Datasets:

Akhil-9640

/

Akhil-Test-Data

like 0

Appeal Nos 2640 41 of 1991 From the Judgment and Order dated 361991 of the Himachal Pradesh High Court in Election Petition Nos 1 2 of 1990 AK Ganguli BT Kaul Sarvesh Bisaria and SK Bisaria for the Appellant B Dutta and R Sasiprabhu for the Respondents 253 The Judgment of the Court was delivered by SC AGRAWAL J These appeals have been filed under section 116 A of the Representation of the People Act 1951 They relate to election to the Himachal Pradesh Legislative Assembly from 60 Chachiot Assembly constituency held during February 1990 The appellant was declared elected to the Legislative Assembly from the said constituency His election was challenged by the respondents in these appeals by filing election petitions in the High Court of Himachal Pradesh By its judgment dated June 3 1991 the High Court has allowed the election petitions and has set aside the election of the appellant on the ground that the nomination of one of the candidates Shri Karam Singh was improperly rejected by the returning officer The last date for filing the nomination papers was February 2 1990 and the scrutiny of the nomination papers was fixed for February 5 1990 Fifteen persons including the appellant and Shri Karam Singh had filed nomination papers At the time of scrutiny an objection was raised on behalf of one of the candidates against the nomination of Shri Karam Singh on the ground that he was holding the office of Chairman Himachal Pradesh Khadi and Village Industries Board which is an office of profit within the meaning of Article 1911a of the Constitution and was therefore disqualified for being chosen as a member of the Legislative Assembly By order dated February 7 1990 the Returning Officer upheld the said objection and rejected the nomination of Shri Karam Singh The High Court has however found that the said rejection of nomination of Shri Karam Singh was improper because on the date of scrutiny Shri Karam Singh was not holding an office of profit and has for that reason set aside the election of the appellant Before we proceed to deal with the appeals on merits it may be mentioned that during the pendency of these appeals before this court the Himachal Pradesh Legislative Assembly has been dissolved This raises the question whether the matters in issue in these appeals have ceased to be living issues and have become wholly academic The effect of dissolution of the legislature on a pending election appeal has been considered by this court in Loknath Padhan vs Birendra Kumar Sahu In that case the election of the returned candidate was challenged before the High Court on the ground that there was a subsisting contract entered into 254 by the respondent in the course of his trade and business with the State Government for the execution of works undertaken by the Government and he was therefore disqualified under section 9A of the Representation of the People Act 1951 The election petition was however dismissed by the High Court and while the appeal against the said decision was pending in this Court the Legislative Assembly was dissolved A preliminary objection was raised on behalf of the respondent to the appeal that in view of the dissolution of the assembly it was academic to decide whether or not the respondent was disqualified under section 9A Upholding the said preliminary objection this court has held that the court should not undertake to decide an issue unless it is a living issue between the parties and if an issue is purely academic in that its decision one way or the other would have no impact on the position of the parties it would be waste of public time and indeed not proper exercise of authority for the court to engage itself in deciding it In that case this court drew a distinction between a case where the challenge to the election is on a ground confined to the validity of that election only and having no consequences operating in future and a case involving challenge to the election on a ground which would entail electoral disqualification for the future such as charge of corrupt practice It was held that if the election is challenged on the ground of commission of a corrupt practice the dissolution of the legislature would not have any effect on the pendency of an election petition or an appeal arising therefrom and the said petition will have to be considered on its merits whereas a challenge to the election on any other ground which does not entail future disqualification would raise academic issue only and in view of the dissolution of the legislature the election petition or the appeal arising therefrom would not survive because it would be futile and meaningless for the court to decide an academic question the answer to which would not affect the position of one party or the other Although in the instant case the election is not challenged on the ground of commission of any corrupt practice and a finding would not result in electoral disqualification in future but the present case differs from the case of Loknath Padhan vs Birendra Kumar Sahu supra in the sense that in Loknath s case the election petition was dismissed whereas in the present case the election petitions against the election of the appellant have been allowed and the election has been set aside It has been submitted by Shri AK Ganguli the learned Senior counsel appearing on behalf of the appellant that in view of the fact that the decision of the High 255 Court setting aside his election the appellant may be required to refund the various allowances that he has received while he was functioning as a member of the Legislative Assembly after his election till the decision of the High Court It would thus appear that invalidation of the election of the appellant may give rise to the liability to refund the allowances received by the appellant as a member of the Legislative Assembly It cannot therefore be said that the question a rising for consideration in this appeal are purely academic in nature In these circumstances it becomes necessary to go into the merits of these appeals The relevant facts relating to the rejection of the nomination of Shri Karam Singh are as under The Himachal Pradesh Khadi and Village Industries Board hereinafter referred to as the Board has been established by the Government of Himachal Pradesh under Section 3 of HP Khadi and Village Industries Board Act 1966 hereinafter referred to as the Act Section 4 provides for the constitution of the Board and in sub section 1 it is laid down that the Board shall consist of not less than three and not more than nine members appointed by the Government of Himachal Pradesh after consultation with the Khadi and Village Industries Commission from amongst non officials who in the opinion of Government of Himachal Pradesh have shown active interest in the protection and development of khadi and village industries and officials In sub section 2 of Section 4 it is provided that the Government of Himachal Pradesh shall after consultation with the Khadi and Village Industries Commission nominate one of the members of the Board to be the Chairman thereof Section 7 makes provision for resignation of office by members Section 11 provides that the term of office and terms and conditions of service of the Chairman Vice Chairman Secretary and other members shall be such as may be prescribed In exercise of the powers conferred by Section 35 of the Act the Government of Himachal Pradesh has made the Himachal Pradesh Khadi and Village Industries Board Rules 1966 hereinafter referred to as the Rules Rule 3 of the Rules prescribes that a member of the Board shall hold office for such period not exceeding three years as may be prescribed in the notification of his appointment which shall be notified in the Official Gazette and shall be eligible for re appointment Rule 7 provides for salary or honorarium and allowance payable to members Sub rule 1 of Rule 7 provides that the Chairman the Vice Chairman the Secretary and other 256 members of the Board shall be paid such salary or honorarium and allowances from the funds of the Board as the Government may from time to time fix In sub rule 2 of Rule 7 it is laid down that the Chairman the Vice Chairman the secretary and other members of the Board shall also be entitled to draw travelling and daily allowances for journeys performed for attending the meetings of the Board or for the purpose of discharging such duties as may be assigned to them by the Board in accordance with the rules and orders issued by the Government from time to time at the highest rate admissible to Government servants of Grade 1 By notification dated September 2 1982 issued in exercise of the powers conferred by Rule 7 of the Rules the Governor of the Himachal Pradesh ordered that the Chairman of the Board shall be entitled to pay and other allowances from the Funds of the Board at the following rates 1 Payremunerationhonorarium of Rs 1500 pm consolidated 2 Free electricity and water charges upto Rs 1500 per year 3 Use of a car or in lieu thereof a conveyance allowance of Rs 300 per month 4 Telephone facilities in office and at residence 5 TA and medical expenses admissible to the officers of Highest First Grade category By notification dated December 27 1986 the Governor of Himachal Pradesh constituted the Board with immediate effect Under the said order the Board consisted of nine members including Shri Karam Singh Thakur By the said order the Governor of Himachal Pradesh also nominated Shri Karam Singh Thakur as Chairman of the said Board By notification dated December 20 1989 the term of the Board was extended upto December 26 1990 On October 18 1989 Shri Karam Singh Thakur wrote a letter to the Financial Commissioner cum Secterary Industries to the Government of Himachal Pradesh wherein it was stated that consequent upon amendment to Second Proviso to section 1 of section 6B of the Himachal Pradesh Legislative Assembly Allowances and Pension of members Act 1971 his pension had been revised to Rs 2400 per month with effect from February 4 1989 and that on the basis of the said orders 257 he was authorised by the Senior DAGAE Himachal Pradesh Shimla by letter dated 6th July 1989 to draw from Shimla Treasury the balance pension of Rs 900 pm after adjusting the remuneration of Rs 1500 which he had been drawing as remuneration from the Board and the pension of Rs 900 pm plus relief due thereon from the Punjab National Bank through Treasury Officer Shimla By aforesaid letter Shri Karam Singh intimated that he now intended not to draw the monthly remuneration of Rs 1500 pm from the Board and that instead he would be drawing the gross pension of Rs 2400 pm from the TreasuryBank and he requested that no objection of the State Government to the said proposal may be conveyed to him at an early date The said proposal made by Karam Singh was accepted by the Government of Himachal Pradesh and by notification dated January 8 1990 issued under Rule 71 of the Rules the Governor of Himachal Pradesh ordered that the remuneration of Rs 1500 pm consolidated which was payable to the Chairman of the Board shall cease as per the request of the Chairman made vide his letter dated October 18 1989 On January 31 1990 Shri Karam Singh addressed a Letter to the Financial Commissioner cum Secretary Industries to the Governor of Himachal Pradesh in the following terms I hereby resign from the membership and Chairmanship of the Himachal Pradesh Khadi and Village Industries Board The resignation may kindly be accepted with effect from today Le 31st January 1990 On the basis of the letter of January 31 1990 which was received on the same day the matter was processed in the office of Financial Commissioner cum Secretary industries and it was placed before the Chief Minister for his approval with the recommendation that the resignation of Shri Karam Singh Chairman may be accepted The Chief Minister gave his approval on February 4 1990 On February 12 1990 a notification was issued in the following terms In exercise of the powers vested in him under section 7 of the Himachal Pradesh Khadi and Village Industries Board Act 1966 the Governor Himachal Pradesh is pleased to accept the resignation of Shri Karam Singh Thakur Chairman HP Khadi and Village Industries Board Shimla with immediate effect 258 In the meanwhile Shri Karam Singh filed his nomination papers for election to the Himachal Pradesh Legislative Assembly from the 60 Chachiot Assembly constituency The scrutiny of the nomination papers was held on February 5 1990 An objection was raised against the nomination of Shri Karam Singh on behalf of one of the candidates viz Vir Singh on the ground that Shri Karam Singh was holding an office of profit and was disqualified for being chosen as a member of the Legislative Assembly Shri Karam Singh was not present at the time of scrutiny but his proposer Shri Mani Ram Advocate was present and he was requested to ensure the appearance of Shri Karam Singh before the Returning Officer on February 6 1990 at 1100 am for hearing him in connection with the objection The Returning Officer also directed Tehsildar Elections to enquire from the Secretary of the Board about the remuneration and other allowances being drawn by Shri Karam Singh in his capacity as chairman of the Board The report of the Tehsildar was placed before the Returning Officer Shri Mani Ram Advocate as proposer of Shri Karam Singh also submitted a reply to the Returning Officer on February 6 1990 wherein it was stated that Karam Singh had resigned from the chairmanship on 29th or 30th of January 1990 and that the acceptance of the resignation was not kwown to Shri Karam Singh By order dated February 7 1990 the Returning Officer rejected the nomination of Shri Karam Singh on the view that were submission of the resignation unless it was accepted could not be taken as deemed to have been accepted and that Shri Karam Singh was holding an office of profit as his resignation had not been accepted upto February 5 1990 which was the date for scrutiny and that he was not eligible to seek election as a candiate for the Himachal Pradesh Legislative Assembly Before the High Court it was submitted on behalf of the petitioners in the election petitions respondents herein that Shri Karam Singh had resigned with effect from January 31 1990 vide his resignation letter of the said date and the said letter takes effect from January 31 1990 itself The High Court accepted the said contention and held that the Act is silent and contains no provision as to how and in what manner the resignation of the Chairman of the Board is to be accepted and therefore the holder thereof could bring his appointment to an end by resigning with effect from a particular date and he would then be deemed to have ceased to be Chairman from the date itself notwithstanding its acceptance on a later date The High Court was therefore of the view that Shri Karam Singh 259 held no office of profit whatsoever in the Board on the date of scrutiny ie February 5 1990 since he had tendered his resignation on January 31 1990 The High Court further found that in view of the letter dated October 18 1989 sent by Shri Karam Singh conveying his request of giving up the remuneration of Rs 1500 per month consolidated which request was accepted by the State Government as pet notification dated January 8 1990 pursuant to which Shri Karam Singh ceased to be entitled to draw the abovementioned remuneration with effect from January 8 1990 Shri Karam Singh was not entitled to remuneration which could be classified as profit for the office of Chairman of the Board held by him and after January 8 1990 it could not be said that Shri Karam Singh was holding an office of profit and therefore the disqualification for membership of the Legislative Assembly of Himachal Pradesh could not attach to him For the reasons aforesaid the High Court held that the nomination of Shri Karam Singh was wrongly rejected by the Returning Officer Shri Ganguli has assailed the findings recorded by the High Court on both the questions whereas Shri B Datta the learned senior counsel appearing for the respondents has supported the said findings It is not disputed that in view of the amendment introduced in clause a of sub section 2 of Section 36 of the Representation of the People Act 1951 by Act 40 of 1961 the relevant date for determining whether a candidate was qualified or disqualified for being chosen to fill the seat under the various provisions of Constitution mentioned therein including Article 191 is the date fixed for scrutiny of nominations In the instant case the said date was February 5 1990 It is therefore necessary to determine whether Shri Karam Singh was holding an office of profit on February 1990 In view of the findings recorded by the High Court the following questions arise for consideration 1 Did Shri Karam Singh cease to hold the office of Chairman of the Board on January 31 1990 the date on which he submitted his resignation from the said office or on February 12 1990 when the notification about acceptance of his resignation with immediate effect was issued by the Government of Himachal Pradesh 2 Did the office of Chairman of the Board held by Shri Karam 260 Singh cease to be an office of profit with effect from January 8 1990 in view of the notification of the said date whereby the remuneration of Rs 1500 pm consolidated payable to the Chairman of the Board had ceased to be payable to Shri Karam Singh Shri Ganguli has urged that the resignation of Shri Karam Singh from the office of Chairman of the Board could be effective only after it was accepted by the Governor of Himachal Pradesh who had nominated him to the said office and till the acceptance of the said resignation Shri Karam Singh continued to hold the office of the Chairman of the Board The submission of Shri Ganguli is that acceptance of a resignation is necessary before it can be effective and since in the present case the resignation was accepted only by notification dated February 12 1990 Shri Karam Singh continued as Chairman of the Board till that date and he was holding that office on the date of scrutiny ie February 5 1990 In support of this submission Shri Ganguli has placed reliance on the decisions of this Court in Central Inland Water Transport Corporation Limited and Another vs Brojo Nath Ganguly and Anr and JK Cotton Spinning and Weaving Mills Company Ltd vs State of UP Others 19901 3 SCR 523 as well as the decision of the Allahabad High Court in Lala Rain vs Gauri Shanker 1981 All Law 1982 Having carefully considered the said contention of Shri Ganguli we find it difficult to accede to it As pointed out by this court resignation means the spontaneous relinquishment of one s own right and in relation to an office it connotes the act of giving up or relinquishing the office It has been held that in the general juristic sense in order to constitute a complete and operative resignation there must be the intention to give up or relinquish the office and the concomitant act of its relinquishment It has also been observed that the act of relinquishment may take different forms or assume a unilateral or bilateral character depending on the nature of the office and the conditions governing it See Union of India vs Shri Gopal Chandra Misra Ors at p 21 If the act of relinquishment is of unilateral character it comes into effect when such act indicating the intention to relinquish the office is communicated to the competent authority The authority to whom the act of relinquishment is communicated is not required to take any action and the relinquishment takes effect from the date of such communication where the resignation is intended to operate in prasenti A resignation may also be prospective to be operative 261 from a future date and in that event it would take effect from the date indicated therein and not from the date of communication In cases where the act of relinquishment is of a bilateral character the communication of the intention to relinquish by itself would not be sufficient to result in relinquishment of the office and some action is required to be taken on such communication of the intention to relinquish eg acceptance of the said request to relinquish the office and in such a case the relinquishment does not become effective or operative till such action is taken As to whether the act of relinquishment of anoffice is unilateral or bilateral in character would depend upon the nature of the office and conditions governing it Under the Constitution of India there are various offices which can be relinquished by unilateral act of the holder of the office and acceptance of resignation is not required eg President Article 56a Vice President Article 67a Deputy Chairman of Rajya Sabha Article 90b Speaker and Deputy Speaker of Lok Sabha Article 94b Judge of the Supreme Court Article 1242a Judge of a High Court Article 217 1a As regards member of either House of Parliament or a member of a House of Legislature of a State originally the position was that he could resign his office by unilateral act and the acceptance of resignation was not required The requirement of acceptance of such resignation was introduced in Articles 1013b and 1903b by the Constitution ThirtyThird Amendment Act 1974 Similarly in company law a director of a company is entitled to relinquish his office at any time he pleases by proper notice to the company and acceptance of the resignation is not required See Glossop vs Glossop Halsbury s Law of England 4th Ed Vol 7 p 316 para 536 A contract of employment however stands on a different footing wherein the act of relinquishment is of bilateral character and resignation of an employee is effective only on acceptance of the same by the employer Insofar as Government employees are concerned there are specific provisions in the Service rules which require acceptance of the resignation before it becomes effective In Raj Kumar vs Union of India it has been held But when a public servant has invited by his letter of resignation determination of his employment his services 262 normally stand terminated from the date on which the letter of resignation is accepted by the appropriate authority and in the absence of any law or rule governing the conditions of his service to the contrary it will not be pen to the public servant to withdraw his resignation after it is accepted by the appropriate authority Till the resignation is accepted by the appropriate authority in consonance with the rules governing the acceptance the public servant concerned has locus paenitentiae but not thereafter p860 Similarly in Central Inland Water Transport Corporation Ltd and Anr vs Brojo Nath Ganguly and Anr supra which related to an employee of a Government company jointly and wholly owned by the Central Government and two State Governments it was observed A resignation by an employee would however normally require to be accepted by the employer in order to be effective It can be that in certain circumstances an employer would be justified in refusing to accept the employee s resignation as for instance when an employee wants to leave in the middle of a work which is urgent or important and for the completion of which his presence and participation a necessary An employer can also refuse to accept the resignation when there is a disciplinary inquiry pending against the employee In such a case to permit an employee to resign would be to allow him to go away from the service and escape the consequences of an adverse finding against him in such an inquiry There be justified in not accepting the resignation of an employee p386 The same view was reiterated in JK Cotton Spinning and Weaving Mills Company Ltd vs State of UP Ors Supra which also relates to a contract of employment The question whether the resignation of Shri Karam Singh from the office of Chairman of the Board was required to be accepted before it became effective involves the question whether the act of relinquishment 263 of the office of Chairman is unilateral or bilateral in character In order to answer this question it is necessary to consider the relevant provisions of the Act The Act does not contain any provision for resignation of the office of Chairman of the Board but in Section 7 the following provision has been made with regard to the resignation of office by members 7 Resignation of office by members Any member may resign his office by giving notice in writing to the Government of Himachal Pradesh and on such resignation being notified in the Official Gazette by the Government of Himachal Pradesh shall be deemed to have vacated his office In the aforesaid provision there is no requirement that the resignation of a member should be accepted by any authority What is required is that a member who wishes to resign his office as member should give notice in writing to the Government of Himachal Pradesh and such resignation takes effect when it is notified in the official gazette by the Government of Himachal Pradesh This indicates that the act of relinquishment of the office of a member of the Board is bilateral in character in as much as the resignation takes effect only when such resignation is notified in the Official Gazette by the Government of Himachal Pradesh There is no such requirement for relinquishing the office of Chairman of the Board Section 42 however provides that the Chairman of the Board has to be nominated from amongst the members of the Board This means that the Chairman of the Board holds office so long as he is a member of the Board and if he ceases to be a member of the Board he also ceases to be the chairman of the Board But the converse is not true A Chairman of the Board may resign his office as Chairman but may continue as member of the Board If he resigns only from the office of Chairman of the Board there is no requirement that such resignation should be accepted by any authority or that any other action is required to be taken for the said resignation to be effective It would therefore appear that the act of relinquishment of the office of Chairman of the Board is unilateral in character and the resignation from the said office takes effect when it is communicated without any further action being required to be taken on the same Since the Chairman of the Board is nominated by the Government of Himachal Pradesh under Section 42 of the Act resignation has 264 also to be communicated to the Government of Himachal Pradesh ie the Head of the Department dealing with the Board and once it is so communicated it takes effect from the date of such communication if the resignation is in presenti or from the date indicated therein if it is prospective in nature to be operative from a future date This means that the act of relinquishment of the office of Chairman of the Board differs from the act of relinquishment from the office of a Member of the Board in the sense that while the act of relinquishment of office of a Member is bilateral in character requiring certain action namely resignation being notified in the Official Gazette by the Government of Himachal Pradesh before it comes into effect the act of relinquishment of the office of Chairman of the Board is unilateral in character The decisions on which reliance has been placed by Shri Ganguli relating to contracts of employment where the act of relinquishment has been held to be bilateral in character requiring acceptance of the resignation can therefore have no application to the present case where the act of relinquishment of the office of Chairman of the Board is unilateral in character Three possible situations involving resignation by a person holding the office of Chairman of the Board can be envisaged i He may resign only from the office of the Chairman of the Board In such a case if the resignation is in presenti it would take effect from the date of communication of the resignation to the Head of the Department in the Government of Himachal Pradesh it would take effect from the date as indicated in the said resignation if the resignation is prospective to be operative from a future date iiHe may resign only from the office of the member of the Board This resignation would take effect from the date the resignation is notified in the Official Gazette by the Government of Himachal Pradesh and with effect from the said date the Chairman would cease to be a member of the Board Since a person cannot continue as Chairman of the Board after he has ceased to be a member of the Board he would also cease to be the Chairman of the Board from the date of his resignation as member of the Board is notified in the Official Gazette by the Government of Himachal Pradesh iiiHe may resign both from the office of Chairman of the Board 265 as well as from the office of member of the Board In such a case his resignation from the office of Chairman of the Board would take effect from the date of communication to the Head of the Department in the Government of Himachal pradesh if it is it praesenti or from the date indicated therein if it is prospective to be operative from a future date He would however continue to be a member of the Board till his resignation from the office of member is notified in the Official Gazette by the Government of Himachal Pradesh under Section 7 of the Act The instant case falls in the third category because Shri Karam Singh by his letter dated January 31 1990 resigned from the office of member as well as the office of Chairman of the Board and wanted the resignation to be accepted with effect from the same day ie January 31 1990 By notification dated February 12 1990 it was notified that the resignation of Shri Karam Singh Thakur as Chairman of the Board has been accepted by the Governor of Himachal Pradesh with immediate effect In our opinion the said notification dated February 12 1990 proceeds under a misconception of the correct legal position The resignation of Shri Karam Singh as Chairman of the Board was not required to be accepted by the Government of Himachal Pradesh It became effective on January 31 1990 when the letter of resignation was received by the Financial Commissioner cum Secretary Industries to the Government of Himachal Pradesh who was the Head of the Department dealing with the Board and to whom it was addressed Since there is no requirement in the Act that the resignation of the Chairman of the Bord should be notified in the Official Gazette as in the case of a member of the Board it cannot be said that the resignation of Shri Karam Singh did not take effect till it was notified in the official gazette vide notification dated February 12 1990 The High Court was therefore right in taking the view that Shri Karam Singh had ceased to hold the office of the Chairman of the Board having resigned from the said office on January 31 1990 and the said resignation became effective from that date itself and that on the date of scrutiny ie February 5 1990 he was not holding an office of profit For that reason it has been rightly held that the nomination of Shri Karam Singh was improperly rejected by the Returning Officer Since we are in agreement with the view of the High Court that the nomination of Shri Karam Singh had been improperly rejected for the 266 reason that he was not holding the office of the Chairman of the Board on the date of scrutiny we do not consider it necessary to go into the question whether the office of Chairman of the Board held by Shri Karam Singh had ceased to be an office of profit after January 8 1990 The appeals therefore fail and are accordingly dismissed But in the circumstances with no orders to costs BVBD Appeals dismissed

The respondent bank charge sheeted the appellant employee for granting bank loans to a large number of persons without proper documentation and without verifying their credit worthiness and obtaining illegal gratification in that connection An enquiry was held The Enquiry Officer found the appellant guilty and on the basis of the enquiry report he was dismissed from service The appellant challenged the order of dismissal in a writ petition before the High Court On 871988 the High Court allowed the petition holding that the enquiry held was not proper and in accordance with law and ordered the appellant to face another enquiry in respect of which it gave certain directions The same enquiry Officer then permitted the appellant to cross examine the witnesses of the bank and to examine his own witnesses The Enquiry Officer held in his report dated 2731989 that nine charges against the appellant were found to be proved one not proved and one partly proved The disciplinary authority considering the enquiry report dismissed the appellant from service on 23101989 161 The appellant challenged the dismissal order in the High Court contending that the enquiry was not conducted as required by the order of the High Court dated 871998 and that he was not furnished with a copy of the Enquiry Report The High Court dismissed the writ petition against which the present appeal by special leave was filed The appellant contended that the Enquiry Officer in the second enquiry report had relied upon the findings of the earlier enquiry since quashed and that he did not permit the appellant to examine three necessary witnesses in support of his case that there was no real enquiry as contemplated by the High Court s order dated 871988 and that therefore the dismissal order passed on the basis of the second enquiry report be quashed The respondent bank submitted that the Enquiry Officer conducted the enquiry as directed by the High Court in its order dated 871988 Allowing the appeal this Court HELD 101 The order dated 8th July 1988 contemplated a fresh enquiry At best the examination in chief of the witnesses of the respondent could be said to have been allowed to be incorporated in the second enquiry proceedings The order certainly contemplated that the Enquiry Officer would apply his mind afresh to the evidence on record comprising the examination in chief and cross examination of the respondent s witnesses and that of the appellant s witnesses 165C 102 It was patent from the Additional enquiry report made by the Enquiry Officer that there had been no fresh application of mind It was impermissible for the Enquiry Officer in these circumstances to have borne his previous Enquiry Report in mind and to have confined the Additional enquiry report only to the cross examination of prosecution witnesses and the examination and cross examination of defence witnesses as the charges have been dealt with one by one in detail in my previous enquiry report It was also impermissible for him to have stated that the findings of the previous enquiry report remain as they are Having regard to the High Court s order dated 8th July 1988 the Enquiry Officer was bound to consider the material on record afresh and not to take his earlier 162 report into account and to say that he found no reason to change that report 165C E 103 In the fitness of things it was directed that another Enquiry Officer should be appointed by the respondent who should allow the appellant the opportunity of examining as his witnesses the three persons referred to by the earlier Enquiry Officer in the paragraph of the Addi tional enquiry report sub titled Conclusion He should give to the respondent and the appellant the opportunity of a hearing He should then apply his mind to the material on record without in any way being influenced by the earlier enquiry reports and make his own enquiry report accordingly 165G H 166A Union of India and Others vs Mohd Ramzan Khan referred to

minal Appeal No 123 of 1985 From the Judgment and Order dated 121184 of the Delhi High Court in State Criminal Appeal No 71 of 1978 RK Garg and Rajendra Prasad Singh for the Appellant 233 NN Goswamy and Ashok Bhan for the Respondent ANAND J This appeal by special leave is directed against the judgment of the High Court of Delhi dated 12th of November 1984 setting aside an order of the Additional Sessions Judge New Delhi acquitting the appellant of an offence under Section 302203 IPC The prosecution case is that on the fateful night of 25th26th July 1976 the appellant and his wife Usha Jain went to sleep in the back verandah of their house situated at P 5 Green Park Extension New Delhi while his brother MP Jain alongwith his wife Sharda and children went to sleep separately in their bed room in the same house Police Control Room was informed over the telephone by Sulekh Chand Jain at 455 AM that an incident had taken place at P 5 Green Park Extension and on receiving the telephone message SI Mauji Ram made a record of it in the daily diary and passed on the information to the duty officer at police station Hauz Khas ASI Maha Singh was deputed to proceed to the spot for investigation of the case After reaching the spot the said ASI Maha Singh informed the police station on telephone that a murder had taken place The information so provided was recorded by ASI Mangal Sen in the daily diary Whereupon SHO Harmit Singh immediately left for the spot alongwith SI Dalip Singh SI Moti Singh Constable Bhawani Dutt and Constable Randhir Singh The police party arrived at the spot at about 535 am and took charge of the investigation The appellant was present near the dead body which had been covered by a Dhoti and on interrogation the appellant informed the police party that his brother and family had retired for the night in their bed room at about 1000 pm and he alongwith his wife had slept in the back verandah Before going to sleep he had locked the collapsable door of the back verandah The wife of the appellant was wearing a gold chain on her neck eartops in her ears and golden bangles on her wrists besides glass bangles At about 130 am the appellant felt thirsty and asked his wife to give him water and after some time when he felt chilly he went inside the room He slept in the room while his wife kept sleeping outside At about 345 am the appellant got up to urinate and when he went outside the room he found that his wife was lying on the cot with her face upwards but her clothes were in a loose condition and he was almost naked upto the thighs On going closer to 234 the cot he found her tongue protruding and on touching her he found her dead He noticed some scratches on her face and neck and also discovered that the golden chain which was on her neck and golden bangles were missing from her body According to the appellant his wife had been murdered by somebody by strangulation while committing the theft of the golden chain and the bangles He started screaming and his brother the brother s wife as well as some neighbours came there Since his telephone was found to be out of order police was informed at his request by Sulekh Chand another neighbour from his telephone The parents of the deceased living in Sonepat were also conveyed the tragic news on telephone through their neighbours The statement of the appellant which revealed a case of lurking house trespass with a view to commit offence of theft and murder was recorded as exhibit P5 and a case under Section 460 IPC was registered The statement of the appellant exhibit P5 was despatched by SHO Harmit Singh to the police station with his endorsement for registration of a case under Section 460 IPC Formal FIR was registered by ASI Mangal Sen at the police station and the same was received back by the SHO at the house of the appellant at about 645 am The crime team as also the dog squad were summoned Both the dogs of the dog squad were first let loose to pick up the smell and according to the ASI Ranbir Singh in charge of the dog squad the dogs after picking up the smell from the lock lying in the corner of the back courtyard and from the spot went to the room where the appellant was sitting and each of the dogs pointed towards him by turn That raised a suspicion against the appellant According to the SHO he then asked the appellant to remove his shirt and found that the appellant had injuries in the nature of bruises etc on the front part of his body on the chest as well as on his back Since the appellant had told the police that the bangles of his wife were identical to the bangles of Sharda the wife of his brother MP Jain who also is the sister of the deceased the SHO took into possession four bangles from Sharda also for comparing the same in case the stolen property was recovered The appellant was thereafter taken for further interrogation to the police station Before proceeding to the police station the SHO had effected recoveries of various articles including some hair lying near the dead body on the cot The appellant had produced the key at the asking of the SHO which purported to be the key of the lock which had been found lying in the back court yard and the same was taken into possession The lock was also taken into possession but it did not appear to have been 235 broken or tampered with The recovery of the key was witnessed amongst others by Kuldip Kaul PWl who was present in the crowd outside the home of the appellant The inquest proceedings were conducted by SI Moti Singh and the body was thereafter sent for postmortem examination At the police station during interrogation the appellants was placed under arrest and in the presence of SI Dalip Singh PW6 Kuldip Kaul PWl and Harnaik Singh PW2 he made a disclosure statement exhibit PC to the effect that he had concealed the golden chain and the bangles in his bathroom and in pursuance of the disclosure statement the appellant led the police party to the bathroom of his house and after removing the cover from the drain hole took out the golden chain and the bangles and handed the same over to SHO Harmit Singh in presence of the witnesses Recovery memo EXPF was prepared and the golden chain and the bangles after being duly weighed were sealed separately and the seal was handed over to Kuldip Kaul PW1 The appellant was sent for medical examination after memo of his personal search EXPE was prepared Dr Dharam Pal PW15 found as many 18 injuries on the person of the appellant consisting of bruises and abrasions on the nose chest arm shoulder and on the umbilical region The injuries were stated to have been caused by blunt weapon The postmortem on the dead body of Usha Jain was conducted on 2771976 at 900 am by Dr Bharat Singh PW 4 and according to the postmortem report EXPL all the injuries found on the person of the deceased were ante mortem and the same were possible by throttling the deceased and that the death of Usha Jain was caused by asphyxia resulting from throttling The deceased was carrying 7th month pregnancy at the time of her death After the disclosure statement was made by the appellant leading to the recovery of the ornaments and after noticing injuries on his person the case which was originally registered under Section 460 IPC was converted into one under Section 302203 IPC The SHO during the course of investigation also took sample hair of the appellant and sent the same alongwith the hair recovered from the cot of the deceased to the Central Forensic Science Laboratory The nail clippings of the deceased were also sent for analysis to CFSL Site plan EXPO was also prepared during the investigation After completion of the investigation challan was filed against the appellant and he was sent up for trial for offences under Section 302203 IPC in the court of Additional Sessions Judge New Delhi 236 There being no eye witness of the occurrence the prosecution sought to establish the case against the appellant on the basis of circumstantial evidence The circumstances set up by the prosecution against the appel lant during the trial were i information to the police at 455 AM given by a neighbour and not the appellant ii that information not specifically giving out that a murder had taken place and simply intimating happening of an incident iii The accused having slept alone at night in the verandah with the deceased after having locked the collapsable door of that verandah from inside and that lock having been found in the corner of the back courtyard in the morning without being tampered with iv The deceased and accused were last seen together v The dogs of the Dog Squad having pointed out the accused after picking up scent from that lock vi The ornaments which were stated to be on the person of the deceased while she was sleeping and which were found missing when she was discovered dead having been recovered from the drain hole of the bath room attached to the bed room of the accused in consequence of and in pursuance of a disclousre statement made by the accused vii injuries found on the person of the accused in the nature of abrasions contusions and lastly viii the accused having given false information to the police by means of hi s statement Ext P5 The learned Sessions Judge carefully analysed each of the circumstance and finally observed On a resume of the analysis of prosecution evidence and 237 on a very careful appraisal of all the facts and circumstances set up by the prosecution I am of my earnestly considered view that the prosecution in this case has entirely failed to prove any of the circumstances set up against the accused much less to establish the chain of circumstances so as to bring out a nexus between the crime and the accused The appellant was therefore acquitted of the offences under Section 302203 IPC On an appeal by the State a division bench of the High Court reversed the order of acquittal of the appellant The High Court held that the circumstances formed a chain and sequences so complete by themselves that one was left in no manner of doubt that the appellant and the appellant alone had committed the crime The appeal was accepted and the order of acquittal was set aside The appellant was sentenced to undergo rigorous imprisonment for life under Section 302 IPC and also to undergo rigorous imprisonment for a period of one year under Section 203 IPC Both the sentences were directed to run concurrently Appearing for the appellant Mr RK Garg the learned senior counsel submitted that the approach of the High Court was totally erroneous and that a well considered and well reasoned judgment of the Trial Court was upset by the High Court by drawing inferences which were not available from the record and by ignoring material discrepancies and infirmities in the prosecution evidence which not only did not establish various circumstances but which also showed that the chain of circumstantial evidence was wholly incomplete Learned counsel for the appellant submitted that the appellant had been roped in on the basis of misguided suspicion and that the circumstances relied upon by the prosecution were not of any conclusive nature and they did not exclude the hypothesis other than that of the guilt of the appellant It was emphasised that the inves tigating officer had created false clues and suppressed material which went against the prosecuting version and supported the defence version He argued that the High Court should have drawn adverse inference against the prosecution for not producing the first informant and withholding the evidence of the father of the deceased Mr NN Goswami learned senior counsel assisted by Mr Ashok 238 Bhan advocate on the other hand submitted that some of the circumstances like the pointing out of the appellant by the dogs of the Dog Squad after picking up the scent from the place of occurence the disclosure statement and the recovery of ornaments as a consequence thereof at the instance of appellant and the presence of injuries on the person of appellant were of such a conclusive and clinching nature that they left no doubt that the appellant had committed the crime It was submitted that the appellant had made attempt to mislead the investigating officer by giving a false version with a view to screen himself According to the learned counsel the established circumstance could only lead to the hypothesis consistent with the guilt of the appellant and not with his innocence We shall now consider various circumstances with a view to determine whether the circumstances alleged against the appellant have been established and the chain of evidence is so complete as to lead to no other hypothesis except the one consistent with the guilt of the accused There is no motive established in this case by the prosecution for the appellant to commit murder of his wife and the evidence of Tara Chand father of the deceased as welt as the sister of the deceased and the tenants living in the same house disclosed that the relations between the husband and wife were cordial In a case based on circumstantial evidence motive assumes pertinent significance as existence of the motive is an enlightening factor in a process of presumptive reasoning in such a case The absence of motive however puts the court on its guard to scrutinise the circumstances more carefully to ensure that suspicion and conjecture do not take place of legal proof Since the disclosure statement and the consequent recovery pursuant thereto of the ornaments belonging to the deceased has been considered to be one of the most important piece of circumstantial evidence in the case not only by the High Court but has also before us by the learned counsel appearing for the State we shall first consider that circumstance This circumstance is indeed of such an incriminating nature that if found to have been established by reliable and trustworthy evidence it would go a long way to furnish proof of the guilt of the appellant and connect him with the crime and on the other hand if the evidence in support of that circumstance is found to be not reliable the entire chain of circumstantial evidence will snap so badly as to affect the credibility of the prosecution case as a whole 239 According to the prosecution after the appellant had been taken to the police station by the investigating officer he was interrogated interrogated after being placed under arrest He voluntarily made a disclosure statement EXPC The disclosure statement was recorded by the SHO and has been attested by Kuldip Kaul PW 1 SI Dalip Singh PW 6 and Harnaik Singh PW2 Pursuant to the disclosure statement the appellant is alleged to have led the police party to the recovery of the ornaments from a drain hole in his bathroom The recovery memo EXPF was prepared at the spot and was attested by SI Dalip Singh PW 6 Kuldip Kaul PW 1 and Hirnaik Singh PW 2 besides the Investigating Officer We shall therefore first analyse the evidence of the witnesses of the disclosure statement and the recovery memo Inspector Harmit Singh PW 19 SHO while deposing about the disclosure statement and the consequent recovery of the ornaments at the pointing out by the appellant stated that he interrogated the appellant in presence of Dalip Singh Kuldip Kaul and Harnaik Singh PWs at the police station at about 145 pm and in their presence the appellant made the disclosure statement exhibit PC and then led the party to his house and pointing out the drain hole in the bath room the appellant took out from that drain hole three golden bangles and one golden chain which were weighed separately and while golden bangles were put in one packet the golden chain was put in another packet and the seal used to seal both the packets was handed over to Kuldip Kaul PWI The recovery memo EXPF was prepared at the spot which was signed by the witnesses then and there at about 2 or 230 pm In his cross examination the Investigating Officer denied the suggestion that the bangles and the chain were recovered from underneath a slab in the service lane in the presence of the appellant and Jagminder Dass Jain and a memo had been prepared which was signed by them He also stated that he did not call any goldsmith to weigh the ornaments because he had taken with him the measure and the scale He then asserted that Kuldip Kaul did not come back with me to the police station when I came back in the evening after recoveries of the ornaments etc had been effected at the spot I recorded statement of Kuldip Kaul at the spot after recoveries That was a complete statement of his and I recorded only one statement of his on that day Kuldip Kaul left from the spot and we were still there when he left Regarding Harnaik Singh PW2 the IO stated I had gone out to 240 look for another witness and I found at that time Harnaik Singh reversing his taxi in the compound of the police station and then I summoned him He had told me that he had dropped a passenger and was taking out his taxi I did not see passenger going inside There are 6070 quarters at the back of the police station and that passengers might have gone to any of those quarters The disclosure statement was made by the accused in his presence I had read out the papers to Harnaik Singh before getting his signature In fact it was written in his presence and whatever were dictated by the accused was within his healing It is incorrect to suggest that disclosure statement was already written and I got signatures of Harnaik Singh without explaining to him the document and assuring him to sign on my trust The witness also asserted that he had seen Harnaik Singh for the first time only at about 2 or 230 pm outside the police station while reversing the taxi and did not know him from before Let us now examine as to what the other witnesses have to say in this regard Kuldip Kaul PW1 while admitting that he was present outside the house of the appellant in the morning at about 630 am when the police party had reached there and had offered himself to join the investigation went on to say that after the SHO had lifted the shirt of the appellant and found 15 20 marks of scratches on the chest of the appellant they all came to the police station along with the appellant He added that while they were sitting at the police station Harnaik Singh PW2 also came there along with SHO Harmit Singh and after some initial hesitation the appellant disclosed that he had kept one golden chain and three bangles which his wife was wearing in the drain hole of the bath room of his house and he could show the same to the police and get them recovered He deposed that disclosure statement EXPC was prepared at the police station and was signed by him as well as by the other witnesses present there Thereafter the appellant was arrested and he led the police party to his house where he pointed out the drain hole in the bath room and after removing the cover of the drain hole the appellant took out from inside the drain hole a golden chain and three golden bangles and handed over the same to SHO Harmit Singh Memo of recovery EXPF was prepared and was signed by the witnesses With a view to assert his independence and that he had no earlier connection with the IO he stated I came to know SHO Harmit Singh since March 1976 when I organised a function of Youth Congress and had contacted the SHO for arrangements for the said function I have never gone to the police station in any other connection or regarding public 241 grievances I have not organised any other function in the area except the one stated above Regarding the signing of the recovery memo at the house of the appellant and his leaving for his house from there as was deposed to by the Investigating Officer Kuldip Kaul PWl stated I had come back with the police to PS after the recovery of the ornaments and there at about 330 pm my statement was recorded by the police and I came back home at about 4 pm Harnaik Singh PW2 giving his version regarding the disclosure statement and the consequent recovery stated About 4 12 or 5 months back at about 2230 pm I had taken a passenger in my taxi to the quarters of PS Hauz Khas When I was coming back after dropping the passenger one police officer Sardarji who was standing at the gate of the PS called me and took me inside the PS There is one room besides the police were one Mr Kaul PWl and Surinder Pal Jain accused present in court Then in the room that Sardarji police officer took up one paper which had been prepared already and asked me to sign saying that they have to conduct some inquiry in the case Then that Sardarji told me to accompany the police party to Green Park Then we went there besides the police party and myself PWl and the accused were also there On reaching the house in Green Park the accused led the police party to the bath room and I also followed them in to the both room Then the Sardarji took out there bangles and one gold chain from the gutter of the bath room The Sardarji took those three bangles from the gutter on being told by the accused He asserted that he did not at all know the Sardarji police officer prior to that date and that he had gone to the police station for the first time on that day During the cross examination he admitted that The contents of memos EXPC and EXPF were not read out to me but I was told by the police that the weight of things recovered and the recovery was being written in those papers ASI Maha Singh PW5 who had arrived at the spot at the earliest and had sent information to his senior officers including SHO Harmit Singh and had kept a guard at the spot During the cross examination admitted that Kuldip Kaul and Harnaik Singh witnesses had come there before 7 am ST Dalip Singh PW6 who had also accompanied the SHO to the house of the appellant at about 630 am stated when we reached Kuldip Kaul and Hamaik Singh witnesses were present ASI Maha Singh was already 242 there The witness also deposed about the interrogation of the appellant and the recording of the disclosure statement at the police station in his presence and the subsequent recovery of the ornaments and the preparation of the recovery memo PF in the presence of Kuldip Kaul and Harnaik Singh PWs Contrary to what Harnaik Singh PW said this witness deposed the accused himself took out three bangles and one golden chain front the main hole and handed them over to the SHO The witness during the cross examination stated The ornaments were weighed by some goldsmith who was called there by the SHO I do not know whether that goldsmith also signed the possession memo or not The above is the entire prosecution evidence relating to the making of the alleged disclsoure statement by the appellant and the consequent recovery under Section 27 of the Evidence Act at his instance According to the appellant however he had made no disclosure statement nor led the police party to the recovery of the ornaments as alleged According to the defence version the missing ornaments had in fact been recovered by the police party around 11 am during search from the service lane from underneath a slab near the boundary wall and at that time the appellant and Jagminder Dass Jain were also present This defence version is supported by the evidence of DW2 Tara Chand father of the deceased The presence of this witness is admitted at the spot by the Investigating team as was natural being the father of the deceased His testimony assumes significance as in the normal course of events he would be the last person to screen the real offender who murdered his daughter Tara Chand DW2 stated that the police had interrogated him and he had told the IO that the appellant and the deceased had good relations with each other and that he had never received any complaint of any dispute or difference between them from his daughter That he had also married of his other daughter with the brother of the appellant MP Jain and that both the sisters alongwith their husbands were living together in the same house Deposing about the sequence of events at the house of the appellant the witness stated Then at about 1030 am the police took into possession four golden bangles from Sharda but I cannot say as to from where she had produced them whether she was wearing them or she had brought them from the house I had seen her just producing them She had handed over those bangles to the same Sardarji police officer who had talked to me and at that time we were in the drawing room The police 243 had been told that the bangles which Usha was wearing and which were missing were of the same type which were with Sharda and there upon they conducted search for the articles in and around the house with the bangles in hand They went out towards the back side Persons who were inside the house and also SP Jain accused had joined the search party I came to know that three missing bangles and one chain had been found out from underneath a slab at the back of the house I came to know at about 1130 am that these things had been recovered and after about 12 hour of that the police took in jeep MP Jain SP Jain and Sharda Jain to the police station Police told me that they were taking all the three for interrogation During the cross examination he asserted After the police had taken Sharda s four bangles in hand and they went around looking for the stolen bangles I was in the varandah by the side of the dead body and kept on observing the scene and I saw that after sometime the same sub inspector who had the four bangles in hand was coming from outside from the back side and had three bangles and one chain in the other hand Some 57 persons from the public who were already inside the house had gone outside with the police and they also came back with the police after recovery of the ornaments I learnt from them that those ornaments had been found front underneath a slab and sometime after myself went out and saw that spot The three bangles and chain were loose and were not found in any cloth He categorically denied the suggestion that the appellant had led the police party to the bath room on that day and had got recovered form the drain hole of the bath room the three bangles and the golden chain Shri Jagminder Dass Jain appeared as DW12 He leves in the same locality as the appellant and had gone to the house of the appellant soon after 6 am on learning that some murder had taken place Deposing about the recovery of ornaments he stated that the SHO after taking into possession the bangles from Sharda went outside towards the back lane and the witness accompanied the SHO and the crime team along with some others He stated that during the course of the search of the back lane and from underneath a slab one gold chain and three golden bangles were recovered The recovered bangles were compared with the other which had been earlier produced by Sharda and a memo of the recovery was prepared by the police and was signed by the witness as well as the appellant The learned Sessions Judge carefully considered the evidence led by the prosecution with regard to the disclosure statement and the recovery 244 of ornaments She found the evidence of Harnaik Singh PW2 who according to DW11 Sunder Lal constable of police station Defence Colonly had been earlier also cited as a witness for the prosecution in a case investigated by Harmit Singh the then Sub inspector of police and the present Investigating Officer was not reliable and that the Investigating Officer had not told the truth when he had deposed that he did not know Harnaik Singh earlier That Harnaik Singh had on his own showing signed the disclosure statement after it had already been written and that the appellant bad not made any disclosure statement in the presence of Harnaik Singh PW2 who had been introduced being a convenient witness The learned Sessions Judge also found the evidence of PWl Kuldip Kaul as not reliable or trustworthy and disbelieved his testimony by giving cogent reasons after properly appreciating the evidence led by the prosecution She found the defence version with regard to the recovery as more probable and opined that the investigating officer had created false clues and fabricated false evidence The learned Sessions Judge observed I therefore cannot bring myself at all to accept the prosecution case about any disclosure having been made by the accused or having led to recovery of missing ornaments in pursuance to this disclosure and I am con strained to say that the IO has made unabashed attempt to fabricate false evidence to bring on record incriminating evidence against the accused whom he had tied down for the offence us 302 IPC and went to the extent of introducing false witnesses preparing fabricated recoveries replacing them by original recoveries The High Court on the other hand did not deal with the various discrepancies and contradictions appearing in the prosecution evidence relating to the making of the disclosure statement and the recovery of the ornaments The High Court placed reliance on the testimony of Kuldip Kaul PWl and Harnaik Singh PW2 to hold that the disclosure statement and the recovery had been made in the manner suggested by the prosecution In our opinion the High Court did not properly appreciate the prosection evidence while reversing the well considered judgment of the learned Sessions Judge 245 On our independent appraisal of the evidence we find that the prosecution evidence relating to the disclosure statement and the recovery of ornaments is not only discrepent and contradictory but also suffers from glaring infirmities and improbabilities rendering it unsafe to rely upon the same There is contradiction between the evidence of Kuldip Kaul PW1 and the IO as to the place where Kuldip Kaul signed the recovery memo According to the 10 it was signed at the spot while according to Kuldip Kaul PW1 he had returned to the police station and there signed the recovery memo Again while Kuldip Kaul attempted to show that he had met the IO just once and did not know him earlier the IO has given a direct lie to it After carefully analysing the evidence we find Kuldip Kaul PWl was a convenient witness and his evidence does not appear to be trustworthy Same is our opinion about Harnaik Singh PW2 Whereas both Harnaik Singh PW2 and the IO want the Court to believe that they did not know each other earlier and that IO had seen Harnaik Singh for the first time on that day only at the police station there is abundant material on the record to show only that Harnaik Singh had earlier been cited as witness by the same IO while posted as Sub Inspector at another police station Harnaik Singh PW2 was also present outside the house of the appellant alongwith Kuldip Kaul PWl as early as on 630 AM on that day Harnaik Singh PW2 also exposed his unreliability when he admitted during the cross examination that the disclosure statement had not been made by the appellant in his presence at the police station but that he had signed a statement which had already been prepared thus giving a lie not only to Kuldip Kaul PWI but also to the IO who have deposed to the contrary As regards the recovery of ornaments also there is a very serious infirmity which emerges from the testimony of Harnaik Singh PW2 Contrary to what the IO and the other witnesses stated Harnaik Singh PW2 deposed that the ornaments were taken out by the Sardarji I O from the drain hole and not by the appellant This probabilises the defence version that the ornaments had been recovered during the search and were with the IO when the ritual of the recovery under Section 27 of the Evidence Act was performed The contradictions in the evidence of the IO and SI Dalip Singh PW6 as to who had weighed the ornaments after their alleged recovery also casts doubt on the correctness of the prosecution story and the bonafides of the investigation 246 The learned Judges of the High Court noticed the evidence of Harnaik Singh as regards the manner of his signing the disclosure statement and the alleged recovery of ornaments and observed Harnaik Singh PW2 even though cited as a witness of the disclosure statement does not subscribe to it and obviously as stated by Harmit Singh he was only brought to the police station after the first interrogation was conducted In any event we think that a person like Harnaik Singh PW2 who is not prepared to subscribe to a part of the prosecution case to which he was not a witness could not but be a truthful witness and there is absolutely no reason not to believe his version that these ornaments were recovered at the pointing out of the accused and were drawn from the drain hole by the accused himself We are unable to appreciate this approach of the High Court The Court seems to have made a virtue out of a vice While deposing about the recovery of the ornaments from the drain hole of the bath room Harnaik Singh PW2 belied the entire prosecution case when he stated that after the appellant had led the police party to the bath room the Sardarji took out three bangles and one golden chain from the gutter of the bath room The High Court did not advert to this aspect of the evidence at all Kuldip Kaul PWl who was also disbelieved by the learned Sessions Judge and in our opinion rightly had also exposed the extent of falsehood indulged into by the investigating officer with regard to the time and place where the witness attested the memo of recovery of the ornaments but the High Court did not deal with the said circumstance also in its proper perspective and on the other hand unjustifiably criticised the Sessions Judge for her adverse comments on the veracity of the prosecution case Obviously the investigating officer had associated Kuldip Kaul PWI not only because he was known to the SHO but also because he was a convenient witness who was prepared to sign the recovery memo at the police station at 330 PM after the police party had returned from the house of the appellant The glaring discrepancies and contradictions noticed above have rendered the evidence of Kuldip Kaul PW1 Harnaik Singh PW2 and the Investigation Officer Harmit Singh PW19 untrustworthy and unreliable On the other hand we find that the defence version regarding the recovery of ornaments is more probable and is supported by independent witnesses including Tara Chand 247 DW2 father of the deceased whom the IO did not produce as a prosecution witness Despite searching cross examination nothing was elicited to created any doubt on the veracity of Tara Chand DW2 the father of the deceased who as already stated would be the last person to screen the real murderer of his daughter The evidence of Tara Chand DW2 has impressed us and we find that the version given by him in the facts and circumstances of the case was more probable In view of the serious discrepancies contradictions and the attempt of the Investigating Officer Harmit Singh to create false clues and fabricate evidence we are of the opinion that the learned Sessions Judge was perfectly justified in rejecting the prosecution evidence relating to the disclosure statement exhibit PC and the consequent recovery of the ornaments The prosecution has failed to establish that the appellant did make the disclosure statement as alleged by the prosecution or led to the recovery of the ornaments belonging to the deceased in the manner suggested by the prosecution This piece of circumstantial evidence therefore has not at all been established much less conclusively In a case based on circumstantial evidence the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and those circumstances must be conclusive in nature Moreover the established facts should be consistent only with the hypothesis of the guilt of the accused alone and totally inconsistent with his innocence Though with the ruling out of the recovery of the ornaments as circumstances relating to the been established conclusively the chain of the circumstantial evidence snaps badly we find that there are some other circumstances also in the prosecution case which militate against its correctness Admittedly the nail clippings of the nails of the deceased had been taken by the police There was also recovery of the hair from near the cot where the dead body was lying and the romoval of the hair from the scalp of the appellant by the IO for the purpose of their comparison The report of the chemical examiner has not connected the hair recovered from the cot with those of the appellant There is no material on the record either to show that the nail clipping had any blood which could have tallied with the blood group of the appellant Thus both the nail clippings and the hair have failed to connect the appellant with the crime 248 The information about the incident was given by Sulekh Chand Jain DW13 an immediate neighbour of the decased who informed the police at 455 AM on the request of the appellant about the occurrence Sulekh Chand Jain was not examined by the prosecution and was instead examined by the defence and has appeared as DW13 He deposed that he had conveyed the information as given to him by the appellant and other inmates of that house regarding the murder of the deceased to Moti Ram PW11 at police station Hauz Khas on telephone The record of the information conveyed by him at the police station was however cryptic and no explanation has been furnished as to why the recorded report was so cryptic In answer to a question in the cross examination the witness naturally expressed his ignorance as to why the report had been recorded in the manner in which it was recorded That was natural This explanation was required to be furnished by the police witnesses rather than DW13 Though he was subjected to incisive cross examination nothing emerged from the evidence of DW13 which may show that he had not conveyed the information of murder having been committed to the police Under these circumstances the argument of Mr Garg that the report was designedly left vague to enable the investigating agency to fill in the blanks latter cannot be dismissed as wholly unplausible particularly when we have noticed the conduct of the Investigating Officer during the investigation The possiblility that the entire case was built up after the dogs of the dog squad pointed towards the appellant cannot be ruled out Since the appellant had slept in the verandah near the cot where the dead body of his wife was found had locked the collapsable door with the recovered lock before going to sleep and had himself been close to the dead body before the police came the picking up of the smell by the dogs and pointing towards the accused could not be said to be a circumstance which could exclude the possibility of guilt of any person other than that of the appellant or be compatible only with hypothesis of guilt of the appellant The pointing out by the dogs could as well lead to a misguided suspicion that the appellant had committed the crime The explanation of the appellant regarding the injuries on his person as having been caused by the police is also quite plausible because according to the father of the deceased the sister of the deceased the tenants of the house and other neighbours who had reached the spot the appellant was wearing only a vest and the pyjama and no shirt and there were no marks of injuries on his body before he was 249 taken to the police station The prosecution case regarding the presence of injuries on the person of the deceased also therefore is quite doubtful On an independent appraisal of the evidence on the record we have therefore unhesitatingly come to the conclusion that the learned Sessions Judge was perfectly justified in acquitting the appellant of all the charges and the reasoning given and the findings recorded by her are sound cogent and reasonable The High Court was not justified to set aside those findings on surmises and conjectures The finding of guilt recorded against the appellant by the High Court is not sustainable in law and we agree with the learned Sessions Judge that the prosecution has not established the case against the appellant beyond a reasonable doubt We accordingly set aside the judgment of the High Court convicting the appellant for the offence under Section 302203 IPC The appeal is allowed and the appellant acquitted of both the charges The appellant is on bail his bail bonds shall stand discharged NVK Appeal allowed

