribunal of Arbitration consisting of one member appointed 397 by the Executive Council one member nominated by the officer or teacher concerned and an umpire appointed by the Visitor and the decision of the Tribunal shall be final
 The powers granted to the Executive Council by the Statutes may now be seen
Statute No 18 was amended in 1958 and is referred to as amended
It laid down  181
The Executive Council shall subject to the control of the Visitor have the management and administration of the whole revenue and property of the University and the conduct of all administrative affairs of the University
2 Subject to the provisions of the Act the Statutes and the Ordinances the Executive Council shall in addition to all other powers vested in it have the following powers namely i To appoint from time to time
Principals of Colleges and institutions established by the University and such Professors Readers Lecturers and other members of the teaching staff as may be necessary on the recommendation of Selection Committees constituted for the purpose Proviso omitted ii to appoint members of the administrative staff or to delegate the power of appointment to such authority or authorities or officers as the Executive Council may from time to time by resolution either generally or specially direct  The power of appointment was thus conferred by the Statutes on the Executive Council
We now turn to the Ordinances where the disciplinary rules are to be found
On October 13 1958 the Executive Council by Resolution No 181 reconstituted the material Ordinance
Chapter III in part I of the Banaras Hindu University Calendar 1958 contains the terms of appointment grades salary and conditions of service of teachers officers and other employees of the University
That Chapter is divided into many sections and sub sections
Section 5 deals with teaching and administrative posts and section 6 with the conditions 398 of service and terms of appointment
Ordinance No 2 in this section lays down  The conditions of service of the staff shall be embodied in the Agreement Form of service
Every employee shall on confirmation sign the agreement Form
 Ordinance No 6 before its amendment read  The Executive Council shall be entitled to terminate the engagement of an employee i on grounds of misconduct and ii physical unfitness for good cause and after calling for and considering his explanation and after giving four months  notice in writing or payment of four months  salary in lieu of notice
The Ordinance was unhappily worded
The expression physical unfitness for good cause hardly makes sense
More difficulty arises by the use of the conjunction and
That word used for the first time in the Ordinance is obviously used disjunctively but on the second and third time it is used conjunctively introducing two conditions precedent
So far there is no dispute though much bad drafting
Dispute arises over the last use of the conjunction and in the Ordinance
The appellants contend that it must be read conjunctively as introducing a third condition precedent while the University urges that it is a separate power of termination unconnected with the others
The High Court was persuaded to read the clause as interpreted by the University and in our opinion rightly
In 1958 the Executive Council re framed this Ordinance but surprisingly enough without any better success
The re enacted Ordinance as printed in the amendment slip read  6
The Executive Council shall be entitled to terminate the engagement of an employee for i misconduct or ii physical unfitness or iii inefficiency or iv breach on his part of one or more of the terms of his agreement with the University after 399 calling for and considering his explanation in each of the cases mentioned above or v after giving four months  notice or payment  of four months  salary in lieu thereof
The dispute this time arises from the careless use of the word or
The Ordinance mentions four reasons for termination of services which are numbered i to iv
In each of those cases there is the condition precedent that explanation must be called for and considered
So far the meaning is clear even though the drafting is far from commendable
Then follow a semi colon and or and number v
The word or does not seek to create an option between calling for and considering an explanation and a four months  notice etc
The number v and the semi colon between  mentioned above  and  or  do not permit this reading
The difficulty however does not end there
If we read the fifth clause as connected independently with the opening words we get this  The Executive Council shall be entitled to terminate the engagement of an employee for          v after giving four months  notice   which makes the word for  superfluous in the sentence
In our opinion the sense of the Ordinance can be obtained by rearranging the matter thus  6
The Executive Council shall be entitled to terminate the engagement of an employee for i misconduct or ii physical unfitness or iii inefficiency or iv breach on his part of one or more of the terms of his agreement with the University after calling for and considering his explanation in each of the cases mentioned above or v after giving four months  notice or payment of four months  salary in lieu thereof  This means that if action is taken under cls
i to iv an opportunity of showing cause against the termination of the service must be given but action can also be taken to terminate the service without assigning a 400 cause on four months  notice or four months  salary in lieu of notice
The case of the University is that all these orders of termination of service were passed under the power granted by cl
v of this Ordinance modified by the terms of the agreements as they existed
The result of this analysis shows that the power of the University to terminate the services of the incumbents was derived from a agreements b Ordinances and c Statute No 30
The agreements merely represented the general right of a master to terminate the services of incumbents where they were subject to agreements after reasonable notice without giving any reason
The Ordinances in addition to preserving that right gave power to terminate service for proved misconduct inefficiency or physical unfitness