The High Court reiterating the principles enunciation in Synthetics and Chemicals Ltd and Ors vs State of UP and Ors held that the Central Government had the exclusive power to grant a licence for the manufacture of industrial alcohol and it was not necessary for the Company respondent to obtain a PD 2 licence from the Excise Commissioner before starting its distillery for the manufacture of industrial alcohol The High Court directed the State of UP and another not to interfere with the respondent Company s manufacturing Industrial alcohol in the distillery for which licence was granted but subject to the State Government s right to ensure that industrial alcohol was not converted into potable alcohol The State of UP filed a special leave petition against the judgment of the High Court in this Court contending that before manufacturing industrial alcohol the respondent company was to manufacture into rectified spirit and that rectified spirit Could be converted potable liquor by merely adding water that the High Court did not give any reason in support of the High Court s direction We further direct that the respondents shall allot molasses to the petitioner in accordance with the assurance given to the petitioner vide order of the Government dated 2331989 The respondent Company submitted that the High Court order was extended from time to time for the subsequent years as well Dismissing the Special Leave Petition this Court HELD 01 The law laid down by this court and the observations of 292 the High Court in the impugned judgment recognise and safeguard the right of the State Govt to guard against any abuse and to ensure that rectified spirit is not diverted for human consumption That power is affirmed 293F 02 The direction of the High Court cannot be construed and shall not be understood as calling upon or directing the Government to do anything or to make any supplies contrary to the provisions of the provisions of the Molasses Contral Order or any other law governing the supplies of molasses The supply of molasses to the respondent shall be made in accordance with law 294A B Synthetics and Chemicals Ltd and Ors vs State of UP and Ors referred to 292F

Appeal No 1749 of 1980 From the Judgment and Order dated 263 1980 of the Gujarat High Court in Special Civil Application No 1606 of 1975 DA Dave Vimal Dave R Karanjawala Mrs Manik Karanjawala Jitender Singh and PK Mullick for the Appellant RR Goswami SK Dholakia PH Parekh Fazal HK Rathod and SC Patel for the Respondents The following Order of the Court was delivered The State of Gujarat the appellant herein is aggrieved against a mandamus issued by the High Court of Gujarat on March 26 1980 in Special Civil Application No 160675 whereby its decision to impose a ratio while working out a Quota rule was upset The minimum facts are these In the State Public Works Department there was an Electrical Engineering Branch By Resolution dated July 10 1972 the services in the said branch wef May 1 1972 were trifurcated on the same pattern as was 386 done in other branches The result was that the trifurcation ended into three cadres 1 Junior Engineers 2 Supervisors and 3 Over seers The compartment of Over seers is a surplus age There was only one Overseer at the relevant time and he stood retired In substance it was a bifurcation between Junior Engineers and Supervisors the former being graduates and the latter being diploma holders This exercise of the State Government was challenged in a writ petition before the High Court in Special Civil Application No 185573 which was negatived by the High Court by an order dated 2nd April 1975 The High Court directed that in working out the trifurcation the Government must provide criterion for promotion from the three independent cadres In compliance thereof the State Government adopted a Resolution dated 2691975 introducing a quota rule effective from May 1 1972 at the ratio of 21 for Junior Engineers and Supervisors respectively for promotion to the posts of Deputy Engineers The nine contesting respondents herein preferred a writ petition being Special Civil Application No 160675 before the High Court challenging the trifurcation as also the quota rule The High Court repelled the challenge in so far as it related to the trifurcation and the adoption of quota rule but struck down the ratio of 21 holding it to be unjustified as also the disparity in qualifying service from both the channels The High Court concluded as follows We are therefore of the opinion that though it was within the power of the State Government to bifurcate the unified cadre into two distinct cadres of Junior Engineers and Supervisors and though it was within the power of the State Government to prescribe a quota for both of them for the purpose of promotion to the higher posts of a Deputy Engineer there was no justification for prescribing the quota of 21 and a longer qualifying service for the Supervisors Therefore the promotional rule which prescribes unequal quota and an unequal length of qualifying service for Supervisors for promotion to the posts of a Deputy Engineer is liable to be struck down And accordingly it did by issuing a mandamus The State Government of Gujarat when appealing to this Court was unsuccessful in obtaining a stay of operation of the impugned judgment 387 As a consequence it had to obey the mandate of the High Court which was to the effect that the ratio of 21 could not be enforced As a result the quota rule went out of gear It was left open all the same to the State Government to make any other rational rule in that behalf Even this Court on 18121980 at that juncture ordered Let the Government frame a fresh quota rule consistent with the High Court judgment under appeal for the purpose of making promotions during the pendency of the appeal Pursuant thereto it appears that the State Government was constrained to introducing of a Rule under Article 309 of the Constitution But before we advert to that Rule it would be relevant to mention that earlier in point of time by Notification dated July 4 1978 Rules known as Deputy Engineer Electrical Recruitment Rules 1978 were framed under Article 309 of the Constitution giving a statutory clothing to the Resolutions dated 10772 and 26975 Unfortunately these statutory provisions were not brought to the notice of the High Court nor were they put to challenge The matter in the High Court proceeded on the assumption that an executive action of the State was under challenge The necessary assumptions and presumptions well known to law and the placement of onuses went unnoticed In this background and facing the situation so arising the State Government issued a Notification on April 12 1982 by causing a substitution in the earlier Rules of 1978 aforementioned by fixing t he promotional ratio from both sources at 11 but subjected them to the result of the instant litigation emerging from this Court We stand deprived of the pleadings of the parties before the High Court The pleadings now introduced do not help us Significantly the High Court judgment is silent as to the basis on which it was persuaded to strike down the ratio of 21 for Junior Engineers and Supervisors respectively The tenor of the judgment of the High Court does however suggest that the executive flexibility with which the Government works could not justify the fixation of the ratio of 21 The High Court could not and did not substitute what was the right ratio in the circumstances and left it to the Government to devise another ratio Had the factum of the legislation on the subject the Rules dated 471978 been brought to its notice perhaps the High Court s angle of vision would have been different The State has no doubt compulsively carried out the mandate but has done so with reservation so as to meet the eventuality No such measure can ever be permanent that would hold good for all times to meet not only the present needs but also future exigencies as well Hands of the State cannot to so 388 tied down That would be a step retrograde to the growth and working of a democracy The State is now left to devise a ratio other than the ratio of 21 and cause a variation It cannot come to that ratio again This appears to us an undesirable situation It must be left to the State to get at it again Though obeying the mandamus of the High Court the State must be free to arrive at the original ratio of 21 On some basis the Governor of the State appears to have legislated on the subject It was on the writ petitioner s now respondents to lay data before the High Court and bear the onus to show that the legislative measure was unfair and arbitrary violative of Article 14 of the Constitution As said before no such data appears to have been placed before the High Court On these circumstances we are left with no option but to upset the judgment of the High Court and remand the matter back to it for reconsideration In doing so we may set at rest the controversy regarding difference of length of qualifying service from both sources The controversy does not survive in view of Roop Chand Adlakha Ors vs Delhi Development Authority Ors 1989 Supp I SCC 116 The High Court need not advert now to the disparity in length of qualifying service from the channels of promotion In the meantime however status quo needs to be preserved The substituted Service Rules of 1982 shall continue to operate till the decision of the High Court and the promotions as before shall continue subject to the result of the judgment of the High Court In these terms we allow the appeal and set aside the judgment The High Court may pass appropriate orders afresh after permitting the parties to amend their pleadings if necessary and putting the onus on the writ petitioners to prove unfairness in the 1978 Rules or violation of Article 14 of the Constitution Since it is an old matter we request the High Court to dispose it of as quickly as possible preferably within six months No Costs VPR Appeal allowed

For election to the Himachal Pradesh Legislative Assembly from 60 Chachiot Assembly Constituency held during February 1990 fifteen persons including the appellant and one Karam Singh filed nomination papers At the time of scrutiny an objection was raised against the nomination of Karam Singh on the ground that he was holding the office of Chairman Himachal Pradesh Khadi and village Industries Board which is an office of porfit within the meaning of Article 191 1 a of the Constitution and was therefore disqualified for being chosen as a member of the legislative Assembly The Returning Officer upheld the objection and rejected the nomination of Karam Singh The appellant was declared elected to the Legislative Assembly from the said Constituency His election was challenged by the Respondents by filing election petitions in the High Court of Himachal Pradesh The High Court found that the said rejection of nomination of Karam Singh was improper because on the date of scrutiny Karam Singh was not holding an office of profit and for that reason the election of the appellant was set aside The appellant herein filed the present appeals under section 116 A of the Representation of the People Act challenging the judgment of the High Court of Himachal Pradesh 251 During the pendency of the appeals the Himachal Pradesh Legislative Assembly was dissolved After considering the appeals on merits the Court which dismissing the appeals HELD 1 Inspite of the dissolution of the Himachal Pradesh Legislative Assembly the question arising for consideration cannot be said to have become academic because the invalidation of the election of the appellant may give rise to the liability to refund the allowances received by the Appellant 253G 255 B Loknath Padhan vs Birendra Kumar Sahu distinguished 253G 201 Resignation means the spontaneous relinquishment of one s own right and in relation to an office it cannotes the act of giving up or relinquishing the office The act of relinquishment may be unilateral or bilateral depending on the return of the office and the conditions governing it 260F 202If the act of relinquishment is of unilateral character it comes into effect when such act indicating the intention to relinquish the office is communicated to competent authority The authority to whom the act of relinquishment is communicated is not required to take any action and the relinquishment takes effect from the date of such communication where the resignation is intended to operate in praesenti 260G 203In cases where the act of relinquishment is of a bilateral character the communication of the intention to relinquish by itself would not be sufficient to result in relinquishment of the office and some action is required to be taken on such communication of the intention to relinquish eg acceptance of the said request to relinquish the office and in such a case the relinquishment does not become effective or operative till such action is taken 260H261A B 301 From the provision of Section 7 of the HP Khadi and Village Industries Board Act 1966 the Act it would appear that the act of relinquishment of the office of Chairman of the HP Khadi and Village Industries Board the Board is unilateral in character and the resignation from the said office takes effect when it is communicated without any 252 further action being required to be taken on the same Since the Chairman of the Board is nominated by the Government of Himachal Pradesh under Section 42 of the Act resignation has also to be communicated to the Government of Himachal Pradesh ie the Head of the Department dealing with the Board and once it is so communicated it takes effect from the date of such communication if the resignation is in praesenti or from the date indicated therein if it is prospective in nature to be operative from a future date 263G H 264A B 302The resignation of Karam Singh as Chairman of the Board was not required to be accepted by the Government of Himachal Pradesh It became effective on January 31 1990 when the letter of resignation was received by the Financial Commissioner cum Secretary Industries to the Government of Himachal Pradesh who was the Head of the Department dealing with the Board and to whom it was addressed 265D 303Since there is no requirement in the Act that the resignation of the Chairman of the Board should be notified in the Official Gazette as in the case of a member of the Board it cannot be said that the resignation of Karam Singh did not take effect till it was notified in the Official Gazette vide notification dated February 12 1990 265E Central Inland Water Transport Corporation Limited and Another vs Brojo Nath Ganguly and Anr JK Cotton Spinning and Weaving Mills Company Ltd vs State of UP Others Lala Ram vs Gauri Shanker 1981 All Law 1982 Raj Kumar vs Union of India 1968 SCR 857 Union of India vs Shri Gopal Chandra Misra Ors at p 21 and Glossop vs Glossop Halsburys Law of England 4th Ed Vol 7 p 316 para 536 relied on 260D G 261G 262G

Appeal Nos3465 69 of 1988 From the Judgment and Order dated 26101987 of the Punjab and Haryana High Court in CWP Nos 755 5141 365987 313888 357 Shanti Bhushan and Prem Malhotra for the Appellants Ms Nisha Bagchi for Ms Indu Malhotra US Chowdhary and Ravindra Bana for the Respondents Bhal Singh Malik and SM Hooda for the Intervenor The Judgment of the Court was delivered by BP JEEVAN REDDY J This batch of appeals is preferred against a common judgment of Punjab an Haryana High Court dismissing a batch of six writ petitions There are three wingsbranches in the Public Works Department of the Government of Haryana viz Irrigation Roads and Buildings and Public Health We are concerned herein with the Irrigation branch The Engineering service in the Irrigation branch comprises both class I and class II services Recruitment to and conditions of service of class I are governed by the Haryana Service of Engineers Class I PWD Irrigation Branch Rules 1964 whereas recruitment to and conditions of service of class 11 is governed by Haryana Service of Engineers Class 11 PWD Irrigation Branch Rules 1970 The lowest category in class I is that of Assistant Executive Engineers Above it is the category of Executive Engineers and above it Superintending Engineers Recruitment to the category of Assistant Executive Engineers is only by direct recruitment Recruitment to the category of Executive Engineers is a by direct recruitment b by transfer of an officer already in class I service of the Government of India or of a State Government and c by promotion from class 11 service Sub rule 2 of Rule 5 of the class I Rules says recruitment to the service shall be so regulated that the number of posts filled by promotion from class 11 service shall not exceed 75 of the number of posts in the service excluding the posts of Assistant Executive Engineers for the first 10 years from the date of commencement of these Rules and thereafter shall not exceed 50 of the number of posts in the service excluding the post of Assistant Executive Engineers The proviso to this sub rule however says that in case an adequate number of Assistant Executive Engineers who are eligible and considered fit for promotion are not available the actual percentage of officers promoted from class 11 service may be larger than 75 or 50 as the case may be In other words after the year 1974 the share of class 11 officers in the promotion quota to the category 358 of Executive Engineers categroy shall not exceed 50 the balance being allocated to the Assistant Executive Engineers who are also entitled to be promoted to the categroy of Executive Engineers But in case adequate number of Executive Engineers are not available the said ceiling can be exceeded Though the Assistant Executive Engineers are in class I and Assistant Engineers are in Class II both these categories discharge similar functions duties and responsibilities Members of both these categories are posted as Sub Divisional OfficersSub Divisional Engieers Both are eligible for promotion to the category of Executive Engineers as stated above but while the cadre strength of Assistant Engineers is very large the cadre strength of Assistant Executive Engineers is quite small with the consequence that in the matter of promotion to the category of Executive Engineers the Assistant Executive Engineers enjoy a marked advantage in view of the inter se quota prescribed by sub rule 2 of Rule 5 The Assistant Executive Engineers get promoted far sooner than the Assistant Engineers The cadre strength of Assistant Executive Engineers is stated to be 49 While the cadre strength of Assistant Engineers is not stated before us it is admittedly far larger In the year 1985 the Haryana Public Service Commission issued a notification stating that a combined competitive examination for recruitment to the post of Assistant Executive Engineers C in the PWD will be held by the Haryana Public Service Commission in AugustSeptember 1985 in accordance with the rules of Haryana PWD Irrigation BR and Public Health Branches as amended from time to time Then followed the table of particulars which must be noticed Reserved Reserved Reserved Name Of Post No Of For Scof For Bc Post For exhibit Haryana Haryana Service 1 2 3 4 5 i Haryana Service of Engineers 15 4 2 1 Class I Junior Sca les in PWD Public Health Branch 359 ii Haryana Service of 8 2 1 enginners Class I Enginee rs Class I Junior Scales in PWD B R Br iiiHaryana Service of Engineers Class I Junior Scale posts in the PWD Irrigation Branch are also likely to be filled from the suitable candidates from this very advertisement after the receipt of demand from the Government The number of posts given against each category is liable to variation Three posts two for SCof Haryana and One BC of Haryana in PWD B R Branch are reserved failing with other shall be considered Seven posts four for SC of Haryana two for BC of Haryana and one for Ex Servicemen in PWD Public Health Branch are reserved failing whom others will be considered It is significant to notice the wording of item iii in the table It is clear therefrom that the Public Service Commission had notified the vacancies in the category of Assistant Executive Engineers referred in the Rules and in the notification as Engineers class I Junior Scale even without a requisition from the Government The Commission by stating that posts in the said category are also likely to be filled from the suitable candidates from this very advertisement after the receipt of demand from the Govern ment had made it known to the candidates of the absence of authority Admittedly no such demand or requisition was ever received by the Government at any time after the issuance of the said notification It is equally relevant to point out that under the notification applications for selection to the category of Assistant Executive Engineers in all the three wings of the PWD were called for The eligibility criteria and the qualifications required for appointment to the said category is stated to be indentical in all the three wings though they are governed by different sets of rules It is also stated before us that no separate applications were necessary and that one could apply for appointment in all or any of the three wings indicating his choice and subject to his fulfilling the prescribed qualifications In response to the notification aforesaid several Engineers including 360 the appellants herein applied A written test was conducted followed by an oral interview On the basis of the marks obtained in the written test and the oral interview certain persons were selected for Public Health and Buildings Roads wings No selections were made for the Irrigation wing evidently for the reason that even by the date of finalisation of selections no requisition or demand had come from the Government It is only then that the appellants approached the Punjab and Haryana High Court with a batch of writ petitions praying for the issuance of an appropriate writ order or direction to the respondents Government of Haryana and the Haryana Public Service Com mission to fill up 44 vacancies of Assistant Executive Engineers and others falling to the quota of direct recruits from amongst the applicants who had applied in pursuance of the advertisement They asked for a further direction to the State of Haryana to send requisition to the Respondent Commission to fill up all the vacancies in the Class I service which are meant for direct recruits forthwith and to make appointment to the class I service by the method of direct recruits as required by the Rules The appellants challenged the method of selection followed by the Commission as also the refusalfailure of the Government to fill up the vacancies in the category of Assistant Executive Engineers The writ petitions were opposed by the Public Service Commission as also by the State Government The High Court dismissed the writ petitions rejecting the several contentions urged by the appellants In this appeal Sri Shanti Bhushan the learned counsel for the appellants urged the following contentions 1 The cadre strength of Assistant Executive Engineers in the Irrigation wing is 49 As against the said strength there were only 5 persons holding the posts which means the vacancies are 44 in number There has been no recruitment to this category since 1979 In that year the Government had sent a requisition for 22 posts but only 8 were selected by the Commission From out of these eight only five were appointed to the category In the year 1983 the Government sent a requisition to the Commission for 23 posts but none were selected or appointed It is in this situation that the notification issued by the Commission in the year 1985 envisaged a selection to the category of Assistant Executive Engineers in the Irrigation Branch as well The Commission expected that in view of the vacancies earlier notified the Government would be sending a requisition and with 361 a view to save time and effort it included the vacancies in Irrigation wing as well in the Notification which pertained to the vacancies in the very same category in the other two wings of the PWD for which requisition was received The Government acted arbitrarily and unreasonably in no sending the requisition inspite of the fact that 44 vacancies have been existing in this category in Irrigation Branch since a long number of years This refusal to fill up the said vacancies is mala fide and is designed to help and promote the interest of class II officers Though according to the Rules the number of promotees from class 11 in the category of Executive Engineers should not exceed 50 the fact is that practically all the promotion posts in the category of Executive Engineers are held by erstwhile class II officers for the reason that the category of Assistant Executive Engineers in this branch is being kept practically empty When the statutory rules have created a particular category and a cadre strength is also fixed therefor and more particularly when a quota is reserved for them in the channel of promotion to the category of Executivie Engineers it is not open to the Government to nullify the spirit and object behind the Rules by refusing to make appointment to the said category If these 44 posts are filled up many of the appellants if not all are likely to be selected and appointed 2 The procedure adopted by the Haryana Public Service Commission is contrary to statutory Rules Whereas the Rules say that a candidate obtaining 50 marks in the written test is entitled to be called for viva voce the Commission has arbitrarily prescribed a threshold of 65 which it had no jurisdiction to do As a result of the said arbitrary stipultion several of the appellants have been denied the opportunity of selection The Commission must now be directed to make selection afresh for all the three wingsbranches in the Public Works Department With a view to clear the ground it would be appropriate to deal with the second contention first It is based upon the proviso to sub rule 2 of Rule 7 of the 1964 Rules Rule 7 deals with direct appointment For the sake of convenience we may set out sub rules 1 and 2 of Rule 7 DIRECT APPOINTMENT 1 A Candidate for direct appointment shall not be less than 20 years and more than 25 years on age of or before the first day of August next precedin g the last date of submission of applications to the commission 362 Provided that a in the case of candidates who are displaced persons and in whose case the age limit for admission to Engineering College had been relaxed and in the case of candidates belonging to the Scheduled Castes Scheduled Tribes and other backward classes the upper age limit shall be such as may be fixed by the Government from time to time b in the case of candidates possessing the requisite qualifications who are already in the service of the State Government the upper age limit shall be 30 years 2 The selection of candidates including those belonging to Scheduled Castes Scheduled Tribes or Backward Classes shall be made by the Commission after holding a competitive examination the syllabus for which shall be such as may be prescribed by the Government from time to time The Commission shall recommend the required number of candidates after arranging their names in the order of merit and indicating which out of them belong to Scheduled Castes Scheduled Tribes or Backward Classes Provided that a candidate shall not be considered qualified for appointment unless he obtains not less than forty per cent marks in each subject and also not less than fifty per cent marks in the aggregate and no candidate who does not obtain the qualifying marks shall be called for interview by the commission Provided further that where a vacancy has been reserved for a person belonging to Scheduled Castes Scheduled Tribes or Backward Classes who secures the highest marks in the aggregate and has qualified for an appointment shall be selected irrespective of his position with respect to the other candidates 363 A reading of the first proviso to Sub Rule 2 of Rule 7 shows that it prescribes a minimum percentage of marks in the written test hoth for appointment as well as for being called for interview viva voce It does not create a right in the candidate who has obtained the prescribed percentage of marks to be called for interview This is how a similar Rule has been understood by a Constitution Bench of this Court in Ashok Kumer Yadav vs State of Haryana AIR 1987 SC 454 Regulation 3 in the Appendix to the Haryana Civil Service Executive and other allied services read as follows 3 No candidate shall be eligible to appear in the viva voce test unless he obtains 45 per cent marks in the aggregate of all subjects including at least 33 per cent marks in each of the language papers in Hindi in Devanagri Script and Hindi Essay provided that if at any examination a sufficient number of candidates do no obtain 45 per cent marks in the aggregate the Commission may at their discretion lower this percentage to not below 40 per cent for the language papers remaining unchanged Construing the said Regulation the Court held it is clear on a plain natural construction of Regulation 3 that what is prescribes is merely a minimum qualification for eligibility to appear at the viva voce test Every can didate to be eligible for appearing at the viva voce test must obtain at least 45 per cent marks in the aggregate in the written examination But obtaining of minimum 45 per cent marks does not by itself entitle a candidate to insist that he should be called for the viva voce test all candidates who satisfy the minimum eligibility requirement It is open to the Harvana Public Service Commission to say that out of the candidates who satisfy the eligibility criterion of minimum 45 per cent marks in the written examination only a limited number of candidates at the top of the list shall be called for interview And this has necessarily to be done because otherwise the viva voce test would be reduced to a farce It is indeed difficult to see how a viva voce test for properly and satisfactorily measuring the personality of a candidate can be carried out if 364 over 1300 candidates are to be interviewed for recruitment to a service If a viva voce test is to be carried out in a thorough and scientific manner as it must be in order arrive at a fair and satisfactory evaluation of the personality of a candidate the interview must take anything between 10 to 30 minutes In view of this decision we do not think it necessary to deal wit the decisions cited by Sri Shanti Bhushan namely Umesh Chandra vs Union of India Nilima Shangla vs State of Haryana and PK Ramachandra Iyer Ors vs Union of India Ors Suffice it to say that neither of them lays down any principle contrary to the one quoted above from Ashok Kumar Yadav Coming to the first submission of Sri Shanti Bhushan the defence of the Government is to the following effect It is also admitted that cadre strength of Assistant Executive Engineer was fixed on 22182 and is 49 out of which 5 persons are in position However at present there is no vacant post of Assistant Executive Engineer in the Department The true facts are that during the year 197980 some major projects viz Drainage Projects Jawahar Lal Nehru Project and Linning etc under the World Bank Schemes were taken into hand and there was immediate requirements of technical staff For this purpose and to take up the time bound works 212 Assistant Engineers were recruited on adhoc basis and 178 Sub Divisional Officers were promoted from Junior EngineersDraftsmen etc on adhoc basis to meet the immediate requirement during the aforesaid period till their replacement by the joining of regular Assistant Engineers through Haryana Public Service Commission The Haryana Public Service Commission recommended 176 number of Assistant Engineers in December 1981 for regular appointment against the posts of those who were appointed promoted as Assistant EngineerSub Divisional Officers on adhoc basis They were given offer of appointment on 2911982On joining of regular Assistant Engineers the 365 services of about 45 adhoc Assistant Engineers were terminated by the Government The adhoc Assistant Engineers whose services were terminated by the Government filed Civil Writ Petition No 152989 Amarjeet Singh and others vs State of Haryana and other writs involving the same cause of action challenging their termination orders Upon regular hearing the above Civil Writ Petition the Punjab and Haryana High Court Hon ble Justice Mr IS Tiwana in its orders dated 3984 decided the matter in favour of the adhoc Assistant Engineers recruited during the year 1980 Thus the services of adhoc Assistant Engineers could not be terminated and they continued to hold the posts of Assistant Engineers till date However Government have filed Letter Patent Appeal No186 90 of 1985 and 374 381 of 1985Amarjeet Singh etc vs State and the same is pending for decision in the Hon ble Punjab and Haryana High Court Similarly the Sub Divisional Officers who are promoted on adhoc basis in the year 1979 80 in excess of their quota could not be reverted by the Government for want of finalisation of Ranking List for the purpose of promotion to the post of Sub Divional Officers in pursuance of the directio n given by the Hon ble Punjab and Haryana High Court in Civil Writ Petition No 5630 5631 of 1981 JP Gupta and Shri Krishan vs State 152476 ML Verma vs State and 448982 Shri RK Jain vs State The learned counsel appearing for the Government of Haryana explains that 176 Assistant Engineers selected by the Commission in December 1981 for regular appointment are in addition to 390 Officers 212 Assistant Engineers recruited on adhoc basis and 178 Sub Divisional Officers promoted from the category of Junior EngineersDraftsment etc on adhoc basis This statement is however disputed by learned counsel for the appellants Be that as it may the submission of the learned counsel for the Government of Haryana is this both the Assistant Engineers and Assistant Executive Engineers are posted as Sub Divisional OfficersSub Divisional Engineers There is no other posting available for them In the circumstances explained in the counter affidavit a large number of Assistant Engineers are in surplus over and above the cadre strength They have to be posted some 366 where and they can be posted only as Sub Divisional Officers Sub Divisional Engineers If Assistant Executive Engineers are also appointed as demanded by the appellants they will be in further surplus inasmuch as they too can be posted only as Sub Divisional OfficersSub Divisional Engineers and there are no posts available to post them The Government is finding it difficult to give postings to the already existing Assistant Engineers who have been recruitedpromoted on adhoc basis as stated above and who could not be ousted because of the orders from courts It is for this reason that the Government did not send requisition for filling up the 44 posts of Assistant Executive Engineers in Irrigation Branch The said decision is a bona fide decision actuated by relevant considerations There are absolutely no mala fides on the part of the Government in not filling up the said posts of Assistant Executive Engineers It is also brought to our notice that though a requisition was sent to the Commission in the year 1983 for 23 posts of Assistant Executive Engineers in the Irrigation Branch the Government had withdrawn the said requisition on May 20 1983 itself ie even before any selection could be made It was for this reason that no one was selected or appointed to the said category in that year Counsel submitted supported by the counsel for the Commission that in these circumstances the Commission was justified in not selecting anyone against the post of Assistant Executive Engineers in the Irrigation wing more particularly when the expectation of the Commission that the Government may send a requisition therefor did not materialise even by the date of finalisation of selections The question that arises in the above circumstances is whether the Government can be compelled to send a requisition to the Commission for the selecting Assistant Executive Engineers in respect of 44 vacant posts and if it can be so compelled would it be appropriate to direct that those posts shall be filled by the candidates who applied for and appeared at the selection held in the year 1985 The first thing to notice is that the Public Service Commission had no authority to include the vacancies in the Irrigation branch in the notification issued by it when the Government had not asked for it The requisition from the Government was to select Assistant Executive Engineers only for the other two wings viz Buildings and Roads and Public Health May be the Commission did so bona fide Even so the fact remains that none were selected against the vacancies in the Irrigation branch evidently because no demandrequisition ever arrived from the Government Merely because the 367 appellants appeared at such selection they did not get any right to compe either the commission or the Government to select and appoint them In deed it is not as if the appellants appeared only for the vacancies in Irrigation Branch It was a composite notification for all the three wings The appellant do not say that they confined their applications to Irrigation wing alone Those selected for the other two wings had admittedly scored more marks at the selection Because the appellants could not get selected against the vacancies in the other wings they have turned their attention to Irrigation wing The relevance of their attack upon the selection procedure adopted by the Commission becomes clearer in this context Be that as it may the mere appearance at the selection does not clothe them with the right to selection andor appointment This is the principle affirmed by this court in State of Haryana vs Subhash Chandra Marwaha and IJ Divakar vs Government of Andhra Pradesh AIR 1982 SC 1555 At the same time we are constrained to observe that where the Rules have created a particular category fixed its cadre strength and have also prescribed a quota for such category in the matter of promotion to the higher category the Government would not be justified in not making appointments to such category for over a decade unless there are very strong and good reasons therefor The Government would not be justified in nullifying though not in word but in spirit the Rules in this manner We are also not persuaded that the defence put forward by the Government in this case is acceptable There is no reason why the Government did not think it fit to make some adhoc appointments to the category of Assistant Executive Engineers when it was recruiting such a large number on adhoc basis to the category of Assistant Engineers The situation in which the Government finds itself today is really of its own making The problem is no doubt real The courts have to think twice before adding the numbers to the already over loaded service It is not so much a question of punishing the errant but one of what to do with the surplus personnel and the consequent unwarranted burden upon the public exchequer On balancing the contending rights and equities we are of the opinion that at least part of the cadre strength of Assistant Executive Engineers in the Irrigation branch should be filled up in the near future The question then arises whether the selection held in 1985 86 at which the appellants had appeard should be directed to be finalised We do not think so The situation is not similar to the one considered by this court in Divakar That was a case where the commission called for applica tions pursuant to the requisition from the Government held the interviews 368 and was about to finalise the select list that the Government withdrew the requisition In those circumstances this Court while holding that the candidates who appeared for the selection had no right to compel the commission or the Government to select and appoint them yet gave a direction in the interest of justice to finalise the selection process and forward the select Kg to the Government The situation in this case as already explained hereinbefore is totally different The only direction that can properly be made herein is to direct the Government to take steps for filling up the vacancies existing in the category of Assistant Executive Engineers in the Irrigation branch as early as possible Atleast half the vacancies therein should be filled within a period of one year from today Before concluding we must refer to certian letters relied upon by Sri Shanti Bhushan to justify the notification issued by the Commission He relied upon the letters of the Engineer in Chief dated 1681985 16 2051986 and another letter written in between the date of this letter is not given addressed to the Government of Haryana outing that while at the moment there was no vacancy of Assistant Executive Engineer there was a possibility of some vacancies arising on amount of retirement etc He there fore requested the Government to take steps to select persons therefor Firstly it may be noticed that the appointing authority for this category being the Government only the Government could send the requirsitiondemand to the commission and not the Engineer in Chief The aforesaid letters are merely in the nature of recommendation to the Government Secondly all the three letters are subsequent to the notification issued by the commission calling for applications These letters therefore do not justify the commission calling for applications in respect of vacancies in the Irrigation branch For the above reasons the appeals are allowed partly A direction shall issue to the Government of Haryana to take steps for filling up the vacancies in the category of Assistant Executive Engineers in Irrigation branch of PWD as early A possible in accordance with law Atleast half the vacancies shall be filled up within am year from today It is further directed that if any of the candidates who had applied in pursuance of the 1985 Notification apply again and if they are found to have become age barred relaxation in the matter of age shall be granted to them so as to make them eligible for consideration No other relief co be granted In these appeals There shall be no order as to costs TNA Appeals allowed

The appellant and his wife went to sleep in the back varandah of their house on the fateful night of 25th26th July 1976 while the appellant s brother alongwith his wife and children went to sleep separately in their bed room in the same house The Police Control Room was informed over the telephone by a neighbour Sulekh Chand Jain at 455 AM that an incident had taken place in the house and on receiving the telephone message the SI made a record of it in the daily diary and passed on the information to the duty officer at the police station who deputed an ASI to proceed to the spot for investigation After reaching the spot the ASI informed the police station on telephone that a murder had taken place The information was recorded and the SHO immediately left for the spot alongwith SI The police party arrived at the spot at about 535 am and took charge of the investigation The appellant was present near the dead body and on interrogation the appellant informed the police party that his brother and family had retired for the night in their bed room at about 1000 PM and he alongwith his wife had slept in the back verandah and that when he got up at 345 AM he noticed that his wife had been murdered by somebody by strangulation while committing the theft of the gold chain eartops and golden bangles that she was wearing The crime team as well as the dog squad were summoned Both the 227 dogs of the dog squad were first let loose and after picking up the smell from the lock lying in the corner of the back courtyard and from the spot went to the room where the appellant was sitting and each of the dogs pointed towards him by turn That raised a suspicion against the appellant The SHO then asked the appellant to remove his shirt and found that the appellant had injuries in the nature of bruises etc on the front part of his body on the chest as well as on his back The appellant was thereafter taken for further interrogation to the police station and in the presence of the Sub Inspector PWI and PW2 he made a disclosure statement to the effect that he had concealed the golden chain and the bangles in his bathroom and in pursuance of the disclosure statement the appellant led the police party to the bathroom of his house and after removing the cover from the drain hole took out the golden chain and the bangles and handed them over to SHO The appellant was placed under arrest After the disclosure statement was made the case which was originally registered under Section 460 IPC was converted into one under Section 302 read with section 203 IPC After completion of the investigation the challan was filed against the appellant and he was tried for offences under Section 302203 IPC in the Court of the Additional Sessions Judge The prosecution sought to establish the case against the appellant on the basis of circumstantial evidence there being no eye witness of the occurrence The circumstances set up by the prosecution were i information to the police at 455 AM given by a neighbour and not the appellant ii that information that a murder had taken place was not given but intimating the happening of an incident iii The accused having slept at night in the verandah with tile deceased after having locked the collapsable door of the verandah from inside iv The deceased and accused were last seen together v The dogs of the dog squad having pointed out to the accused after picking up scent from the lock vi The ornaments which were on the person of the deceased while she was sleeping and found missing when she was discovered dead were recovered from the drain hole of the bath room attached to the bed room of the accused in consequence of and in pur suance to the disclosure statement made by the accused vii injuries found on the person of the accused in the nature of abrasions contusions and viii the accused having given false information to the police by means of his statement Ext 228 The Sessions Judge after carefully analysing the aforesaid circumstances held that the prosecution has entirely failed to prove any of the circumstances set up against the accused much less to establish the chain of circumstances so as to bring out a nexus between the crime and the accused and acquitted the appellant for the offences under Section 302203 IPC The State appealed to the High Court and a Division Bench reveresed the order of acquittal of the appellant The High Court held that the circumstances formed a chain and the sequences were so complete by themselves that one was left in no manner of doubt that the appellant alone had committed the crime The appeal was allowed the order of acquittal was set aside and the appellant was sentenced to undergo rigorous imprisonment for life under Section 302 IPC and also to undergo rigorous imprisonment for a period of one year under Section 203 IPC In the appeal to this Court it was contended on behalf of the appellant that the approach of the High Court was totally erroneous and that a well considered and well reasoned judgment of the Trial Court was upset by the High Court by drawing inferences which were not available from the record and by ignoring material discrepancies and infirmities in the prosecution evidence which not only did not establish various circumstances but which also showed that the chain of circumstantial evidence was wholly incomplete It was further contended that the appellant had been roped in on the basis of misguided suspicion and that the circumstances relied upon by the prosecution were not exclude the hypothesis other than that of the guilt of the appellant The appeal was contested by the State submitting that some of the circumstances like the pointing out of the appellant by the dogs of the Dog Squad the disclosure statement and the recovery of ornaments as a consequence thereof and the presence of injuries on the person of appellant were of such a conclusive and clinching nature that they left no doubt that the appellant had committed the crime and this was fortified when the appellant had made the attempt to mislead the investigating officer by giving a false version with a view to screen himself Allowing the appeal and setting aside the judgment of the High Court convicting the appellant this Court HELD 1 The High Court did not properly appreciate the prosecu 229 tion evidence while reversing the well considered judgment of the Sessions Judge On independent appraisal of the evidence the prosecution evidence relating to the disclosure statement and the recovery of ornaments is not only discrepent and contradictory but also suffers from glaring infirmities and improbabilities rendering it unsafe to rely upon the same 244H 245B 2 The Sessions Judge was perfectly justified in acquitting the appellant of all the charges and the reasoning given and the findings recorded are sound cogent and reasonable The High Court was not justified to set aside those findings on surmises and conjectures The finding of guilt recorded against the appellant by the High Court is not sustainable in law and the prosecution has not established the case against the appellant beyond a reasonable doubt 249B 3a In a case based on circumstantial evidence motive assumes pertinent significance as existence of the motive is an enlightening factor in a process of presumptive reasoning in such a case The absence of motive however puts the court on its guard to scrutinise the circumstances more carefully to ensure that suspicion and conjecture do not take place of legal proof In a case based on circumstantial evidence the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and those circumstances must be conclusive in nature Moreover the established facts should be consistent only with the hypothesis of the guilt of the accused alone and totally inconsistent with his innocence 238E F 4 No motive has been established by the prosecution for the appellant to commit the murder of his wife and the evidence of Tara Chand father of the deceased as well as the sister of the deceased and the tenants living in the same house disclose that the relations between the husband and wife were cordial 238E 5 The circumstance of the disclosure statement and the consequent recovery pursuant thereto of the ornaments belonging to the deceased is of such an incriminating nature that if found established by reliable and trustworthy evidence it would go a long way to furnish proof of the guilt of the appellant and connect him with the crime and if the evidence in 230 support of that circumstance is found to be not reliable the entire chain of circumstantial evidence will snap so badly as to affect the credibility of the prosecution case as a whole 238G H 6 According to the prosecution after the appellant had been taken to the police station by the investigating officer he was interrogated after being placed under arrest He voluntarily made a disclosure statement exhibit The disclosure statement was recorded by the SHO and has been attested by Kuldip Kaul PWI SI Dalip singh PW6 and Harnaik Singh PW2 Pursuant to the disclosure statement the appellant is alleged to have led the police party to the recovery of the ornaments from a drain hole in his bathroom The recovery memo EXPF was prepared at the spot and was attested by PW6 PWl and PW2 besides the Investigating Officer 239A B 7 According to the appellant however he had made no disclosure statement nor led the police party to the recovery of the ornaments as alleged and according to the defence version the missing ornaments had in fact been recovered by the police party around 11 AM during search from the service lane from underneath a slab near the boundary wall and at that time the appellant and Jagminder Dass Jain were also present This defence version is supported by the evidence of DW2 Tara Chand father of the deceased 242D E 8 The Sessions Judge carefully considered the evidence led by the prosecution with regard to the disclosure statement and the recovery of ornaments It was found that the evidence of Harnaik Singh PW2 who according to DW11 Sunder Lal constable of police station Defence Colony had been earlier also cited as a witness for the prosecution in a case investigated by Harmit Singh the then Sub Inspector of police and the present Investigation Officer was not reliable and that the Investigating Officer had not told the truth when he had deposed that he did not know Harnaik Singh earlier The Sessions Judge also found the evidence of PW1 Kuldip Kaul as not reliable or trustworthy and disbelieved his testimony by giving cogent reasons after properly appreciating the evidence led by the prosecution The defence version with regard to the recovery found as more probable and it was opined that the investigating officer had created false cluses and fabricated false evidence 243H 244A B D 9 The High Court on the other hand did not deal with the various discrepancies and contradictions appearing in the prosecution evidence 231 relating to the making of the disclosure statement and the recovery of the ornaments but place reliance on the testimony of Kuldip Kaul PWl and Harnaik Singh PW2 to hold that the disclosure statement and the recovery had been made in the manner suggested by the prosecution 244G 10 There is contradiction between the evidence of Kuldip Kaul PWl and the IO as to the place where Kuldip Kaul signed the recovery memo According to the IO it was signed at the spot while according to Kuldip Kaul PW1 he had returned to the police station and there signed the recovery memo After carefully analysing the evidence it is found that Kuldip Kaul PWl was a convenient witness and his evidence does not appear to be trustworthy 245B C 11 As regards the recovery of ornaments also there is a very serious infirmity which emerges from the testimony of Harnaik Singh PW2 Contrary to what the IO and the other witnesses stated Harnaik Singh PW2 deposed that the ornaments were taken out by the Sardarji IO from the drain hole and not by the appellant This probabilises the defence version that the ornaments had been recovered during the search and were with the IO when the ritual of the recovery under Section 27 of the Evidence Act was performed The contradictions in the evidence of the IO and SI Dalip Singh PW6 as to who had weight the ornaments after their alleged recovery also casts doubt on the correctness of the prosecution story and the bonafides of the investigation 245G H 12 Having regard to the serious discrepancies contradictions and the attempt of the Investigating Officer to create false clues and fabricate false evidence the Sessions Judge was perfectly justified in rejecting the prosecution evidence relating to the disclosure statement exhibit PC and the consequent recovery of the ornaments 247C 13 The prosecution has failed to establish that the appellant did make the disclosure statement as alleged by the prosecution or led to the recovery of the ornaments belonging to the deceased in the manner suggested by the prosecution This piece of circumstantial evidence therefore has not at all been established much less conclusively 247D 14 Though with the ruling out of the circumstance relating to the recovery of the ornaments as not having been established conclusively the chain of the circumstantial evidence snaps badly there are some other 232 circumstances also in the prosecution case which militate against its correctness Admittedly the nail clippings of the nails of the deceased had been taken by the police Were was also recovery of the hair from near the cot where the dead body was lying and the removal of the hair from the scalp of the appellant by the IO for the purpose of their comparison The report of the chemical examiner has not connected the hair recovered from the cot with those of the appellant There is no material on the record either to show that the nail clipping had any blood which could have tallied with the blood group of the appellant Thus both the nail clippings and the hair have failed to connect the appellant with the crime 247F H 15 The possibility that the entire case was built up on suspicion after the dogs of the dog squad pointed towards the appellant connot be ruled out Since the appellant had slept in the verandah near the cot where the dead body of his wife was found had locked the collapsable door with the recovered lock before going to sleep and had himself been close to the dead body before the police came the picking up of the smell by the dogs and pointing towards the accused could not be said to be a circumstance which could exclude the possibility of guilt of any person other than that of the appellant or be compatible only with hypothesis of guilt of the appellant The pointing out by the dogs could as well lead to a misguided suspicion that the appellant had committed the crime 248E F 16 The explanation of the appellant regarding the injuries on his person as having been caused by the police is also quite plausible because according to the father of the deceased the sister of the deceased the tenants of the house and other neighbours who had reached the spot the appellant was wearing only a vest and the pyjama and no shirt and there were no marks of injuries on his body before he was taken to the police station The prosecution case regarding the presence of injuries on the person of the deceased also therefore is quite doubtful 248G H

Appeal No 3719 of 1991 From the Judgment and Order dated 391991 of the Andhra Pradesh High Court in Election Petition No 22 of 1990 PP Rao D Prakash Reddy and AVV Nair for the Appellant C Sitaramaiah B Rajeshwar Rao Vimal Dave Mrs Rani Chhabra NP for the Respondent The Judgment of the Court was delivered by BHARUCHA J This is an appeal under the provisions of the Representation of the People Act 1951 against the judgment and order of the High Court of Andhra Pradesh whereby the election of the appellant before us to the Andhra Pradesh Legislative Assembly from the Tanuku Assembly constituency was declared void and set aside in view of the finding that he had committed the corrupt practice proscribed by section 1233 of the Act Section 1233 inter alia states that the appeal by a candidate or his agent or by any other person with the consent of a candidate or his election agent to vote or refrain from voting for any person on the ground of his religion or the use of or appeal to 348 religious symbols for the furtherance of the prospects of the election of that candidate or for prejudicially affecting the election of any other candidate is a corrupt practice The respondent a candidate of the Telugu Desam Party secured the largest number of votes at the said election which was held on 22nd November 1989 The High Court found that during the election campaign posters depicting NT Rama Rao the leader of the Telugu Desam Party in the role of Lord Krishna blowing a conch shell had been used The offending poster bore at the top a sloka from the Bhagavad Gita which said roughly translated that the Lord would be born upon this earth in age after age to establish dharma or righteouness At its bottom the offending poster stated that the deceitful Congress which had sold out the country should be defeated It was the contention of the election petitioner before the High Court who was a voter in the Constituency that the offending posters had been exhibited by or at the behest of the successful candidate It was held by the High Court that it had no doubt that the offending poster was a religious symbol its implication being that NT Rama Rao who was an incarnation of Lord Krishna exhorted voters to defeat the deceitful Congress The High Court went on to consider whether the offending posters had been affixed by the successful candidate or his election agent or by any person with the consent of the successful candidate or his election agent It came to the conclusion that it was clear from the evidence that the respondent or his agent or other persons with his consent have used religious symbol for the furtherance of the prospects of the respondent or for prejudicially affecting the election of the Congress I candidate Accordingly the corrupt practice under section 1233 was found to have been established The High Court did not accept the case of the election petitioner in regard to the other corrupt practices that had been alleged Upon the basis of the finding in regard to the corrupt practice under section 1233 the High Court allowed the election petition declared the election of the successful candidate to be void and set it aside As aforestated the successful candidate is in appeal The election petition alleged that the respondent herein and with his consent and connivance his followers supporters and his party men and election agent had resorted to large scale display of wall posters and paintings on the walls of the picture of Lord Krishna The offending 349 posters which were described had been pasted on walls at important places in all villages and towns throughout the Constituency and also on the sides of vans and vehicles used for canvassing The election petition stated that particulars of some of the instances where inter alia the offending posters were exhibited were given in Schedule A thereto Schedule A gave various addresses whereat the offending posters had been pasted Photographs would it was stated be produced in support of the allegation and four witnesses would depose thereto namely Penicherla Rama Krishna Raju Dukka Suri Appa Rao Allabani Venkanna Venni Subba Rao The schedule also referred to oil painting and posters on the publicity vans at three locations which would be established by photographs and by leading the evidence of Bollina Satvanarayana and Kudapa Akkanna In his written statement the successful candidate denied the allegations afore stated The election petitioner filed documents along with the election petition which included the affidavits of the four first named persons The affidavit of Dukkasuri Appa Rao is representative of the three affidavits of those who are alleged to have pasted the offending posters The fourth affidavit is of the photographer The affidavit of Dukkasuri Appa Rao stated that the successful candidate had assigned to him the work of pasting wall posters and he had been paid Rs 25 per day Among these wall posters there were a few photos showing Sri NT Rama Rao in the disguise of Lord Krishna Playing shanku The election petitioner examined Dukkasuri Appa Rao and Venne Subba Rao before the High Court He did not examine the third person who was alleged to have pasted the wall posters at the addresses mentioned in Schedule A to the petition The examination in chief of Dukkasuri Appa Rao and Venne Subba Rao is almost identical The cross examination of the former is more extensive It is therefore that we refer to his evidence Dukkasuri Appa Rao deposed that he was a labourer in Tanuku He and two others had pasted wall posters on behalf of the successful candidate They had affixed wall posters and door posters The posters had been given to them about 15 days prior to the election when they had gone to the Telugu Desam Party election office The successful candidate his election agent and some others were present there The successful candidate had 350 engaged Dukkasuri Appa Rao and two others to affix the posters on wages of Rs 25 per head They were given about 1500 wall posters and 5000 door posters The wall posters depicted NT Rama Rao in the role of Lord Krishna The wages had been paid daily Dukkasuri Appa Rao had retained with himself one poster because he had liked it and he had given it to the election petitioner about three months before the date of his deposition In cross examination Dukkasuri Appa Rao stated that he also did agricultural work He was not a member of the Telugu Desam Party He had not been called to the election office of that party either before or after the election while he had been working near a coffee hotel somebody whose name he did not know had come and called him to the Telugu Desam Party office The election petitioner had asked him in the Congress Party office whether he had any election posters He had replied that he had one and gave it to the election petitioner It was similar to the poster at exhibit A 2 the offending poster His affidavit had been taken by the election petitioner at Tanuku After having made that affidavit the election petitioner had asked for the poster and he had given it to him It must be stated here that no evidence was led by the election petitioner to show that the offending posters had been got printed by or on behalf of the successful candidate Learned counsel for the election petitioner drew our attention to the cross examination of the successful candidate wherein it had been stated that he had incurred the expenditure of Rs 4000 upon writing wall posters painting and other publicity and had also paid Rs 8000 to a printer These statements however were not followed up in further cross examination There is therefore no evidence to show that the offending posters were printed by or on behalf of the successful candidate There is no doubt in our mind that the offending poster is a religious symbol The depiction of anyone be it NT Rama Rao or any other person in the attire of Lord Krishna blowing a shanku and quoting the words from the Bhagavad Gita addressed by Lord Krishna to Arjuna that his incarnation would be born upon the earth in age after age to restore dharma is not only to a Hindu by religion but to every Indian symbolic of the Hindu religion The use by a candidate of such a symbol coupled with the printing upon it of words derogatory of a rival political party must lead to the conclusion that the religious symbol was used with a view to prejudicially affect the election of the candidate of the rival political party 351 The question therefore is is it established upon the record that the offending poster was used at the election by the successful candidate or his agent or by any other person with the consent of the successful candidate or his election agent As has been stated there is no evidence to show that the offending poster was printed by or at the behest of the successful candidate The successful candidate himself in his evidence denied that he had had the offending posters printed or pasted The evidence of Dukkasuri Appa Rao and Venne Subba Rao is in our view not satisfactory In the first place the averment in the election petition was that the offending posters had been pasted by the respondent herein who is a Telugu Desam party candidate and with his consent and connivance his followers supporters and his party men and election agent Both Dukkasuri Appa Rao and Venne Subba Rao stated in the witness box that they were not members of the Telugu Desam Party They were called to the Telugu Desam Party election office for the first time on the day on which they were engaged for a daily wage to paste the wall posters The averment in the election petition that the offending posters were pasted by followers supporters and party men of the successful candidate is therefore not established If the evidence of Dukkasuri Appa Rao and Venne Subba Rao was true the election petition would have stated that the successful candidate and his election agent had engaged Dukkasuri Appa Rao and Venne Subba Rao on daily wages to affix the offending posters Secondly the offending posters were not put to Dukkasuri Appa Rao and Venne Subba Rao in examination in chief and were not identified by them as being the posters that they had pasted Thirdly neither of these two witnesses identified the places at which they had pasted the offending posters It was not stated by them that they had pasted the posters at any of the addresses in Tanuku mentioned in Schedule A to the election petition The evidence of Dukkasuri Appa Rao is suspect also because he claimed to have retained one offending poster which he gave to the petitioner this is not borne out by the election petition or the affidavit made by him The standard of proof in an election petition is rigorous having regard to the quasi criminal nature of the proceeding We are not satisfied that upon the evidence before us the charge laid against the successful candidate under section 1233 has been established Learned counsel on behalf of the election petitioner drew our atten 352 tion to the statements made by the successful candidate s election agent in regard to a van used for canvassing He stated that the van toured the Constituency There were photographs of NT Rama Rao in his various film roles exhibited in the van He said that exhibit A 13 was a photograph which showed that a poster showing NT Rama Rao in the role of Krishna blowing a conch was affixed to publicity van but I have no personal knowledge about it The statement that the election agent had no personal knowledge in this behalf was not probed in further cross examination It is also not established that the poster shown by the photograph exhibit A 13 was what we have called the offending poster in that it not only showed NT Rama Rao in the role of Lord Krishna blowing a conch but also contained the afore mentioned sloka from the Bhagavad Gita and the statement that the Congress was a deceitful party which should be defeated So far as we can ascertain from the judgment under appeal the offending posters were produced only at exhibits A 2 and A 18 The evidence upon the record does not to our mind establish that the offending posters were used at the election by the successful candidate or his election agent or with their consent Having regard to our finding that the charge of corrupt practice under section 1233 has not been established we do not find it necessary to consider the argument that the election petition did not plead all necessary material facts and did not give all necessary particulars so that the election petition was liable to be dismissed in limine In the result the appeal is allowed and the election petition is dismissed The respondent shall pay to the appellant costs quantified at Rs 10000 GN Appeal allowed

The appellant State by resolution dated 1071972 trifurcated the services in the Electrical Engineering Branch of the Public Works Department into three cadres namely 1 Junior Engineers 2 Supervisors and 3 Over seers wef 151972 At the relevant time there was only one Overseer and he stood retired Therefore In substance it was a bifurcation between Junior Engineers and Supervisors the former being graduates and the latter being diploma holders In a writ petition before the High Court exercise of the State was challenged The High Court directed the State to provide for a criterion for promotion from the three independent cadres for working out the trifurcation In compliance of the order of the High Court the appellant adopted a Resolution dated 2691975 introducing a quota rule effective from May 1 1972 at the ratio of 21 for Junior Engineers and Supervisors respectively for promotion to the posts of Deputy Engineers The respondents challenged the trifurcation and also the quota rule in a writ petition before the High Court 384 The High Court struck down the ratio of 21 holding it to be unjustified as also the disparity in qualifying service from both the channels Hence this appeal by special leave by the State being aggrieved against a mandamus issued by the High Court not to impose the ratio of 21 while working out the quota rule As the appellant was unsuccessful in obtaining a stay of operation of the High Court s judgment it had to obey the mandate of the High Court and the ratio of 21 could not be enforced This Court on 18121980 ordered the Government to frame a fresh quota rule consistent with the High Court judgment for the purpose of making promotions during the pendency of the appeal and under Article 309 of the Constitution a Rule was framed Earlier the appellant had framed the Deputy Engineer Electrical Recruitment Rules 1978 under Article 309 of the Constitution which were not brought to the notice of the High Court nor the Rules 1978 were challenged Allowing this appeal this Court HELD101 The matter in the High Court proceeded on the as sumption that an executive action of the State was under challenge The necessary assumptions and presumptions well known to law and the placement of onuses went unnoticed In this background and facing the situation so arising the State Government issued a Notification on April 12 1982 by causing a substitution in the earlier Rules of 1978 by fixing the promotional ratio from both sources at 11 but subjected them to the result of the instant litigation emerging from this Court 387D E 102 The High Court judgment is silent as to the basis on which it was persuaded to strike down the ratio of 21 for Junior Engineers and Supervisors respectively The tenor of the judgment of the High Court does however suggest that the executive flexibility with which the Government works could not justify the fixation of the ratio of 21 The High Court could not and did not substitute what was the right ratio in the circumstances and left it to the Government to devise another ratio Had the factum of the legislation on the subject ie the Rules dated 471978 been brought to its notice perhaps the High Court s angle of vision would have been different 387F G 385 103 The State has no doubt compulsively carried out the mandate but has done so with reservation so as to meet the eventuality No such measure can ever be permanent that would hold good for all times to meet not only the present needs but also future exigencies as well Hands of the State cannot be so tied down Mat would be a step retrograde to the growth and working of a democracy 387H 388A 104 It was on the Writ petitioner s now respondents to lay data before the High Court and bear the onus to show that the legislative measure was unfair and arbitrary violative of Article 14 of the Constitution No such data appears to have been placed before the High Court 388B 105 On these circumstances the case is remanded to the High Court for reconsideration 388C Roop Chand Adlakha Om vs Delhi Development Authority Ors 1989 Supp I SCC 116 referred to 388D

ivil Appeal No 65 of 1956 Appeal from the judgment and order dated August 31 1954 of the Calcutta High Court in Income tax Ref No 57 of 1953 N C Chatterjee and B P Maheshwari for the appellant K N Rajagopala Sastri R H Dhebar and D Gupta for the respondent March 26 The Judgment of the Court was delivered by HIDAYATULLAH J Messrs Howrah Trading Company Ltd Calcutta hereinafter called the assessee obtained on April 28 1955 a certificate under section 66A2 of the Indian Income tax Act from the Calcutta High Court to appeal to this Court against the judgment dated August 31 1954 in Income tax Reference No 57 of 1953 The Divisional Bench Chakravarti C J and Lahiri J in the judgment under appeal merely followed their earlier judgment delivered the same day in Income tax Reference No 22 of 1953 since reported as Hindustan Investment Corporation vs Commissioner of Income tax 1 It is the latter judgment which gives the reasons for the decision The facts of the case have been stated with sufficient fulness yet briefly in the statement of the case submitted by the Income tax Appellate Tribunal Calcutta Bench and may be conveniently set out in its own words 1 57 450 The applicant had received sums of Rs 3831 Rs 6606 Rs 7954 and Rs 8304 in the four assessment years 1944 45 1945 46 1946 47 and 1947 48 as income from dividends The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies The Applicant s claim in these income tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant It was further claimed that this dividend income should be grossed up under section 162 and credit for the tax deducted should be allowed to the Applicant under section 185 The Income tax Officer did not accept this claim and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income tax Calcutta A Range and by the Appellate Tribunal The Tribunal however on being moved referred the following question to the High Court Whether in the facts and circumstances of this case the Applicant the assessee was entitled to have this dividend income grossed up under section 162 and claim credit for tax deducted at source under section 185 of the Income tax Act The High Court answered the question in the negative thus affirming the decisions of the Department and the Appellate Tribunal The assessee contends that the decision of the High Court is erroneous and that it is entitled to have the dividend income I grossed up under section 162 and also to claim credit for tax deducted at source under s185 of the Income tax Act The relevant sections are as follows 162 For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid credited or distributed or deemed to have been 451 paid credited or distributed to him and shall be increased to such amount as would if income tax but not super tax at the rate applicable to the total income of the company without taking into account any rebate allowed or additional income tax charged for the financial year in which the dividend is paid credited or distributed or deemed to have been paid credited or distributed were deducted therefrom be equal to the amount of the dividend proviso omitted 18 5 Any deduction made and paid to the account of the Central Government in accordance with the provisions of this section and any sum by which a dividend has been increased under sub section 2 of section 16 shall be treated as a payment of incometax or super tax on behalf of the shareholder and credit shall be given to him therefor on the production of the certificate furnished under section 20 in the assessment if any made for the following year under this Act proviso omitted 49B1 Where any dividend has been paid credited or distributed or is deemed to have been paid credited or distributed to any of the persons specified in section 3 who is a shareholder of a company which is assessed to income tax in the taxable territories or elsewhere such person shall if the dividend is included in his total income be deemed in respect of such dividend himself to have paid income tax exclusive of super tax of an amount equal to the sum by which the dividend has been increased under sub section 2 of section 16 It was contended in the High Court that inasmuch as section 162 referred to an I assessee the assessee company was entitled to have the dividend grossed up by the addition of income tax paid by the various companies at source and consequently to have the benefit of the credit allowed under the two remaining sections In the opinion of the High Court an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions The learned Judges of the High Court were of the opinion that the word shareholder in 452 s185 had the same signification as the word member used in the Indian Companies Act and that the assessee was not qualified to be considered as a shareholder even though by a blank transfer it had purchased the relevant shares In our opinion the High Court was right in its conclusion A company when it pays income tax does not do so on behalf of the shareholders It is itself chargeable under the Act In Cull vs Inland Revenue Commissioners 1 Lord Atkin stated the law which in substance is also the law in our country thus My Lords it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits and that it pays tax in discharge of its own liability and not as agent for its shareholders At one time it was thought that the company in paying tax paid on behalf of the shareholder but this theory is now exploded by decisions in this House and the position of the shareholders as to tax is as I have stated it When the company pays its own income tax and declares a dividend from the balance of its profits it deducts from such dividend a proportionate part of the amount of the tax paid by it This principle is explained in another English case and it is substantially also the law in this country In Inland Revenue Commissioners vs Blott 2 Viscount Cave stated the law in these words Plainly a company paying income tax on its profits does not pay it as agent for its shareholders It pays as a tax payer and if no dividend is declared the shareholders have no direct concern in the payment If a dividend is declared the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company and in that case the payment by the company operates in relief of the shareholder But no agency properly so called is involved The share holders however get the benefit of the payment of the tax by the company Though under 1 56 636 2 201 453 s162 of the Act their dividend is increased by a proportionate amount of tax paid by the company the payment of the tax by the company is deemed tinder sections 185 and 49B1 to be payment by the shareholders The rates of income tax applicable to the company are in most instances higher than the rates applicable to the individual shareholders and by this process of grossing up as it is commonly called the recipient of the dividend gets some benefit The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever But transfers of shares are common and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913 or by what are known as blank transfers In such blank transfers the name of the transferor is entered and the transfer deed signed by the transferor is handed over with the share scrip to the trans feree who if he so chooses completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share The company recognises no person except one whose name is on the register of members upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable Of course between the transferor and the transferee certain equities arise even on the execution and handing over of a blank transfer and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee These equities however do not touch the company and no claim by the transferee whose name is not in the register of members can be made against the company if the tranferor retains the money in his own hands and fails to pay it to him A glance at the scheme of the Indian Companies Act 1913 shows that the words member shareholder and holder of a share have been used interchangeably in that Act Indeed the opinion of most of the writers on the subject is also the same 454 Buckley on the Companies Act 12th Edition page 803 has pointed out that the right of a transferee is only to call upon the company to register his name and no more No rights arise till such registration takes place Section 216 of the Indian Companies Act 1913 defines share as share in the share capital of the company Section 5 deals with the mode of forming incorporated companies and in the case of companies limited by shares the liability of the members is limited to the amounts if any unpaid on the shares respectively held by them By section 18 Table A is made applicable to companies unless by the Articles of any company the terms of Table A have been excluded or modified Regulation 18 of Table A reads as follows The instrument of transfer of any share in the company shall be executed both by the transferor and transferee and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof The words holder of a share are really equal to the word shareholder and the expression holder of a share denotes in so far as the company is concerned only a person who as a shareholder has his name entered on the register of members A similar view of the Companies Clauses Consolidation Act 1845 was taken in Nanney vs Morgan1 The learned Lord Justices held that under section 15 of that Act the transferee bad not the benefit of a legal title till certain things were done which were indicated by Lopes LJ in the following passage Therefore the transferor until the delivery of the deed of transfer to the secretary is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder and in my opinion until the requisite formalities are complied with he continues the legal proprietor of the stock or shares subject to that proprietorship being divested which it may be at any moment by a compliance with the requisite formalities 1 356 455 The same position obtains in India though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made See Nagabushanam vs Ramachandra Rao 1 During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company equities exist between them but not between the transferee and the company The transferee can call upon the transferor to attend the meeting vote according to his directions sign documents in relation to the issuance of fresh capital call for emergent meetings and inter alia also compel the transferor to pay such dividend as he may have received See E D Sassoon Co Ltd vs Patch 2 approved in Mathalone vs Bombay Life Assurance Co Ltd 3 But these rights though they no doubt clothe the transferee with an equitable ownership are not sufficient to make the transferee a full owner since the legal interest vis a vis the company still outstands in the transferor so much so that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital which may be needed The cases in Black vs Homersham 4 or Wimbush In re Richards vs Wimbush 5 hardly advance the matter further than this The position therefore under the Indian Com panies Act 1913 is quite clear that the expression shareholder or holder of a share in so far as that Act is concerned denotes no other person except a member The question that arises in the present case is whether by reason of sections 162 and 185 the assessee who was a transferee on a blank transfer is entitled to the benefits of the grossing up of the dividend income Learned counsel for the assessee strenuously contends that the assessee being an owner in equity of the shares and thus also of the dividend is entitled to this benefit He refers to the use of the word I assessee in section 162 The Department on the 1 Mad 537 3 2 4 1878 79 L R 5 456 other hand says that the dividend can be increased under section 162 and credit allowed under section 185 if the assessee is a shareholder because the benefit of section 185 can go only to the shareholder i e a person with his name on the register of members and not to a person holding an equity against such shareholder The assessee contends that the word shareholder includes even a person who holds a share as a result of a blank transfer and does not necessarily mean a member of the company whose name is on the register of members Authorities on this point are not wanting and indeed in the judgment of the Calcutta High Court they have all been referred to They are all against the assessee See Shree Shakti Mills Ltd vs Commissioner of Income tax 1 Jaluram Bhikulal vs Commissioner of Income tax 2 Arvind N Mafatlal vs Incometax Officer 3 and Bikaner Trading Co vs Commissioner of Income tax 4 The question that falls for consideration is whether the meaning given to the expression shareholder used in section 185 of the Act by these cases is correct No valid reason exists why shareholder as used in section 185 should mean a person other than the one denoted by the same expression in the Indian Companies Act 1913 In In re Wala Wynaad Indian Gold Mining Company 5 Chitty J observed I use now myself the term which is common in the Courts I a shareholder that means the holder of the shares It is the common term used and only means the person who holds the shares by having his name on the register Learned counsel for the assessee cited a number of authorities in which the ownership of the dividend was in question and it was held that the transferee whose name was not registered was entitled to the dividend after transfer had been made These cases are Commissioners of Inland Revenue vs Sir John Oakley 6 Spence vs Commissioners of Inland Revenue 7 1 3 5 854 2 4 6 7 457 and others cited at page 367 in Multipar Syndicate Ltd vs Devitt 1 No one can doubt the correctness of the proposition in these cases but from an equitable right to compel the transferor to give up the dividend to the transferee to a claim to the dividend by him as a shareholder against the company is a wide jump In so far as the company is concerned it does not even issue the certificate under section 20 of the Income tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises because his name is borne on its books Section 20 lays down The principal officer of every company shall at the time of distribution of dividends furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income tax on the profits which are being distributed and specifying such other particulars as may be prescribed The meaning of section 20 as also of section 185 is clear if they are read with section 19A under which information regarding dividends has to be supplied by the company when demanded by the Income tax Officer It lays down The principal officer of every company shall on or before the 15th day of June in each year furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses as entered in the register of shareholders maintained by the company of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been distributed during the preceding year and of the amount so distributed to each such shareholder Italics supplied Section 19A makes it clear if any doubt existed that by the term shareholder is meant the person whose name and address are entered in the register of shareholders maintained by the company There is but one register maintained by the Company There 1 58 458 is no separate register of shareholders such as the assessee claims to be but only a register of members This takes us immediately to the register of members and demonstrates that even for the purpose of the Indian Income tax Act the words member and shareholder can be read as synonymous The words of section 185 must accordingly be read in the light in which the word shareholder has been used in the subsequent sections and read in that manner the present assessee notwithstanding the equitable right to the dividend was not entitled to be regarded as a shareholder for the purpose of section 185 of the Act That benefit can only go to the person who both in law and in equity is to be regarded as the owner of the shares and between whom and the company exists the bond of membership and ownership of a share in the share capital of the company In view of this we are satisfied that the answer given by the Calcutta High Court on the question posed by the Tribunal was correct The appeal fails and is dismissed with costs Appeal dismissed

The Public Works Department of Government of Haryana consists of three wings viz Irrigation Roads and Buildings and The Engineering Service in the Irrigation Branch comprises both Class I service consisting of Assistant Executive Engineers Executive Engineers and Superintending Engineers and Class II service including Assistant Engineers While the Assistant Executive Engineers are recruited by direct recruitment only the Executive Engineers are recruited by i direct recruitment ii by transfer iii by promotion from Class II service The cadre strength of Assistant Engineers fixed under tie Rules is very large 354 as compared to the cadre strength of Assistant Executive Engineers For the purposes of promotion to Executive Engineers both Assistant Executive Engineers and Assistant Engineers are eligible for which inter se quota is fixed under the Rules The Haryana Public Service Commission issued a notification in 1985 inviting applications for selection to the posts of Assistant Executive Engineers for all the three wings of the PWD Although the requisition from the Government was to select Assistant Executive Engineers only for two wings viz Public Health and Buildings and Roads yet the Commission notified the vacancies with respect to Irrigation Branch also stating that posts in the said category are also likely to be filled from the suitable candidates from this very advertisement after the receipt of demand from the Government On the basis of written test and interview selections were made for Public Health and Buildings and Roads wings but no selections were made for the Irrigation wing because even by the date of finalisation of selections no requisition or demand had come from the Government The appellants who were not selected filed writ petitions in the Punjab and Haryana High Court for a direction to respondents to fill up vacancies of Assistant Executive Engineers and others falling to the quota of direct recruits from amongst the applicants who had applied in pursuance to the advertisement and for a further direction to the State of Haryana to send requisition to the Commission to fill up all vacancies which are meant for direct recruits The High Court dimissed all the petitions In appeals to this Court it was contended on behalf of the appellants that 1 the Government acted arbitrarily in not sending the requisition inspite of the fact that vacancies in Irrigation Branch existed for a number of years 2 when the rules created a particular category and the cadre strength was also fixed therefor and more particularly when a quota was reserved for them in the channel of promotion to the category of Executive Engineers it was not open to the Government to nullify the spirit and object behind the Rules by refusing to make appointment to the said category 3 the procedure adopted by the Haryana Public Service Com mission was contrary to Rules because under the Rules a candidate obtaining 50 per cent marks in the written test is entitled to be called for viva voce but the Commission arbitrarily prescribed a threshold of 65 per 355 cent which resulted in denial of opportunity of selection to the appellants The stand taken by the Government of Haryana was that the decision not to send requisition for filling up the vacant posts of Assistant Executive Engineers in Irrigation Branch was bona fide and actuated by relevant considerations because a large number of Assistant Engineers who can be posted only as Sub Divisional OfficersSub Divisional En gineers are in surplus over and above the cadre strength and if the Assistant Executive Engineers are also appointed as demanded by the appellants they will be in further surplus inasmuch as they too can be posted only as Sub Divisional OfficersSub Divisional Engineers Allowing the appeals in part this Court HELD1 The Public service commission had no authority to include the vacancies in the Irrigation Branch in the notification issued by it when the Government had not asked for it May be the Commission did so bona fide Even so the fact remains that none were selected against the vacancies in the Irrigation Branch evidently because no demandrequisition ever arrived from the Government Indeed it is not as if the appellants appeared only for the vacancies in Irrigation Branch It was a composite notification for all the three wings The appellants do not say that they confined their applications to Irrigation wing alone nose selected for the other two wings had admittedly scored more marks at the selection Therefore the mere appearance at the selection does not clothe them with the right to selection or appointment 366G H 367A C State of Haryana vs Subhash Chandra Marwaha 1974 3 SCC 220 and LJ Divakar vs Government of Andhra Pradesh AIR relied on Where the Rules have created a particular category fixed its cadre strength and have also prescribed a quota for such categroy in the matter of promotion to the higher category the Government would not be justified in not making appointments to such category for over a decade unless there are very strong and good reasons therefor The Government would not be justified in nullifying though not in word but in spirit the Rules in this manner 367C D 21 There is no reason why the Government did not think it fit to 356 make some ad hoc appointments to the category of Assistant Executive Engineers when it was recruiting such a large number on ad hoc basis to the category of Assistant Engineers At the same time the Courts have to think twice before adding the numbers to the already over loaded service It is not so much a question of punishing the errant but one of what to do with the surplus personnel and the consequent unwarranted burden upon the public exchequer On balancing the contending rights and equities the Court is of the opinion that at least part of the cadre strength of Assistant Executive Engineers in the Irrigation Branch should be riled up in the near future 367E G 3 The selection held in which the appellants had appeared cannot be directed to be finalised The only direction that can properly be made herein is to direct the Government to take steps for filling up the vacancies existing in the category of Assistant Executive Engineers in the Irrigation Branch as early as possible Atleast half the vacancies therein should be filed within a period of one year from today 367H 368A B IJ Divakar vs Government of Andhra Pradesh AIR 1982 SC 1555 distinguished A reading of the first proviso to Sub Rule 2 of Rule 7 shows that it prescribes a minimum percentage of marks in the written test both for appointment as well as for being called for interview viva voce It does not create a right in the candidate who has obtained the prescribed percentage of marks to be called for interview 363A Ashok Kumar Yadav vs State of Haryana AIR 1987 SC 454 relied On Umesh Chandra vs Union of India Nilima Shangla vs State of Haryana and PK Ramachandra Iyer Ors vs Union of India Ors referred to

minal Appeal No 642 of 1991 From the Judgment and Order dated 2541991 of the Bombay High Court in Criminal Appeal No 25 of 1990 Lalit Chari Peter D Souza and Mukul Mudgal for the Appellant JS Wad and Ms A Subhashini for the Respondent 340 The Judgment of the Court was delivered by K JAYACHANDRA REDDY J The appellant a German National has been convicted by the trial court under Section 20bii of the Act for short and sentenced to undergo 10 years RI and to pay a fine of Rs 1 lakh in default of payment of which to further undergo six months RI The appeal filed by the appellant was dismissed by the High Court Hence the present appeal In brief the prosecution case is that on 29989 the Police Sub Inspector Gaonkar PW3 alongwith a police party was patrolling at Calangute Beach near Panjim and they came across the accused who was sitting on a wooden log On suspicion they went near him and noticed a chillum smoking pipe in front of him lying on the log He secured the presence of panch witnesses and searched the accused and recovered a polythene pouch from his pyjama pocket in which there were tobacco one cigarette paper packet and two cylindrical pieces of Charas The two pieces of Charas were weighed and found to be 7 gms and 5 gms respectively They were seized under a panchnama and were separately sealed in two different envelopes One of the pieces weighing less than 5 gms was sent for chemical analysis and the other piece weighing 7 gms was not sent nor part of it by way of sample was sent for chemical analysis Maria Caldeira PW1 the Junior Scientific Officer in the Directorate of Health Services carried out the chemical analysis of the substance weighing 4570 gms consisting of three cylindrical pieces sticking together and she deposed that the substance which was examined by her was found to have contained Charas PW2 a panch witness supported the prosecution case The accused when examined under Section 313 Cr PC denied being in possession of any Charas and said that he had only a pouch containing tobacco and that he was taken to Calangute Police Station and was falsely impli cated The trial court relying on the evidence of PWs 1 to 3 convicted the accused The submissions on behalf of the accused before the trial court as well as the High Court have been that the search conducted on the person of the accused was in contravention of Section 50 of the and that there have been contradictions between the evidence of PWs 2 and 3 and that at any rate even if the prosecution case is to be accepted the 341 accused can be at the most held to be in possession of less than 5 gins of Charas which is a small quantity and therefore is entitled to the benefit of Section 27 Before us more or less the same submissions are made So far as the contentions in respect of seizure and drafting of panchnama and weight are concerned the question is whether the accused has been told that if he so desires he would be taken to a Magistrate before the search as provided under Section 50 Whether this has been complied with or not mostly depends on the evidence and they are only questions of fact Both the courts below have considered the entire evidence and have rejected these submissions Though these are questions of fact yet we have also considered the relevant evidence on these aspects and we agree with the findings of the courts below The next and most important submission of Shri Lalit Chari the leaned senior counsel appearing for the appellant is that both the courts below have erred in holding that the accused was found in possession of 12 gins of Charas According to the learned counsel only a small quantity ie less than 5 gms has been sent for analysis and the evidence of PW1 the Junior Scientific Officer would at the most establish that only that much of quantity which was less than 5 gms of Charas is alleged to have been found with the accused The remaining part of the substance which has not been sent for analysis can not be held to be also Charas in the absence of any expert evidence and the same could be any other material like tobacco or other intoxicating type which are not covered by the Therefore the submission of the learned counsel is that the quantity proved to have been in the possession of the accused would be small quantity as provided under Section 27 of the and the accused should have been given the benefit of that Section Shri Wad learned senior counsel appearing for the State submitted that the other piece of 7 gms also was recovered from the possession of the accussed and there was no need to send the entire quantity for chemical analysis and the fact that one of the pieces which was sent for analysis has been found to contain Charas the necessary inference would be that the other piece also contained Charas and that at any rate since the accused has totally denied he can not get the benefit of Section 27 as he has not discharged the necessary burden as required under the said Section Before examining the scope of this provision we shall first consider whether the prosecution has established beyond all reasonable 342 doubt that the accused had in his possession two pieces of Charas weighing 7 gms and 5 gms respectively As already mentioned only one piece was sent for chemical analysis and PW1 the Junior Scientific Officer who examined the same found it to contain Charas but it was less than 5 gms From this report alone it can not be presumed or inferred that the substance in the other piece weighing 7 gms also contained Charas It has to be borne in mind that the applies to certain narcotic drugs and psychotropic substances and not to all other kinds of intoxicating substances In any event in the absence of positive proof that both the pieces recovered from the accused contained Charas only it is not safe to hold that 12 gms of Charas was recovered from the accused In view of the evidence of PW1 it must be held that the prosecution has proved posi tively that Charas weighing about 4570 gms was recovered from the accused The failure to send the other piece has given rise to this inference We have to observe that to obviate this difficulty the concerned authorities would do better if they send the entire quantity seized for chemical analysis so that there may not be any dispute of this nature regarding the quantity seized If it is not practicable in a given case to send the entire quantity then sufficient quantity by way of samples from each of the packets or pieces recovered should be sent for chemical examination under a regular panchnama and as per the provisions of law Section 27 of the reads thus 27 Punishment for illegal possession in small quantity for personal consumption of any narcotic drug or psychotropic substance or consumption of such drug or substance whoever in contravention of any provision of this or any rule or order made or permit issued thereunder possesses in a small quantity any narcotic drug or psychotropic substance which is proved to have been intended for his personal consumption and not for sale or distribution or consumes any narcotic drug or psychotropic substance shall notwithstanding anything contained in this Chapter be punishable a Where the narcotic drug or psychotropic substance possessed or consumed is cocaine morphine diacetylmorphine or any other narcotic drug or any psychotropic 343 substance as may be specified in this behalf by the Central Government by notification i n the Official Gazette with imprisonment for a term which may extend to one year or with fine or with both and b Where the narcotic drug or psychotropic substance possessed or consumed is other than those specified in or under clause a with imprisonment for a term which may extend to six months or with fine or with both Explanation 1 For the purposes of this section small quantity means such quantity as may be specified by the Central Government by the notification in the Official Gazette 2 Where a person is shown to have been in possession of a small quantity of a narcotic drug or psychotropic substance the burden of proving that it was intended for the personal consumption of such person and not for sale or distribution shall lie on such person In general possession of any narcotic drug or psychotropic substance has been prohibited by Section 8 of the and any person found in possession of the same contrary to the provisions of the or any rule or order made or permit issued thereunder is liable to be punished as provided thereunder to imprisonment for a term which shall not be less than 10 years and shall also be fined which shall not be less than Rs1 lakh Section 27 of the however is an exception whereby lesser punishment is provided for illegally possessing any smaller quantity for personal consumption of any narcotic drug or psychotropic substance Under this section the following ingredient should be fulfilled a The person has been found in possession of any narcotic drug or psychotropic substance in small quantity b Such possession should be in contravention of any provision of the or any rule of order made or permit issued thereunder and c The said possession of any narcotic drug or psycho 344 tropic substance was intended for his personal consumption and not for sale or distribution The first explanation to this Section lays down that the small quantity means such quantity as may be specified by the Central Government by a notification By virtue of the notification issued on 141185 for the purpose of this 5 gms or less quantity of Charas shall be the small quantity Explanation 2 further lays down that the burden of proof that the substance was intended for the personal consumption and not for sale or distribution lies on such person from whose possession the same was recovered As held above in the instant case the prosecution has proved that the quantity seized from the accused was less than 5 gms Therefore it is within the meaning of small quantity for the purpose of Section 27 Then the other ingredient that has to be satisfied is whether the substance found in possession of the appellant was intended for his personal consumption and not for sale or distribution No doubt as the Section lays down the burden is on the appellant to prove that the substance was intended for his personal consumption As to the nature of burden of proof that has to be discharged depends upon the facts and circumstances of each case Whether the substance was intended for personal consumption or not has to be examined in the context in which this exception is made In the instant case the accused though in general has taken a plea of denial but his examination under Section 313 Cr PC by the Magistrate reveals that there was such a plea namely that it was meant for his personal consumption In the judgment of the trial court it is noted that the accused made an application on 23390 stating that the piece said to have been recovered from him was less than 5 gms and not 12 gms as alleged and that the application was written and signed by the appellant himself The prosecution case itself shows that he was having this substance in a pouch alongwith a chillum smoking pipe and smoking material The averments made by the appellant in the application and as extracted by the trial court would themselves show that it was meant for his personal consumption The above surrounding circumstances under which it was seized also confirm the same The appellant is a foreigner and as a tourist appears to have carried this substance for his personal consumption We are aware that the menace of trafficking in narcotic drugs and psychotropic substance has to be dealt with severely but in view of the provisions of Section 27 we are unable to hold that the small quantity found with the appellant was not 345 meant for his personal consumption and that on the other hand it was meant for sale or distribution Therefore the appellant is liable to be punished as provided under Section 27 of the From the records it appears that the appellant has been in jail for more than three years but that may not be relevant since the sentence prescribed under Section27 is only six months We are only just mentioning it as a fact In the result the conviction of the appellant under Section 20bii of the and sentence of 10 years RI are set aside Instead he is convicted under Section 27 of the and is sentenced to undergo 6 monghs RI and to pay a fine of Rs 1 lac in default of payment of which to further undergo 6 months RI Subject to the above modifications the appeal is disposed of NPV Appeal disposed of