These powers unless used according to the stated conditions were unexercisable and in the case of a service which was protected against arbitrary action being perma nent could only be invoked in an appropriate instance
In those cases which would fall within the categories of proved misconduct inefficiency and physical unfitness the University was required to take action in accordance with the Ordinance and the Rules
This was the position before the new Statute No 30 was added by Parliament
This legislative measure was undertaken as the result of the sorry state of affairs of the University and a special ground was required to be proved
It was that the continuance of an incumbent was detrimental to the interests of the University
The power to terminate the services of an incumbent on this ground was hedged in with appropriate safeguards due to the struggle for power which it is said had arisen in the University in the past and though the Mudaliar Committee had suggested a Screening Committee to go into the cases of all teachers Parliament thought it necessary that before any case reached the Screening Committee renamed the Reviewing Committee it should be scrutinised by the Solicitor General
The procedure which the new Statute enacted ensured fair play and proper scrutiny
First the Executive Council had to resolve that the continuance in office of any particular person 401 was detrimental to the interests of the University
The reasons for such belief had to be recorded briefly and the Resolution together with the connected papers had to be sent to the Solicitor General
In the case of a teacher who was a member of the Executive Council the Executive Council was not to consider the allegations but to send the papers to the Solicitor General
The Solicitor General had to decide if there was a prima facie case for enquiry and then he was to refer suitable cases to the Reviewing Committee
The Reviewing Committee was then to enquire into the matter and forward its recommendations to the Executive Council
The Executive Council was thereafter required to proceed under cl
6 which was as follows  Before taking any action against any person on the recommendations of the Reviewing Committee the Executive Council shall give him a reasonable opportunity of being heard
 The power of the Executive Council was conferred by cl 5 which provided  On receipt of the recommendations of the Reviewing Committee the Executive Council shall take such action thereon as it may think fit
 The procedure laid down in Statute No 30 was followed by the University
The cases of the appellants went before the Solicitor General and then before the Reviewing Committee
In seven cases out of eight  the Reviewing Committee gave its opinion
In four out of seven cases a show cause notice was issued under cl 6 but not in others and the four appellants Group 1 also showed cause
They also obtained a stay from the High Court of Allahabad against action under Statute No 30 and the Executive Council decided to postpone consideration of their cases
But the Executive Council abandoned action under Statute No 30 and proceeded to act under powers which it thought flowed from the agreements and the Ordinances and terminated the services of the eight appellants giving four or six months  salary in lieu of notice
51 402 In so far as the power of terminating services with
out notice was concerned the general power could not be invoked when allegations of conduct detrimental to the interests of the University had already been made and scrutinised by the Solicitor General and the Reviewing Committee and the matter was pending before the Executive Council
The powers granted by the Ordinances are expressly subject to the Statutes and the Ordinances cannot prevail over the Statutes
Statute No 30 provided for special action in special circumstances
The existence of the special circumstances is expressly admitted inasmuch as the cases were referred to the Reviewing Committee
The existence of the special circumstances and the special remedy excluded the right of the University to invoke its general powers not to start with but after the special procedure had been deliberately adopted and had commenced
If the cases of these appellants had not been sent to the Solicitor General and the Reviewing Committee at all other considerations might have arisen
The question is whether after the special procedure was once invoked it could be dropped in the middle and other powers exercised
The University relies on three arguments in this connection
It is first contended that the powers of the University were cumulative and that the University could resort to any of the remedies open to it
Reliance is placed in support of this argument on Shankar Sahai vs Din Dial 1 observations of Mahmood J at p 418 Om Prakash Gupta vs State of U P 2 The State of Madhya Pradesh vs Veereshwar Rao Agnihotry 3  Brockwell vs Bullock 1 Seward vs  Vera Cruz 5 and Barker vs Edger 6
It is not necessary to refer to these cases in detail
It has been laid down recently by this Court that where the law allows alternative remedies one or the other or both can be invoked unless one remedy is expressly or by necessary implication excluded by the other See State 1 All 409
2  3   4 5 6 1898 AC 748 PC 403 of Kerala vs G M Francis and Co 1
The question thus is whether there is anything expressly stated by law or clearly implied which would exclude powers under the agreements and the Ordinances when action has been taken under the Statutes
The University Act expressly makes the Ordinances subject to the Statutes and in case of any clash between them the Ordinances must be made to stand down
Further Statute No 30 was enacted by Parliament to meet a special situation and contained a code for dealing with certain special kinds of cases
To that extent the implication is not only one way but is also clear
The University could not having started enquiries under Statute No 30 abandon the enquiries in midcourse and pass on to something else
This is illustrated by the contradictory Resolutions passed on the same day
In the case of the four appellants belonging to Group I action under Statute No 30 was deferred till after the decision of the High Court