The appellant s election to the Legislative Assembly was challenged by the Respondent in his election petition before the High Court It was contended by the election petitioner that the respondent had used a religious symbol for the furtherance of his election prospects which was a corrupt practice under Section 1233 of the Representation of the People Act 1951 The High Court declared the election of the successful candidate to be void and set it aside The successful candidate preferred the present appeal On the question whether the use of a religious symbol in the election of Respondent amounted to corrupt practice us 1233 of the Representation of the People Act 1951 this court HELD11 There is no doubt that the offending poster is a religious symbol The depiction of anyone in the attire of Lord Krishna blowing a shanku and quoting the words from the Bhagavad Gita addressed by Lord Krishna to Arjuna that his incarnation would be born upon the earth in age after age to restore dharma is not only to a Hindu by religion but to every Indian symbolic of the Hindu religion The use by a candidate of such a symbol coupled with the printing upon it of words derogatory of a rival political party must lead to the conclusion that the religious symbol was used with a view to prejudicially affect the election of the candidate of the rival political party 350G H 12But there is no evidence to show that the offending poster was printed by or at the behest of the successful candidate The successful 346 347 candidate himself in his evidence denied that he had the offending posters printed or pasted The averment in the election petition that the offending posters were pasted by followers supporters and party men of the successful candidate is not established 351B D 13The evidence on record does not establish that the offending posters were used at the election by the successful candidate or his election agent or with their consent 352D 14The standard of proof in an election petition is rigorous having regard to the quasi criminal nature of the proceeding The charge laid against the successful candidate under section 1233 has not been established on the basis of the evidence on record 351G

minal Appeal No 277 of 1993 From the Judgment and Order dated 14101991 of the Bombay High Court in Crl Application No 226091 in Crl Revision Application No 123 of 1991 Altaf Ahmed Addl Solicitor General BR Handa Mrs Manjula Rao SM Jadhav AS Bhasme and AM Khanwilkar for the Appellant Dr B Subha Rao Respondent in person The Judgment of the Court was delivered by RM SAHAI J The short question that arises for consideration in this appeal is if the High Court was justified in allowing the application filed by the accused for declaring that the charges framed by the Additional Sessions Judge by order dated 2427th July 1990 were null and void as they were obtained by fraud practised by the State Merits or otherwise of the application alleging fraud against the State apart what has left us completely surprised is not so much the entertaining of the application filed by the accused for declaration that the charges framed against him were nullity having been procured by fraud as the procedure adopted by the learned Single Judge of granting the prayer 332 merely for failure of the State to file any reply by way of counter affidavit than by recording any finding that the State was guilty of procuring the order framing the charges by fraud One of the objections raised by the State was that since the High Court by its order passed on 2526th March 1991 in Criminal Writ Petition No 966 of 1990 had specifically held that the question of framing charge had become final therefore it could not be re opened cannot be said to be without substance as the Division Bench had clearly held that it was not open to go behind the order passed by the learned Single Judge on 3rd4th April 1990 directing that the charges be framed against the accused not only under Section 3 but under Section 5 as well Nor can any exception be taken to the finding of the Bench that the said order could not be said to have been passed without jurisdiction in as much as the learned Single Judge had jurisdiction to decide the revision application preferred under the provisions of the Code Even the question of fraud raised by the accused was negatived by the Division Bench and it was held that it was not capable of being gone into as it did not form part of the substratum of the case of the prosecution and was not germane to the question of deciding as to whether he was entitled to be discharged or not However it is not necessary to rest the decision on this ground as the learned Single Judge having allowed the application as being vitiated by fraud it appears necessary to examine if the pleading on fraud in the application filed by the accused was sufficient in law to empower the High Court to take cognizance of it and even if it was did the accuse succeed in proving it as even if the State did not file any counter affidavit the application could not be allowed unless it was found as a fact that the State by its acts or omissions acted deceitfully or it misled the court Fraud is false representation by one who is aware that it was untrue with an intention to mislead the other who may act upon it to his prejudice and to the advantage of the representor It is defined in Oxford Dictionary as using of false representations to obtain an unjust advantage or to injure the rights or interests of another In Webster it is defined as deception in order to gain by another s loss craft trickery guile any artifice or deception practiced to cheat deceive or circumvent another to his injury It has been defined statutorily in Section 17 of the Contract Act as including certain acts committed with connivance or with intent to deceive another In Administrative Law it has been extended to failure to disclose 333 all relevant and material facts which one has a positive duty to disclose It is thus understood as deliberate act or omission to mislead other to gain undue advantage It consists of some deceitful practice of wilful device resorted to with intent to deprive another of his right or in some manner to do him an injury Black s Law Dictionary Effect of fraud on any proceeding or transaction is that it becomes nullity Even the most solemn proceedings stand vitiated if they are actuated by fraud Such being the nature and consequence of it the law requires not only strict pleading of it but strict proof as well Did the averments in the application made out case of fraud Were the statements of fact capable of giving rise to an inference in law that the State was guilty of misleading the court From the charge sheet it is clear that it complied with the requirements of law and mentions not only the offence and the section but the particulars as to time place and person Whether prosecution was possessed of sufficient evidence to prove each of the charges is different matter but they were framed on basis of documents seized from possession of the accused at the airport search of his residence on the next day interrogations of the accused and examination of prosecution witnesses In the connected appeal No 276 of 1993 Arising out of SLP Crl No 986 of 1992 directed against the discharge of the accused for failure to obtain sanction a very brief summary has been given of various attempts made by the accused to get an order of discharge on merits without success It is not necessary to recount all that here Ul timately when the accused was discharged for failure of the State to obtain sanction under Section 197 of the Criminal Procedure Code in brief the Code and the State challenged the correctness of the order by way of revision the accused filed the application for the declaration that the charge sheet be declared null and void In paragraph 3 of the application it was stated that the charges were vitiated by fraud as the Punchnama dated 30th May 1988 was fabricated as it did not contain his signature and it was ante dated It was further averred that three months even the copies of the remand application filed by the police were denied to the applicant and the orders thereon were not supplied to him It was also claimed that the complaint was in contradiction with the statement of witnesses May or may not be so but that could be relevant when the merits were gone into It certainly could not be taken as a ground for claiming that the framing of charge was fraudulent especially when these aspects had been thrashed out once before the learned Single Judge who by his order dated 3rd4th 334 April 1990 held that the charges against the accused were made out not only under Section 3 but under Section 5 of the Act In the same paragraph the accused extracted certain observations made by a learned Single Judge in one of the orders and claimed that they furnished guidelines to distinguish between offences under Sections 3 and 5 of the OS Act According to him if honest and fair answer to the question if any charge was made out Was given by the State it would have exonerated the applicant but the State committed fraud by keeping the Trial Judge in the dark of real facts and induced him to entertain erroneous opinion and pass order on 24th July framing charges against him In paragraphs 4 to 8 various sentences from one or the other judgment rendered for or against the accused by different courts at one or the other stage were extracted and it was claimed that the State either knowingly did not place correct facts to substantiate those observations or deliberately concealed the truth and made fraudulent submissions inducing the Trial Judge thereby to frame the charges Emphasis was laid on the submissions advanced by the State and it was stated that it was result of fraudulent submissions that the Trial court was induced to frame charges against the accused No foundation giving rise to fraud was laid Facts which could be fished out from paragraphs averring fraudulent submissions could not in our opinion be said to be relevant for alleging fraud For instance in paragraph 4 it was stated the Ld Addl Session Judge was deceived by the aforesaid fraudulent and false submission of the Respondent in February 1989 during the judicial proceedings and the Ld Addl Session Judge was induced to believe that the applicant was also found and caught carrying books on 30 5 1988 at the Sahar Airport Bombay which books as alleged by the Respondent could not have come into possession of the Applicant even in the ordinary course when the applicant was holding the office of the Captain of Navy The respondent knew very well that in the record of the Sessions Case No 108488 there were no books as alleged by the Respondent and moreover the disputed documents were not deposited in the Sessions Court in February 1989 when the Learned Addl Session Judge was induced to believe the fraudulent submissions of the 335 Respondent in February 1989 The above mentioned fraudulent submissions of the Respondent were clearly meant to deceive the Session Court in February 1989 and to see that the applicant was not discharged under Section 227 Cr PC Similarly in paragraph 5 it was stated It is significant to note that in February 1989 the documents were not deposited in the Session Court though it was mandatory under Section 209c Cr PC to deposit the documents in the Session Court after the Case was committed to the Sessions on 2291988 by the Ld Magistrate Thus in actual position there were no documents in February 1989 for consideration of the Ld Addl Session Judge as prescribed under the provisions of Sec 227 Cr PC and the Respondent took advantage of that situation and intentionally made the aforesaid fraudulent submissions in Feb 1989 during the judicial proceedings before the Ld Addl Session Judge Shri Patel and caused circumstances to induce the Ld Session Judge Shri Patel to entertain erroneous opinions and pass orders resulting in miscarriage of justice In paragraph 7 it was stated as under The Ld Addl Session Judge Shri Patel passed two orders dated 11 9 1989 and 11 10 1989 to compel the Respondent to deposit the documents in the Session Court and accordingly the Documents were deposited in the Session Court only on 11 10 1989 which conclusively establishes that in February 1989 when Charges were framed the Documents were not with the Session Court and the fraudulent and false evidence advanced in February 1989 by the Respondent alone became the basis to frame Charges in February 1989 We must confess our inability to appreciate the worth of such averments to establish fraud Legal submissions cannot be equated to misrepresentation In our opinion the pleadings fell short of legal requirements 336 to establish fraud Various sentences extracted from different judgments between the accused and State in various proceedings could not give rise to an inference either in law or fact that the state was guilty of fraud Suffice it to say that it was complete misapprehension under which the accused was labouring and it was indeed unfortunate that the High Court not only entertained such application but adopted a course which amounted to reviewing and setting aside orders of his predecessor without sufficient material and accept the claim that all earlier judgments were liable to be ignored under Section 44 of the Evidence Act as the proceedings were vitiated by fraud We are constrained to say that the learned Judge not only committed an error of procedure but misapplied the law In the result this appeal succeeds and is allowed The order dated 14th October 1991 in Criminal Miscellaneous Application No 2260 of 1991 is set aside and the application of the accused for declaring the order dated 2427th February 1990 framing the charges against him as vitiated by fraud is dismissed NVK Appeal allowed

The assessee acquired shares in certain companies under blank transfers without getting the transfers registered with the companies and it received dividends in respect of these shares It claimed that the dividend income should be grossed up under section 162 Income tax Act and that it should be allowed credit under section 185 for the tax deducted at source on the dividend in the hands of the companies Held that the assessee was not entitled to the benefits of sections 162 and 185 as its name was not in the register of members of the companies The benefit of section 185 could only go to a shareholder and a shareholder in that section meant the same thing as in the Indian Companies Act 1913 i e a member having his name on the register The scheme of the Indian Companies Act 1913 shows that the words member shareholder and holder of a share have been used interchangeably The words holder of a share are really equal to the word shareholder and the expression holder of a share denotes only a person who as a shareholder has his name entered on the register of members In re Wala Wynaad Indian Gold Mining Company 1882 21 Ch D 849 Shree Shakti Mills Ltd vs Commissioner of Income tax jaluram Bhikulal vs Commissioner of Income tax Arvind N Mafatlal vs Incometax Officer 1957 32 IT R 350 Bikaner Trading Co vs Commissioner of Income tax referred to A company when it pays income tax does not do so on behalf of the shareholders but the shareholders get the benefit of such payment The rates of income tax applicable to the company are in most instances higher than the rates applicable to individual shareholders and by the process of grossing up the recipient of the dividend gets some benefit Cull vs Inland Revenue Commissioners and Inland Revenue Commissioners vs Blott referred to 440 In blank transfers the transfer deed signed by the transferor is handed over with the share scrip to the transferee who may complete the transfer by entering his name and applying to the company for registration of his name The company only recognises those persons whose names are on the register of members and they alone are legally entitled to the dividend declared In the case of a blank transfer equities exist between the transferor and the transferee and the transferee has a right to claim the dividend from the transferor who holds it in trust for him but the company is only liable to the transferor and not to the transferee Though the transferee is clothed with an equitable ownership he is not a full owner since the legal interest vis a vis the company still outstands in the transferor

on Civil No3 of 1990 etc Under Article 32 of the Constitution of India KTS Tulsi Addl Solicitor General MK Ramamurthy Govinda Mukhoty and N Santosh Hegde Ms C Ramamurthi MA Krishna Moorthy MA Chinnaswamy H Subramaniam Ms CM Chopra A Bhattacharjee GS Chatterjee HK Puri MP Jha Serva Mitter RK Maheshwari Vineet Maheshwari Ms Niranjan Singh BD Prasad K Swamy and BK Prasad for the appearing parties The Judgment of the Court was delivered by KASLIWAL J All these cases are an upshot of the case RD Gupta Ors vs Lt Governor Delhi Administration Ors It is not necessary for us to give the background and history of the constitution of the two main civic bodies namely New Delhi Municipal Committee in short MDMC and the Municipal Corporation of Delhi in short MCD in the Union Territory of Delhi as the same has already been mentioned in detail in the above RD Gupta s case supra We would thus mention only such details which are relevant and necessary for the purpose of deciding the above cases All the above cages relate to the employees of the NDMC who are claiming the benefit of the report of Shiv Shankar Committee in short SSC in respect of the grant of pay scales 416 as allowed to other employees of NDMC in RD Gupta s case The Government accepted the report of the Third Pay Commission and granted pay scales as recommended to the employees of NDMC as well as to the MCD The technical staff of the Delhi Electricity Supply Undertaking in short DESU claimed higher scales of pay as they were not satisfied with the pay scales recommended by the Third Pay Commission The Government therefore constituted Shiv Shankar Committee to go into the question of revision of pay scales of the technical staff of DESU The SCC submitted its report in 1973 according to which higher pay scales were allowed to the technical staff of DESU The non technicalministerial staff of DESU who were not covered by the report of the SSC demanded that they should also be granted pay scales as recommended by the SSC The DESU considered the demand of the ministerial staff at its meeting held in May 1973 and decided to revise the pay scales of the non technical staff also working in DESU Since the technical as well as the ministerial staff working in the DESU were granted the pay scales recommended by SSC the NDMC also by its resolution No154 dated 19101973 allowed the benefits of pay scales as recommended by SSC to its staff working in the electricity wing In view of the fact that the benefit of the SSC pay scales was granted by the NDMC to the ministerial staff working in the electricity wing only the employees working in the general wing of the NDMC also raised a demand for granting them also the benefit o f the pay scales recommended by SSC Many orders were passed from time to time and writ petitions Were also filed by the concerned parties but we do not think it necessary to give the details as the same have been narrated in RD Gupta s case and we come to the resolution of the NDMC dated 2761978 constituting the electricity wing with effect from 151978 or such subsequent date as may be fixed composed of 28 posts of pump drivers two posts of welders three posts of carpenters and one post of pump mechanic and 496 posts of ministerial staff and to give all of them scales of pay as per SS Committee Report Three petitions under Article 226 of the Constitution viz CW Nos 1231 557 and 280 of 1978 were filed in the Delhi High Court We are only concerned with the grievance of the ministerial staff who were claiming to be treated at par with the ministerial staff of the electricity win in the matter of pay and allowances The ministerial staff in the general wing having not received the full relief in the High Court filed CA 2969 of 1973 417 before this Court It was claimed in the said appeal that instead of restricting the payment of SS Committee pay scales to the 496 ex cadre posts in the electricity wing and directing the NDMC to fill up those posts on the basis of seniority cum option the High Court should have directed the NDMC to give the SS Committee pay scales to all the members of the ministerial staff In RD Gupta s case this Court decided many appeals by a common order but we are only concerned with the CA No 2969 of 1983 which relates to the ministerial staff in the general wing of the NDMC It was contended by the appellants in the said appeal that the electricity wing of the NDMC was not a distinct and independent unit entitled to have its own scales of pay and secondly the ministerial staff of the NDMC belonged to a unified cadre and the staff members were liable to transfer from one branch of the NDMC to another and as such the NDMC cannot create a cadre within a cadre and fix different scales of pay for those in the carved out cadre It was also urged that the nature of the duties performed by the ministerial staff in all the three wings of the NDMC is more or less similar if not identical and hence the well established rule of equal pay for equal work should govern the staff members This Court in RD Gupta s case held that the grievance of the ministerial staff of the general wing was well founded The ministerial staff in the NDMC constituted a unified cadre The recruitment policy for the selection of the ministerial staff is a common one and the recruitment is also done by a common agency They are governed by a common seniority list The ministerial posts in three wings of the NDMC viz the general wing the electricity wing and the water works wing are interchangeable posts and the postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications It was held that it would be futile to say that merely because a member of the ministerial staff had been given a posting in the electricity wing either due to force of circumstances or due to voluntary preferment he stands on a better or higher footing or in a more advantageous position than its counterparts in the general wing It was thus held that all sections of the ministerial staff should be treated alike and all of them were entitled to the same scales of pay for the work of equal nature done by them After the above decision in RD Gupta s case the employees of NDMC working in different departments have filed the above writ petitions under Article 32 of the Constitution or Civil Miscellaneous Petitions in 418 RD Gupta s case which have been directed by this Court to be treated as Writ Petitions by order dated 17111989 In all these cases the employees have prayed for granting the same pay scales including the ex gratia benefits as was recommended by SSC Writ Petition No1 of 1990 has been filed by NDMC Workship Employees Association on behalf of the employees of Auto Workship of NDMC In Writ Petition No5 of 1990 the petitioners are Class IV employees of NDMC holding the posts of Duplicating Machine Operators and GunmenDog Shooters In Writ Petition No3 of 1990 the petitioners were initially appointed as Junior Clerks and subsequently promoted to the posts of Junior Technical Assistants Hindi also knows as Translator Hindi In Writ Petition No13 of 1990 the petitioner is working on the post of Assistant Store Keeper In Writ Petition No292 of 1990 the petitioners are pump drivers in the water supply horticulture and civil wings of NDMC In Writ Petition No1109 of 1990 the petitioners are the employees of Junior Navyug School run by NDMC In Writ Petition No409 of 1990 the petitioners are working as Telephone Operators under the NDMC The short controversy to be decided in the above cases is whether the petitioners fall within the cadre of ministerial staff or fall in similar cadres which have already been granted the benefit of SSC pay scales It is no longer in controversy now that the ministerial staff working in all the wings are also entitled to the same benefit of SSC pay scales as has been given to the ministerial staff working in the electricity wing of the NDMC It has already been decided in RD Gupta s case that the entire ministerial staff in the NDMC constitutes a unified cadre The ministerial post in the three wings of the NDMC viz the General Wing the Electricity Wing the the Water Works Wing are interchangeable posts and the postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications It may be further noted that the NDMC itself in order to extend the benefit of RD Gupta s case in a meeting dated 961988 resolved as under IMPLEMENTATION OF BENEFIT OF SS SCALE SLP 11270 OF 1982 SHRI RD GUPTA 419 AND OTHERS VERSUS LG DELHI AND OTHERS The Committee as per the advice of the Law Deptt and the opinion given by our counsel justice VD Mishra on 2621988 had decided that following categories of employees who constitutes 496 posts created by the NDMC while forming the Electricity Cell vide Reso passed on 2761978 should be extended the benefits 1 Office Supdt HAAccountant 3 Personal Asstt Clear 5 Stenographers 6 Jr Clerk 7 Asstt Storekeepers 8 Adrema Operators 9 Asstt Adrema Operators 10 Asstt Record Keepers 11 Daftry 12 Peon 13 Bill Collector 14 Sorter 15 Ferro Printer 16 Chowkidar 17 Sewerman 18 Sweeper Accordingly the Committee passed orders to extend the benefits vide orders dated 2621988 to all the above 420 categories These employees have already been paid a part of the arrears and salaries under SS Scale The CAP while checking the pay fixation have required a formal resolution of the Committee for processing the cases Accordingly this is noted to the Committee for information in continuation of Reso No26 dated 921988 ADMINISTRATOR S DECISION Information noted By another order dated 2771988 the benefit of SS Committee s scales was extended to the following cadre of employees NEW DELHI MUNICIPAL COMMITTEE DATED 2771988 OFFICE ORDER Under the orders of the Administrator dated 1871988 the following allied categories of sweepers are extended the benefit of SS Scales in terms of Reso No26 dated 921988 read with Reso No52 dated 961988 as they form the common cadre of sweepers Lorry Belders 2 Dumping ground beldars 3 Bhisties 4 Rat catchers 5 Verandha Beldars 6 Hawker Raid Van beldars 7 Sweepers cum chockidars 8 Dog catchers Sd Asstt Health 421 Copy to 1 All Estts with the request to fix the pay of the above mentioned categories in the SS Scales DS E 3 AS AIC 4 PA to Secy NDMC 5 CA0 OS CBS 7 Supdt ACs 8 File 9 PA to FA 10 OS CE 1 The case is laid before the Committee of Officers presided over by the Administrator for consideration and decision if the benefit of Supreme Court Judgment dated 781987 be extended to all the Drivers in anticipation of the approval of the Lt Governor Delhi and in the anticipation of the confirmation of the Minutes of the Committee ADMINISTRATOR S DECISION Resolved by the Committee of Officers and decided by the Administrator that benefit of Supreme Court judgment dated 7th Aug 87 is extended to all the Drivers of the Committee in the anticipation of the approval of the LG Delhi The action be taken in anticipation of confirmation of the minutes of the Committee In Writ Petition No1 of 1990 the contention of the petitioners is that they are employees working in the Auto Workshop of NDMC which is a part and parcel of the electricity establishment and their duties are mini sterial in nature It has been further contended that the Auto Workshop 422 employees have to work throughout on the ground beneath the vehicles belonging to all departments whether it belongs to electricity water or the administrative staff and they have to work for such time till a vehicle is fit for traffic and have to maintain the vehicle not only for administrative staff but also for the electrical health water etc It has been further urged that Auto Workshop employees are part and parcel of electrical wing and their appointments promotions pension salaries increments transfers main tenance of personal filing is done by the electricity establishment Moreover their services are inter transferable such as drivers cleaners helper peon chowkidar sweepers fitters khalasis working in the Auto Workshop can be and are transferred to other departments It has also been urged that a discriminatory treatment has been given in the case of the petitioners inasmuch as a fitter which is a promotional post from amongst peon or chowkidar or sweeper is getting less pay scale than the peon or chowkidar and likewise clearner which is a promotional post is getting less pay scale than a chowkidar peon and sweeper We find force in the submission of the petitioners As already mentioned above the benefit of the pay scales recommended by the SSC has been allowed to the NDMC to the 18 categories of employees which includes daftry peon chowkidar sweeper etc and we find no valid justification for discriminating the employees of the Auto Workshop which forms a part and parcel of the electricity wing of the NDMC In Writ Petition No5 of 1990 the petitioners are Class IV employees of NDMC holding posts of Duplicating Machine Operators and GunmenDog Shooters Needless to say that NDMC has allowed the benefit of SS Committee s scales to Rat Catchers and Dog Catchers vide order dated 2771978 as already quoted above and we find to valid justification for denying such benefit to Duplicating Machine Operators and GunmenDog Shooters When such benefit has been allowed to Rat Catchers and Dog Catchers there is no essential difference in the job work done by GenmenDog Shooters The Duplicating Machine Operators are also Class IV employees and such post is transferable and interchangeable from other Class IV employees of the NDMC who have already been granted the benefit of SSC s pay scales vide order dated 961988 already mentioned above In Writ Petitoin No3 of 1990 the petitioners are working as Junior 423 Technical Assistants Hindi and are also known as Translator Hindi In Writ Petition No13 of 1990 the petitioner is working on the post of Assistant Store Keeper Both the above posts of Junior technical Assistants Hindi and Assistant Store Keeper are such posts which clearly fall within the ministerial cadre Learned counsel appearing for the NDMC was unable to show any material on record for taking a contrary view In Writ Petition No292 of 1990 the petitioners are pump drivers employed in the water supply horticulture and civil wings of NDMC The benefit of SSC pay scales has already been extended to the pump drivers in the electricity wing and there in no valid ground or justification to deny such benefit to the pump drivers working in the water supply horticulture and civil wings of NDMC In Writ Petition No1109 of 1990 the petitioners are the employees of Junior Navyug School run by NDMC In our view the employees of the school though run by NDMC fall in a different cadre altogether and as such cannot claim the benefit of SSC pay scales on the basis of RD Gupta s Judgment It is not their case that their posts are interchangeable or transferable from any other post under NDMC The nature and the duties performed by the petitioners are totally different and they cannot be granted the benefit of the SSC pay scales on the basis of any equality with the other employees of NDMC who have been granted such benefit In Writ Petition No409 of 1990 the petitioners are working as Telephone Operators The Telephone Operators fall in a separate cadre and their posts are neither interchangeable nor transferable with the other members of the service in NDMC That apart the petitioners are Trained Telephone Operators and Senior Telephone Operators and as such do not fall within the category of ministerial staff and as such are not entitled to the benefit of SSC pay scales on the basis of RD Gupta s case In the above cases we are only concerned with the granting of benefit of SSC pay scales on the basis of RD Gupta s case and as such we are holding that the petitioners working in the Navyug School in Writ Petition No1109 of 1990 and Telephone Operators in Writ Petition No 409 of 1990 are not entitled to the benefit of the SSC pay scales These petitioners are free to make their claim if any for the revision of their pay scales to the competent authorities 424 In the result we allow Writ Petition Nos 1 3 5 13 and 292 of 1990 and grant them the benefit of SSC pay scales in the same manner as granted to other employees vide Resolution No26 dated 921988 read with Resolution No52 dated 961988 The respondent Delhi Administration and NDMC shall take appropriate steps within three months of the notice of this order and make payment of the entire arrears and grant future benefit in the pay scales as recommended by SS Committee The Writ Petition Nos1109 of 1990 and 409 of 1990 are dismissed No order as to costs

The appellant a foreign national was convicted by the trial court under Section 20bii of the and sentenced to undergo ten years rigorous imprisonment and to pay a fine of one lakh rupees and in default to further undergo rigorous imprisonment for six months According to the prosecution two cylindrical pieces of charas weighing 7 gms and 5 gms respectively were seized from the appellant by a Police Patrol Party and on chemical analysis of one of the pieces it was found that the substance contained charas The trial court relying on the evidence of PW 1 Junior Scientific Officer of the Director of Health Services who examined the substance PW 2 a panch witness and PW 3 the Police Inspector who was heading the Patrol Party convicted the appellant The High Court dismissed the appellants appeal In the appeal before this Court on behalf of the appellant it was contended that both the courts below had erred in holding that the accused was found in possession of 12 gins of Charas since only a small quantity ie less than 5 gms had been sent for analysis the remaining part of the substance which had not been sent for analysis could not be held to be also Charas and therefore the quantity proved to have been in the 338 possession of the accused would be small quantity as provided under Section 27 of the Act and the accused should have been given the benefit of that Section On behalf of the State it was submitted that there was no need to send the entire quantity for chemical analysis and the fact that one of the pieces which was sent for analysis had been found to contain Charas the necessary inference would be that the other piece also contained Charas and that at any rate since the accused had totally denied he could not get the benefit of Section 27 as he had not discharged the necessary burden as required under the section Disposing of the appeal this Court HELD11 In the absence of positive proof that both the pieces recovered from the accused contained Charas only it is not safe to hold that 12 gms of Charas was recovered from the accused In view of the evidence of PW 1 the prosecution has proved positively that Charas weighing about 4570 gms was recovered from the accused 342C 12In general possession of any narcotic drug or psychotropic substance has been prohibited by Section 8 of the and any person found in possession of the same contrary to the provisions of the Act or any rule or order made or permit issued thereunder is liable to be punished as provided thereunder to imprisonment for a term not less than 10 years and a fine not less than Rs 1 lakh However Section 27 is an exception whereby lesser punishment is provided for illegally possessing any smaller quantity for personal consumption of any narcotic drug or psychotropic substance By virtue of the notification issued on 141185 under Explanation 1 of the Section 5 gms or less quantity of Charas has been specified by the Central Government to be the small quantity 343E F 344B 13 In the instance case the prosecution has proved that the quantity seized from the accused was less than 5 gms Therefore it is within the meaning ofsmall quantity for the purpose of Section 27 344C 14 No doubt as Section 27 lays down the burden is on the appellant to prove that the substance was intended for his personal consumption As to the nature of burden of proof that has to be discharged 339 depends upon the facts and circumstances of each case Whether the substance was intended for personal consumption or not has to be examined in the context in which this exception is made 344D 15 The accused though in general has taken a plea of denialbut his examination under Section 313 Cr PC by the Magistrate reveals that there was a plea that it was meant for his personal consumption The trial court has also noted in its judgment that the accused had made an application stating that the piece said to have been recovered from him was less than 5 gms and not 12 gms as alleged The prosecution case itself shows that he was having this substance in a pouch alongwith a chillum smoking pipe and smoking material The averments made by the appellant in the application and as extracted by the trial court would themselves show that it was meant for his personal consumption The surrounding circumstances under which it was seized also confirm the same 344E G 16The appellant is a foreigner and as a tourist appears to have carried this substance for his personal consumption No doubt the menace of trafficking in narcotic drugs and psychotropic substance has to be dealt with severely but in view of the provisions of Section 27 it cannot be held that the small quantity found with the appellant was not meant for his personal consumption Therefore the appellant is liable to be punished as provided under Section 27 of the Act 344G H 345A 17Accordingly the conviction of the appellant under Section 20bii of the Act and sentence of 10 years RI are set aside and he is convicted under Section 27 of the Act and sentenced to undergo 6 months RI and to pay a fine of Rs 1 lakh in default of payment of which to further undergo 6 months RI 345C

Appeal Nos 1334 43 of 1993 From the Judgments and Orders dated 29101991 of the Andhra Pradesh High Court in WP Nos 9133 8920 8074 7932 and 1111990 811391 dt 311091 820190 898791 dt 301091 9165 7656 of 1990 KK VenugopalCS Vaidyanathan Vijayanarayana and Ms Vijayalakshmi Menon for the Appellants K Swamy and Ms A Subhashini for the Respondents The Judgment of the Court was delivered by KULDIP SINGH J Special leave granted in all the petitions The appellants petitioners challenged the constitutional validity of Clause 16 of the Textile Control Order 1986 the 1986 Order and the notification issued thereunder dated March 29 1990 as amended on May 11 1990 and May 17 1990 the notification by the Textile Commissioner before the Andhra Pradesh High Court by way of writ petitions under Article 226 of the Constitution of India The High Court by its judgment dated October 29 1991 dismissed the writ petitions These appeals by way of special leave are against the judgment of the High Court The appellants are the Spinning and Weaving Mills in the State of Andhra Pradesh The cotton yarn manufactured by the mills is of different 406 varieties It is classified on the basis of counts Yarn with 1 to 40 counts is coarse 40 to 60 medium between 60 and 100 fine and anything above 100 counts is described as very fine There are two methods of packing the yarn One is the cone form packing which is used in power loom and hosiery industry The other is hank form packing which is exclusively consumed by the handloom industry Spinning and packing are the two stages of manufacturing yarn Raw cotton has to pass through the process of blow room carding drawing simplex and finally the ring frame to complete the process of spinning The process of packing starts thereafter For the cone form packing the ring frame cops are fed to the winding machines and for the hank form packing the cops are fed to the reeling machines According to the appellants they are packing the yarn in cone form They have not installed the reeling machines and as such it is not possible for them to pack the yarn in hank form The 1986 Order was issued by the Government of India in exercise of its powers under section 3 of the Clause 16 of the 1986 Order is as under 16 1 The Textile Commissioner may from time to time issue directions in writing to any manufacturer or class of manufacturers or manufacturers generally regarding a the clauses or specifications of cloth or yarn which each manufacturer or class of manufacturers of or manufacturers generally shall or shall not manufacture b the maximum or minimum quantities of cloth or yarn which such manufacture or class of manufacturers or manufacturers generally shall manufacture during such period as may be specified in the Order c the maximum price ex factory wholesale or retail at which any class or specification of cloth or yarn may be sold or d the principles on which and the manner in which such maximum prices may be determined by a manufacturer and e the manner of packing of yarn in hanks cones or in 407 any other form and in such proportion as he may consider necessary or expedient Provided that in issuing any direction under this clause the Textile Commissioner shall have regard to i the demand for cloth or yarn ii the needs of the general public iiithe special requirements of the industry for such cloth or yarn iv the capacity of the manufacturer or class of manufacturers or manufacturers generally to manufacture or pack different descriptions or specifications of cloth or yarn and v the necessity to make available to the general public cloth of mass consumption 2 While issuing any direction under sub clause 1 the Textile Commissioner may also provide that such direction shall be with reference to the quantity of cloth or yarn packed by the manufacturer or class of manufacturers or manufacturers generally during the period specified in the direction 3 Every manufacturer or class of manufacturers or manufacturers generally to whom a direction has been issued shall comply with it 4 Where on an application made by any manufacturer or class or manufacturers or otherwise the Textile Commissioner is satisfied that any direction issued by him under this clause causes undue hardship or difficulty to any such manufacturer or class of manufacturers he may by order and for reasons to be recorded in writing direct that the direction shall not apply or shall apply subject to such modification as may be specified in the order to such manufacturer or class of manufacturers 408 In exercise of the powers under Clause 16 of the 1986 Order the Textile Commissioner issued the notification The operative part of the notification is re produced hereunder 2 Every producer of yarn shall pack yarn for civil consumption in hank form in each half yearly period commencing from April September 1990 period and in every subsequent half yearly period in proportion of not less than fifty percent of total yarn packed by him during each half yearly period for civil consumption Provided that not less than eighty percent of the yarn required to be packed in hank form shall be of counts 40s and below in regard to category 1 at Annexure I to this Notification Provided further that the obligation to pack hank yarn pertaining to a particular half yearly period can be fulfilled before the end of the month succeeding such period to which the obligation pertains At this stage we may briefly notice the earlier litigation which ended with the judgment of the Madras High Court in Sri Rani Lakshmi GS W Mills Pvt Ltd Others vs Textile Commissioner Bombay Ors AIR 1986 Madras 66 In Rani Lakshmi Mills case the constitutional validity of Clause 215 of the cotton textile Control Order 1948 1948 Order and the notification dated June 29 1979 issued thereunder were challenged The said Notification was in similar terms as the notification before us in these appeals Clause 215 of the 1948 Order was as under 5 The Textile Commissioner may by General or Special Order direct any manufacturer or class of manufacturers to pack yarn in hanks cones or in any other form and in such proportion as he may consider necessary or ex pedient and thereupon such manufacturers or class of manufacturers shall be bound to comply with such directions It was argued before the Madras High Court that Clause 215 of the 1948 Order did not provide any guidelines for the exercise of power by the 409 Textile Commissioner and as such was arbitrary and violative of Article 14 of the Constitution of India The High Court accepted the argument and struce down Clause 215 of the 1948 Order on the following reasoning A bare reading of the provision of clause 215 would therefore show that the proviso under that clause gives completely uncontrolled and uncanalized power which can only be described as an arbitrary power depending upon what he considers is necessary or expedient Special leave petitions 12569 9284 against the judgment of the Madras High Court were dismissed by this Court on February 21 1991 Because of the judgment of the Madras High Court in Rani Lakshmi Mills case the 1948 Order was repealed and the 1986 Order was promulgated Clause 161 of the 1986 Order gives power to the Textile Commissioner to issue directions providing the manner of packing of yarn in hanks cones or in any other form and in such proportion as he may consider necessary or expedient Proviso to Clause 161 lays down complete guidelines for the exercise of power by the Textile Commissioner Relying upon Rani Lakshmi Mills case the learned counsel for the appellants have contended that identical notification having been struck down by the Madras High Court and the judgment upheld by this Court the respondents are bound by the same and the Textile Commissioner had no authority to issue fresh notification in similar terms In any case according to the learned counsel the impugned notification is liable to be struck down on the same grounds We do not agree with the learned counsel The notification struck down by the Madras High Court was issued under Clause 215 of the 1948 Order The High Court held Clause 215 of the 1948 Order unconstitutional and as a consequence struck down the notification dated June 29 1979 The present notification has been issued under Clause 161 of the 1986 Order Unlike Clause 215 of the 1948 Order proviso to Clause 161 of the 1986 Order provides complete guidelines to the Textile Commissioner to issue the directions envisaged thereunder As such the ground of attack which was available to the petitioners before the Madras High Court is not available to the appellants before us We therefore reject the contention based on the judgment of the Madras High Court in Rani Lakshmi Mills case 410 Mr Venogopal and Mr Vaidyanathan learned counsel for the appellants have then contended that the appellants do not manufacture hank yarn The contention is that the respondents cannot compel the appellants to manufacture something for which the appellants have not installed the necessary machinery and other superstructure The notification according to the learned counsel infracts their fundamental right under Article 191g of the Constitution of India We see no force in the contention The Textile Industry in this country is the second largest industry next to agriculture providing employment to millions of people This industry is accounting for 20 of the total industrial output The appellant mills are part of the textile industry in the State of Andhra Pradesh The respondents in their written statement before the High Court have elaborately explained the spinning and the packing processes undertaken by the appellant mills According to the respondents it is not correct that the appellants are being forced to manufacture something which they are not manufacturing already The five stages of spinning blow room carding drawing simplex and ring frame are common and only thereafter the ring frame cops are either packed in hank form or in cone form The respon dents have given cogent reasons for issuing the impugned notification We may briefly state the same The textile industry consists of three sectors namely Mill Sector Powerloom Sector and Handloom Sector The primary product in the industry is yarn It is produced only by the Mill sector The Powerloom and Handloom Sectors manufacture fabrics and they depend upon the Mill Sector for yarn The yarn is packed in two forms namely cone form and hank form The cone form is consumed entirely by the Powerloom Sector and the hank form by the Handloom Sector The handloom industry is the largest cottage industry in India Nearly one third of the country s requirement of cloth is met by this Sector As per the National Handloom Census 1987 88 there were 39 million handlooms spread all over the country out of which three million were engaged in production of cotton cloth The Handloom Sector provided direct employment to 84 million during 198889 and indirect employment to millions of people The production target for Handloom Sector for the Seventh Plan was 4600 million mts In order to achieve the said production target a minimum of 460 million kgs of hank was required The employment generated in the three sectors during the year 1988 was 8422 5095 and 1181 lakh persons in Handloom Sector Powerloom Sector and Mill Sector respectively The production of cloth 411 for Handloom Sector during the Eighth Plan has been targeted at 7000 million mts out of which cotton cloth is 5610 million mts In order to achieve this target 561 million kgs of hank yarn is required Against the said requirement only 355 million kgs of cotton yarn is being packed in hank form According to the respondents there is a big gap between the demand and supply This causes scarcity of yarn in the market and results in spiralling of prices It further results in unemployment in Handloom Sector In order to make available sufficient quality of hank yarn at reasonable prices and also for the sustenance of Handloom workers it became necessary to reserve hank yarn for Handloom Sector by making it obligatory on the part of the manufacturers of yarn to pack a certain percentage of their production packet for civil consumption in the form of hanks We are satisfied that impugned notification has been issued in the interest of the general public and also for the larger interest of the textile industry It is not disputed that under Clause 4 of the Industrial Licence granted to the appellants one of the conditions is as under the packing of yarn in hank form and count wise production shall be in accordance with the policy in force and the directions issued by the Textile Commissioner in this regard from time to time The appellants having accepted the above condition while taking the licence cannot now turn round and say that they are not bound by the same Mr Vaidhyanathan further contended that under the impugned notification unequals have been treated as equals According to him different mills have installed different machinery and have different equipments The contention is that the impugned notification is violative of Article 14 as it has been made uniformly applicable to mills which do not have the same capacity to produce hank yarn We see no force in the contention The impugned notification has been made applicable uniformly to all the producers of yearn The appellants are required to pack yarn in hank form in the proportion as provided in the notification keeping in view the total yarn packed by the mill concerned In any case the grievance of 412 the appellants has been substantially mitigated by the press note dated May 11 1990 issued by the Textile Commissioner Bombay The relevant part is re produced hereunder 2 The Government have now reinstituted the erstwhile relaxation of getting hank yarn obligation fulfilled by transfer of surplus hank yarn packing of another producer Secondly the Government have also allowed a producer to get Hank yarn reeled through another producer having extra relying capacity with the permission of the Central Excise Authorities and with the arrangements through the State Handloom Corporations and Apex Handloom Cooperative Organisations in the areas having concentration of handloom weavers We see no ground to interfere with the judgment of the High Court We therefore dismiss the appeals with costs We assess the costs as Rs 5000 to be paid by each of the appellants GN Appeals dismissed

The respondent an ex Naval Officer and Computer Science graduate was accused of leaking Atomic Energy Secrets and charged for violating the provisions of the and the official Secrets Act Ultimately when he was discharged for failure of the State to obtain the necessary sanction under Section 197 Cr PC and the State challenged the correctness of the order by way of revision the respondent filed an application for the declaration that the charge sheet be declared null and void In para 3 thereof it was stated that the charges were vitiated by fraud as the Panchnama dated May 30 1988 was fabricated as it did not contain his signature and it was ante dated It was further averred that for three months even the copies of the remand application filed by the police were denied to him and that orders thereon were not supplied to him and that the complaint was in contra on wit the statement of witnesses The High Court allowed this application In the State s appeal to this Court on the question whether the High Court was justified in allowing the application flied by the respondent for declaring that the charges framed by the Additional Sessions Judge by his order dated 2427th July 1990 were null and void as they were obtained by fraud practised by the state 330 Allowing the appeal setting aside the order of the High Court dated 14th October 1991 and dismissing the application of the accused for declaring the order of the Additional Sessions Judge framing the charges against him as vitiated by fraud this Court HELD1 The High Court by its order passed on 2526th March 1991 in Criminal Writ Petition No 966 of 1990 had specifically held that the question of framing charge had become final It could not be therefore re opened The Division Bench had clearly held that it was not open to go behind the order passed by the Single Judge on 341990 directing that the charges being framed against the accused not only under Section 3 but under Section 5 as well Nor can any exception be taken to the finding of the Bench that the said order could not be said to have been passed without jurisdiction in as much as the Single Judge had jurisdiction to decide the revision application preferred under the provisions of the Code 332B C 2 The question of fraud raised by the accused was negatived by the Division Bench and it was held that it was not capable of being gone into as it did not form part of the substratum of the case of the prosecution and was not germane to the question of deciding as to whether he was entitled to be discharged or not 332D 3 Fraud is false representation by one who is aware that it was untrue with an intention to mislead the other who may act upon it to his prejudice and to the advantage of the representor It has been defined statutorily in Section 17 of the Contract Act as including certain acts committed with connivance or with intent to deceive another In Ad ministrative Law it has been extended to failure to disclose all relevant and material facts which one has a positive duty to disclose 332G H 4 Even the most solemn proceedings stand vitiated if they are actuated by fraud Such being the nature and consequence of it the law requires not only strict pleading of it but strict proof as well 333B 5 Facts which could be fished out from paragraphs averring fraudulent submissions could not be said to be relevant for alleging fraud 334E 6 Legal submissions cannot be equated to misrepresentation The pleadings in the instant case fall short of the legal requirements to estab 331 lish fraud Various sentences extracted from different judgments between the accussed and State in various proceedings could not give rise to an inference either in law or fact that the State was guilty of fraud 335H 336A In the instant case the averments in paragraphs 3 and 4 to 8 of the application do not establish fraud No foundation giving rise to fraud was laid It was complete misapprehension under which the accused was labouring and it was indeed unfortunate that the Single Judge of the High Court not only entertained the respondent s application but adopted a course which amounted to reviewing and setting aside orders of his predecessor without sufficient material and accepting the claim that all earlier judgments were liable to be ignored under Section 44 of the Evidence Act as the proceedings were vitiated by fraud The Single Judge not only committed an error of procedure but misapplied the law 336B

ivil Appeal No 1210 of 1984 From the Judgment and Order dated 2881980 of the Madras High Court in Appeal No 213 of 1978 K Ram kumar for the Appellant R Mohan T Raja and R Nedumaran for the Respondent 891 The following Order of the Court was delivered Ten acres of land belonging to the appellant had been acquired under the Land Acquisition Act The Land Acquisition Officer awarded compensation at the rate of one rupee one paise per sq On a reference under section 18 of the Act the Court enhanced the rate of compensation to Rs 225 per sq On appeal by the State the High Court by the impugned judgment reduced the compensation to Rs 200 per sq The reason stated by the High Court for so reducing the rate of compensation was that the acquired area was a compact plot of 10 acres which was laid out as building sites with fully formed roads and drainage The High Court held that since the roads and drainage occupied a part of the area acquired proportionate deduction in compensation ought to be made Counsel for the appellant submits that what was acquired was a compact area of 10 acres The fact that roads and drainage had been laid out does not reduce the value of the land acquired In fact the appellant had incurred expenditure in preparing the land as building sites and the High Court ought to have accepted his contention that he was entitled to higher compensation We see no reason why the High Court should have reduced the compensation awarded by the Reference Court on the ground that roads and drainage had been laid out The fact that these improvements had been made on the land shows that what was acquired was more valuable than what it would have been without the improvements The reason given by the High Court for reducing the compensation awarded by the Reference Court was wrong in principle Accordingly we set aside the impugned judgment of the High Court and restore that of the Reference Court The appeal is allowed in the above terms No Costs RP Appeal allowed