But one is tempted to ask what possible further action was con templated when their services were terminated the same day
It may be pointed out here that dropping of action under Statute No 30 deprived the appellants of the right to show cause against what had been alleged against them or found by the Reviewing Committee
The appellants characterised the whole action as lacking in bonafides
The action can only be questioned if it is ultra vires  and proof of alien or irrelevant motive is only an example of the ultra vires character of the action as observed by Warrington LJ in the following passage  My view then is that only case in which the Court can interfere with an act of a public body which is on the face of it regular and within its powers is when it is proved to be in fact ultra vires and that the references in the judgments in the several cases cited in argument to Lad faith corruption alien and irrelevant motives collateral and indirect objects and so forth are merely intended when properly understood as examples of matters 1  404 which if proved to exist might establish the ultra vires character of the action in question  Short vs Poole Corporation 1
We are not concerned so much with the motives nor even with the justice of the action as with its legality and in our opinion having invoked Statute No 30 in the special circumstances and having gone on with that procedure it was not possible to undo everything and rely upon other powers which were not only subordinate but were clearly not available in those special circumstances which led to action under Statute No 30
The next argument is that Statute No 30 itself left liberty of action inasmuch as el
5 gave power to the Executive Council to act as it thought fit
To begin with it is wrong to think that the words conferring discretion are to be read in the abstract
Those words have to be read within the four corners of Statute No 30
Tile words are permissive no doubt as to the choice of action but are imperative in so far as they require some act completing the intent and purpose of the enquiry itself
The words  shall take such action thereon as it may think fit  give liberty of action on the recommendations of the Reviewing Committee but lay a duty to form an opinion
The words do not give a discretion to take action outside the Statute
Lastly it is argued that the Executive Council as the appointing authority had the power also to dismiss and reference is made to sections 47 and 413 of the Act and section 16 of the General Clauses Act
None can deny that the University did possess such a power
The question is whether it exercised it correctly under the Statutes and Ordinances
We are quite clear that the Executive Council did not
We may say here that we have not accepted the contention that the action of the Executive Council was based upon malice or any indirect or oblique motive
The error was in thinking that there were cumulative or alternative powers even after the adoption of the special procedure under Statute No 30
We are therefore of opinion that 1  91 405 the impugned Resolutions were ultra vires and should be quashed
In the result the appeals are allowed
Resolutions Nos 90 94 to 96 and 99 to 102 dated May 15 1960 of the Executive Council of the Banaras Hindu University are quashed and an appropriate writ or writs shall issue to the respondents to that effect
The respondents shall pay the costs of these appeals as also of the High Court
Only one set of hearing fee here and in the High Court shall be allowed
Appeals allowed


Summary:
One Rangachari a partner of a partnership firm assigned by means of a deed of settlement a fourth share of the profits of the firm each to his wife a married adult daughter and a minor daughter for 8 years with the right to receive the said share of profits absolutely and exclusively from the firm
The question which arose before the High Court on a reference under section 661 of the Income tax Act was  Whether the inclusion in the assessee s total income of the profits settled by him on his wife and two daughters is justified in law  The assessee Rangachari relying on the rule laid down by the Privy Council in Bijoy Singh Dudhuria s case claimed that the amounts payable to his wife and two daughters never became his income being diverted by an overriding title and that those amounts could not be included in his total income for the purposes of assessment being excluded by reason of the third proviso to section 161c of the Income tax Act
The High Court held that the third proviso was not attracted and that the income had accrued to the assessee in the first instance and had then been applied for payments under the deeds
On appeal with a certificate of the High Court Held that the answer given by the High Court was correct
381 An examination of the deeds of settlement showed that the disponer had stated that from the profits  payable to him  certain amounts in specified shares were to be paid to his wife and two daughters
No doubt the assessee in those deeds created a right in favour of the disponees to get the amounts direct from the firm of which he was a partner
The tenor of the document In showed that the profits were first to accrue to him and were then applied for payments to the disponees
Under the law of partnership it is the partner and the partner alone who is entitled to the profits
A stranger even if he were an assignee has not and cannot have a direct claim to the profits
By the deeds in question the assessee merely allowed a payment to his wife and daughters to constitute a valid discharge in favour of the firm but what was paid was in law a portion of his profits or in other words his income
The rule in Bijoy Singh s case was not applicable to this case and in view of the decision of this court in Sitaldas Tirathdas s case it cannot be said that the profits were diverted by an overriding title before they accrued to the assessee
Provat Kumar Mitter vs Commissioner of Income tax West Bengal  Tulsidas Kilachand vs The Commissioner of Income tax  The Commissioner of Income tax Bombay vs Sitaldas Tirathdas   applied
Bijoy Singh Dudhuria vs Commissioner of Income tax Bengal  held inapplicable