The New Delhi Municipal Committee by its resolution dated 1910 1973 extended the benefit of higher pay scales recommended in the Shiv Shankar Committee Report to its staff working in the electricity wing Following this the employees working in the general wing of the NDMC also raised demand for granting them the benefit of those pay scales In the meantime by its resolution dated 2761978 the NDMC constituted with effect from 151978 the electricity wing composed of 28 technical and 496 ministerial posts and decided to give all of them scales of pay as per SS Committee s Report In the writ petitions filed in the High Court the ministerial staff failed to receive full relief This Court in RD Gupta Ors etc vs Lt Governor Delhi Administration Ors found that the entire ministerial staff in the NDMC constitutes a unified cadre The ministerial posts in the general wing the electricity wing and the water works wing are interchan geable posts and postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications It was thus held that all sections of the ministerial staff should be treated alike and all of them were entitled to the same scales of pay for the work of equal nature done by them In order to extend the benefit of RD Gupta s case the NDMC by its order dated 961988 revised the pay scales of 18 categories of employees who constituted 496 posts forming the electricity cell By another order 414 dated 2771988 the NDMC extended the benefit of SS Committee s scales to eight allied categories of sweepers subsequently all the drivers of the NDMC were extended benefit of RD Gupta s case On the question whether the petitioners fall within the cadre of ministerial staff or fall in similar cadres which have already been granted the benefit of SS Committee s pay scales Disposing of the writ petitions the Court HELD 1 There is no valid justification for discriminating the employees of the Auto Workshop which forms a part and parcel of the electricity wing of the NDMC since the benefit of the pay scales recommended by the SS Committee has been allowed by the NDMC to the 18 categories of employees which include daftry peon chowkidar sweeper etc 422D E 2 The NDMC having allowed the benefit of SS Committee s scales to rat catchers and dog catchers vide order dated 2771988 there is no valid justification for denying such benefit to duplicating machine operators and gunmendog shooters There is no essential difference in the job work done by gunmendog shooters The post of duplicating machine operators in transferable and interchangeable from other class IV employees of the NDMC who have already been granted benefit of SS Committee s pay scales vide order dated 961988 422E 3 Both the posts of Junior Technical Assistant Hindi and Assistant Store Keeper are such posts which clearly fall within the ministerial cadre They are thus entitled to the benefit of SS Committee s scales 423B 4 The benefit of SS Committee s pay scales having already been extended to the pump drivers in the electricity wing there is no valid ground or justification to deny such benefit to the pump drivers working in the water supply horticulture and civil wings of NDMC 423C 5 The employees of Junior Navyug School run by NDMC fall in a different cadre altogether and as such cannot claim the benefit of SS Committee s pay scales on the basis of RD Gupta s judgment Their posts are not interchangeable or transferable from any other post under the NDMC The nature and the duties performed by them are totally different and they cannot be granted the benefit of the SS Committee s pay scales 415 on the basis of any equality with the other employees of NDMC who have been granted such benefit 423D E 6 The telephone operators working in the NDMC fall in a separate cadre and their posts are neither interchangeable nor transferable with the other members of the service in the NDMC That apart the petitioners are trained Telephone Operators and Senior Telephone Operators and as such do not fall within the category of ministerial staff and are not entitled to the benefit of SS Committee s pay scales on the basis of RD Gupta s case 423F 7 The respondent Delhi Administration and NDMC are directed to take appropriate steps within three months and make payment of the entire arrears and grant future benefit in the pay scales as recommended by SS Committee 424B

minal Appeal No 757 of 1985 From the Judgment and Order dated 6111984 of the Gauhati High Court in Criminal Appeal No 11 of 1979 Sunil Kumar Jain PD Tyagi and Vijay Hansaria for the Appellant SK Nandy for the Respondent ANAND J Anil Phukan and his brothers Mahendra Phukan and Jojneswar Phukan were tried for an offence under Section 30234 IPC for the murder of one Trinavan Chandra Baruah on 2131976 at about 8 pm The learned Sessions Judge convicted all the three brothers for the said offence and sentenced each one of them to suffer imprisonment for life 392 An appeal was preferred by all the three brothers against their conviction and sentence in the Gauhati High Court A Division Bench of that court vide judgment dated 6111984 upheld the conviction and sentence of all the three A Special Leave Petition Crl No 56185 was preferred by Mahendra Nath Phukan and Anil Phukan the third brother Jojneswar however did not file any special leave petition On 291985 the special leave petition as regards Mahendra Nath Phukan was dismissed while notice was issued in the petition as regards Anil Phukan Subsequently on 29101985 special leave was granted to Anil Phukan and on 2941986 he was also directed to be released on bail to the satisfaction of the Chief Judl Magistrate Golaghat Assam We are therefore at this stage concerned only with the criminal appeal by special leave of Anil Phukan In brief the prosecution case is that the appellant Anil Phukan had borrowed a sum of Rs 450 from Trinayan Chandra Baruah deceased and had executed two hand notes exhibit 7 and exhibit 8 promising to repay the amount on 2131976 However he did not repay the amount On 2131976 the deceased accompanied by his nephew Ajoy Baruah PW3 proceeded to the village of the appellant and as he was getting late Ajoy Baruah PW3 carried with him a torch light The distance of the house of the deceased from that of the appellant is about one furlong Anil appellant was present in the fields in front of his house and on being asked as to why he had not come to return the money he asked them to wait there and proceeded towards his house Later on when Anil did not return for some time the deceased alongwith Ajoy PW3 proceeded towards the house of the appellant when they found all the three brothers coming towards them variously armed Mahendra had a crowbar while jojneswar had a crooked dao and Anil a kupi dao Ajoy PW3 apprehended some danger from the appellant and his brothers but his uncle told him that since they had done no wrong they need not be afraid of any assault On coming near the deceased and Ajoy PW3 Mahendra who came first gave a blow to Trinayan on his head with the crowbar the other two brothers also allegedly assaulted the deceased thereafter Ajoy PW3 pulled the deceased towards his house and implored the accused not to assault him At the asking of his uncle Ajoy PW3 ran away to his house and gave the information to the wife of the deceased PW5 Debayani Baruah about the occurrence He also narrated the occurrence to PW4 Bijoy Baruah the wife of the deceased went to PW6 Punaram Gogoi and after telling him as to what had been told to her by Ajoy PW3 she requested him to accompany her to the place of 393 occurrence On reaching the place of occurrence they found Trinayan lying on the spot with injuries on his person but he was still alive Pws Bijoy and Ajoy brought a bullock cart from Sabharam Bora PW7 and after lifting the body of Trinayan with some difficulty brought it to his house and kept it in the verandah However before any medical aid could be provided the deceased succumbed to the injuries at night The first information report was lodged at Golaghat Police Station the next day in the afternoon at 1230 pm by Surendra Nath Gogoi PW2 During the investigation some weapons including an axe were seized from the house of Mahendra accused On the same day Mahendra was arrested at about 645 pm The other two brothers Anil and Jojneswar surrendered subsequently in the court The IO prepared the sketch plan of the place of occurrence and sent the body for postmortem examination The autopsy revealed that the deceased had two incised injuries on the head besides one swelling and an injury on the inner part of his thigh The prosecution in all examined 12 witnesses to connect the accused with the crime This case primarly hinges on the testimony of a single eye witness Ajoy PW3 Indeed conviction can be based on the testimony of a single eye witness and there is no rule of law or evidence which says to the contrary provided the sole witness passes the test of reliability So long as the single eye witness is a wholly reliable witness the courts have no difficulty in basing conviction on his testimony alone However where the single eye witness is not found to be a wholly reliable witness in the sense that there are some circumstances which may show that he could have an interest in the prosecution then the courts generally insist upon some independent corroboration of his testimony in material particulars before recording conviction It is only when the courts find that the single eyewitness is a wholly unreliable witness that his testimony is discarded in toto and no amount of corroboration can cure that defect It is in the light of these settled principles that we shall examine the testimony of PW3 Ajoy Ajoy PW3 on his own showing is the nephew of the deceased He had accompanied the deceased to the place of occurrence when the later went to recover the loan from Anil appellant This witness therefore is a relative of the deceased and an interested witness Of course mere relationship with the deceased is no ground to discard his testimony if it is otherwise found to be reliable and trustworthy In the normal course of events a close relation would be the last person to spare the real assailant 394 of his uncle and implicate a false person However the possibility that he may also implicate some innocent person along with the real assailant cannot be ruled out and therefore as a matter of prudence we shall look for some independent corroboration of his testimony to decide about the involvement of the appellant in the crime Since there are some doubtful aspects in the conduct of Ajoy PW3 it would not be safe to accept his evidence without some independent corroboration direct or circumstantial The unnatural conduct of Ajoy PW3 which has come to our notice from the record is that though he was present alongwith the deceased at the time of occurrence on 2131976 at about 8 pm he made no attempt to save his uncle from the assault He did not even continue to stay there though of course according to him he ran for his life on being advised so by his uncle He was not assaulted though both he and his uncle were unarmed Even if Mahendra was engaged in assaulting the deceased Anil who was also allegedly armed neither made an attempt to assault Ajoy PW3 nor even chased him PW3 Ajoy did not himself lodge the FIR Of course he gave information about the occurrence to PW4 PW5 PW7 and others immediately after the occurrence describing the manner of assault and the names of the assailants but why he did not lodge the FIR has not been explained by him In his testimony in the court he deposed that after Mahendra accused gave blow with the crowbar on the head of the deceased other accused also assaulted him He did not describe as to on which part of the body of the deceased had Anil and Jojneswar caused the injuries and made a general vague statement without assigning any particular injury to either of them When we look to the medical evidence we find that the deceased had suffered two injuries on his head and no other injury on any other part of the body In all four injuries were recorded in the post mortem report The other two injuries according to the doctor could have been the result of a fall and indeed looking to the nature of those injuries which are in the nature of a swelling on the back of the interscapular region and a lacerated wound on the interior aspect of the right thigh it is possible to agree with the medical witness PWl Dr Ganesh Ch Buragohain that those injuries could have been caused by a fall and were not the result of any direct impact with a weapon of assault Both the head injuries are almost of the same dimensions The possibility therefore that both the injuries had been caused to the deceased by Mahendra with the crowbar who according to PW3 had hit the deceased on the head cannot be ruled 395 out In this connection it would also be relevant to not that according to the testimony of the Investigating Officer PW11 Abhiram Taye all the weapons like the crowbar ExM5 a dao an axe and a hand dag were recovered only from the house of Mahendra We have it from the testimony of PW3 and the first informant PW2 that all the three brothers lived separately No recovery was affected from the house of the appellant Anil at all All that was seized from his house were two bonds Ex7 and Ex8 undertaking to repay the loan to the deceased Unlike Mahendra accused he was not even arrested on the date of the occurrence and the mere ipse dixit of the investigating officer that Anil had absconded is not acceptable particularly when the investigating officer is totally silent as to where all he had made the search for the appellant and when He was not questioned under Section 313 Cr PC about the allegation of absconding either The deceased was still alive when his wife and the other co villagers who have appeared as witness reached the place of occurrence The deceased did not name the appellant as his assailant before anyone The crowbar exhibit 5 was recovered from the house of Mahendra and according to the testimony of PW3 it was the same weapon with which Mahendra had hit deceased on his head which position also receives corroboration from medical evidence The deposition of PW4 who is the sister of PW3 Ajoy to the effect that when Ajoy PW3 came running to the house he told her that her uncle had been killed by Anil and his brothers does not stand scrutiny because admittedly according to PW3 himself when he ran from the place of occurrence the deceased was still alive and as a matter of fact he was alive even when the wife of the deceased and other neighbours reached there and brought him to the house It was only at the house while the deceased was kept in the verandah that he succumbed to the injuries There could have been therefore no occasion for Ajoy PW3 to have told his sister PW4 that her uncle had been killed by Anil and his brothers This also shows that Ajoy PW3 has the tendency to exaggerate matters The medical evidence is consistent with the theory that the deceased had been assualted only by one person and not by all the three brothers as alleged by the prosecution The possibility therefore that Mahendra accused alone had caused injuries on the deceased cannot be ruled out May be on account of the recovery of the two bonds Ex7 and Ex8 from the house of Anil he was also implicated We cannot be sure The origin of the fight is totally in obscure and the prosecution has not explained the genesis of the origin of the fight either It is not even the case of the prosecution that Anil had refused to repay the loan or that any hot words 396 or abuses had exchanged between Anil and the deceased when the later had demanded from him the repayment of the loan In view of the infirmities pointed out above it would not be safe to rely upon the testimony of Ajoy PW3 the sole eye witness without looking for independent corroboration and as already noticed the corroboration furnished by the prosecution unlike in the case of Mahendra is negative in character in so far as the involvement of Anil appellant is concerned In our considered opinion therefore it would not be safe to hold that the prosecution has established its case against Anil appellant beyond a reasonable doubt The appellant in our opinion is entitled to the benefit of doubt and granting him that benefit we set aside his conviction and sentence for the offence under Section 30234 IPC and consequently the judgment of the High Court in so far as Anil appellant is concerned is set aside and he is hereby acquitted Anil appellant is on bail His bail bonds shall stand discharged NVK Appeal allowed

Different varieties of cotton yarn were manufactured by the appellant Mills Packing of the yarn was done in two forms viz cone form which was used in powerloom and hosiery industry and hank form which was exclusively consumed by the handloom industry For the cone form of packing the ring frame cops were fed to the winding machines and for the hank form of packing the cops were fed to the reeling machines The appellants were packing the yarn in cone form only Since they had not installed the reeling machines they could not pack the yarn in hank form In exercise of powers under S3 of the Textile Control Order 1986 was issued by the Government Clause 16 of the said order gave power to the Textile Commissioner to issue directions providing the manner of packing of yarn in hanks cones or in any other form and in such proportion as he deemed necessary or ex pedient It also laid down the complete guidelines for exercise of the powers by the Textile Commissioner Exercising his powers under clause 16 of the 1986 Order the Textile Commissioner issued a notification on 29390 which was amended on 11590 and 17590 According to the Notification every producer of yarn should pack in hank form at least 50 404 of the total yarn packed by him during each half yearly period for civil consumption The appellants challenged the constitutional validity of clause 16 of the Textile Control Order 1986 and the Notification issued thereunder by filing Writ Petitions before the High Court The Writ Petitions were dismissed and the appellant Mills preferred the present appeals The appellants contended that an identical notification dated 2961979 issued under the Textile Control Order 1948 was struck down by the High Court and the said judgment having been upheld by this Court the respondents were bound by the same and the Textile Commissioner had no authority to issue a fresh notification in similar terms and that the appellants could not be compelled to manufacture something for which the appellants have not installed necessary machinery and other super structure It was further contended that the Notification was violative of Articles 14 and 191g of the Constitution of India Dismissing the appeals this Court HELD 1 The present notification under challenge has been issued under Clause 161 of the Textile Control Order 1986 Unlike Clause 215 of the 1948 Order proviso to Clause 161 of the 1986 Order provides complete guidelines to the Textile Commissioner to issue the directions envisaged thereunder 409G H Sri Rani Lakshmi GS W Mills Pvt Ltd Others vs Textile Commissioner Bombay Ors AIR 1986 Madras 66 distinguished In order to make available sufficient quantity of hank yarn at reasonable price and also for the sustenance of Handloom workers engaged in the largest cottage industry in India it became necessary to reserve hank yarn for Handloom sector by making it obligatory on the part of the manufacturers of yarn to pack a certain percentage of their production packet for civil consumption in the form of hanks Thus the notification has been issued in the interest of the general public and also for the larger interest of the textile industry and is not violative of article 191g of the Constitution of India 411B C 3 Having accepted the condition regarding packing of yarn in hank form while taking the licence under clause 4 of the Industrial Licence the 405 appellants cannot now turn round and say that they are not bound by the same 411F 4 There is no violation of article 14 of the Constitution since the notification has been made applicable uniformly to all the producers of yarn The appellants are required to pack yarn in hank form in the proportion as provided in the notification keeping in view the total yarn packed by the mill concerned In any case the grievance of the appellants has been substantially mitigated by the press note dated May 11 1990 issued by the Textile Commissioner reinstituting the erstwhile relaxation getting yarn obligation fulfilled by transfer of surplus yarn packing of another producer and allowing a producer to get hank yarn reeled through another producer having extra relying capacity 411G H 412A

Appeal No 251 of 1982 From the Judgment and Order dated 241081 of the Disciplinary Committee of the Bar Council of India Delhi in BCIT R Case No 28 of 1979 BSingh SKGambhir and Davinder Singh for the Appellant RPKapur and Rajiv Kapur for the Respondents The Judgment of the Court was delivered by 491 KULDIP SINGH J DS Dalal was a practising advocate in Delhi The Bar Council of India by its order dated October 24 1981 removed his name from the rolls of advocates of the Bar Council of Delhi and the sanad granted to him has been withdrawn This appeal under Section 30 of the is against the order of the Bar Council of India The State Bank of India lodged a complaint before the Bar Council of Delhi on September 4 1978 It was alleged in the complaint that the appellant along with two other advocates was practising under the name and style of Ms Singh and Company a firm of advocates and solicitors having their office at 2670 Subzi Mandi Delhi It was alleged that the advocates were duly engaged by the Asaf Ali Road branch of the State Bank of India to file a recovery suit against Ms Delhi Flooring Pvt Ltd for the recovery of Rs 61216410 Singh and Company the firm at that time was represented by Mr DS Dalal Mr B Singh and Ms VSingh Advocates who were the partners of the said firm and were conducting cases for and on behalf of the firm It is the case of the complainant that in the year 1975 the file relating to the case which was to be filed against ms Delhi Flooring Pvt Ltd containing original and valuable documents was handed over to the Firm by the complainant Thereafter the Firm submitted a bill for filing the recovery suit which included the professional fees and other miscellaneous charges An amount of Rs 11475 was paid to the Firm on November 15 1975 for filing the suit which included 13rd of the professional fee plus the miscellaneous charges This was acknowledged by the Firm under a receipt which was placed on the record Till December 19 1975 the Firm did not inform the bank as to whether the suit was filed and if so what was the stage of the proceedings The bank wrote a letter dated December 05 1975 to the Firm asking it to send a copy of the plaint before December 8 1975 for signatures and verification failing which the bank would be compelled to withdraw the case from the firm At that stage Mr B Singh Advocate one of the partners of the Firm in his letter dated December 15 1975 informed the bank that the suit had been filed on December 15 1975 in the High Court of Delhi Thereafter the bank appears to have received no communication from the said advocates despite repeated reminders oral and other vise and the bank was kept in the dark about the fate of the case entrusted to the appellant and his associates 492 As there was no response from the appellant the bank engaged the services of Mr RP Arora Advocate in order to find out as to what happened to the suit filed by the appellant and his associates on behalf of the bank RP Arora in his letter dated March 2 1977 informed the bank that the suit which had been filed on December 15 1975 was returned by the original Branch on January 31 1976 to the Registry of the High Court with objections Mr Arora in his letter dated March 31 1977 further informed the bank that the entire suit paper book had been returned to Mr B Singh Advocate on July 27 1976 for removing the objection and thereafter the suit has not been re filed in the Registry of the High Court of Delhi The complainant therefore claimed that the appellant and his associates were guilty of serious professional misconduct as they failed to discharge their professional duties and responsibilities entrusted to them by the bank in its capacity as a client It was further claimed by the bank that the appellant and his associates had misappropriated the money paid to them for court fee miscellaneous expenses and one third of the professional fee The complainant further stated that even the documents and other papers handed over to the appellant and his associates for filing the suit were not returned The complainant was originally registered with the Bar Council of Delhi On September 19 1979 the Disciplinary Committee of the Bar Council of Delhi transferred the case to the Bar Council of India on the ground that the case had been pending for more than one year The Bar Council of India issued notices returnable on November 2 1980 On that date the respondents were not present and as such fresh notices were issued for December 20 1980 Mr DS Dalal though served was not present on December 20 1980 and as such ex parte proceedings were ordered Notice to Mr B Singh Advocate was returned with the postal endorsement refused He was also ordered to be proceeded ex parte The case was posted for January 23 1981 for the evidence of the complainant On that day the appellant moved an application for setting aside the ex parte order dated December 20 1980 The ex parte order was set aside conditionally permitting the appellant to participate in the proceedings and the case was adjourned to February 27 1981 On February 27 1981 three witnesses were examined in the presence of the appellant and he cross examined them Thereafter the case was adjourned from time to time and finally fixed for evidence on August 22 1981 The appellant again sent an application for adjournment which was rejected The evidence was con 493 cluded arguments were heard and the order reserved The Bar Council of India in the impugned order observed as under From a perusal of the order sheet of the Disciplinary Committee of the Bar Council of Delhi and also of the order sheet before us it reveals that the respondents have throughout adopted the tactics of non cooperation purposely with a view to protract the proceedings unnecessarily It may be mentioned that the complainant had given up its case against Ms V Singh Advocate and as such the Bar Council of India ultimately did not proceed against her So far as Mr B Singh and Mr DS Dalal are concerned the case against them was proved beyond reasonable doubt and their names were removed from the rolls of advocates of Bar Council of Delhi and the sanads granted to them were ordered to be withdrawn The appeal before us is by DS Dalal We have been informed that Mr B Singh Advocate filed a review petition before the Bar Council of India on October 221989 which is still pending The Bar Council has also granted stay of the order dated October 24 1981 with the result that MrB Singh is continuing with his legal practise This appeal was argued before us by Mr BSingh Advocate It is not disputed before us that MrBSingh and Mr DSDalal were the main partners of the Firm It is also not disputed that an amount of Rs11475 was received by these advocates towards the filing of the suit and further that the connected documents and papers were received by them BSingh learned counsel for the appellant primarily argued that the suit was filed by the appellant in the Delhi High Court on December 15 19 5 but the record of the suit file was misplacedlost by the High Court registry He further stated that by his letter dated August 20 1977 he informed the bank about the suit file being not traceable and further that the record of the suit was to be re structured and refiled We have been taken through the copy of the letter dated August 20 1977 written by MrBSingh on behalf of the Firm to the Regional Manager State Bank of India Parliament Street New Delhi The relevant paragraph is as under 494 However as already intimated two bank cases one of Delhi Flooring P Ltd of Asaf Ali Road branch and second of JMAIE Corporation of Jungpura branch filed by the undersigned in Delhi High Court have been misplacedlost by High Court Registry and the record reconstruction petitions have already been given to the branches in March 1976 itself In case the said suits have not already been got restored through some other learned counsel and the assistance the undersigned is required for the restorationreconstruction then he is willing to cooperate fully without charging any fee and without insisting on the payment of his outstanding bills first The undersigned can work only when he is allowed to work in terms of his approved schedule of fees and the payment is made of all his bill forthwith The letter dated August 20 1977 quoted above was not produced before the Bar Council of India It has been placed before us for the first time Apart from the ipse dixit of the appellant and MrB Singh in the above letter there is no evidence on the record to show that the suit file was misplaced or lost by the High Court Registry On the other hand there is cogent and reliable evidence on the record to show that the Delhi High Court Registry returned back the papers to Mr B Singh for removing the objections raised by it Mr RP Arora Advocate appeared as a witness before the Bar Council of India The relevant part of his evidence is as under I know the respondents in the case I was instructed by the complainant in case to find out as to whether the respondents had filed the suit against the Delhi Flooring P Ltd in the High Court of Delhi which was entrusted by the complainant with the respondents Accordingly I went to Delhi High Court and made enquiries to find out whether such a suit has been filed On enquiry I came to know from the registers of the High Court that the suit had been filed on behalf of the complainant against Delhi Flooring P Ltd on 15th December 1975 1 found from the records that the office has not registered the suit 495 because of certain objections raised by the office I also came to know that the entire suit filed had been returned to the respondents for complying with the objections and to refile the suit This was so returned on 27776 The enquiries that were made by me in the High Court office was during March 1977 and till that date the suit had not been refiled by the respondents Mr RP Arora Advocate after examining the records of the Delhi High Court had sent two reports to the State Bank of India In his report dated March 2 1977 he stated as under As desired by you to know the whereabouts of the above noted case I contacted the concern clerk in the Original Branch of High Court of Delhi at New Delhi and also inspected the registers of the Original suits The above noted case was filed by Ms Singh Co on 15121975 but there were certain objections by the original branch and on 31176 the said case file was returned to the registree by the original branch The register of the registree in respect of the period from 3111976 is not available and I shall let you know the upto date information when the said case was returned to Ms Singh Co within a short period Subsequently in his report dated March 31 1977 Mr RPArora Advocate gave the following information to the bank I have enquired from the Original section of High Court of Delhi at New Delhi that the file of the above stated case was returned to Shri BSingh on 2771976 as the said case was under objections So far he has not again filed the said case in High Court Both the above quoted reports have been proved on the record of the Bar Council of India as evidence The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr B Singh was proved beyond doubt The Bar Council of India concluded as under 496 After having gone through the evidence and the documents produced in the case carefully we have come to the conclusion that the complainant had entrusted the suit to be filed against Ms Delhi Flooring Pvt Ltd with the necessary papers and Rs 1140074 for expenses etc to the respondent advocates It is also established that the respondents have filed the suit on 15121975 with some objections deliberately and when the papers were returned by the High Court they had not refiled the suit for a pretty long time and as is established tiff this day So we have no hesitation to conclude that the respondents have misappropriated the amount realised by them from the Bank without filing the suit in a proper manner We have given our thoughtful consideration to the evidence on the record against the appellant We see no ground to interfere with the order of the Bar Council of India We agree with the reasoning and the conclusions reached therein We therefore dismiss the appeal No costs VPR Appeal dismissed

On State s appeal against enhancement of compensation for a compact area of 10 acres of land laid out as building sites with fully formed roads and drainage and acquired under the Land Acquisition Act 1894 the High Court reduced the compensation holding that since the roads and drainage occupied a part of the area acquired proportionate deduction in compensation ought to be made The claimant filed appeal by special leave to this Court Allowing the appeal this Court Held 11 The High Court was wrong in principle in reducing the compensation on account of roads and drainage The fact that these improvements had been made on the land acquired shows that what was acquired was more valuable than what it would have been without the improvements p 891E F 12 Accordingly the judgment of the High Court is set aside and that of the Reference Court is restored p891F

Appeal No 447 of 1982 From the Judgment and Order dated 671981 of the Bombay High Court in WP No 1967 of 1981 475 BK Mehta and Vimal Dave for the Appellant UR Lalit Mrs J Wad and Mrs Tamali Wad for the Respondents The Judgment of the Court was delivered by VENKATACHALA J In this appeal by special leave the summary rejection by the Bombay High Court of an application filed under Article 227 of the Constitution for setting aside an eviction order made by the Court of Small Causes at Bombay the trial court under clause c of sub section 1 of section 13 of the Bombay Rents Hotel and Lodging House Rates Control Act 1947 to be referred to as the Act and upheld by the appellate Division Bench of the same court the appellate court is questioned Sudarshan Building No 2 Shivaji Park Road No3 Bombay 28 is a storeyed building comprised of a large number of flats occupied by different tenants Flat No 10 in the Second Floor of that building to be referred to as the premises was in occupation of the appellant defendant eversince the year 1952 as its tenant under Kherodkar the owner of the whole of that building In the year 1958 when Kherodkar mortgaged with possession the said building in favour of respondents plaintiffs the defendant and other tenants in different flats of that building became tenants under plaintiffs usufructuary mortgages and continued as such tenants on payment of monthly rents to them But by a quit notice dated July 3 1967 the plaintiffs determined the monthly tenancy of the defendant respecting the premises in his occupation and sought to recover from him the possession of the premises by instituting a suit in the court of Small Causes at Bombay on the very ground on which his tenancy was terminated that is that the defendant had been guilty of conduct which was a nuisance or annoyance to the adjoining or neighbouring occupiers That was a ground which entitled the landlord under clause c of sub section 1 of section 13 of the Act to recover possession of the premises from the tenant That ground had been based on plaintiffs allegations of threats of murder posed by the defendant to the neighbouring occupiers abuses hurled at neighbouring occupiers by his sons whistling at neighbouring occupiers by the defendant s sons spitting against the walls and in the common staircase area of the building by the defendant s sons obstructions offered by the defendant his wife sons and servants to the neighbouring occupiers to reach the common terrace of the building by a staircase and removal by 476 them of aerials of radios of the tenants in the other flats of the building which had been fixed above the common terrace obstructions offered to the landlords and their workers to inspect the common terrace unauthorised errection by the defendant in the common terrace area certain machinery and running it during nights causing disturbance to sleep of neighbouring occupiers and also unauthorised used by the defendant of the water in common over head storage tanks in the common terrace area for his business purposes depriving other tenants of the normal use of such water The defendant however resisted the claim for recovery of possession of the premises made in that suit filing a written statement thereto denying the allegations of nuisance and annoyance levelled against him his wife sons and servants and urging that those allegations even if established did not constitute the ground of nuisance or annoyance envisaged under clause c of sub section 1 of section 13 of the Act as a ground for recovery of possession of premises from a tenent It was also urged therein by the defendant that the ground for recovery of possession of premises from a tenant under clause c thereof was not available to plaintiffs for they being usufructuary mortgagees of the building were not landlord within the meaning of that expression in sub section 1 of section 13 of the Act as would entitle them to recover possession of premises from a tenant In so far as the common terrace the defendant s unauthorised use of which was complained of by the plaintiffs the defendant urged therein that he being a tenant of that terrace in addition to the premises was entitled to put it for the use of his choice and prevent other tenants in the building from its common use It was further urged therein that the suit having been instituted by the plaintiffs to pressurise the defendant and extract from him higher rent for the premises was vitiated by malafides The trial court which tried the suit on an appraisal of the oral and documentary evidence adduced by the parties recorded its findings on issues arising for its determination in that suit in favour of the plaintiffs and against the defendant Consequently it decreed the suit of the plaintiffs for recovery of possession of the premises from the defendant The appellate court before which the decree of the trial court was appealed against by the defendant on its re appraisal of the evidence affirmed the findings of the trial court and dismissed the appeal Feeling aggrieved by the decree of the trial court and its affirmation by the appellate court the defendant impugned the same by filing a writ petition under Article 227 of the Constitution before the High Court of Bombay but that writ petition was rejected by the High Court in limine The defendant has questioned 477 in this appeal by special leave the correctness of the decree of the trial court made against him for recovery of possession of the premises by the plaintiff the decree of the appellate court affirming the decree of the trial court and the order of the High Court rejecting his writ petition In support of the appeal three contentions were raised before us by Shri BK Mehta the learned senior counsel for the appellant defendant But those contentions were strongly refuted by Shri UR Lalit the learned senior counsel for respondents plaintiffs Taking into consideration the serious nature of the contest we shall examine the merit in every one of the contentions rather in detail First of the said contentions which was urged as a legal contention by the learned counsel for the appellant was that an usufructuary mortgagee was not entitled to recover possession of a premises from a tenant under section 131 c of the Act pleading the ground that the tenant or any person residing with him in such premises was guilty of conduct which is a nuisance or annoyance to the adjoining and neighbouring occupiers when the expression Land lord in section 13 of the Act cannot be said to include an usufructuary mortgagee Provisions in the Act in so far as they become necessary for a proper appreciation of the said contention could be excerpted at the outset Section 131 of the Act 13 When landlord may recover possession 1 Notwithstanding anything contained in this Act a landlord shall be entitled to recover possession of any premises if the Court is satisfied a b c that the tenant or any person residing with the tenant has been guilty of conduct which is a nuisance or annoyance to the adjoining or neighbouring occupiers d 478 e f g that the premises are reasonably and bona fide required by the landlord for occupation by himself or by any person for whose benefit the premises are held or where the landlord is a trustee of public charitable trust that the premises are required for occupation for the purposes of the trust or h hh hhh 2 No decree for eviction shall be passed on the ground specified in clause g of sub section 1 if the Court is satisfied that having regard to all the circumstances of the case including the question whether other reasonable accommodation is available for the land lord or the tenant greater hardship would be caused by passing the decree than by refusing to pass it Where the court is satisfied that no hardship would be caused either to the tenant or to the landlord by passing the decree in respect of a part of the premises the Court shall pass the decree in respect of such part only Explanation For the purposes of clause g of subsection 1 a b the expression landlord shall not include a rentfarmer or rent collector or estate manager Section 53 of the Act 5 Definitions In this Act unless there is anything repugnant to the subject or context 479 3 landlord means any person who is for the time being receiving or entitled to receive rent in respect of any premises whether on his own account or on account or on behalf or for the benefit of any other person or as a trustee guardian or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant and includes any person not being a tenant who from time to time derives title under a landlord and further includes in respect of his sub tenant a tenant who has sub let any premises and also includes in respect of a licensee deemed to be a tenant by section 15A the licensor who has given such licence Whether the expression landlord in sub section 1 of section 13 of the Act cannot be said to include an usufructuary mortgagee where the tenanted premises is the subject of usufructuary mortgage is the question which requires our answer in the light of the provisions of the Act As could be seen from the definition of usufructuary mortgage in clause d of section 58 of the the TP Act an usufructuary mortgagee is a transferee of a right to possession of the mortgaged property and the right to receive the rents and profits accruing from such property When a lessor of a leased property creates an usufructuary mortgage in respect of such property what he transfers under section 109 of the TP Act as a mortgagor in favour of the usufructuary mortgagee includes his right to possession of such property and the right to receive the rents and profits accruing from it Thus section 109 of the TP Act entitles the usufructuary mortgagee from the lessor as against the lessee for all rights which the lessor had against such lessee From this it follows that tenanted premises if is mortgage by the landlord by way of usufructuary mortgage the usufructuary mortgagee thereunder would become entitled to receive the rents and profits accruing from such property in his own right and on his own account Clause 3 of section 5 of the Act which contains the definition of landlord states that under the Act landlord means any person who is for the time being receiving or entitled to receive rent in respect of any premises on his own account and includes any person 480 not being a tenant who from time to time derives title under a landlord unless there is anything repugnant to the subject or context There comes section 131 of the Act entitling landlord to recover possession of any premises from his tenant on the ground envisaged under clause c thereof that is the tenant or any person residing with the tenant being guilty of conduct which is a nuisance or annoyance to the adjoining or neighbouring occupiers and that section 131 contains nothing repugnant in its subject or context which would disentitle an usufructuary mortgagee as a landlord of the tenanted premises to recover its possession from the tenant on the said ground Further if the legislative intendment was that the usufructuary mortgagee was not to be regarded as a landlord for recovering possession of a tenanted premises on any of the grounds envisaged under sub section 1 of section 13 of the Act it would not have omitted to state so expressly particularly when it had been so stated in clause b of the explanation to sub section 2 of section 13 of the Act as regards rent farmer or a rent collector or an estate manager who would have been otherwise a landlord entitled to recover possession of a tenanted premises from the tenant under clause g of sub section 1 of that section Indeed the decision of this Court in SB Abdul Azeez By Lrs vs Af Maniyappa Setty and Others throws full light on the question under consideration for the question decided there is virtually identical That question was whether an usufructuary mortgagee was entitled to recover possession of a premises under section 211 proviso h of the Karnataka Rent Control Act 1961 the KRC Act as a landlord envisaged therein In deciding that question with reference to the expression landlord found in section 211 proviso h of KRC Act the definition of that expression landlord found in section 3h of the KRC Act and the explanation to clause 4 found in section 211 proviso of K RC Act excluding a rent farmer a rent collector and an estate manager from being a landlord for recovery of possession of a premises from a tenant on the ground of bona fide use and occupation and certain provisions of the TP Act this Court stated thus It therefore follows that the Legislature if wanted that a mortgagee with possession should not be equated with the owner of the premises and should be denied the benefit of seeking a tenant s eviction under section 211 481 h the legislature would have undoubtedly categorised a mortgagee with possession also as one of the excluded class of landlords for the purposes of section 211 h of the Act Obviously therefore the legislature has not wanted a mortgagee with possession to be excluded of his right to seek eviction of a tenant from the mortgaged premises under section 211 h of the Act Thirdly a mortgagee with possession is enjoined by section 76a of the to manage the property as a man of ordinary prudence would manage it if it were his own As such the mortgagee s acts if prudently done could bind the mortgagor even after the redemption of the mortgage A mortgagee with possession steps into the shoes of the mortgagor and becomes entitled to all the rights of the mortgagor and the only right left with the mortgagor is the right of redemption A mortgagee with possession is entitled to be in possession of the mortgage property as long as it is not redeemed If the mortgagee with possession leases back the property to the mortgagor he acquires the rights of a lessor and is entitled to enforce the terms of the lease against the mortgagor vide Mathura lal vs Keshar Bai On account of all these factors there can be no doubt that a mortgagee with possession stands very differently from other kinds of landlords en visaged under section 3h of the Act He is therefore entitled as much as the owner himself to seek recovery of possession of the leased premises from a tenant for his own bona fide requirements of use What is said by this Court in the above decision as regards the right of the usufructuary mortgagee to recover possession of a premises from tenant as a landlord envisaged therein under section 211 proviso h in our view must necessarily apply to a landlord envisaged in section 131 of the Act It would be so because i that the expression landlord in section 131 C of the Act is not used in a context different from the one in which the expression landlord is used in section 211 proviso h of the KRC Act ii that the definition of landlord and explanation as to is not the landlord are common to both the Acts and iii that the legal position of an usufructuary mortgagee under the KRC Act is not different 482 from the legal position of an usufructuary mortgagee under the Act since the rights and liabilities of an usufructuary mortgagee concerned in both Acts are governed by the provisions of TP Act Thus it becomes clear that the expression landlord in sub section 1 of section 13 of the Act includes an usufructuary mortgagee where the tenanted premises is the subject of usufructuary mortgage The decision in Nanalal Girdharlal and Anr vs Gulamnabi Jamalbhai Motorwala and Ors 1972 13 Gujarat Law Reporter 880 relied upon by leaned counsel for the appellant in support of the first contention does not lend such support One of the questions with which the Gujarat High Court was concerned in that decision was whether one out of several co owners was entitled to maintain a suit for eviction against the tenant under the Act In considering that question the Court took the view that the landlord referred to in section 12 and section 131 of the Act was not a landlord as defined in section 53 but was a landlord who was entitled to possession of the premises on a determination of the tenancy under the ordinary law of landlord and tenant that is under section 106 of the TP Act It is this view which was sought to be made use of by learned counsel for the appellant to contend that the landlord under section 131 of the Act cannot be an usufructuary mortgagee But the said view of the High Court that a landlord referred to under sections 12 and 131 of the Act is a landlord who is entitled to possession of premises on determination of the tenancy under section 106 of the TP Act itself cannot now be good law because of the nine Judges Bench decision of this Court in V Dhanapal Chettiar vs Yesodal Ammal where the scope of the provisions of sections 5 12 and 13 of the Act in the context of section 106 of the TP Act is considered and held otherwise thus Adverting to the provisions of the Bombay Rents Hotel and Lodging House Rates Control Act 1947 it would be found from the definition of section 5 that any person remaining in the building after the determination of the lease is a tenant within the meaning of clause 11 Section 12 of the Bombay Act says that the landlord shall not be entitled to the recovery of possession of any premises so as long as the conditions mentioned in sub section 1 are fulfilled nor any suit for recovery of possession shall be 483 instituted by a landlord against a tenant on the happening of the event mentioned in sub section 2 until the expiration of one month next after the notice is served on the tenant in the manner provided in section 106 of the as required by the said sub section Section 13 provides that a landlord may recover possession on certain grounds Is it not plain then that on the happenings of the events or on the fulfilment of the conditions mentioned in sections 12 and 13 etc the landlord becomes entitled to recover possession from the tenant otherwise not It will bear repetition to say that under the in order to entitle the landlord to recover possession determination of the lease is necessary as during its continuance he could not recover possession while under the State Rent Act the landlord becomes entitled to recover possession only on the fulfilment of the rigour of law provided therein Otherwise not He cannot recover possession merely by determination of tenancy Nor can he be stopped from doing so on the ground that he has not terminated the contractual tenancy The first contention urged in support of the appeal that an usufructuary mortgagee of tenanted premises cannot file a suit for recovery of its possession from the tenant under section 131 c of the Act does not therefore merit acceptance and is rejected The second contention of the learned counsel for the appellant defendant relates of correctness of the findings of the appellate court recorded respecting acts of nuisance and annoyance constituting the ground for recovery of possession of premises by the plaintiffs from the defendants According to the learned counsel those findings not having been based on the evidence on record become unsustainable We are unable to find any merit in this contention The findings as to the acts of nuisance id annoyance attributable to the defendant and the persons who were residing in the premises are i that the defendant who was a tenant in a premises tenament in the storeyed building erected a Rangeen Min Textile Printing Mill on the terrace of the storeyed and ran it during nights so as to make the occupiers of the adjoining and neighbouring 484 tenaments in the storeyed residential building suffer the vibrations and noise in the building arising on account of the running of the Mill and loose their quiet and sleep during night ii that the defendant unauthorisedly utilised the water stored in the common over head tanks on the terrace meant for domestic use of all the occupiers of the tenaments in the building for running his run Rangeen Mill a non domestic purpose iii that the defendant and the persons residing with him in the premises had often removed the radio aerials and TV antenas of the occupiers of the adjoining and neighbouring tenaments which had been fixed above the common terrace of the building iv that the defendant and the persons residing in the premises were wrongly preventing the plaintiffs and their workers in reaching the common terrace for repairs of radio aerials TV antenas telephone lines and the like of the occupiers of the neighbouring tenaments in the building by blocking its staircase These finding of the lower appellate court it cannot be said are not supported by the evidence on record of the case In fact some of the findings are to a great extent based on the facts which were admitted by the defendant himself Besides the findings receive support from the evidence given in the case by the occupiers of the adjoining and neighbouring tenaments of the same building The defendant and the persons residing with him in the premises have committed some of the acts respecting which the aforesaid findings are recorded by the appellate court because of the defendant s unfounded claim that he had taken the terrace on lease independently of the premises in which he was an occupant and as such was not only entitled to its exclusive use but also had the right to prevent the neighbouring occupiers of the tenaments in the building from its use The trial Court as well as the appellate court on examining the claim put forth by the defendant have found on the basis of material on record that it was a false claim and the defendant had not taken on lease the disputed terrace as was pleaded by him Therefore as seen from the judgment of the appellate court its findings in relation to the aforesaid acts of the defendant and persons residing with him in the premises are based on appreciation of ample evidence that was on record and the same cannot be said to have been based on no evidence or even improper appreciation of evidence as contended for Thus we are unable to see any justification in this Appeal by Special Leave to interfere with such findings of facts recorded by the appellate court virtually affirming the findings of fact 485 recorded by the trial court The second contention raised in support of the appeal must therefore fail It is accordingly rejected The third and the last contention urged in support of the appeal was that the acts found to have been committed by the appellant defendant and the persons residing with him in the premises even if are true they could not have been regarded as acts amounting to nuisance or annoyance forming a ground for recovery of possession of a premises from the tenant under section 131 c of the Act In support of the said contention reliance was placed on decisions of the Gujarat High Court in Dhabhi Lalji Kalidas vs Ramniklal Somchand Mehta 1975 16 Gujarat Law Reporter 824 and Gaurishanker Babulal Govindji vs Bhikhalal Chhaganlal Ors 1977 18 Gujarat Law Reporter 805 This contention in our view again is devoid of merit The decisions relied upon also do not support the contention There are no statutory definitions of nuisance or annoyance which under section 131 c of the Act constitute a ground for recovery of possession by landlord of a premises in the occupation of tenant In the case with which we are concerned the acts of nuisance or annoyance complained of are committed by the tenant and persons residing with him in the premises which is a tenament flat lying amidst other tenaments flats of the one and same storeyed building The acts of the defendant or persons residing with him in the tenanted premises which are found as acts causing nuisance or annoyance to adjoining or neighbouring occupiers cannot fall short of being acts of nuisance or annoyance if regard is had to their nature intensity and duration and the consequential ill effects which might have been produced by them on the normal living of such occupiers Further when the particular acts of the defendant or persons residing with him in the premises flat of a storeyed building said to have caused nuisance or annoyance to the occupiers of adjoining or neighbouring occupiers of tenaments flats in the very same storeyed building are seen they cannot make us think that they were not clear acts of nuisance or annoyance envisaged under section 131 c of the Act because of the intolerable inconveniences sufferings humiliations which must have been caused to the adjoining or neighbouring occupiers due regard being given to the locality of the storeyed building the class of the people living in the tenAments of the storeyed building and the nature of living to which they 486 were accustomed Even otherwise the acts said to have been committed by the defendant and persons residing with him in the premises when are as stated found by the fact finding courts to have amounted to acts of nuisance or annoyance entitling the plaintiff under section 131 c of the Act to recover possession of the premises from the defendant and when the High Court has refused to interfere with such fInding in exercise of its writ jurisdiction there could be no justification whatever for us to interfere with the same in this appeal under Article 136 of the Constitution The decision in Dhabhi Lalji Kalidas vs Ramniklal Somchand Mehta supra relied upon to support the third contention is a case decided by Single Judge of the Gujarat High Court The learned Single Judge who examined in that case the question whether the use by washerman who was tenant of a premises some chemicals for washing clothes in a tenanted premises could have amounted to act of nuisance or annoyance to adjoining or neighbouring occupiers as entitling the landlord to recover possession of tenanted premises under section 131 c of the Act held that the ill effects produced on adjoining or neighbouring occupants cannot be found out in the absence of evidence of chemical experts and therefore the ground for recovery of possession of tenanted premises under section 131 c of the Act was unavailable We are unable to see how this decision could help the contention of the appellant under our considera tion The decision in Gaurishanker supra relied upon to support the third contention is again that of a Single Judge of the Gujarat High Court It was a case where the learned Judge was concerned with the question whether a quarrel in the household of a tenant could be a ground for eviction of a tenant under section 131 c of the Act The learned Judge who held that quarrels in a domestic household of a tenant can never constitute a nuisance or annoyance within section 131 c of the Act pointed out that nuisance or annoyance contemplated under section 131 c of the Act as ground for eviction of tenant from a premises must be of a serious character in nature intensity and frequency We do not see how this decision could advance the contention of the appellant now under consideration In fact in the case on hand we have held that the courts below having regard to the nature intensity and duration of the acts complained of and their HI effects on the normal living of adjoining or neighbouring occupiers have rightly found them as acts of nuisance or annoyance envisaged under section 131 c of the Act 487 Hence the third and the last contention urged in support of the appeal being also devoid of merit is rejected In the result this Appeal fails and is dismissed with costs The advocate s fee payable by the appellant defendant to respondents plaintiffs is fixed at Rs 2000 TNA Appeal dismissed

The prosecution alleged that the appellant borrowed a sum of Rs 450 from the deceased and had executed two hand notes exhibit 7 and exhibit 8 promising to repay the amount on 2131976 On the said date the deceased accompanied by his nephew PW3 proceeded to the village of the appellant and as he was getting late PW3 carried with him a torch light The distance of the house of the deceased from that of the appellant was about one furlong The appellant was present in the fields in front of his house and on being asked as to why he had not come to return the money he asked them to wait there and proceeded towards his house When the appellant did not return for some time the deceased alongwith PW3 proceeded towards the house of the appellant when they found him and his two brothers coming towards them variously armed one had a crowbar while the others had a crooked dao and a kupi dao with them PW3 apprehended some danger from the appellant and his brothers but his uncle told him that since they had done no wrong they need not be afraid of any assault On coming near the deceased and PW3 one of the brothers gave a blow with a crowbar while the other two brothers assaulted the deceased thereafter PW3 pulled the deceased towards his house and implored the accused not to assault him At the asking of his uncle PW3 ran away to his house and gave the information to the wife of the deceased and also narrated the occurrence to PW4 The wife of the deceased went to PW6 and after telling him as to what had been told to 390 her by PW3 she requested him to accompany her to the place of occurrence On reaching the place of occurrence they found him lying on the spot with injuries on his person but he was still alive Two of the PWs brought a bullock cart and PW7 after lifting the body with some difficulty brought it to his house and kept it in the verandah However before any medical aid could be provided the deceased succumbed to the injuries at night The first information report was lodged at the police station at 1230 pm by PW2 During the investigation some weapons including an axe were seized from the house of the accused and on the same day one of the brothers was arrested at 645 pm and the other two brothers surrendered subsequently in the court The Investigation Officer prepared a sketch of the place of occurrence and sent the body for postmortem examination The appellant alongwith his brothers were tried for offences under section 30234 IPC for the murder of the deceased and the Sessions Judge convicted all the three brothers for the said offence and sentenced them for life On appeal by the three brothers the Division Bench of the High Court upheld the conviction and sentence of all the three The instant SLP was admitted as regards one petitioner only and notice was issued The SLP of the second petitioner was dismissed while the third brother did not file any appeal Allowing the appeal and acquitting the appellant this court HELD 1 Conviction can be based on the testimony of a single eye witness and there is no rule of law or evidence which says to the contrary provided the sole eye witness passes the test of reliability So long as the single eye witness is a wholly reliable witness the courts have no difficulty in basing conviction on his testimony alone However where the single eye witness is not found to be a wholly reliable witness in the sense that there are some circumstances which may show that he could have an interest in the prosecution then the courts generally insist upon some independent corroboration of his testimony In material particulars before recording conviction It is only when the courts find that the single eye witness is a wholly unreliable witness that his testimony is discarded in toto and no amount of corroboration can cure that defect 393E F 391 2 The instant case the medical evidence is consistent with the theory that the deceased had been assaulted only by one person and not by all the three brothers as alleged by the prosecution The possibility therefore that Mahendra accused alone had caused injuries on the deceased cannot be ruled Out May be on account of the recovery of the two bonds Ext 7 and Ext 8 from the house of Anil he was also implicated 395G 3 The origin of the fight is totally obscure and the prosecution has not explained the genesis of the origin of the fight either It is not even the case of the prosecution that Anil had refused to repay the loan or that any hot words or abuses had been exchanged between Anil and the deceased when the later had demanded from him the repayment of the loan 395H 396A 4 In view of the infirmities of the prosecution evidence it would not be safe to rely upon the testimony of Ajoy PW3 the sole eye witness without looking for independent corroboration and as already noticed the corroboration furnished by the prosecution unlike in the case of Mahendra the appellant s brother is negative in character in so far as the involvement of Anil appellant is concerned 396B 5 The appellant was held entitled to the benefit of doubt and granting him that benefit his conviction and sentence for the offence under Section 30234 IPC were set aside 396C

o 3 of 1992 IN Civil Appeal No 732 of 1973 From the Judgment and Order dated 29979 of the Delhi High Court in Civil Writ 734 of 1971 Satish Chandra Pramod B Agarwala and Mohinder Rupral for the Appellants VR Reddy Additional Solicitor General P Chidambaram Syed Akhtar CL Sahu RC Bhalla P Parmeshwaran CVS Rao K Swamy and EC Agarwala for the Respondents J Shri Chiranjilal Shrilal Goenka was involved in several suits and one of which is the pending appeal at his behest He died on November 25 1985 leaving behind last Will dated October 291982 said to have been executed in which he appointed his younger daughter Mrs Sushila N Rungta as sole executrix of his Will Radhey Shyam claims to be the adopted son of Shri CS Goenka Radhey Shyam is the natural son of Shri Mangal Chand Kedia and Mrs Sita another daughter of Sri CS Goenka The applicant executrix Radhey Shyam and his wife filed substitution applications under order 22 Rule 3 CPC setting up rival claims When the dispute arose as to who would represent the estate of Shri CS Goenka by order dated October 7 1991 this Court brought all the three on record as legal representatives By further order dated November 1 1991 this Court passed the following order lm15 By consent of parties Justice VS Deshpande retired Chief Justice of the Bombay High Court is appointed as arbitrator to settle the dispute as to who would be the 459 legal heirs to the estate of the late Chiranjilal Shrilal Goenka The rest of the order is not necessary for the purpose of this case hence omitted Pursuant thereto Shri Justice VS Deshpande entered upon the arbitration Preceding the order counsel for Sri Radhey Shyam had enclosed a letter giving details of all the pending suits and item No 19 Suit No 65 of 1985 titled SN Rungta vs R C Goenka was one such case The schedule of the suits was annexed to the order of appointment of the arbitrator On filing the respective pleadings the arbitrator framed diverse issues Issues No 1 and 2 relate to two Wills and are as under 1 Does Claimant No1 prove execution of the Will dated 29th 28th October 1982 and prove the same to be the last and genuine Will of late Shri GS Goenka If not does she prove the execution of the Will dated 471978and prove the same to be the last and genuine Will of the late Shri GS Goenka Simultaneously proceedings in the probate suit is being pursued in Bombay High Court where in the learned Judge on application expressed doubt whether arbitrator has jurisdiction to decide probate suit Similarly on application made before the arbitrator seeking clarification he too had stated that when the appointment of him as arbitrator was made and all the pending proceedings were referred to in the schedule it would be assumed that this Court applied its mind and referred to him the probate suit as well but he cannot give any clarification in that behalf It would be expedient to the applicant to seek clarification from this Court Thus the prayers in the application are A That this Hon ble Court may be pleased to allow the applicant to proceed with the Probate Suit No 65 of 1987 pending before the Hon ble High Court of Bombay in accordance with law and B to pass such order and other orders as this Hon ble Court may deem fit and proper in the circumstances Shri Satish Chandra learned Senior counsel for the applicant contended placing reliance on Gopi Rai vs BN Rai AIR 1930 Allahabad 840 460 Chellan Bhai vs Nandu Bhai ILR 21 Bombay 337 and Manmohini Guha vs Banga Chandra Das ILR that probate court has exclusive jurisdiction to grant probate of the Will to the applicant for due implementation of the directions contained in the Will as the executrix That issue cannot be referred to arbitration and the arbitrator thereby is devoid of jurisdiction to decide issuses Nos1 and 2 He also further contended that the applicant had not consented to refer the probate suit for arbitration Shri P Chidambaram learned Senior counsel for the respondents contended that preceding the order of this Court dated November 1 1991 the counsel for the respondents addressed a letter to the counsel for the petitioner including the probate suit for reference to arbitration This was to obviate the litigation pending in all the courts as to who are the leg heirs of Shri CS Goenka Thereafter this Court appointed Shri Justice SV Deshpande The contention therefore of the applicant that she did not consent to refer the probate suit for arbitration is an after thought and cannot be accepted He further contended that this Court with a view to put an end to the litigation in all the suits pending in different courts appointed the arbitrator to decide all the disputes in pending suits go that it would bind them The arbitrator had accordingly framed Issues Nos 1 and 2 referred to herein before which pertinently relate to the Wills in the probate suit alongwith other suits Therefore the arbitrator alone has got jurisdiction The award of the arbitrator would be subject to approval or disapproval by this Hon ble Court and on putting its seal it would bind all the parties and the courts including the probate court Therefore it is expedient that instead of parallel proceedings before the probate court and the arbitrator to be permitted to continue it is desirable that the arbitrator should decide issues Nos1 and 2 with other issues and determine as to who would be the legal heirs and his decision would be binding in the probate suit If any clarification is necessary it may be indicated accordingly Having given our anxious consideration we will proceed further in deciding the scope and effect of the order passed by this Court As seen the order of reference to the arbitrator relates to settle dispute as to who would be the legal heirs to the estate of Shri CS Goenka Section 211 of CPC Act 5 of 1908 defines legal representatives means a person who in law represents the estate of a deceased person and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representatives character the person on whom the estate 461 devolves on the death of the party so suing or sued Order 22 rule 3 says that if one or two or more plaintiffs die and the right to sue does not survive to the surviving plaintiff or plaintiff alone or a sole plaintiff or sole surviving plaintiffs dies and the right to sue survives the Court on an application made in this behalf shall cause the legal representatives of the deceased plaintiff to be made a party and shall proceed with the suit Mutatis Mutandis by operation of Order 22 Rule 11 this rule applies to the appellants at the appeal stage Similarly Order 22 Rule 4 applies in the case of death of one of several defendants or of sole defendant and in case of a dispute under Rule 5 such a question shall be determined by the court Inheritance is in some sort a legal and fictitious continuation of the personality of the dead man for the presentation is in some sort identified by the law with him who he represents The rights which the dead man can no longer own or exercise in propria persona and the obligations which he can no longer in propria person a fulfil he owns exercise and fulfils in the persons of a living substitute To this extent and in this fiction it may be said that legal personality of a man survives his natural personality until his obligation being duty performed and his property duly disposed of his representation among the living is no longer called for In Black s Law Dictionary the meaning of the world Legal Representative is The term is its broadest sense means one who stands in place of and represents the interests of another A person who overseas the legal affairs of another Examples include the executors or administrator of an estate and a court appointed guardian of a minor or incompetent person Term Legal representative which is almost always held to be synonymous with term personal representative means in accident cases member of family entitled to benefits under Wrongful death statute Unsatisfied claim and judgment fund In The Andhra Bank Ltd vs R Srinivasan and Ors 1963 1 and WRSC 14 this Court considered the question whether the legatee under the Will is the legal representative within the meaning of Section 211 of the Code It was held that it is well known that the expression Legal Representative had not been defined in the Code of 1882 and that led to a difference of judicial opinion as to its denotation Considering the case law developed in that behalf it was held that respondents 2 to 12 the legatees under the Will of the estate are legal 462 representatives of the deceased Raja Bahadur and so it follows that the estate of the deceased was sufficiently represented by them when the judgment were pronounced In The Official Liquidator vs Parthasarathi Sinha and Ors this Court considered whether the legal representative would be bound by the liability for misfeasance proceeding against the deceased While considering that question under section 50 CPC this Court held that the legal representative of course would not be liable for any sum beyond the value of the estate of the deceased in his hands Mulla on CPC 14th Ed Vol I at P27 stated that a person on whom the estate of the deceased devolves would be his legal representative even if he is not in actual possession of the estate It includes heirs and also persons who without title either as executors administrators were in possession of the estate of the deceased It is therefore clear that the term legal representative is wide and inclusive of not only the heirs but also intermeddlers of the estate of the deceased as well as a person who in law represents the estate of the deceased It is not necessarily confined to heirs alone The executor administrators assigns or persons acquired interest by devolution under Order 22 Rule 10 or legatee under a Will are legal representatives Section 3f of the defines heirs means any person male or female who is entitled to succeed to the property of an intestate under this Act Section 8 thereof provides that the property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter Chapter 11 Inestate succession firstly upon the heirs being the relatives specified in Class 1 of the Schedule Schedule provides Class 1 heirs are Son daughter widow mother Thus under the personal law of if a Hindu dies intestate the heirs either male or female specified in Schedule 1 Class 1 are heirs and succeed to the estate as per law In their absence the next class or classes are entitled to succeed to the property of an intestate under the Act In Sudama Devi and Ors vs Jogendra Choudhary and Ors AIR 1987 Patna 239 Full Bench considered the question whether father of the minor in possession of his property and who himself was a party to the suit alongwith the minor is legal representative The minor died The father was held per majority to be legal representatives under section 211 of the Code as an intermeddler It must therefore be held that not only that Class I heirs under Section 8 read with Schedule of the but also 463 the executor of the Will of the deceased Goenka are legal representatives within the meaning of Section 211 of the Code Section 213 of the Act 39 of 1925 for short the Succession Act provides right to the executor to obtain probate of the Will thus 1 No right as executor can be established in an Court of Justice unless court of competent jurisdiction in India has granted probate of the will under which the right is claimed with a copy of the Will annexed By operation of sub section 2i only in the case of wills made by any Hindu where such wills are of the classes specified in Cls a and b of Sec Section 57 provides that the provisions of part which are set out in Schedule 111 shall subject to the restrictions and modifications specified therein apply a to all wills made by any Hlndu on or after the first day of September 1870 within the local limits of the ordinary original civil jurisdiction of the High Court of Judicature at Madras and Bombay c to all wills and codicils made by any Hindu on or after the first day of January 1927 to which those provisions are not applied by Cls a and b In other places the Dist Court or Court to whom the power is delegated alone are entitled to grant probate Section 276 provides the procedure to obtain probate namely 1 application for probate with the Will annexed shall be made by a distinctly written in English the will as the case may be the particulars are the details mentioned in Clsa to e and further details provided in sub sections 2 and 3 the mention of the details whereof are not material for the purpose of this case The petition shall be verified in the manner prescribed under section 280 and also further to be verified by at least one of the witnesses to the will in the manner and to the affect specified therein The Caveator is entitled to object to its grant by operation of Section 284 When it is contested Section 295 directs that probate proceedings shall take as nearly as may be the form of a regular suit according to the provisions of CPC and the petitioner for probate shall be the plaintiff and the person who had appeared to oppose the 464 grant shall be the defendant Section 217 expressly provides that save as otherwise provided by this Act or by any other law for the time being in force all grants or probate with the will annexed shall be made or carried out as the case may be in accordance with the provisions of Part IX Section 222 declares that 1 Probate shall be granted only to an executor appointed by the will 2 The appointment may be expressed or by necessary implication Section 223 prohibits grant of probates to the persons specified therein Section 224 gives power to appoint several executors Section 227 declares the effect of probate thus Probate of a will when granted establishes the will from the death of the testator and renders valid all intermediate acts of the executor as such Section 248 envisages grant of probate for special purposes namely if an executor is appointed for any limited purpose specified in the will the probate shall be limited to that purpose and if he should appoint an attorney with the will annexed shall be limited accordingly Section 273 declares conclusiveness of probate thus Probate shall have the effect over all the property and estate moveable or immovable of the deceased throughout the State in which the same is or are granted and shall be conclusive as to the representative title against the debtors of the deceased and all persons holding property which belongs to him and shall afford full indemnity to all debtors paying their debts and all persons delivering up such property to the person to whom such probate have been granted The further details are not necessary for the purpose of this case Under section 294 it shall be the duty of the court to preserve original Wills Section 299 gives right of appeals against an order or the decree of the court of probate By operation of Section 2111 the executor of a deceased person is his legal representative for all purposes and all the property of the deceased person vests in him as such In Inswardeo Narain Singh vs Smt Kanta Devi Ors AIR 1954 SC 280 this court held that the court of probate is only concerned with the question as to whether the document put forward as the last will and testament of a deceased person was duly executed and attested in accordance with law and whether at the time of such execution the testator had sound disposing mind The question whether a particular bequest is good or bad is not within the purview of the Probate Court Therefore the only issue in a probate proceeding relates to the genuineness and due execution of the Will and the court itself is under duty to determine it and preserve 465 the preserve the original Will in its custody The Succession Act is a self contained code in so far as the question of making an application for probate grant or refusal of probate or an appeal carried against the decision of the probate court This is clearly manifested in the fasecule of the provision of Act The probate proceedings shall be conducted by the probate court in the manner prescribed in the Act and in no other ways The grant of probate with a copy of the Will annexed establishes con clusively as to the appointment of the executor and the valid execution of the will Thus it does no more than establish the factum of the will and the legal character of the executor Probate court does not decide any question of title or of the existance of the property itself The grant of a Probate by Court of competent jurisdiction is in the nature of a proceeding in rem So long as the order remains in force it is conclusive as to the due execution and validity of the will unless it is duly revoked as per law It binds not only upon all the parties made before the court but also upon all other persons in all proceedings arising out of the Will or claims under or connected therewith The decision of the Probate Court therefore is the judgment in rem The probate granted by the competent court is conclusive of the validity of the Will until it is revoked and no evidence can be admitted to impeach it except in a proceeding taken for revoking the probate In Sheoparsan Singh vs Ramnandan Prasad Singh Cal 694 PC the judicial committee was to consider whether the Will which had been affirmed by a Court of competent jurisdiction would not be impugned in a court exercising original jurisdiction Civil Court in suit to declare the grant of probate illegal etc The privy council held that the Civil Court has no jurisdiction to impugne the grant of probate by the court of competent jurisdiction In that case the subordinate court of Muzafarbad was held to be had no jurisdiction to question the validity of the probate granted by the Calcutta High Court In Narbheram Jivram vs Jevallabh Harjivan AIR 1933 Bombay 469 probate was granted by the High Court exercising probate jurisdiction A civil suit on the Original Side was filed seeking apart from questioning the probate also other reliefs The High Court held that when a probate was granted it operates upon the whole estate and establishes the Will from the death of the testator Probate is conclusive evidence not only of the factum but also of the validity of the Will and after the probate has been granted in is incumbent on a person who wants to have the Will declared null and void to have the probate revoked before proceeding further That could 466 be done only before the Probate Court and not on the original side of the High Court When a request was made to transfer the suit to the Probate Court the learned Judge declined to grant the relief and stayed the proceeding on the original side Thus it is conclusive that the court of probate alone had jurisdiction and is competent to grant probate to the will annexed to the petition in the manner prescribed under the Succession Act That court alone is competent to deal with the probate proceedings and to grant or refuse probate of the annexed will It should keep the original will in its custody The probate thus granted is conclusive unless it is revoked It is a judgment in rem We agree with Mr Chidambaram that the applicant had consented to refer the dispute for arbitration of dispute in the pending probate proceedings but consent cannot confer jurisdiction nor an estoppel against statute The other legatees in the will were not parties to it In AR Antulay VI RS Naik when a Constitution Bench directed the High Court Judge to try the offences under the Prevention of Corruption Act with which the petitioner therein was charged and the trial was being proceeded with he questioned by way of writ petition the jurisdiction of this Court to give such a direction A Bench of seven judges per majority construed meaning of the word jurisdiction Mukerjee J as he then was speaking per himself Oza and Natarajan JJ held that the power to create or enlarge jurisdiction is legislative in character So also the power to confer a right of appeal or to take away a right of appeal The Parliament alone can do it by law and not Court whether interior or both combine can enlarge the jurisdiction of a Court and divest a person of his rights of appeal or revision Ranganath Misra J as he then was held that jurisdiction comes solely from the law of the land and cannot be exercised otherwise In this country jurisdiction can be exercised only when provided for either in the Constitution or in the laws made by the Legislature Jurisdiction is thus the authority or power of the Court to deal with a matter and make an order carrying binding force in the facts Oza J supplementing the question held that the jurisdiction to try a case could only be conferred by law enacted by the legislature The Supreme Court could not confer jurisdiction if it does not exist in law Ray J held that the Court cannot confer a jurisdiction on itself which is not provided in the law In the dissenting opinion Venkatachaliah J as he then was to lay down that the expression jurisdiction or prior determination is a verbal coat of many colours In the case of a Tribunal an error of law might 467 become not merely an error in jurisdiction but might partake of the character of an error of jurisdiction But otherwise jurisdiction is a legal shelter and a power to bind despite a possible error in the decision The existence of jurisdiction does not depend on the correctness of its exercise The authority to decide embodies a privilege to bind despite error a privilege which is inherent in and indispensable to every judicial function The characteristic attribute of a judicial act is that it binds whether it be right or it be wrong Thus this Court laid down as an authoritative proposition of law that the jurisdiction could be conferred by statute and this Court cannot confer jurisdiction or an authority on a tribunal In that case this Court held that Constitution Bench has no power to give direction contrary to Criminal Law Amendment Act 1952 The direction per majority was held to be void It is settled law that a decree passed by a court without jurisdiction on the subject matter or on the grounds on which the decree made which goes to the root to its jurisdiction of lacks inherent jurisdiction is a corum non judice A decree passed by such a court in a nullity and is nonest Its invalidity can be set up whenever it is sought to be enforced or is acted upon as a foundation for a right even at the stage of execution or in collateral proceedings The defect of jurisdiction strikes at the very authority of the court to pass decree which cannot be cured by consent or waiver of the party In Bahadur Singh Anr vs Muni Subrat Dass Anr an eviction petition was filed under the Rent Control Act on the ground of nuisance The dispute was referred to the arbitration An award was made directing the tenant to run the workshop upto a specified time and thereafter to remove the machinery and to deliver vacant possession to the landlord The award was signed by the arbitrators the tenant and the landlord It was filed in the court A judgment and decree were passed in terms of the award On expiry of the time and when the tenant did not remove the machinery nor delivered vacant possession execution was levied under Delhi and Ajmer Rent Control Act It was held that a decree passed in contravention of Delhi and Ajmer Rent Control Act was void and the landlord could not execute the decree The same view was reiterated in Smt Kaushalya Devi and Ors vs KL Bansal AIR 1970 SC 838 In Ferozi Lal Jain vs Man Mal Anr AIR 1979 SC 794 a compromise dehore grounds for eviction was arrived at between the parties under section 13 of the Delhi and Ajmer Rent Control Act A decree in terms thereof was passed The possession was not delivered and execution was 468 laid It was held that the decree was nullity and therefore the tenant could not be evicted In Sushil Kumar Mehta vs Gobind Ram Bohra dead through his Lrs JT 1989 SUPPI SC329 the Civil Court decreed eviction but the building was governed by Haryana Urban Control of Rent Eviction Act 11 of 1973 It was held that the decree was without jurisdiction and its nullity can be raised in execution In Union of India vs Ms Ajit Mehta and Associates Pune and Ors AIR 1990 Bombay 45 a Division Bench to which Sawant J as he then was a member was to consider whether the validity of the award could be questioned on jurisdictional issue under section 30 of the Arbitration Act The Division Bench held that Clause 70 of the Contract provided that the Chief Engineer shall appoint an engineer officer to be sole arbitrator and unless both parties agree in writing such a reference shall not take place until after completion of the works or termination or determination of the Contract Pursuant to this contract under section 8 of the Act an Arbitrator was appointed and award was made Its validity was questioned under section 30 thereof The Division Bench considering the scope of Sections 8 and 204 of the Act and on review of the case law held that Section 8 cannot be invoked for appointment of an Arbitrator unilaterally but be available only under section 204 of the Act Therefore the very appointment of the Arbitrator without consent of both parties was held void being without jurisdiction The Arbitrator so appointed inherently lacked jurisdiction and hence the award made by such Arbitrator is nonest In Chellan Bhai s case Sir C Farran Kt CJ of Bombay High Court held that the Probate Court alone is to determine whether probate of an alleged will shall issue to the executor named in it and that the executor has no power to refer the question of execution of Will to arbitration It was also held that the executor having propounded a Will and applied for probate a caveat was filed denying the execution of the alleged Will and the matter was duly registered as a suit the executor and the caveatrix subsequently cannot refer the dispute to arbitration signing a submission paper but such an award made pursuant thereto was held to be without jurisdiction In Gopi Rai s case Sulaiman J as he then was speaking for the Division Bench held that the Civil Court has no jurisdiction to allow the dispute relating to the genuineness of a Will in a probate proceedings pending before him to be referred to the arbitration of an arbitrator He has got to be specified that the Will is a genuine document before the order of granting probate is passed He cannot delegate those functions to a 465 private individual and decide the point through him Similar was the view laid in Manmohini Guha s case Sarda Kanta Das vs Gobinda Das 6 Indian Cases 912 and Khelawati vs Chet Ram Khub Rain AIR 1952 Punjab 67 When the plea of estoppel was raised Sulaiman J in Gopi Rai s case held that We cannot hold that there is any estoppel against Gopi Rai on this question of jurisdiction That is a matter which we can take into account only when ordering costs The decision in Nalla Ramudamma vs Nalla Kasi Naidu AIR 1945 Madras 269 relied on by Shri Chidambaram does not help his clients Therein the question was the matrimonial dispute The Arbitrator had decided at the request of the parties and a decree was passed It was held that the dispute would come under section 21 of the Arbitration Act The question of jurisdiction was not raised therein Equal ly the decision in Mt Mahasunader Kuer and Anr vs Ram Ratan Prasad Sahi is also of little assistance The question of adoption it was held cannot be decided in the probate proceedings On a conspectus of the above legal scenario we conclude that the Probate Court has been conferred with exclusive jurisdiction to grant probate of the Will of the deceased annexed to the petition suit on grant or refusal thereof it has to preserve the original Will produced before it The grant of probate is final subject to appeal if any or revocation if made in terms of the provisions of the Succession Act It is a judgment in rely and conclusive and binds not only the parties but also the entire world The award deprives the parties of statutory right of appeal provided under section 299 Thus the necessary conclusion is that the Probate Court alone has exclusive jurisdiction and the Civil Court on original side or the Arbitrator does not get jurisdiction even if consented to by the parties to adjudicate upon the proof or validity of the Will propounded by the executrix the applicant It is already seen that the executrix was nominated expressly in the will is a legal representative entitled to represent the Estate of the deceased but the heirs cannot get any probate before the Probate Court They are entitled only to resist the claim of the executrix of the execution and genuineness of the Will The grant of probate gives the executrix the right to represent the estate of the deceased the subject matter in other proceedings We make it clear that our exposition of law is only for the purpose of finding the jurisdiction of the arbitrator and not an expression of opinion on merits in the probate suit From this perspective we are constrained to conclude that the Ar 470 bitrator cannot proceed with the probate suit to decide the dispute in issues Nos1 and 2 framed by him Under these circumstances the only course open in the case is that the High Court is requested to proceed with the probate suit No6585 pending on the probate jurisdiction of the High Court of Bombay and decide the same as expeditiously as possible The learned Judge is requested to fix the date and proceed day to day at his convenience till it is concluded and decide the matter according to law preferably within six months Till then the Arbitrator is requested not to decide issue Nos1 and 2 He may be at liberty to proceed with the other issues He is requested to await the decision of the Probate Court depending upon the result thereon he would conclude his findings on Issues Nos1 and 2 and then make the award and take the proceedings according to law The application is accordingly ordered but without cost NVK Application disposed of

Respondent Bank lodged a complaint before the Bar Council of Delhi against the appellant Advocate alleging that the appellant and two other Advocates of the Ms Singh and Company a Firm of Advocates and solicitors were guilty of serious professional misconduct as they failed to discharge theirprofessional duties and responsibilities entrusted to them The case of the Bank was that in 1975 the Bank engaged the Firm to rile a recovery suit for the recovery of Rs 61216410 from Ms Delhi Flooring P Ltd and handed over the case rile containing original and valuable documents The Firm submitted a bill for riling the recovery suit which included the professional fees and other miscellaneous charges On 15111975 the Bank paid a sum of Rs 11475 which included 13rd of the professional fee and the miscellaneous charges It did not inform the Bank whether the suit was filed or not On 5121975 the Bank wrote a letter to the Firm to send a copy of the plaint before 8121975 or the Bank would be compelled to withdraw the case from the Firm On 15121975 one of the partner of the firm informed the Bank the suit was filed on 15121975 in the High Court Thereafter the Bank was kept in the dark about the fate of the case Hence the Bank engaged the services of one Mr Arora Advocate in order to find out as to what happened to the suit On 231977 the Bank was informed by Mr Arora Advocate that 489 suit was filed on 15121975 in the High Court and on 3111976 it was returned by the Original Branch to the Registry with objections Mr Arora Advocate further informed the Bank on 3131977 that the entire suit paper book was returned to Mr Singh Advocate of the Firm on 2771976 for removing the object ions and thereafter the suit was not refiled The respondent Bank therefore claimed before the Bar Council of Delhi that the appellant and his associates misappropriated the money paid to them for court fee miscellaneous expenses and one third of the professional fee The Disciplinary Committee of the Bar Council of Delhi transferred the case of the Bar Council of India as the case was pending for more than one year The Bar Council of India issued notices returnable on 2111980 The appellant and his associates were not present on that date Therefore fresh notices were issued for 20121980 The appellant did not present on 20121980and ex parte proceedings were ordered The case was posted for 2311981 for the evidence of the complainant On 2311981 the appellant moved an application for setting aside the ex parte order dated 20121980 which was allowed and the case was adjourned to 2721981 The case was adjourned from time to time and finally fixed for evidence on 2281981 On 2281981 the appellant s application for adjournment was rejected The evidence was concluded ar guments were heard and the order was reserved The complainant had given up its case against one Ms VSingh Advocate an associate of the appellant and the Bar Council of India did not proceed against her One Mr BSingh Advocate the other associate of the appellant was also proceeded against Notice to him was returned with the postal endorsement refused and ex parte proceeding were ordered The Disciplinary Committee of the Bar Council of India held that the case against the appellant and his associate was proved beyond reasonable doubt Their names were removed from the rolls of Advocates of the Bar Council of Delhi and the Sanads granted to them were ordered to be withdrawn 490 The appellant riled the appeal before this Court while his associate riled a review petition before the Bar Council of India which was still pending The Bar Council of India granted him stay of the order dated 24101981 in the review proceeding The appellant contended that the suit was filed by the appellant on 151211975 but the record of the suit file was misplacedlost by the Registry of the High Court that by his letter dated 2081977 he informed the Bank about the suit rile being not traceable and that the record of the suit was to be structured and refiled Dismissing the appeal this Court HELD 101 The letter dated August 201977 was not produced before the Bar Council of India It has been placed before this Court for the first time Apart from the ipse dixit of the appellant and Mr BSingh in the said letter there is no evidence on the record to show that the suit rile was misplaced or lost by the High Court Registry On the other hand there is cogent and reliable evidence on the record to shows that the Delhi High Court Registry returned back the papers to Mr B Singh for removing the objections raised by it 494D E 102 Both the reports of MrRPArora Advocate have been proved on the record of the Bar Council of India as evidence The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr BSingh was proved beyond doubt There is no ground to interfere with the order of the Bar Council of India 495H 496D

Appeal No 1890 of 1974 From the Judgment and Order dated 681973 of the Gujarat High Court in Second Appeal No98 of 1973 MV Goswami for the Appellants SK Dholakia and P Narasimhan for the Respondents The following Order of the Court was delivered This appeal under Article 136 is against the judgment of the High Court of Gujarat in Second Appeal No98 of 1973 dated August 6 1973 The appellants predecessor was inducted in Field Nos439 and 676 as an usufructuary mortgagee in the year 1945 On expiry of the period of redemption prescribed therein that is 25 years the suit for redemption was filed in 1970 by the respondents The trial court decreed the suit subject to payment of damages for improvements On appeal the District Court confirmed the decree for redemption but set aside the decree for damages In second appeal the High Court confirmed the decree of the appellate court Thus this appeal In the High Court the appellants sought two contentions namely by operation of Section 2 A which was brought by way of amendment of Section 48 to the Bombay Tenancy Act 1939 the mortgagee became a deemed tenant It was not permitted to argue as is not a pure question of law but is a mixed question of law and fact which need investigation of facts It was neither raised in the pleadings nor argued either before the trial court or the appellate court Therefore the question raised in the second appeal for the first time was disallowed The second question namely the jurisdiction of the civil court to declare the tenancy rights by operation of the Amendment Act 573 which brought Section 85 A on statute with retrospective effect It ousted the jurisdiction of the civil court to decide the dispute of tenancy rights in pending suit This contention too was negatived as when the Amendment Act came into force the second appeal was pending and therefore the High Court held that the civil court was not ousted to exercise the jurisdiction and to refer the matter to the Revenue Court for jurisdiction for adjudication whether the appellants 580 were or were not deemed tenants The same contention was reiterated before us Placing reliance on a Division Bench judgment of the Gujarat High Court in Salman Raje vs Madhavsang Benesang reported in ILR 1963 Guj722 Shri MV Goswami the learned counsel for the appellants contended that by operation of Section 2 A the appellants are deemed tenants Once the appellants are deemed tenants the Revenue Court has to decide that issue The second appeal is a continuation on the suit and therefore the High Court is not right in rejecting the claims of the appellants It is not necessary to express any opinion on the correctness of the judgment of the Division Bench of the Gujarat High Court Suffice it to say that the appellants had not specifically pleaded that the appellants are deemed tenants by operation of Section 2 A of the Act What was pleaded in the written statement was that initially the appellants predecessor was continuing as cultivating tenant But by virtue of the mortgage their tenancy right merged in the right as usufructuary mortgagee On redemption pre existing tenancy rights get revived But that plea was not pursued A new plea based on Section 2 A was sought to be raised for the first time in the High Court The High Court rightly did not permit the appellants to raise the plea of a deemed tenancy as the said claim needs investigation based on factual foundation which was lacking Once the right of tenancy is not permitted to be raised the question of construction of Section 85 A whether the Civil Court had jurisdiction or not is an academic issue Accordingly we are not going into that question The learned counsel for the appellants also contended that the appellants are entitled to the improvements The High Court did not go into that question as the same was not canvassed and the decree of the appellate court is quite right We cannot go into that question which is accordingly rejected The appeal is accordingly dismissed but in the circumstances without costs TNA Appeal dismissed

The appellant defendant was in occupation of a flat as its tenant in a storeyed building comprised of a large number of flats occupied by different tenants When the owner of that building mortgaged with possession the said building in favour of respondents plaintiffs the appellant defendant and other tenants in different flats of that building became tenants under respondents plaintiffs usufructuary mortgagees and continued as such tenants on payment of monthly rents to them But by a quit notice dated July 3 1967 the respondents plaintiffs determined the monthly tenancy of the appellant respecting the premises in his occupation and sought to recover from him the possession of the premises by instituting a suit in the court of Small Causes at Bombay on the very ground on which his tenancy was terminated that is that the defendant had been guilty of conduct which was a nuisance or annoyance to the adjoining or neighbouring occupiers under clause c of sub section 1 of Section 13 of the Bombay Rents Hotel and Lodging House Rates Control Act The trial court on an appraisal of the oral and documentary evidence adduced by the parties recorded its findings on issues in favour 471 472 of the respondents plaintiffs Consequently it decreed the suit of the respondent plaintiffs for recovery of possession of the premises The appellate court before which the decree of the trial court was appealed against by the appellant defendant on its re appraisal of the evidence affirmed the findings of the trial court and dismissed the appeal The findings as to the acts of nuisance and annoyance attributable to the appellant and the persons who were residing in the premises are i that the appellant erected a Textile Printing Mill on the terrace of the storeyed building and ran it during nights so as to make the occupiers of the adjoining and neighbouring tenements suffer the vibrations and noise in the building arising on account of the running of the Mill and loose their quiet and sleep during nights ii that he unauthorisedly utilised the water stored in the common over head tanks on the terrace meant for domestic use of all the occupiers of the tenements in the building for running his Mill a non domestic purpose iii that the appellant and the persons residing with him in the premises had often removed the radio aerials and TV antenas of the occupiers of the adjoining and neighbouring tenaments which had been fixed above the common terrace of the building iv that they were wrongly preventing the respondents plaintiffs and their workers in reaching the common terrace for repairs of radio aerials TV antenas telephone lines and the like of the occupiers of the neighbouring tenaments in the building by blocking its staircase Feeling aggrieved by the decree of the trial court and its affirmation by the appellate court the defendant impugned the same by filing a writ petition under Article 227 of the Constitution before the High Court of Bombay but that writ petition was rejected in limine In appeal to this Court it was contended on behalf of the appellants a that an usufructuary mortgage of tenanted premises cannot rile a suit for recovery of its possession from the tenant under section 131 c of the Act b the findings of the appellate court recorded respecting acts of nuisance and annoyance not having been based on the evidence on record become unsustainable c the acts found to have been committed by the appellant defendant and the persons residing with him in the premises even if are true they could not have been regarded as acts amounting to nuisance or annoyance under section 131 c of the Act Dismissing the appeal this Court 473 HELD 1 The expression landlord in sub section 1 of section 13 of the Act includes an usufructuary mortgagee where the tenanted premises is the subject of usufructuary mortgage Section 131 contains nothing repugnant in its subject or context which would disentitle an usufructuary mortgagee as a landlord of the tenanted premises to recover its possession from the tenant on the ground envisaged under clause c 482A 480B SB Abdul Azeez By Lrs vs M Maniyappa Setty and Ors relied on V Dhanapal Chettiar vs Yesodal Ammal AIR 1979 SC 1745 referred to Nanalal Girdharlal and Anr vs Gulamnabi Jamalbhai Motorwala and Ors 1972 13 Gujrat law Reporter 880 referred to as no longer good law 11 Under the definition of usufructuary mortgage in clause d of Section 58 of the an usufructuary mortgagee is a transfer of a right to possession of the mortgaged property and the right to receive the rents and profits accruing from such property When a lessor of a leased property creates an usufructuary mortgage in respect of such property what he transfers under Section 109 of the TP Act as a mortgagor in favour of the usufructuary mortgagee includes his right to possession of such property and the right to receive the rents and profits accruing from it Thus Section 109 of the TP Act entitles the usufructuary mortgagee from the lessor as against the lessee for all rights which the lessor had against such lessee From this it follows that tenanted premises if is mortgaged by the landlord by way of usufructuary mortgage the usufructuary mortgagee thereunder would become entitled to receive the rents and profits accruing from such property in his own right and on his own account 479E G 2 It cannot be said that the findings of the lower appellate court are not supported by the evidence on record of the case In fact some of the findings are to a great extent based on the facts which were admitted by the appellant himself Besides the findings receive support from the evidence given in the case by the occupiers of the adjoining and neighbouring tenaments of the same building Therefore as seen from the judgment of the appellate court its findings in relation to the acts of the appellant 474 and persons residing with him in the premises are based on appreciation of ample evidence that was on record and the same cannot be said to have been based on no evidence or even improper appreciation of evidence Thus there is no justification to interfere with such findings of facts recorded by the appellate court virtually affirming the findings of fact recorded by the trial court 484D G H 485A 3 There are no statutory definitions of nuisance or annoyance which under section 131 c of the Act constitute a ground for recovery of possession by landlord of a premises in the occupation of a tenant However the acts of the appellant or persons residing with him in the tenanted premises which are found as acts causing nuisance or annoyance to adjoining or neighbouring occupiers cannot fall short of being acts of nuisance or annoyance if regard is had to their nature intensity and duration and the consequential ill effects which might have been produced by them on the normal living of such occupiers They cannot make the Court to think that they were not clear acts of nuisance or annoyance envisaged under section 131 c of the Act Therefore the courts below have rightly found them as acts of nuisance or annoyance envisaged under section 131 c of the Act 485D G Dhabhi Lalji Kalidas vs Ramniklal Somchand Mehta 1975 16 Gujarat Law Reporter 824 Gaurishanker Babulal Govindji vs Bhikhalal Chhaganlal Ors 1977 18 Gujarat Law Reporter 805 held inapplicable Even otherwise the acts said to have been committed by the defendant and persons residing with him in the premises when are as stated found by the fact finding courts to have amounted to acts of nuisance or annoyance entitling the plaintiff under section 131 c of the Act to recover possession of the premises from the defendant and when the High Court has refused to interfere with such finding in exercise of its writ jurisdiction there could be no justification whatever for this Court to interfere with the same in appeal under Article 136 of the Constitution 485H 486A B

Appeals Nos 220 to 223 of 1953 Appeals from the Judgment and decrees dated April 141943 of the Bombay High Court in Appeals Nos 183 184 185 and 186 of 1942 arising out of the judgments and decrees dated February 16 1942 of the Court of the 1st Class Sub Judge Poona in Suits Nos 90037 39235 87536 and 120233 V P Rege and Naunit Lal for the appellants N C Chatterjee K V Joshi and Ganpat Rai for respondents Nos 1 to 6 In all the Appeals 478 1959 March 26 The Judgment of the Court was delivered by GAJENDRAGADKAR J These four appeals represent the last stage of a long and tortuous litigation between the appellants Waghmares also called Guravs who claim the rights of hereditary worshippers in the Shree Dnyaneshwar Maharaj Sansthan Alandi and respondents 1 to 6 who are the trustees of the said Sansthan Alandi which is a small town situated on the banks of the river Indrayani at a dis tance of about 14 miles from Poona is regarded as a holy place of pilgrimage by thousands of Hindu devotees In the last quarter of the 13th century Shree Dnyaneshwar Maharaj the great Maharashtra Saint and Philosopher lived at Alandi He was a spiritual teacher and reformer by his saintly life and his inspiring and illuminating commentary on the Bhagvad Gita known as Dnyaneshwari he helped to create a popular urge and fervour for religious and social revolution which led to the foundation of a devotional cult the followers of this cult are known as Warkaris in Maharashtra They refuse to recognise any barriers of caste or class and amongst them prevails a feeling of real and genuine spiritual brotherhood Every year in the months of July and November thousands of them proceed on pilgrimage on foot and accompany the annual palanquin procession from Alandi to Pandharpur Pandharpur is the chief centre of pilgrimage in Maharashtra and it is regarded by devotees as the Banares of Southern India About 1300 A D Shree Dnyaneshwar Maharaj took Samadhi at Alandi and since then Alandi also has become a place of pilgrimage In or about 1500 A D a big temple was erected in front of the idol of Shiva called Siddeshwar where the said Shree Dayaneshwar Maharaj took his Samadhi In due course the Mahratta Kings and the Peshwas of Poona granted the village of Alandi in inam for the upkeep of the temple and the Samadhi About 1760 A D Peshwa Balaji Baji Rao framed a budget called Beheda or Taleband in order to regulate the management and worship of the shrine and provided for proper 479 administration of its annual revenue amounting to Rs 1725 The appellants claim that their ancestors were then in possession of the temple and management of its affairs especially the worship of the shrine The budget framed by the Peshwa shows that out of the sum of Rs 1725 an amount of Rs 361 was assigned to the worshippers for some of their services After the fall of the Mahratta power the management of Alandi passed into the hands of the East India Company which continued the old arrangement without any interference In 1852 under orders from the Government of Bombay the Collector of Poona drew up a yadi or memorandum appointing six persons as Punchas trustees with directions to them for the management of the temple in accordance with the old tradition and practice as well as for the administration of the revenue of the village subject to the control and sanction of the Collector This arrangement came to be described as the scheme of 1852 In 1863 the Religious Endowment Act was passed and inconsequence in 1864 the Government of Bombay withdrew their superintendence over the affairs of the Alandi Sansthan and the trustees continued to manage the affairs of the temple without any supervision on the part of the Government It was during this period that the appellants ancestors began to assert that they were the owners of the shrine while the trustees insisted on treating them as the servants of the shrine This conflict inevitably led to several disputes between the worshippers and the trustees Matters appear to have come to a crisis in 1911 when the trustees dismissed eleven Guravs from the temple service on the ground that they were found guilty of gross misconduct The Guravs nevertheless asserted that they were the owners of the shrine and that the trustees had no authority or power to dismiss them Taking their stand on their ownership of the shrine some of the dismissed Guravs filed Civil Suit No 485 of 1911 in the Court of the Subordinate Judge Poona against the trustees and this was the beginning of the long drawn out litigation which followed between the parties In that suit the Guravs 480 claimed a declaration that they were the owners of the temple and not the servants of the temple committee and as owners they were entitled to perform the worship at the shrine and to appropriate the offerings made to the idol of the Saint This claim was resisted by the trustees who pleaded that the Guravs were merely the servants of the temple committee and not the owners at all On April 20 1917 the learned trial judge dismissed the suit because he held that the Guravs were not the owners of the shrine and were not entitled to the declarations claimed by them Against this decision the Guravs preferred several appeals but these appeals were dismissed on August 3 1921 While dismissing their appeals the High Court incidentally expressed the view that it was open to the Guravs to come to terms with the temple committee and that the terms on which the Guravs could be reinstated can be decided appropriately in a suit filed under section 92 of the Code of Civil Procedure It was also observed by the High Court in its judgment that the temple committee did not dispute the fact that the Guravs were the hereditary pujaris and that they had some rights in that capacity No doubt the committee claimed that under the scheme framed in 1852 it was competent to dismiss hereditary servants for a substantial cause such as gross misconduct It appears that instead of adopting the course indicated in the judgment of the High Court and filing a suit under section 92 of the Code the Guravs chose to take the law into their own hands and obtained forcible possession of the temple premises on July 25 1922 and began to perform the puja and to take the offerings placed before the deity as they had been doing prior to their dismissal This was followed by a suit filed by the trustees on September 12 1922 Suit No 1075 of 1922 under section 9 of the Specific Relief Act This suit terminated in a decree in favour of the committee on November 4 1922 In pursuance of this decree the committee recovered possession of the temple on November 16 1922 Thus the Guravs had occupied the temple precincts for about three and a half months 481 When the Guravs were thus dispossessed by the committee in execution of the decree obtained by it some of them proceeded to file Suit No 19 of 1922 in the District Court of Poona this suit purported to be one under section 92 of the Code but it claimed the same reliefs as had been claimed by the Guravs in theirs earlier suit of 1911 On April 25 1927 the District A Court dismissed this suit on the ground that the Guravs could not reagitate the same questions over again it was held that their claim was barred by the deci sion of the earlier Suit No 485 of 1911 Against this decision the Guravs appealed to the High Court First Appeal No 507 of 1927 but the High Court agreed with the conclusion of the District Court and dismissed the Guravs appeal on June 20 1933 It was held by the High Court that the suit as framed was not properly constituted under section 92 of the Code It was at this stage that a properly constituted suit No 7 of 1934 was filed under section 92 of the Code by the general public of Alandi along with two Guravs in the District Court at Poona This suit claimed that a proper scheme should be framed for the management of the temple Even so one of the allegations made in the plaint referred to the Guravs rights as hereditary worshippers It was apparently apprehended that this allegation would be treated as outside the scope of a scheme suit under section 92 and so the Guravs took the precaution of filing four separate suits on behalf of four branches in the Waghmare family one after the other These suits were numbered as 1202 of 1933 392 of 1935 875 of 1936 and 900 of 1937 the plaintiffs in these suits were respectively the members of the third the fourth the first and the second branch of the Waghmare family It appears that the hearing of these suits were stayed by an order of the District Judge pending the final decision of the scheme suit which was being tried by him The scheme suit was taken up for hearing in 1937 As many as 22 issues were framed in this suit and voluminous evidence Was recorded In the result the learned judge substantially confirmed the original 61 482 scheme of 1852 though he issued certain directions modifying it This decree was passed on December 11 1937 The trustees felt aggrieved by this decree and challenged its propriety by preferring an appeal No 92 of 1938 in the Bombay High Court On November 16 1939 the High Court dismissed the appeal though it made some amendments in the scheme framed by the District Judge by consent of the parties After the scheme suit was thus disposed of by the High Court the four suits filed by the pujaris were taken up for trial by the learned Subordinate Judge First Class Poona In all these suits the appellants claimed their rights as hereditary vatandar Pujari Gurav Servants of the Sansthan They alleged that they were under a duty to perform worship according to certain rites in Shree Dayaneshwar Sansthan and that they were also under an obligation to perform other incidental duties enumerated by them in their plaints Likewise they claimed that for remuneration they were entitled to receive coins and perishable articles offered by the devotees and the committee as well as yearly emoluments from the committee On these allegations the appellants claimed a declaration about their respective rights and an injunction permanently restraining the trustees from obstructing the appellants in the exercise of the said rights They also claimed accounts from the trustees in regard to the offerings prior to the institution of the suit as well as those made after the institution of the suit and before the passing of the decree These allegations were denied by respondents 1 to 6 Their case was that the appellants were the servants of the temple committee and as such had no hereditary rights set up by them In the alternative it was pleaded by them that even if the appellants had any hereditary rights the same had been lost by their misconduct and had been otherwise extinguished by limitation Against the appellants claim pleas of res judicata and estoppel were also raised On these pleadings as many as 21 issues were framed in the trial court The trial court found in favour 483 of the appellants on all the issues The learned judge held that the Guravs had established the hereditary rights set out by them and he was inclined to take the view that the respondents could not deprive the appellants of their hereditary rights of service because of the misconduct of some of their ancestors He also found that there was no substance in the plea of estoppel or res judicata and that the suits were not barred by limitation In the result the appellants suits were decreed on February 16 1942 Thereupon the respondents challenged these decrees by preferring appeals against them in the Bombay High Court The four suits accordingly gave rise to First Appeals Nos 183 184 185 and 186 of 1942 respectively In these appeals the High Court agreed with the trial court in holding that on the merits the appellants had established their case and that their claim was not barred either by res judicata or by estoppel However on the question of limitation the High Court took the view that the appellants suits were governed by article 120 of the Limitation Act and that they had been filed beyond the period of six years prescribed by the said article That is why the High Court set aside the decrees passed by the trial court allowed the respondents appeals and dismissed the appellants suits However in view of the special facts of the case the High Court directed that each party should bear its own costs throughout This judgment was pronounced on April 14 1943 Like the trial court the High Court also dealt with all the four cases by one common judgment It appears that after this judgment was pronounced by the High Court but before it Was signed the appellants moved the High Court on July 2 1943 for a rehearing of one of the appeals No 186 of 1942 It was urged before the High Court that even if article 120 applied the claim made by the appellant in the said appeal which arose from Suit No 1202 of 1933 could not be held to be barred by limitation The High Court was not impressed by this plea and so the motion for rehearing was discharged Subsequently a Civil Application No 1039 of 1944 484 was made by the appellant in the said appeal seeking to raise the same point over again but this application was rejected by the High Court on September 12 1944 The appellants then applied for leave to appeal to the Privy Council on August 15 1944 Their applications were heard together and were disposed of by an order passed on March 26 1946 whereby leave was granted to them to appeal to the Privy Council and their prayer for consolidating all the appeals was also allowed These appeals could not however be disposed of by the Privy Council before the jurisdiction of the Privy Council to deal with Indian appeals came to an end and so they ultimately came to this Court and were numbered as Appeals Nos 220 to 223 of 1953 It may be convenient to state that these appeals arise respectively from Suits Nos 907 of 1937 392 of 1935 875 of 1936 and 1202 of 1933 It would thus be seen that the litigation which began between the parties in 1911 has now reached its final stage before us in the present appeals As we have already indicated both the courts below have found in favour of the appellants on most of the issues that arose in the present litigation but the appellants have failed in the High Court on the ground of limitation In the trial court the respondents had urged that the present suits were governed by article 124 of the Limitation Act and that since the Guravs had been dismissed from service in 1911 and other Guravs refused to serve in 1913 and 1914 limitatation began to run against them at least from 1914 and so the suits were beyond time The learned trial judge held that article 124 was inapplicable He also found alternatively that even if the said article applied the trustees did not have continuous possession of the suit properties from 1911 or 1914 for twelve years and so the suits were not barred by time According to him the case was really covered by section 23 of the Limitation Act and so the plea of limitation could not succeed The High Court has agreed with the trial court in holding that article 124 is inapplicable It has however 485 come to the conclusion that the suits are governed by article 120 of the Limitation Act and according to its findings limitation began to run against the appellants either from September 12 1922 when the trustees filed their suit under section 9 of the Specific Relief Act or in any case from November 1922 when in execution of the decree passed in the said suit the appellants were driven out of the temple precincts by the trustees The High Court has also held that section 23 can have no application to the present case That is how the High Court has reached the conclusion that the appellants suits are barred by time under article 120 The question which arises for our decision in the present appeals therefore is one of limitation it has to be considered in two aspects Was the High Court right in holding that article 120 applies and that the cause of action accrued more than six years before the dates of the institution of the present suits Was the High Court also right in holding that section 23 does not apply to the suits On behalf of the appellants Mr Rege has contended that in substance in their present suits the appellants have made a claim for possession of an hereditary office and as such they would be governed by article 124 of the Limitation Act In this connection he has referred us to the relevant allegations in the plaint to show that the appellants prayer for a declaration about their hereditary rights and for a consequential permanent injunction amount to no more and no less than a claim for possession of the said hereditary office In support of this argument reliance has been placed on the decision of the Bombay High Court in Kunj Bihari Prasadji vs Keshavlal Hiralal 1 In that case the plaintiff had made a claim to the gadi of the Swaminarayan temple at Ahmedabad and had asked for a declaration that the will of the last Acharya which purported to appoint defendant 14 as his adopted son and successor was null and void As a consequence a perpetual injunction was also claimed restraining the defendants from offering any obstruction to the plaintiff in occupying the said gadi The 1 Bom 567 486 principal point which was decided in the case had reference to the effect of the provisions of section 42 of the Specific Relief Act The plaintiff s suit had been dismissed in the courts below on the ground that he had omitted to ask for further relief as he was bound to do under section 42 of the said Act and the High Court held that the section did not empower the court to dismiss the suit under the said section In considering the nature of the claim made by the plaintiff Jenkins C J observed that in the plaintiff s view the suit was not one of possession of land appertaining to the gadi but to determine who was to occupy the gadi and thus as gadinishin become the human agent of the deity If that was so then the injunction restraining all interference with the occupancy by the plaintiff of the gadi secures in the most complete manner to him the rights he claims The learned Chief Justice also observed that the plaintiff might in terms have asked for possession of the office he said was his but be asked how would practical effect be given to an award of possession of office otherwise than by preventing interference with the rights of which it was made up Even so having reversed the decree passed by the courts below when the High Court remanded the case for retrial the plaintiff was advised to amend his plaint and to define more precisely the terms of the injunction he sought It is urged that in the present appeals also by asking for a declaration of their rights and for an appropriate injunction against the respondents the appellants were in effect asking for possession of the hereditary office It is doubtful if the claims made by the appellants in their respective suits are exactly analogous to the claim made by the plaintiff in Kunj Bihari Prasad s case 1 The appellants have not only asked for an injunction but also for an account of the income received by the trustees from July 23 1933 up to the date of the suit as well as for similar account from the date of the suit until the date of the decree A claim for accounts in the form in which it is made may not be quite consistent with the appellants contention that their suits are for nothing more than possession 1 Bom 567 487 of the hereditary office but in dealing with the present appeals we are prepared to assume that they have in substance claimed possession of the office The question which then arises is Does this claim for possession attract the application of article 124 of the Limitation Act Article 124 governs suits for possession of an hereditary office The period of limitation prescribed by the article is twelve years and the said period begins to run when the defendant takes possession of the office adversely to the plaintiff This is explained to mean that the hereditary office is possessed when the profits thereof are usually received or if there are no profits when the duties thereof are usually performed It is clear that before this article can apply it must be shown that the suit makes claim for possession of an office which is hereditary and the claim must be made against the defendant who has taken possession of the said hereditary office adversely to the plaintiff Unlike article 142 the fact that the plaintiff is out of possession of the hereditary office for more than twelve years before the date of his suit would not defeat his claim for possession of the said office What would defeat his claim is the adverse possession of the said office by the defendant for the prescribed period As the explanation makes it clear usually the receipt of the profits may amount to the possession of the office but if the defendant merely receives the profits but does not perform the duties which are usually performed by the holder of the office the receipt of the profits by itself may not amount to the possession of office The cause of action for possession in suits falling under article 124 is the wrongful dispossession of the plaintiff and the adverse possession by the defendant of the office in question Claims for possession of hereditary offices which attract the application of this article are usually made by holders of the said offices against persons who claim adverse possession of the said offices in other words in suits of this kind the contest is usually between rival claimants to the hereditary office in question In the present appeals the claim for possession is 488 made by the appellants against the trustees of the Sansthan It is significant that the persons who are actually performing the duties of the worshippers are not impleaded and they do not claim to hold office as hereditary officers either They have been appointed by the trustees as servants of the institution and they perform the duties of worship as such servants The trustees on the other hand cannot be said to have taken possession of the office themselves adversely to the appellants They do not take the profits themselves nor do they perform the duties associated with the said office They have in exercise of their authority and power as trustees dismissed the appellants predecessors from office and have made fresh appointments of servants to perform the worship at the Sansthan and in making the said appointments have in fact destroyed the hereditary character of the office The dispute in the present appeals is between the worshippers who claim hereditary rights and the trustees of the institution who claim to have validly terminated the services of some of the predecessors of the appellants and to have made valid appointments to the said office It is therefore impossible to accept the argument that the claim made by the appellants in their respective suits attracts the provision of article 124 It is conceded by Mr Rege that if article 124 does not apply the suits would be governed by article 120 which is a residuary article It may prima facie appear somewhat strange that whereas a suit against a person claiming to hold the hereditary office adversely to the plaintiff is governed by a period of twelve years a claim against the trustees like the respondents in the present appeals who have dismissed the hereditary worshippers should be governed by a period of six years It may be possible to suggest that there is a substantial difference in the nature of the two disputes but apart from it it is well known that the artificial provisions of limitation do not always satisfy the test of logic or equity Mr Rege however argued that in determining the scope of article 124 we need not consider the provisions of col 3 to the said article His contention appears 489 to be that once it is shown that the suit is for possession of an hereditary office article 124 must apply though the claim for possession may not have been made against a person who has taken possession of the office adversely to the plaintiff He also urged alternatively that the trustees should be deemed to have taken possession of the office adversely to the appellants We have already held that the conduct of the trustees shows that they have not taken possession of the office adversely within the meaning of col 3 of article 124 and we do not think it is possible to ignore the provision of col 3 in deciding whether or not article 124 applies It is true that in Jalim Singh Srimal vs Choonee Lall Johurry 1 while holding that the adjustment on which the plaintiff s claim was based in that case was in time both under articles 115 and 120 Jenkins C J has observed that the function of the third column of the second schedule is not to define causes of action but to fix the starting point from which the period of limitation is to be counted but this observation does not support the appellants case that article 124 would govern the suit even though the third column is wholly inapplicable to it That obviously is not the effect of the observations made in Jalim Singh s case 1 The question about the nature and scope of the provisions of article 124 has been considered by the Madras High Court in Thathachariar vs Singarachariar 2 If we take into consideration the terminology used in the three columns of article 124 observed Srinivasa Aiyangar J in that case it is clear that the nature of the suit intended to be covered by that article must be a suit filed by a plaintiff who claims the office from a person who at that time holds the office himself In our opinion this view is correct We may also refer to another decision of the Madras High Court in which this question has been considered In Annasami vs Adivarachari 3 a Full Bench of the Madras High Court was dealing with a suit in 1 2 AIR 1928 Mad 377 3 ILR 62 490 which the plaintiff had claimed an injunction restraining the trustee and the archakas of the Sri Bhuvarabaswami temple at Srimushnam from interfering with the performance of the duties of his office of mantrapushpam of the temple This suit had been filed in 1929 The office of mantrapushpam was a hereditary office and the plaintiff had succeeded to it on the death of his father in 1906 The emoluments of the office consisted of a ball of cooked rice per them and twelve annas per month It appears that the plaintiff was a Vadagalai while the archakas of the temple were Thengalais and there was animosity between them and as a result of this animosity the plaintiff bad never been able to perform the duties of his office It was common ground that the plaintiff was the lawful holder of the office and that he had been receiving its emoluments month by month until 1927 The archakas who resisted the plaintiff s claim did not claim that they were in possession of the office or that they had performed the duties of the said office The Full Bench held that where a person is admittedly the lawful holder of the office and he is enjoying its emoluments he must in law be regarded as being in possession of the office itself especially where no one else is performing the duties of the said office and so under article 124 it was enough for the plaintiff to show that he had been in receipt of the emoluments of the office to save his claim from the bar of limitation The Full Bench also rejected the contention that under article 120 the suit was barred because it was held that every time the trustee and the archakas prevented the plaintiff from performing his duties as a hereditary officer a fresh cause of action arose and so there can be no bar of limitation under article 120 It would be noticed that the basis of this decision was that in the eyes of law the plaintiff was in possession of the hereditary office since he was receiving the emoluments of the said office month by month and so every act of obstruction on the part of the archakas and the trustee was in the nature of a continuing wrong which gave rise to a fresh cause of action to the plaintiff from time to time In other words on the facts the Full Bench held that 491 s23 helped the plaintiff and saved his suit from the bar of limitation As we will presently point out there is no scope for applying section 23 to the facts of the present cases and so the decision in Annasami Iyengar s case 1 cannot assist the appellants In this connection it is relevant to consider the decision of the Privy Council in Jhalandar Thakur vs Jharula Das 2 in which it was held that article 124 was inapplicable The defendant Jharula Das had obtained a decree for money on a mortgage which bad been executed in his favour by Mst Grihimoni the widow of the shebait of the temple In execution of the said decree the defendant had caused 3 12 as share of the judgment debtor including her right in the nett income of the daily offerings made before the idol to be put up for sale and had himself purchased it at the auction sale As such purchaser he was in possession of the income of the said share The judgment debtor attempted to challenge the said sale by two suits but her attempts failed and the auction purchaser continued to be in possession of the income On the death of Mst Grihimoni Bhaiaji Thakur who succeeded to the office of the shebait sued the defendant for possession of certain lands and claimed a declaration that he was entitled to receive the 3 12 as share of the nett income from the offerings to the temple with other reliefs This claim was resisted by the defendant Jharula Das In regard to the plaintiff s claim in respect of the said 3 12 as share the High Court had held that article 124 applied and that the claim was barred under the said article That is why the decree passed by the trial court in favour of the plaintiff in respect of the said income was reversed by the High Court This decision was challenged by the plaintiff before the Privy Council and it was urged on his behalf that article 124 did not apply The Privy Council upheld this contention It was clear that the office of the shebait of the temple was a hereditary office which could not be held by anyone who was not a Brahmin Panda Jharula Das was not a Brahmin Panda He was of an inferior caste and was not 1 ILR 2 Cal 492 competent to hold the office of the shebait of the temple or to provide for the performance of the duties of that office On these facts the Privy Council held that the appropriation from time to time by Jharula Das of the income derivable from the said 3 12 as share did not deprive Mst Grihimoni and after her death Bhaiaji Thakur of the possession of the office of the shebait although that income was receivable by them in right of the shebaitship The basis of this decision is that on each occasion on which Jharula Das received and wrongfully appropriated to his own use a share of the income to which the shebait was entitled he committed a fresh actionable wrong in respect of which a suit could be brought against him by the shebait but it did not constitute him a shebait for the time being or affect in any way the title of the office Thus this decision emphasises that for the application of article 124 it is essential that the defendant to the suit must be in adverse possession of the hereditary office in question We must therefore hold that article 124 does not apply to the suits filed by the appellants and as we have already observed if article 124 does not apply article 120 does The next point which arises for our decision is whether under article 120 the suits are barred by limitation Under article 120 time begins to run against the plaintiffs when the right to sue accrued to them and that naturally poses the question as to when the right to sue accrued to the appellants In deciding this question it would be necessary to recall briefly the material facts in regard to the past disputes between the appellants and the trustees These disputes began in 1911 On January 31 1911 the trustees wrote a yadi memorandum to the Collector of Poona asking his permission to dismiss eleven Guravs from service They set out in detail several items of misconduct of which the said Guravs were guilty and they expressed their opinion that for the proper management of the affairs of the institution it was necessary to terminate the services of the off ending Guravs exhibit 407 On April 1 1911 the Collector sent a reply to the trustees and told them that as a result of the Government 493 Resolution No 4712 passed on November 291864 it was unnecessary for the trustees to obtain the Collector s sanction because it was competent to the trustees to settle their own affairs without any such sanction The trustees then met in a committee on September 18 1911 and decided to dismiss from service the said eleven Guravs In its resolution the committee stated that the Guravs were violent and arrogant and it was likely that they may commit riot at the time when the committee would seek to take charge from them The committee also apprehended that the rest of the Guravs would make a common cause with those who had been dismissed from service and would refuse to serve the Sansthan Even so the committee decided to appoint six Brahmins temporarily to perform the service because the committee was prepared to allow the rest of the Guravs to render service to the Sansthan if they were ready to act according to the orders of the committee and were willing to enter into a formal agreement in that behalf In accordance with this resolution the committee served notice on the eleven Guravs on October 13 1911 terminating their services and calling upon them to hand over to the committee all articles in their charge and forbidding them from entering the temple in their capacity as servants Notice was likewise served on the rest of the Guravs calling upon them to agree to serve the Sansthan on conditions specified in the notice These terms were not acceptable to the Guravs and so on behalf of two Guravs Eknath and his brother Ramachandra notice was served on the trustees on October 26 1911 complaining against the trustees conduct in forcibly removing the Guravs from the temple and thereby wrongfully denying their rights The notice warned the trustees that unless they retraced their steps and gave possession to the Guravs as claimed in the notice legal steps would be taken against them This notice was followed by the Guravs Suit No 485 of 1911 In the suit the plaintiffs claimed declaration about their rights of ownership and asked for consequential reliefs This claim was denied by the 494 trustees who claimed the right to dismiss the Guravs It was alleged on their behalf that some of the plaintiffs had been dismissed and others had resigned their employments and so all of them had lost their rights This suit was seriously contested but in the end the Guravs lost and their suit was dismissed on January 31 1918 The Guravs then preferred appeals in the High Court but these appeals were also dismissed on August 3 1921 We have already pointed out that while dismissing the said appeals the High Court made certain observations about the Guravs hereditary rights of worship and suggested that these rights could be adjudicated upon in a suit filed under section 92 of the Code Thus at the time when the Guravs appeals were dismissed the position was that the claim of ownership set up by them had been rejected but the question as to whether they were entitled to the lesser rights of hereditary worshippers was left open The Guravs then obtained forcible possession of the temple and that led to the trustees suit under section 9 of the Specific Relief Act No 1075 of 1922 on September 12 1922 In this suit the trustees specifically alleged that the relationship of the defendants as servants of the Sansthan had ceased as from September 1911 and they averred that the defendants had therefore no right to obtain possession of the temple The defendants no doubt disputed this claim and pleaded that they were the hereditary vatandar pujari servants but their claim was negatived and a decree for possession was passed on November 4 1922 In execution of this decree the defendants were dispossessed On these facts the High Court has held in favour of the appellants and rightly we think that it was difficult to accept the respondents contention that the cause of action for the present suits which were expressly based upon the status of the Guravs as hereditary servants arose in 1911 But the High Court felt no doubt that the cause of action to file the present suits had accrued either on September 12 1922 when the trustees filed their suit under section 9 of the Specific Relief Act or in any event on November 4 495 1922 when the said suit was decreed and the Guravs were consequently dispossessed In our opinion this conclusion is also right One of the Guravs who was examined in the present litigation has stated that if in any year when it is the turn of any takshim to serve if a person outside the Gurav family is appointed by the trustees all the takshims have a right to object There is also no dispute that since the dismissal of eleven Guravs in 1911 till the institution of the present suits none from the Gurav family has served the temple except for 3 12 months in 1922 when the Guravs had wrongfully obtained possession of the temple In 1922 the Guravs knew that their claim of ownership had been rejected and that the only right which they could set up was as hereditary worshippers of the temple and not its owners This right was specifically denied by the trustees in their plaint while it was specifically set up in defence by the Guravs in their written statement and the decree that followed upheld the trustees case and rejected the defendant s claim On these facts the conclusion is irresistible that the right to sue accrued to the Guravs at the latest on November 4 1922 when a decree was passed under section 9 of the Specific Relief Act If not the plaint in the suit at least the decree that followed clearly and effectively threatened the Guravs rights as hereditary worshippers and so the cause of action to sue on the strength of the said rights clearly and unambiguously arose at that time If that be the true position it follows that the present suits which have been filed long after the expiration of six years from 1922 are barred by time under article 120 It is then contended by Mr Rege that the suits cannot be held to be barred under article 120 because section 23 of the Limitation Act applies and since in the words of the said section the conduct of the trustees amounted to a continuing wrong a fresh period of limitation began to run at every moment of time during which the said wrong continued Does the conduct of the trustees amount to a continuing wrong under section 23 That is the question which this contention raises for our decision In other words did the 496 cause of action arise de die in them as claimed by the appellants In dealing with this argument it is necessary to bear in mind that section 23 refers not to a continuing right but to a continuing wrong It is the very essence of a continuing wrong that it is an act which creates a continuing source of injury and renders the doer of the act responsible and liable for the continuance of the said injury If the wrongful act causes an injury which is complete there is no continuing wrong even though the damage resulting from the act may continue If however a wrongful act is of such a character that the injury caused by it itself continues then the act constitutes a continuing wrong In this connection it is necessary to draw a distinction between the injury caused by the wrongful act and what may be described as the effect of the said injury It is only in regard to acts which can be properly characterised as continuing wrongs that section 23 can be invoked Thus considered it is difficult to hold that the trustees act in denying altogether the alleged rights of the Guravs as hereditary worshippers and in claiming and obtaining possession from them by their suit in 1922 was a continuing wrong The decree obtained by the trustees in the said litigation had injured effectively and completely the appellants rights though the damage caused by the said decree subsequently continued Can it be said that after the appellants were evicted from the temple in execution of the said decree the continuance of their dispossession was due to a recurring act of tort committed by the trustees from moment to moment As soon as the decree was passed and the appellants were dispossessed in execution proceedings their rights had been completely injured and though their dispossession continued it cannot be said that the trustees were committing wrongful acts or acts of tort from moment to moment so as to give the appellants a cause of action de die in diem We think there can be no doubt that where the wrongful act complained of amounts to ouster the resulting injury to the right is complete at the date of the ouster and so there would be no scope for the application of section 23 in such a case That is 497 the view which the High Court has taken and we see no reason to differ from it We would now like to refer to some of the decisions which were cited before us on this point The first case which is usually considered in dealing with the application of section 23 is the decision of the Privy Council in Maharani Rajroop Koer vs Syed Abdul Hossein 1 In order to appreciate this decision it is necessary to refer though briefly to the material facts The plaintiff had succeeded in establishing his right to the pyne or an artificial watercourse and to the use of the water flowing through it except that which flowed through the branch channel he had however failed to prove his right to the water in the tal except to the overflow after the defendants as owners of mouzah Morahad used the water for the purpose of irrigating their own land It was found that all the obstructions by the defendants were unauthorised and in fact the plaintiff had succeeded in the courts below in respect of all the obstructions except two which were numbered No 3 and No 10 No 3 was a khund or channel cut in the side of the pyne at a point below the bridge whereas No 10 was a dhonga also below the bridge and it consisted of hollow palm trees so placed as to draw off water in the pyne for the purpose of irrigating the defendants lands It was in regard to these two obstructions that the question about the continuing wrong fell to be considered and the Privy Council held that the said obstructions which interfered with the flow of water to the plaintiff s mehal were in the nature of continuing nuisance as to which the cause of action was renewed de die in them so long as the obstructions causing such interference were allowed to continue That is why the Privy Council allowed the plaintiff s claim in respect of these two obstructions and reversed the decree passed by the High Court in that behalf In fact the conduct of the defendant showed that whenever he drew off water through the said diversions he was in fact stealing plaintiff s water and thereby committing fresh wrong every time Thus this is clearly not a case of exclusion or ouster 1 1880 LR 7 IA 240 63 498 Similarly in Hukum Chand vs Maharaj Bahadur Singh 1 the Privy Council was dealing with a case where the defendants act clearly amounted to a continuing wrong and helped the plaintiff in getting the benefit of section 23 The relevant dispute in that case arose because alterations had been made by the Swetambaris in the character of the charans in certain shrines and the Digambaris complained that the said alterations amounted to an interference with their rights It had been found by the courts in India that the charans in the old shrines were the impressions of the footprints of the saints each bearing a lotus mark The Swetambaris who preferred to worship the feet themselves have evolved another form of charan not very easy to describe accurately in the absence of models or photographs which shows toe nails and must be taken to be a representation of part of the foot This the Digambaris refused to worship as being a representation of a detached part of the human body The courts had also held that the action of the Swetambaris in placing the charans of the said description in three of the shrines was a wrong of which the Digambaris were entitled to complain The question which the Privy Council had to consider was whether the action of the Swetambaris in placing the said charans in three of the shrines was a continuing wrong or not and in answering this question in favour of the plaintiffs the Privy Council referred to its earlier decision in the case of Maharani Rajroop Koer 2 and held that the action in question was a continuing wrong There is no doubt that the impugned action did not amount to ouster or complete dispossession of the plaintiffs It was action which was of the character of a continuing wrong and as such it gave rise to a cause of action de die in diem In our opinion neither of these two decisions can be of any assistance to the appellants On the other hand the decision of the Patna High Court in Choudhury Bibhuti Narayan Singh vs Maharaja Sir Guru Mahadev Asram Prasad Sahi Bahadur3 1 1933 LR 60 IA 313 2 1880 LR 7 IA 240 3 Pat 208 499 as well as that of the Full Bench of the Punjab High Court in Khair Mohammad Khan vs Mst Jannat support the respondents contention that where the s impugned act amounts to ouster there is no scope for the application of section 23 of the Limitation Act We are therefore satisfied that there is no substance in the appellants contention that section 23 helps to save limitation for their suits The result no doubt is unfortunate The appellants have succeeded in both the courts below in proving their rights as hereditary worshippers but their claim must be rejected on the ground that they have filed their suits beyond time In this court an attempt was made by the parties to see if this long drawn out litigation could be brought to an end on reasonable terms agreed to by them but it did not succeed In the result the appeals fail and are dismissed We would however direct that the parties should bear their own costs throughout Appeals dismissed

The appellant Shri Chiranjilal Shri Lal Goenka was involved in several suits one of which was the present appeal He died on November 25 1985 leaving behind his last Will dated October 29 1982 in which he appointed his younger daughter Mrs Sushila N Rungta as the sole executrix Radhey Shyam the natural son of Shri Mangal Chand Kedia and Mrs Sita daughter of Shri CS Goenka claimed to be the adopted son of Shri CS Goenka The applicant executrix Radhey Shyam and his wife filed substitution applications under Order 22 Rule 3 CPC setting up rival claims When the dispute arose as to who should represent the estate of Shri CS Goenka by order dated October 7 1991 this Court brought all the three on record as legal representatives and by a further order dated November 1 1991 by consent of parties appointed a retired Chief Justice of the Bombay High Court as an Arbitrator to settle the dispute as who would be the legal heirs to the estate of late Chiranjilal Shri Lal Goenka The arbitrator entered upon the reference and on the riling of pleadings by the parties framed diverse issues Issues No 1 and 2 related to the two Wills and were 1 Does the claimant No 1 prove execution of the Will dated 29th Oct 1982 and prove the same to be the last and genuine Will of Shri GS Goenka 2 If not does she prove the execution of the Will dated 4778 and prove the same 455 to be the last and genuine Will of the late Shri GS Goenka Simultaneous proceedings in the probate suit were being pursued in Bombay High Court and a Single Judge expressed doubt whether the arbitrator had jurisdiction to decide the probate suit Similarly on an application made before the arbitrator seeking clarification he too stated that with his appointment as arbitrator all the pending suits in the schedule should be assumed to have been referred for arbitration and that includes the probate suit as well but that he cannot give any clarification in that behalf An Interlocutory Application was therefore moved in this Court for clarification and it was contended on behalf of the applicant that the probate court had exclusive jurisdiction to grant probate of the Will to the applicant for due implementation of the directions contained in the Will as the executrix and that this issue cannot be referred to arbitration and the arbitrator thereby is devoid of jurisdiction to decide Issue Nos 1 and 2 that had been framed by him and that the applicant had not consented to refer the probate suit for arbitration The application was contested on behalf of the respondents by contending that proceeding the order of the Court dated November 1 1991 the counsel for the respondents addressed a letter to the counsel for the petitioner including the probate suit for reference to arbitration and this was to obviate the litigation pending in all the courts as to who were the legal heirs of Shri CSGoenka and thereafter this court appointed the arbitrator that with a view to put an end to the litigation in all the suits pending in different courts this Court appointed the arbitrator to decide all the disputes in pending suits It is therefore desirable that the arbitrator should decide Issue Nos 1 and 2 that have been framed Disposing of the Application this Court HELD 1 Section 211 of Code of Civil Procedure 1908 defines legal representatives to mean a person who in law represents the estate of a deceased person and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued Order 22 rule 3 says that if one or two or more plaintiffs dies and the right to sue survives the Court on an application made in this behalf shall cause the legal representatives of the deceased plaintiff 456 to be made a party and shall proceed with the suit Mutatis Mutandis by operation of Order 22 Rule 11 this rule applies to the appellants at the appeal stage Similarly Order 22 Rule 4 applies in the case of death of one of several defendants or of sole defendant and in case of a dispute under Rule 5 such a question shall be determined by the Court 460H 461A B 2 Inheritance is In some sort a legal and fictitious continuation of the personality of the dead man for the prepresentation is in some sort identified by the law with him who he represents The rights which the dead man can no longer own or exercise in propria persona and the obligations which he can no longer in propria persona fulfil he owns exercises and fulfils in the person of a living substitute To this extent and in this fiction it may be said that legal personality of a man survives his natural personality until his obligations being duty performed and his property duly disposed of his representation among the living is no longer called for 1461D 3 The grant of Probate by a Court of competent jurisdiction is in the nature of a proceeding in rem So long as the order remains in force it is conclusive as to the due execution and validity of the will unless it is duly revoked as per law It binds not only upon all the parties made before the Court but also upon all other persons in all proceedings arising out of the Will or claims under or connected therewith The decision of the Probate Court therefore is the judgment in rem The probate granted by the competent court is conclusive of the validity of the Will until it is revoked and no evidence can be admitted to impeach it except in a proceeding taken for revoking the probate 465D Slieoparsan Singh vs Ramnandan Prasad Singh Cal 694 PC and Narbharam Jivram vs Jayvallabh Harjiwan AIR 1933 Bom 469 approved 465E F 4 It is settled law that a decree passed by a court without jurisdiction on the subject matter or on the grounds on which the decree made which goes to the root of its jurisdiction or lacks inherent jurisdiction is a corum non judice A decree passed by such a court is a nullity and is nonest Its invalidity can be set up whenever it is sought to be enforced or is acted upon as a foundation for a right even at the stage or execution or in collateral proceedings The defect of jurisdiction strikes at the very authority of the court to pass decree which cannot be cured by consent or 457 waiver of the party 467D AR Antulay vs RS Naik Bahadur Singh Anr vs Muni Subrat Dass Anr Smt Kaushalya Devi and Ors vs KL Bansal AIR 1970 SC 838 Ferozi Lal Jain vs Man Mal Anr AIR 1979 SC 794 and Sushil Kumar Mehta vs Gobind Rain Bohra dead through his Lrs JT 1989 suppl SC 329 In the instant case the applicant had consented to refer for arbitration the dispute in the pending probate proceedings but consent cannot confer jurisdiction nor an estoppel against statute The other legatees in the Will were not parties to it The Probate Court has been conferred with exclusive jurisdiction to grant probate of the Will of the deceased annexed to the petition suit on grant or refusal thereof it has to preserve the original will produced before it The grant of probate is final subject to appeal if any or revocation if made in terms of the provision of the Succession Act It is a judgment in rem and conclusive and binds not only the parties but also the entire world The award deprives the parties of statutory right of appeal provided under section 299 Thus the necessary conclusion is that the Probate Court alone has exclusive jurisdiction and the Civil Court on original side or the Arbitrator does not get jurisdiction even if consented to by the parties to adjudicate upon the proof or validity of the Will propounded by the executrix the appellant 468D F 6 The executrix was nominated expressly in the Will as a legal representative entitled to represent the Estate of the deceased but the heirs cannot get any probate before the Probate Court They are entitled only to resist the Claim of the executrix of the execution and genuiness of the Will The grant of probate gives the executrix the right to represent the estate of the deceased the subject matter in other proceedings This exposition or the law is only for the purpose of finding the jurisdiction of the arbitrator and not an expression of opinion on the merits in the probate suit 468G 7 The Arbitrator cannot therefore proceed with the probate suit to decide the dispute in Issue Nos 1 and 2 framed by him The High Court is to proceed with the Probate suit the Judge to fix the date and proceed day to day till it is concluded and decide the matter within six months Till 458 then the Arbitrator is not to decide Issue Nos 1 and 2 but at liberty to proceed with the other issues to await the decision of the probate Court and depending upon the result thereon conclude the findings on issue Nos1 and 2 and then make the award and take the proceedings according to law 469H 470A B

minal Appeal No 554 of 1984 From the Judgment and Order dated 2791984 of the Allahabad High Court in Government Appeal No 1634 of 1977 MR Sharma Ms Anjana Sharma and RD Upadhayaya for the Appellant Arvind K Nigam Ms Kamini Jaiswal and AS Pundir for the Respondent The Judgment of the Court was delivered by GN RAY J This appeal is directed against the Judgment dated September 27 1984 passed by the Division Bench of the Allahabad High Court setting aside the judgment dated April 30 1977 passed by the learned Additional Sessions Judge Second Court Kanpur Dehat By the impugned Judgment the Division Bench of the Allahabad High Court allowed the appeal preferred by the State of Uttar Pradesh against the judgment of acquittal in Sessions Trial No 235 of 1976 and convicted the accusedappellant Mohd Aslam under Section 302 IPC and sentenced him to imprisonment for life The prosecution story in short is that there is long standing enmity between Abdul Salem and Abdul Hamid Kham Pradhan on one side and the complainant Abdul Hamid on the other Such enmity arose out of rival claim in placing sawai on the Akbara of Tajias at the time of Moharram Sawai is a kind of flag which is put on Tajias at the time of Moharram Over such dispute a civil litigation was going on between the said parties and there were also criminal proceedings under Section 107 read with Section 117 of the Code of Criminal Procedure between the said parties Shamim Raza was nephew and son in law of Abdul Hamid the complainant and the said Shamim Raza was doing pairvi of the said cases on behalf of Abdul Hamid For the aforesaid reasons Abdul Salem and Abdul Hamid Khan Pradhan became inimical towards Shamim Raza and Abdul Hamid Mohd Aslam the accusedappellant is the son of Abdul Salem Both the parties were residents of village Bara 448 within Police Station Akbarpur in the District of Kanpur On December 25 1975 at about 600 PM Shamim Raza was sitting on a wooden bench in front of a hair cutting shop of Iiyas in village Raza Mohd Umar and Abdul Khaliq PW1 were also sitting with him and the said three persons were talking The Gumti of one Mohd Laiq was at a short distance towards the east of that place Bhurey PW2 Qamruddin PW3 and Abdul Hamid were standing near the said Gumit and had also been talking There was light coming from electric bulbs at that place At that time the accusedappellant Mohd Aslam came there armed with a double barrel gun He challenged Shamim Raza and threatened to kill anyone who would come forward Thereafter he fired two shots By said shots Shamim Raza and Mohd Umar sustained gun shot injuries and both of them fell down Shamim Raza died on the spot and the condition of Mohd Umar also became serious Such occurrence was seen by Mohd Umar Abdul Hamid Bhurey and Qamruddin Peer Mohammed PW10 took Mohd Umar to Lala Lajpatrai Hospital at Kanpur for treatment and at 750 PM RC Asthana PW8 examined Mohd Umar Abdul Hamid went to his house and got a report of the occurrence written by Mohd Raizwan PW4 and took the said report to Akbarpur Police Station which was about 4 miles away and lodged the FIR at 715 PM Station Officer incharge of the Akbarpur Police Station Mr Jagdamba Prasad Misra took up the investigation of the case and he interrogated Abdul Hamid at the Police Station and thereafter reached the scene of occurrence at about 755 PM He found the dead body of Shamim Raza lying at the scene of occurrence and he prepared inquest report and other connected papers He also interrogated Bhurey Qamruddin and Abdul Khaliq who were the eye witnesses He also prepared the site plan and found blood on the wooden bench and also on the ground and collected portion of the blood stained wooden bench and blood stained bricks The injured Mohd Umar was interrogated in the hospital on January 1976 The post mortem examination on the body of Shamim Raza was performed by Dr Prakash PW6 Mohd Umar died in the hospital on January 4 1976 and his post mortem examination was performed by Dr BD Misra at Kanpur on January 51976 The accusedappellant Mohd Aslam denied the prosecution allegations against him and alleged that he was falsely implicated on account of enmity and party faction He also denied that he had been absconding from the village and he examined two witnesses in defence The learned Additional Sessions Judge did not find the prosecution case and the evidences acceptable Accordingly he acquitted the accusedappellant The State 449 thereafter preferred an appeal before the Allahabad High Court and as aforesaid the Allahabad High Court allowed the said appeal set aside the judgment of acquittal passed by the learned Sessions Judge and convicted the accusedappellant under Section 302 IPC and sentenced him to suffer rigorous imprisonment for life Learned counsel appearing for the accusedappellant has strenuously contended that the High Court did not appreciate the salutory principles governing the judgment of acquittal He has contended that the learned Sessions Judge had taken pains in analysing in detail the evidences adduced in the case and gave reasonings for each of the findings as to why the prosecution case could not be accepted and what were the intrinsic deficiency in the evidences adduced in the case in support of the prosecution The learned counsel has contended that the law is well settled that in a case of acquittal the appellate Court should not interfere with the judgment of acquittal if such judgment is based on consideration of the evidences adduced in the case and there is no perversity in coming to the finding for passing the judgment of acquittal In such a case of acquittal the High Court in exercise of its appellate power should not endeavour to appreciate the evidence on its own in order to come to different finding unlike in an appeal arising from the judgment of conviction The learned counsel has contended that it has been established convincingly that there was party faction between the two groups over a dispute to place Sawai on Tajias and both civil and criminal proceedings were instituted between the two groups The learned counsel has contended that Abdul Hamid the father in law of the deceased Shamim Raza was the principal man with whom Abdul Salem and Abdul Hamid Khan Pradhan had disputes and differences There was no earthly reason to bear malice and grudge against Shamim Raza who was only a son in law of Abdul Hamid Khan Pradhan Accordingly there was no reason to kill him particularly in the presence of eye witnesses as alleged Such fact was taken note of by the learned Sessions Judge in analysing the acceptability of the prosecution case and credibility of the witnesses examined in support of the prosecution case The learned counsel for the appellant has also submitted that there was no reason for injuring Mohd Umar by the accusedappellant He has contended that the alleged incident of gun shot injuries had not happened in the manner alleged by the prosecution but after such incident the complainant and the other alleged eve witnesses falsely implicated the ac 450 cusedappellant because of the old enmity between the two groups The learned counsel has contended that in a very short time a written complaint was lodged in the Akbarpur Police Station which is admittedly four miles away from the place of occurrence The prosecution story is that after the incident the said written complaint was reduced in writing by a person other than the complainant and thereafter the complainant went to the Police Station to file the written complaint If the incident had taken place at about 600 PM as alleged by the prosecution it is practically impossible to lodge the said written FIR at Akbarpur Police Station by 715 PM particularly when Abdul Hamid the complainant did not straightaway go to the Akbarpur Police Station but he had been to his house and got a report of the occurrence written by Mohd Raizwan PW4 and then lodged the FIR at the Akbarpur Police Station The learned Sessions Judge had taken note of this very important fact in not accepting the prosecution case Unfortunately the High Court failed to appreciate the strong reasonings given by the learned Sessions Judge in not accepting the prosecution case The learned counsel has also submitted that there is serious discrepancy so far as the injury of Mohd Umar is concerned Admittedly Mohd Umar got injured by a gun shot at the back but the manner in which the injured was sitting and the direction from which the gun was fired by the appellant could not have caused gun shot injuries at the back of Mohd Umar The learned Sessions Judge having noted such discrepancies had rightly rejected the prosecution case implicating the accusedappellant He has also submitted that the doctor had noted that Mohd Umar sustained gun shot injuries from a bullet but the injuries sustained by the other deceased namely Shamim Raza was a gun shot injury from pellets It was nobody s case that different guns had been used by the accusedappellant for injuring the said two persons differently Because of such discrepancy the learned Sessions Judge was not inclined to accept the prosecution case and the suggestiongiven by the prosecution witnesses that Mohd Umar might have turned his back in a reflex and received the gun shot injuries at the back was not accepted by the learned Sessions Judge The learned counsel for the appellant has also contended that the alleged eye witness were in the faction of the complainant Abdul Hamid and they were partisan witnesses Accordingly their testimonies were required to be considered with extreme care and caution The learned Sessions Judge therefore after noting the various discrepancies in the prosecution case was not inclined to place reliance on the evidences adduced by the alleged eye witnesses and acquitted the accusedappellant 451 Such order of acquittal in the facts of the case and the reasons indicated by the learned Sessions Judge was not required to be interfered with in appeal by the High Court We are however unable to accept the submissions made by the learned counsel for the appellant In an appeal arising from an order of acquittal the appellate Court is not precluded from appreciating the evidences on its own if the reasons given by the learned trial Judge in passing the order of acquittal do not stand scrutiny and are against the weight of the evidences adduced in the trial The appellate Court will be quite justified in setting aside the order of acquittal if it appears to the court of appeal that improper consideration of the materials and evidences on record was made and the reasonings of the trial Judge are wholly unjustified It is only necessary that the court of appeal should weigh the reasonings of the learned trial Judge with care and caution in the light of the evidences adduced in the case by giving cogent reasons as to why such findings are unreasonable and against the evidence In the instant case the High Court has taken care in analysing each and every finding of the learned Sessions Judge in the light of the evidences adduced in the case and has given cogent reasons as to why such findings were unreasonable and not acceptable It is an admitted position that the two persons suffered gun shot injuries on December 25 1975 in the evening and one of the injured persons died on the spot and the other was removed to hospital He got serious injuries and later on sccummbed to such injuries The mere fact that there was enmity and bitterness between the two groups by itself does not establish that the eye witnesses falsely implicated the accusedappellant Shamim Raza was the son in law of Abdul Hamid and it was established in evidence that he was looking after the cases between the parties and making pairvi in civil and criminal cases In our view the High Court is justified in holding that because of such positive role taken by Shamim Raza he had incurred displeasure of the other group which acted as a motive for the gun shot injuries The learned Sessions Judge doubted the prosecution case because of lodging the FIR at 715 pm at Akbarpur Police Station which was about four miles away from the place of occurrence where the incident according to the prosecution had taken place at about 600 PM We do not think that such FIR could not have been lodged by that time The High Court has considered the reasonings of the learned Sessions Judge on the question of lodging the FIR at Akbarpur Police Station within a short time and has in our view given very good 452 reasons in not accepting the views entertained by the learned Sessions Judge In our view the learned Sessions Judge was also not justified in holding that the gun shot injuries suffered by Mohd Umar had not been property explained by the prosecution because the doctor had noted that such injuries were caused by bullet and not by pellets The injuries suffered by Mohd Umar as noted by the doctor do not run counter to the prosecution case that such injuries were caused by the gun used by the accusedap pellant The High Court is right in our view in holding that the size of the pellet depends on the type of cartridge used in a gun It cannot be held as a matter of course that simply because the pellets injuring the deceased Shamim Raza were smaller in size than the size of the pellets used in injuring Mohd Umar both the injuries could not have been inflicted by the same gun The High Court in our view is also justified in not accepting the reasonings of the learned Sessions Judge that the injuries caused at the back of Mohd Umar were not possible and run counter to the evidences adduced by the prosecution There was interval though very short between the two shots and it is not at all unlikely or highly improbable that because of the inherent reflex the other injured Mohd Umar had turned his side and received the injuries at the back portion In the instant case there are eye witnesses to the occurrence and there are no intrinsic discrepancies in their evidences Even if it is assumed that such eye witnesses belong to the group of the complainant their evidences are not liable to be discarded on that score if such evidences otherwise inspire confidence and get corroborated by other evidences and from the nature of injuries sustained by the deceased persons The High Court is right in holding that although Abdul Khaliq PW1 belonged to a group and appeared to be a partisan witness his evidence was not required to be discarded on that ground but was required to be closely scrutinised The High Court in our view is also justified in holding that Qamruddin PW3 was not related to Shamim Raza deceased or the complainant and he did not belong to any of the rival groups This witness had no enmity with the accusedappellant or his father Qamruddin PW3 has been rightly held by the High Court as an independent and reliable witness It appears to us that all the findings made by the learned Sessions Judge were considered in detail by the High Court and the findings of the learned Sessions Judge were not accepted by the High Court by indicating that such findings were against the weight of the evidences and the same were wholly unreasonable In the aforesaid circumstances we do not find 453 any reason to take a contrary view in this appeal and set aside the order of conviction made by the High Court The appeal therefore fails and is dismissed By the Order dated April 8 1986 this Court granted bail to the accusedappellant In view of the dismissal of this appeal the bail stands cancelled and the accusedappellant is directed to surrender and serve out the sentence VPR Appeal dismissed

The appellants predecessor was inducted as an usufructuary mortgagee of certain fields On the expiry of redemption period the respondents filed a suit for redemption which was decreed subject to payment of damages for improvements On appeal the District Court confirmed the redemption decree but set aside the decree for damages In second appeal the appellants raised a new plea that they were deemed tenants by operation of Section 2 A of the Bombay Tenancy Act 1939 It was also contended on their behalf that Section 85 A of the Act ousted the jurisdiction of the Civil Court to decide the dispute of tenancy rights In pending suit Rejecting both the contentions the High Court confirmed the decree of the appellate court Against the judgment of the High Court an appeal was flied in this Court Dismissing the appeal this Court HELD 1 The plea based on Section 2 A was sought to be raised for the first time in second appeal before the High Court It was neither raised in the pleadings nor argued either before the trial Court or the appellate court Therefore the High Court rightly did not permit the appellants to raise the plea of a deemed tenancy as the said claim needs investigation based on factual foundation which was lacking Consequently the question whether under Section 85 A the Civil Court had jurisdiction or not need not be gone into 580 D E Salman Raje vs Madhavsang Benesang ILR 1963 Guj 722 cited

Appeal No 2860NT of 1979 From the Judgment and Order dated 831979 of the Patna High Court in Civil writ jurisdiction case No2909 of 1978 VA Babde RF Nariman and Ms Kamakshi For Gagrat Co for the appellant Dr section Narayan P Parmeshwaran and Manoj Prasad for the Respondents The Judgment of the Court was delivered by VENKATACHALA J The short question which needs our decision in this appeal by special leave is whether a person who credits to the account of or pays to a contractor any sum payable by any of the organisations specified in section 194C1 of Income Tax Act 1961 the Act for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and the specified organisation is liable to deduct two per cent of such sum as income tax as required under that sub section The facts which have lad to the need for our decision on the said question are briefly these The Associated Cement Company Ltd the appellant issued a letter dated 5th November 1973 to Mr SP Nag contractor Jhiakpani Containing the terms and conditions of a contract of leading packed cement bagsfrom its Packing Plants Nos1 2 into wagons or trucks Under clause 12 of those terms and conditions there 541 was a stipulation that the contractor shall be paid a sum for his work at a flat rate of 41 paise for such tonne of cement handled in Packing Plant No1 and 30 paise for each tonne o f cement handled in Packing Plant No2 Clause 13 thereof which contained a recital that the rate of loading in clause 12 had been worked out on the basis of daily basic wages of Rs235 paise DA of Rs 121 paise and HRA of Rs050 paise per day per worker stipulated a term of reimbursement by the appellant to the contract of the difference in DA over the amount of Rs121 paise and annual increment etc payable from month to month to every worker by him as per the Second Wage Board Recommendation As the contractor carried out his work according to the terms and conditions in the contract during the years 1973 74 and 1974 75 the appellant made payments of the sums payable to him under clause 12 of the contract and the sums reimbursable to him under clause 13 thereof But the deductions made under section 194C1 of the Act by the appellant out of the sums paid or reimbursed to the contractor fell short of the deductions required to be made thereunder As the appellant took the stand that it was not liable to deduct any amount under section 1941 out of the sums paid on its behalf to the contractor as per clauses 12 13 of the contract the Income Tax Officer Jamshedpur served on the principal officer of the appellant a notice dated 30th March 1978 to show cause as to why action should not be taken against the appellant under sections 276B1 281 and 221 of the Act in respect of assessment years 1973 74 and 1974 75 for short deductions out of the sums paid to contractor without observing the requirement of section 194C1 of the Act Another notice dated 8th May 1978relating to the assessment years 1974 75 to 1977 78 of a similar nature was also served on the principal officer of the appellant The appellant although impugned both the said notices in a Writ Petition filed under Articles 226 and 227 of the Constitution before the High Court of Judicature at Patna that Writ Petition was dismissed by the High Court by its order dated 8th March 1979 The appellant has therefore filed this appeal by special leave before this Court seeking the quashing of the notices which it had unsuccessfully impugned before the High Court in its Writ Petition It was argued by Mr VA Bobde the learned senior counsel appearing for the appellant that the amount deductible under section 194C1 out of the sums credited to the account of or paid to a contractor would arise only when such sums are paid on account of a contractor executing a works contract that is a contract which produces a tangible property 542 According to him the work for the the carrying of which the sum is required to be credited to the account of or paid to a contractor under section 194C1 of the Act is only a works contract and hence deduction under that sub section could arise only to the extent where the sum credited to the account of or paid to a contractor for executing such works contract is comprised of the element of income profit of the contractor as held by this Court in Brij Bhushan Lal Parduman Kumar etc vs Commissioner of Income Tax Haryana Himachal Pradesh and New Delhi III 1979 2 SCR 16 and not otherwise It was also his argument that the words in the sub section on income comprised therein appearing immediately after the words deduct an amount equal to two per cent of such sum as income tax found in the concluding part of that sub section must be taken to mean the percentage amount deductible on the income received by the contractor under the contract and not on the sum credited to the account of or paid to the contractor in pursuance of the contract These arguments were however strongly refuted by Dr section Narayan the learned counsel for the Revenue It is how the question mentioned at the outset needs our decision Section 194C1 of the Income Tax Act on the proper construction of which the decision on the aforesaid question should necessarily rest runs thus 194C1 Any person responsible for paying any sum to any resident hereafter in this section referred to as the contractor for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and a the Central Government or any State Government or b any local authority or c any corporation established by or under a Central State or Provincial Act or d any company or e any co operative society or f any authority constituted in India by or under any law 543 engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning development or improvement of cities towns and villages or for both or g any society registered under the 21 of 1860 or under any law corresponding to that Act in force in any part of India or h any trust or i any University established or incorporated by or under a Central State or Provincial Act and an institution declared to be a University under section 3 of the 3 of 1956 shall at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode whichever is earlier deduct an amount equal to two per cent of such sum as income tax on income comprised therein No ambiguity is found in the language employed in the subsection What is contained in the sub section as appears from its plain reading and analysis admit of the following formulations 1 A contract may be entered into between the contractor and any of the organisations specified in the sub section 2 Contract in Formulation 1 could not only be for carrying out any work but also for supply of labour for carrying out any work 3 Any person responsible for paying any sum to a contractor in pursuance of the contract in Formulations 1 and 2 could credit that sum to his account or make its payment to him in any other manner 4 But when the person referred to in Formulation 3 either credits the sum referred to therein to the account 544 of or pays it to the contractor he shall deduct out of that sum an amount equal to two per cent as income tax on income comprised therein Thus when the percentage amount required to be deducted under the sub section as income tax is on the sum credited to the account of or paid to a contractor in pursuance of a contract for carrying out a work or supplying labour for carrying out a work of any of the organisations specified therein there is nothing in the sub section which could make us hold that the contract to carry out a work or the contract to supply labour to carry out a work should be confined to works contract as was argued on behalf of the appellant We see no reason to curtail or to cut down the meaning of plain words used in the Section Any work means any work and not a works contract which has a special connotation in the tax law Indeed in the sub section the work referred to therein expressly includes supply of labour to carry out a work It is a clear indication of legislature that the work in sub section is not intended to be confined to or restricted to works contract Work envisaged in the sub section therefore has wide import and covers any work which one or the other of the organisations specified in the sub section can get carried out through a contractor under a contract and further it includes obtaining by any of such organisations supply of labour under a contract with a contractor for carrying out its work which would have fallen outside the work but for its specific inclusion in the sub section In Brij Bhushan supra this Court was concerned with the question whether the cost of materials supplied by the Government for being used in execution of works is liable to be taken into consideration while estimating the income or profits of a contractor That question was answered by this Court thus It is true that ordinarily when a works contract is put through or completed by a contractor the income or profits derived by the contractor from such contract is determined on the value of the contract as a whole and cannot be determined by considering several items that go to form such value of the contract but in our view where certain storesmaterial is supplied at fixed rates by the Department to the Contractor solely for being used or 545 fixed or incorporated in the works undertaken on terms and conditions mentioned above the real total value of the entire contract would be the value minus the cost of such storesmaterial so supplied Therefore since no element of profit was involved in the turnover represented by the cost of storesmaterial supplied by the MES to the assessee firms the income or profits derived by the assessee firms from such contracts will have to be determined on the basis of the value of the contracts represented by the cash payments received by the assessee firms from the MES Department exclusive to the cost of the material stores received for being used fixed or incorporated in the works undertaken by them The above decision cannot be of any help to the appellant for it does not lay down that the percentage amount deductible under section 194C1 should be out of the income of the contractor from the sum or sums credited to the account of or paid to him The words in the sub section on income comprised therein appearing immediately after the words deduct an amount equal to two per cent of such sum as income tax from their purport cannot be understood as the percentage amount deductible from the income of the contractor out of the sum credited to his account or paid to him in pursuance of the contract Moreover the concluding part of the sub section requiring deduction of an amount equal to two per cent of such sum as income tax by use of the words on income comprised therein makes it obvious that the amount equal to two per cent of the sum required to be deducted is a deduction at source Indeed it is neither possible nor permissible to the payer to determine what part of the amount paid by him to the contractor constitutes the income of the latter It is not also possible to think that the Parliamer could have intended to cast such impossible burden upon the payer nor could it be attributed with the intention of enacting such an impractical and unworkable provision Hence on the express language employed in the sub section it is impossible to hold that the amount of two per cent required to be deducted by the payer out of the sum credited to the account of or paid to the contractor has to be confined to his income component out of that sum There is also nothing in the language of the sub section which permits exclusion of an amount paid on behalf of the Organisation to the contractor according to clause 13 of the terms and conditions of the contract in reimbursement of the amount 546 paid by him to workers from the sum envisaged therein as was suggested on behalf of the appellant For the foregoing reasons our decision on the question under consideration is held in the affirmative and in favour of the Revenue In the result this appeal fails and is dismissed directing the appellant to pay the costs of the respondent the Revenue in this appeal Advocate s fee is fixed at Rs 3000 TNA Appeal dismissed

The appellants who were the hereditary worshippers called Guravs of the Shree Dnyaneshwar Sansthan of Alandi claimed to be its owners The respondents as trustees of the said Sansthan dismissed eleven of the Guravs in 1911 served a notice on the rest calling upon them to agree to act according to the orders of the Temple committee and appointed six Brahmins to carry on the services of the Sansthan The Guravs did not agree and sued the respondents for a declaration of their rights of ownership and consequential reliefs That litigation ended in the High Court in 1921 with the result that their claim of ownership stood rejected but their rights as hereditary worshippers were left open Thereafter the Guravs took forcible possession of the temple on July 251922 The trustees brought a suit under section 9 of the Specific Relief Act on September 12 1922 and obtained a decree on November 4 1932 In execution of that decree the Guravs were dispossessed The suits out of which the present appeals arise were filed by the appellants against the trustees for declaration of their rights as hereditary servants of the Sansthan a permanent injunction restraining the trustees from obstructing them in the exercise of the said rights and accounts The respondents claimed that the appellants were servants of the Temple committee and had no hereditary rights as claimed by them even if they had their claim to such rights was barred by limitation The trial Court decreed the suits In appeal the High Court while agreeing with the trial court on the merits disagreed on the question of limitation held the suits to be barred by limitation under article 120 Of the Limitation Act the cause of action arising either on the filing of the section 9 suit by the respondents or in any event on the date when the said suit was decreed section 23 of the Act having no application and allowed the appeals It was contended on behalf of the appellants in this Court that the suits were governed by article I24 Of the Limitation Act and even if article 120 applied section 23 saved limitation Held that the High Court was right in holding that article 120 and not article 124 of the Limitation Act applied and that section 23 had no application to the suits in question 477 Article 124 Of the Limitation Act applies only where the cause of action for the suit is wrongful dispossession of the plaintiff and adverse possession by the defendant in respect of the hereditary office in question In such suits the contest usually is between rival claimants to the hereditary office and not between such claimants and trustees It is impossible to ignore the provision Of Col 3 to that article in deciding its applicability Kunj Bihari Prasadji vs Keshavlal Hiralal Bom 567 and jalim Singh Srimal vs Choonee Lall Johurry held inapplicable Thathachariar vs Singarachariar AIR 1928 Mad 377 ap proved Annasami vs Advarachari ILR distin guished Jhalandar Thakur vs jharula Das Cal 2444 referred to Section 23 Of the Limitation Act refers not to a continuing right but to a continuing wrong A continuing wrong is essentially one that creates a source of continuing injury as opposed to one that was complete and makes the doer liable for such continuance A completed inJury would not be a continuing wrong even though it might give rise to continuing damage Thus tested the injury to the appellants resulting from the decree obtained by the trustees in the section 9 suit which amounted to a ouster was complete at the date of the ouster and section 23 Of the Limitation Act could not apply so as to save limitation Choudhury Bibhuti Narayan Singh vs Maharaja Sir Guru Mahadeu Asram Prasad Saki Bahadur Pat 208 and Khair Mohammad Khan vs Mst jannat Lah 22 referred to Maharani Rajroop Koer vs Syaed Abdul Hossein 1880 LR 7 IA 240 and Hukum Chand vs Maharaj Bahadur Singh 1933 LR 60 IA 313 distinguished and held inapplicable

C No 1237 of 1988 Under Article 32 of the Constitution of India PP Rao and Ms K Amreshwari B Rajeshwar Rao and Vimal Dave for the Petitioners VR Reddy Addl Solicitor General K Madhaya Reddy G Prabhakar B Kanta Rao A Ranganathan and AV Rangam for the Respondents The Judgment of the Court was delivered by KULDIP SINGH J The petitioners and respondents 4 to 16 are District and Sessions Judges in the State of Andhra Pradesh The petitioners are direct recruits whereas the respondents were promoted from the Subordinate judiciary The respondents were initially appointed on temporary basis in the year 19781979 but they were made substantive in the year 1983 The petitioners who were appointed substantively in the year 1981 claim seniority over the respondents by way of this petition under Article 32 of the Constitution of India The recruitment to the Andhra Pradesh Higher Judicial Service the Service is governed by the Rules called The Andhra Pradesh State Higher Judicial Service Special Rules the Special Rules Rules 1 2 4 and 6 of the Special Rules which are relevant are as under Rule 1 Constitution The service shall consist of the following categories 550 Category 1 District and Sessions Judges 1st Grade Category II District and Sessions Judges Second Grade including Chairman Andhra Pradesh Sales Tax Appellate Tribunal Chief Judge City Civil Court Additional Chief Judge City Civil Court Chief Judge Court of small Causes Chief City Magistrate Chairman Tribunal for Disciplinary Proceedings Presiding Officers Labour Courts and Addl District and Sessions Judges Rules 2 Appointment a Appointment to Category 1 shall be made by promotion from Category II and appointment to Category II shall be made i by transfer from among a Sub Judges in the Andhra State Judicial Service or in the Hyderabad State Judicial Service and ii by direct recruitment from the Bar Provided that 33 13 of the total number of permanent posts shall be filed or reserved to be filled by direct recruitment Explanation In the determination of 33 13 of the total number of permanent posts fractions exceeding one half shall be counted as one and other fractions shall be disregarded b All promotions shall be made on grounds of merit and ability seniority being considered only when merit and ability are approximately equal Rule 4 Probation Every person appointed to Category II otherwise than by transfer shall from the date on which he joins duty be on probation for a total period of one year on duty Rule 6 Seniority The seniority of a person appointed to Category 1 or Category 2 shall be determined with refer 551 ence to the date from which he was continuously on duty in that category We may briefly notice the scheme of the Special Rules Rule 1 constitutes the Service Category 1 consists of District and Sessions Judges 1st grade and Category II consists of District and Sessions Judges Second grade Rule 1 does not say that Service shall consist of only permanent posts All the posts designated as District and Sessions Judges Second grade under Category II are part of the service under Rule 1 In other words as and when a post of District and Sessions Judge Second grade is created permanent or temporary it becomes part of the Service under Rule 1 of the special Rules Rule 2 provides the method of appointment Appointment to Category 1 is from Category II Appointment to Category II is from two sources By transfer from amongst the Subordinate Judges and by direct recruitment from the Bar Proviso to Rule 2 states that 33 13 of the total number of permanent posts shall be filled or reserved to be filled by direct recruitment All the posts of District and Sessions Judges Second grade are part of the Service but quota for the direct recruits is provided only in the permanent posts Rule 6 of the Rules provides for the fixation of seniority Under Rule 6 the seniority of persons appointed to Category 1 or Category II posts is fixed on the basis of continuous length of service in their respective posts On the plain reading of the Special Rules the salient features of the Service can be culled out as under 1 Rule 1 provides for the constitution of the Service All the posts of District and Sessions Judges Second grade created from time to time are part of the Service The natural corollary is that the Service consists of permanent as well as temporary posts The recruitment to Category II of the service is by transfer from amongst the Subordinate Judges and also by direct recruits from the Bar 33 13 of the total number of permanent posts in Category II of the Service are to be filled by way of direct recruitment The seniority under Rule 6 is to be determined with reference to the date from which a person is continuously on duty Whether the person 552 is continuously on duty against a temporary post or permanent post is of no consequence A person is entitled to the fixation of his seniority on the basis of continuous length of service rendered either against permanent post or temporary post The three petitioners were appointed as District and Sessions Judges Second grade by direct recruitment on October 12 1981 Petitioners 1 and 2 joined service on October 23 1981 and petitioner 3 on October 30 1981 Respondents 4 to 16 were appointed District and Sessions Judges Second grade by transfer from amongst the Subordinate Judges during the years 197879 It is not disputed that permanent vacancies in their quota became available in the year 1983 We therefore proceed on the basis that the petitioners were appointed substantive members of the Service earlier to respondents 4 to 16 We may at this stage notice Rule 10ai of the Andhra Pradesh State and Subordinate Service Rules the State Rules The State Rules are general rules which are applicable to all the services in the State of Andhra Pradesh Needless to say that to the extent the Special Rules are applicable to the Service the State Rules are excluded Rule 10ai of the State Rules is as under 10 Temporary appointment ai Where it is necessary in the public interest to fill emergently a vacancy in the post borne on the cadre of a service class or category and if the filling of such vacancy in accordance with the rules is likely to result in undue delay the appointing authority may appoint a person temporarily otherwise than in accordance with the said rules Mr PP Rao learned counsel for the petitioners has raised the following contentions for our consideration 1 That the Service consists of only permanent posts under the Special Rules There is no provision under the Special Rules for adding temporary posts to the cadre The appointment of respondents to the posts of District and Sessions Judges Second grade on temporary basis can at best be treated under rule 10ai of the State Rules 553 2 The temporary service rendered by respondents4 to 16 being outside the cadre cannot be counted towards seniority Proviso to Rule 2 and Rule 6 of the Special Rules have to be read together and doing so the permanent vacancies having been made available for respondents 4 to 16 in the year 1983 their service prior to that date cannot be counted towards seniority Before dealing with Mr Rao s contentions we may notice two preliminary contentions raised by Mr K Madava Reddy learned counsel for the respondents Mr Madava Reddy has invited our attention to the judgment of a Division Bench of Andhra Pradesh High Court in THB Chalapathi and others vs High Court of Andhra Pradesh and others Writ Petition Nos 196882 5283 and 1228285 decided on December 28 1985 Those writ petitions were filed before the Andhra Pradesh High Court by the direct recruits to Category II of the Service claiming seniority over the persons who were appointed to category 11 on temporary basis earlier to them Similar questions were raised as are being raised by Mr PP Rao before us By a well reasoned judgment the High Court rejected all the contentions of the direct recruits and dismissed the writ petitions It is not disputed that Special Leave Petition No1035 of 1986 against the said judgment was dismissed by this Court on January 30 1988 Mr Madava Reddy plausibly contends that all the contentions which are being raised by the petitioners in this Court having been rejected by the High Court and special leave petition against the judgment of the High Court having been dismissed by this Court the same cannot be agitated once over again Mr Madava Reddy then contended that the petitioners were appointed in the years 1981 and since then till the year 1988 twelve seniority lists have been published showing the petitioners below respondents 4 to 16 At no point of time they challenged the seniority lists in the Court Even when the writ petitions filed by Chalapathi and others were pending they did not intervene before the High Court The petitioners according to Mr Madava Reddy are guilty of gross delay and latches and as such are not entitled to get relief by way of this petition under Article 32 of the Constitution of India 554 We see considerable force in both the contentions raised by Mr Madava Reddy We are however of the view that it would be in the larger interest of the Service to dispose of this petition on merits We see no force in the contention of Mr Rao that the Service consists of only permanent posts under the Special Rules We have already interpreted Rule 1 to mean that the Service under the Special Rules consists of all the posts permanent and temporary which have been designated as District and Sessions Judges Second grade Even otherwise in the absence of any prohibition under the Special Rules the State Government can always create temporary posts as additions to the cadre Rule 10ai of the State Rules has no application to the Service which is governed by the Special Rules Rule 10ai provides for emergency appointments made on stop gap basis to meet a temporary exigency Apart from that the temporary appointments under the said Rules are made without following the procedure prescribed under the Rules governing the relevant service The appointments of respondents 4 to 16 on the other hand Were made under Rule 2 of the Special Rules by the State Government in consultation with the High Court We are of the view that the Special Rules provide a complete scheme for the appointment and seniority of the members of the Service Rule 10ai of the State Rules has no application to the Service Constituted under the Special Rules We therefore reject the contention raised by Mr Rao Having taken the view that the Service under the Special Rules consists of permanent as well as temporary posts the second contention of Mr Rao looses its ground Temporary posts of District and Sessions Judges Second grade being part of the Service the seniority has to be counted on the basis of length of service including the service against a temporary post The third contention of Mr Rao is mentioned to be rejected in view of Rule 6 of the Special Rules Rule 6 of the Special Rules is in no way dependent on proviso to Rule 2 of the Special Rules Both are to be operative independently In the scheme of the rules the seniority rule is not dependent on the quota Rule Quota has been provided for the direct recruits only against permanent posts The seniority rule permits the counting of total period of service from the date a person is on duty against a 555 post in the category Even though the petitioners were appointed substantively to the service earlier to respondents 4 to 16 but in view of Rule 6 they cannot be declared senior on the basis of continuous length of service against temp orary as well as permanent posts respondents 4 to 16 have been rightly given seniority above the petitioners We therefore find no force in any of the contentions raised by Mr Rao The writ petition is consequently dismissed No costs NVK Petition dismissed

The prosecution case was that there was long standing enmity between appellant s father and one Khan on one side and the complainant on the other which rose out of rival claim in placing sawai on the Akhara of Tajias A Civil litigation was pending between the parties over the dispute Criminal proceedings under section 107 read with section 117 of the Code of Criminal Procedure were also pending between them The nephew and son in law of the complainant was doing pairvi of the cases on behalf of the complainant and because of that the father of the appellant and one Khan became inimical to the son in law of the complainant At about 600 PM on the date of the occurrence namely 25121975 the son in law of the complainant was sitting on a wooden bench in front of a hair cutting shop of his village One Umar and PW1 were also sitting with him and all the three were talking PWs 2 and 3 and the complainant were standing near a Gumti at a short distance and were talking At the time the appellant armed with a double barrel gun came there He challenged the complainants son in law and threatened to kill anyone who would come forward He fired two shots which hit the complainant s son in law add one Umar Both of them fell down Complainant s son in law 445 died on the spot PW 10 took Umar to Hospital The Complainant went to his home and got a report of the occurrence written by PW4 and taking the report to the Police Station about 4 miles away he lodged the FIR at 715 PM Investigation of the case was immediately commenced Umar died on 411976 prior to his death on 111976 the Police had interrogated the deceased The case of accused appellant was that he was falsely implicated on account of enmity and party faction He denied all the allegations of the prosecution The Sessions Court acquitted the accused appellant as it did not rind the prosecution case and the evidence acceptable Allowing the State s appeal against acquittal the High Court convicted the appellant under section 302 IPC and sentenced him to imprisonment for life In the appeal before this Court the accused contended that the High Court did not appreciate the salutory principles governing the judgment of acquittal that the Sessions Judge had taken pains in analysing in detail the evidences adduced in the case and gave reasonings for each of the finding as to why the prosecution case could not be accepted and what were the intrinsic deficiency in the evidences adduced in the case in support of the prosecution that the law was well settled that in a case of acquittal the appellate Court should not interfere with the judgment of acquittal if such judgment was based on consideration of the evidences adduced in the case and there was no perversity in coming to the finding for passing the judgment of acquittal and in such a case of acquittal the High Court in exercise of its appellate power should not endeavour to appreciate the evidence on its own in order to come to different finding Unlike in an appeal arising from the judgment of conviction that it has been established convincingly that there was party faction between the two groups over a dispute to place Sawai on Tajias and both civil and criminal proceedings were instituted between the two groups that the eye witnesses were in the faction of the complainant and they were partition witnesses that the Sessions Judge therefore after nothing the various discrepancies in the prosecution case was not inclined to place reliance on the evidences adduced by the alleged eye witnesses and acquitted the accusedappellant 446 and that such order of acquittal in the facts of the case and the reasons indicated by the Sessions Judge was not required to be interfered with in appeal by the High Court Dismissing the appeal this Court HELD 1 In an appeal arising from an order of acquittal the appellate Court is not precluded from appreciating the evidences on its own if the reasons given by the learned trial Judge in passing the order of acquittal do not stand scrutiny and are against the weight of the evidences adduced in the trial The appellate Court will be quite justified in setting aside the order of acquittal if it appears to the court of appeal that improper consideration of the materials and evidences on record was made and the reasonings of the trial Judge are wholly unjustified It is only necessary that the court of appeal should weigh the reasonings of the learned trial Judge with care and caution in the light of the evidences adduced in the case by giving cogent reasons as to why such findings are unreasonable and against the evidence 451B C 201 In the instant case the High Court has taken care in analysing each and every finding of the learned Sessions Judge in the light of the evidences adduced in the case and has given cogent reasons as to why such findings were unreasonable and not acceptable It is an admitted position that two persons suffered gun shot injuries and one of the enjured persons died on the spot and the other was removed to hospital He got serious injuries and later on sccummbed to such injuries The mere fact that there was enmity and bitterness between the two groups by itself does not establish that the eye witnesses falsely implicated the accusedappellant 451D E 202 There are no intrinsic discrepancies in the evidences of the eye witnesses Even if it is assumed that such eye witnesses belong to the group of the complainant their evidences are not liable to be discarded on that score if such evidences otherwise inspire confidence and get cor roborated by other evidences and from the nature of injuries sustained by the deceased persons 452E 203 All the findings made by the Sessions Judge were considered in detail by the High Court and the findings of the learned Sessions judge were not accepted by the High Court by indicating that such findings were 447 against the weight of the evidences and the same were wholly unreasonable In the circumstances there is no reason to take a contrary view in this appeal 452H

minal Appeal Nos 375 376 of 1985 From the Judgment and Order dated 1751983 of the Patna High Court in Criminal Misc 193183 and 9240 of 1982 SN Misra Manish Misra and PC Kapur for the Appellants Mrs K Amareswari CVS Rao ADN Rao and SN Jha for the Respondents J The appellants on the relevant date were managing director and directors of a Public Limited Company registered as Ms Bihar Cable and Wire Industries Limited hereinafter referred to as the Company A case was instituted by the Central Bureau of Investigation hereinafter referred to as the CBI against the appellants and others on basis of a complaint made by the then Deputy Secretary Ministry of Industrial Development and Company Affairs Government of India It was alleged that after the registration of the company aforesaid as a Public Limited Company the appellants as managing director and directors issued prospectus inviting public subscriptions of 42000 equity shares and 3000 preference shares It was given out by the appellants to the investors that application was being made to the Calcutta Stock Exchange for enlisting the shares of the company for official quotation Such application which was made on behalf of the company was rejected by the stock 702 exchange In spite of the rejection the share money collected from different investors was held by the appellants and none of the share holders were either informed or were repaid It was also alleged that money lying in the bank on account of the share applications were transferred to another account of the Company The circumstances were pointed out in the complaint made to the CBI as to how the acts of the appellant clearly indicated their dishonest intentions to convert the share application money for their own benefit and as such they had committed the offence under section 409 read with section 405 of the Penal Code After investigation of the allegations made in the complaint aforesaid the CBI submitted a chargesheet against the appellants along with some others for their trial for the offence under section 409 of the Penal Code When the Special Judicial Magistrate CBI Cases Patna rejected the prayer of the appellants to discharge them validity of that order was questioned by filing an application under section 482 of the Code of Criminal Procedure The High Court rejected the said application The criminal proceeding pending against the appellants has been challenged saying that it amounted to an abuse of the process of court because instead of invoking the different provisions of the Companies Act which are meant to cover such situations and to protect the interest of share holders a prosecution has been launched against the appellants before a Criminal Court for offences under the Penal Code It was pointed out that in view of section 69 of the Companies Act all moneys received from the applicants for shares have to be deposited and kept in an account and in event the shares are not issued the moneys so received have to be repaid with interest Reference was also made to section 73 of the Act which requires every company intending to offer shares or debentures to the public for subscriptions by the issue of prospectus has to make an application before such issue to one or more recognised stock exchanges for permission for shares or debentures intended to be so offered to be dealt with in the stock exchange All moneys received from applicants in pursuance to the prospectus has to be kept in a separate bank account until the permission is granted and where permission is not granted such money has to be repaid within time in the manner specified and if default is made in complying with the same the company and every officer of the company who is in default is liable to be punished with a fine which may extend to Rs 5000 In other words the provisions of the Companies Act 703 take care of the investors and they put restrictions on the misbehavior of the promoters and the directors of the Company and for any lapse on their part in such matters they cannot be summoned to stand trial for offenses under the Penal Code It is true that the Companies Act contains provisions regarding the issuance of prospectus applications for shares and allotment thereof and provides different checks over the misuse of the fund collected from the public for issuance of shares or debentures But can it be said that where persons issue prospectus and collect moneys from public assuring them that they intend to do business with the public money for their benefit and the benefit of such public but the real intention is to do no business other than collecting the moneys from the public for their personal gain still such persons are immune from the provisions of the Penal Code Originally the concept of a company implied association of persons for some common object having a juristic entity separate from those of its members In due course the gap between the investors in such companies and those in charge of management was widened A situation has reached today that in bulk of the companies in which many individuals have property rights as share holders and to the capital of which they have directly or indirectly contributed have no idea how their contributions are being utilised It can be said that modern share holder in many companies has simply become supplier of capital The savings and earnings of in dividuals are being utilised by persons behind such corporate bodies but there is no direct contact between them The promoters of such companies are not even known to many investors in shares of such companies It is a matter of common experience that in some cases later it transpires to the investors that the promoters had the sole object to form a bogus company and foist it off on the public to the latter s detriment and for their own wrongful gain In this process the public becomes victim of the evil design of the promoters who enrich themselves by dishonest means without there being any real intention to do any business From time to time amendments have been introduced in the Companies Act to safeguard the interest of the share holders and to provide regulatory and penal provisions for misuse of the power by those who are in charge of the management of such companies Butif the promoters or those in charge of managing affairs of the company are found to have committed offenses like cheating criminal breach of trust criminal misappropriation or alike then whether the only 704 remedy to which the investor is entitled is to pursue under and in accordance with the provisions of the Companies Act The persons managing the affairs of such company cannot use the juristic entity and corporate personality of the company as a shield to evade themselves from prosecution for offenses under the Penal Code if it is established that primary object of the incorporation and existence of the company is to defraud public But at the same time while taking cognizance of alleged offenses in connection with the registration issuance of prospectus collection of moneys from the investors and the misappropriation of the fund collected from the share holders which constitute one offence or other under the Penal Code court must be satisfied that prima facie an offence under the Penal Code has been disclosed on the materials produced before the court If the screening on this question is not done properly at the stage of initiation of the criminal proceeding in many cases some disgruntled share holders may launch prosecutions against the promoters directors and those in charge of the management of the company concerned and can paralyse the functioning of such company It need not be impressed that for prosecution for offenses under the Penal Code the complainant has to make out a prima facie case against the individuals concerned regarding their acts and omissions which constitute the different ingredients of the offenses under the Penal Code It cannot be overlooked that there is a basic difference between the offenses under the Penal Code and acts and omissions which have been made punishable under different Acts and statutes which are in nature of social welfare legislations For framing charges in respect of those acts and omissions in many cases mens rea is not an essential ingredient the concerned statute imposes a duty on those who are in charge of the management to follow the statutory provisions and once there is a breach of contravention such persons become liable to be punished But for framing a charge for an offence under the Penal Code the traditional rule of existence of mens rea is to be followed In the facts of the present case itself the prosecution has to prove that the appellants as promoters or directors had dishonest intention since very beginning while collecting the moneys from the applicants for the shares and debentures or that having collected such moneys they dishonestly misappropriated the same The ingredients of the different offenses under the Penal Code need not be proved only by direct evidence they 705 can be shown from the circumstances of a particular case that the intention of the promoters or the directors was dishonest since very inception or that they developed such intention at some stage for their wrongful gain and causing wrongful loss to the investors All the circumstances and the materials to prove such a charge have to be collected during investigation and enquiry and ultimately have to be produced before the court at the stage of trial for a verdict as to whether the ingredients of offence in question have been established on behalf of the prosecution The complaint made by the Deputy Secretary to the Government of India to the CBI mentions different circumstances to show that the appellants did not intend to carry on any business In spite of the rejection of the application by the Stock Exchange Calcutta they retained the share moneys of the applicants with dishonest intention Those allegations were investigated by the CBI and ultimately chargesheet has been submitted On basis of that chargesheet cognizance has been taken In such a situation the quashing of the prosecution pending against the appellants only on the ground that it was open to the applicants for shares to take recourse to the provisions of the Companies Act cannot be accepted It is a futile attempt on the part of the appellants to close the chapter before it has unfolded itself It will be for the trial court to examine whether on the materials produced on behalf of the prosecution it is established that the appellants had issued the prospectus inviting applications in respect of shares of the Company aforesaid with a dishonest intention or having received the moneys from the applicants they had dishonestly retained or misappropriated the same That exercise cannot be performed either by the High Court or by this Court If accepting the allegations made and charges leveled on their face value the Court had come to conclusion that no offence under the Penal Code was disclosed the matter would have been different This court has repeatedly pointed out that the High Court should not while exercising power under section 482 of the Code usurp the jurisdiction of the trial court The power under section 482 of the Code has been vested in the High Court to quash a prosecution which amounts to abuse of the process of the court But that power cannot be exercised by the High Court to hold a parallel trial only on basis of the statements and documents collected during investigation or enquiry for purpose of expressing an opinion whether the accused concerned is likely to be punished if the trial is allowed to proceed 706 The appeals are accordingly dismissed The trial court should proceed with the case in accordance with law We make it clear that we have not expressed any opinion on the merit of charges leveled against the appellants GN Appeals dismissed

The appellant Company issued a letter to its Contractor containing the terms and conditions of a contract of loading packed cement bags from its Packing Plants Into wagons or trucks Under Clause 12 there was a stipulation that the Contractor shall be paid a sum for his work at a flat rate of 41 paise for each tonne of cement handled In Packing Plant No1 and 30 paise for each tonne of cement handled in Packing Plant No2 Clause 13 thereof which contained a recital that the rate of loading in Clause 12 had been worked out on the basis of daily basic wages of Rs235 paise DA of Rs121 paise and HRA of Rs050 paise per day per worker stipulated a terms of reimbursement by the appellant to the Contractor of the difference in DA over the amount of Rs121 paise and annual increment etc payable from mouth to month to every worker by him The Contractor carried out his work and the appellant made payments of the sums payable to him under the contract But no deductions of tax were made under Section 194C1 of the Income Tax Act 1961 The Income Tax Officer served two notices One in respect of assessment years 1973 74 and 1974 75 and the other for 1974 75 to 1977 78 on the principal officer of the appellant Company to show cause as to why action should not be taken against the appellant for non compliance with Section 194C1The appellant filed a Writ Petition before the High Court of Patna seeking the quashing of the notices but the same was dismissed In appeal to this Court it was contended on behalf of the appellant 538 539 that 1 the work for the carrying of which the sum is required to be credited to the account of or paid to a Contractor under Section 194C1 of the Act is only a works contract and hence deduction under that sub section could arise only to the extent where the sum credited to the account of or paid to a Contractor for executing such works contract is comprised of the element of Income of the Contractor 2 that the words on income comprised therein appearing immediately after the words deduct an amount equal to two per cent of such sum as income tax in the concluding part of the sub section must be taken to mean the percentage amount deductible on the Income received by the Contractor under the contract and not on the sum credited to the account of or paid to the Contractor Dismissing the appeal this Court HELD 1 Them is nothing fit sub section 1 of Section 194C to show that the contract to carry out a work or the contract to supply labour to carry out a work should be confined to works contract There is no mason to curtail or to cut down the meaning of plain words used in the Section Any work means any work and not works contract which has a special connotation in the tax law Work envisaged In the sub section therefore has a wide import and covers any work which one or the other of the organisations specified in the sub section can get carried out through a Contractor under a contract and further It includes obtaining by any of such organisations supply of labour under a contract with a Contractor for carrying out its work which would have fallen outside the work but forks specific inclusion in the sub section 544 B E Brij Bhushan Lal Parduman Kumar etc vs CI T Haryana Himachal Pradesh and New Delhi 1979 2 SCR 16 distinguished The words in the sub section on income comprised therein appearing Immediately after the words deduct an amount equal to two per cent of such sum as income tax from their purport cannot be understood as the percentage amount deductible from the income of the Contractor out of the sum credited to his account or paid to him in pursuance of the co Moreover the concluding part of the sub section requiring deduction of an amount equal to two per cent of such sum as income tax by use of the words on income comprised therein makes It obvious that the amount equal to two per cent of the sum required to be deducted Is a 540 deducts at source Hence on the express language employed in the sub section it is impossible to hold that the amount of the two per cent required to be deducted by the prayer out of the sum credited to the account of or paid to the Contractor has to be confined to his income component out of that sum 545 D G 21 There is also nothing in the language of the sub section which permits exclusion of an amount paid on behalf of the organisaiton to the Contractor according to the termsand conditions ofthe contract in reimbursement of the amount paidby to workersfrom the sum envisaged therein 545 G H 546 A

minal Appeal No 818 of 1985 From the Judgment and Order dated 471985 of the Kerala High Court in Criminal Appeal No 251 of 1982 PS Poti and Ms Malini Poduval for the Appellant MT George for the Respondent The Judgment of the Court was delivered by NP SINGH J The appellant along with others was put on trial for offenses under sections 302 read with 149 148 323 of the Penal Code on the charge of committing the murder of Moideen Kutty hereinafter referred to as the deceased The Trial Court on consideration of the 695 materials on record came to the conclusion that the charges leveled against the accused persons have not been established beyond all reasonable doubt and on that finding acquitted the appellant as well others On appeal being filed on behalf of the State of Kerala the High Court convicted the appellant under section 302 of the Penal Code and sentenced him to undergo rigorous imprisonment for life So far another accused Alavi who had been acquitted by the Trial Court was also convicted by the High Court under section 323 of the Penal Code and sentenced to pay a fine of Rs 250 and in default thereof to suffer simple imprisonment for a term of one month The acquittal of other accused persons was affirmed by the High Court by dismissal of the appeal against them The case of the prosecution is that on 1691980 Mammed Kutty at 600 AM in the morning pelted stones at the house of the deceased At about 1200 in the noon while Mammed Kutty and his brother Abdulla Kutty were passing in front of the house of the deceased a protest was made by the deceased in respect of the morning incident They denied that any stone had been pelted by them It is the further case of the prosecution that at about 2 PM while the deceased was sitting with his wife PW4 and others on the varandah of his house five persons including the appellant came to his courtyard and challenged him to come out if he wanted to beat aforesaid Mammed Kutty and Abdulla The deceased stepped out into his courtyard and asked the accused persons not to create a scene At this the appellant and the other accused since acquitted gave some blows to the deceased on his hand Thereafter the deceased raised his hand to give a blow to the appellant At this very moment the appellant took out a dagger from his waist and gave an injury on the upper part of the chest of the deceased near the left shoulder and above the armpit The deceased ran towards the house of PW1 and fell on the varandah Thereafter the accused persons escaped The victim was removed to the Medical Hospital Calicut where he was examined by PW9 But soon thereafter he expired The First Information Report was lodged at 715 PM After investigation the charge sheet was submitted against five accused persons At the trial prosecution examined four eye witnesses PW1 to PW4 The doctor who held the post mortem examination was examined as PW8 He found only one incised penetrating wound vertically placed on the front of left shoulder above the left armpit tailing 6 cm in length running towards from the lower sharp end According to his opinion The an 696 died because the artery was cut This injury became dangerous only because it cut the artery In the cross examination PW8 stated that it was impossible to cause an injury like one which was found on the person of the victim by the assailant standing in front of the victim He also stated that the tailing of the injury show that either the knife was dragged after stabing or that the injury was caused during the course of the struggle According to him if the accused had given a direct blow as is normally done there would not have been the tailing of the injury The learned counsel appearing for the appellant placed the statement made in the First Information Report the evidence of the eye witnesses in connection with the morning incident of pelting of stones to show that it was a concoction and none had pelted any stone on the house of the deceased According to the learned counsel if this part of the prosecution case is disbelieved then it shall have a bearing on the main occurrence itself It was also pointed out that the prosecution has suppressed real manner of occurrence in as much as one Abdulla on the side of the accused persons was first assaulted by the prosecution party on the same day at about 130 PM and he was hospitalised after having received the injuries That incident was an integral part of the occurrence which has not been disclosed by the prosecution In this connection our attention was drawn to the evidence of DW1 who has stated that he had examined the injuries on the person of one Abdulla on 1691980 at 430 PM and found three injuries on his person i A contusion on the left shoulder 4 x 2 cm ii abrasion below the right collar bone 3 x 5 cm and iii injury on the outer side of the left ankle 4 x 3 cm He has also stated that the said Abdulla had alleged that he had been assaulted with a wooden stick at 130 PM the same day The Trial Court while acquitting the accused persons has attached great importance to the injury found on the person of aforesaid Abdulla and has drawn adverse inference against the prosecution case The High Court has rightly pointed out that merely non disclosure of the aforesaid superficial injuries on the person of Abdulla even if those injuries had been caused in the same occurrence shall not in any manner affect the prosecution case It is well settled that if the evidence of the eye witnesses are held to be reliable and inspire confidence then the accused cannot be acquitted solely on the ground that some superficial injuries found on the person of the accused concerned had not been explained by the prosecution 697 According to us if the evidence of four eve witnesses including the evidence of the son and the wife of the deceased are accepted as reliable and trust worthy then the prosecution case cannot be rejected merely on the ground that the incident of pelting of the stones on behalf of the accused in the early morning had not been proved or established or that some minor injuries on the person of Abdulla caused in the same occurrence had not been disclosed and explained by the prosecution So far the four eve witnesses are concerned they have been named in the First Information Report The First Information Report was lodged at 715 PM the same evening within two hours of the death of the victim In the First Information Report the details of the occurrence was men tioned The version disclosed in the First Information Report has been supported by the eye witnesses before the Court The learned counsel appearing for the appellant could not point out any reason why their evidence against the appellant should not be accepted It may be pointed out that in the First Information Report itself PW1 the informant stated that this appellant came to the house of the deceased and challenged him as to who was there to beat Abdulla and Muhammed Kutty He further stated that having heard this the deceased moved towards them and asked them to go back At that very moment this appellant and the other co accused Alavi gave him blows on his hand Thereafter the deceased tried to give counter blow to the appellant Then the appellant took out a knife from his waist and gave a blow from the said knife to the deceased at his left collar bone The prosecution very fairly admitted that accused persons were not carrying any weapon in their hands and during the protest made a sudden quarrel and fight took place between the prosecution party and the accused persons Even at trial evidence the eve witnesses have admitted this part of the version and have stated that first the appellant and the other co accused gave blows on the hand of the deceased The knife blow was given by the appellant when the deceased was trying to give a counter blow to the appellant There is no dispute that the appellant suddenly took out the knife during the course of the quarrel and fight from his waist From the evidence of doctor PW8 referred to above it appears that injury aforesaid could not have been caused by the assailant standing in front of the victim It could have been caused only during the struggle In view of the admitted position that a sudden fight and quarrel preceded the giving of the knife 698 blow by the appellant to the victim which in all probabilities was given not while the victim and the appellant were standing face to face but during a struggle between them causing tailing of the injury it shall not be just and proper to hold that appellant had an intention to cause the death of the victim Taking the evidence of the witnesses along with circumstances of the case according to us the appellant had the knowledge that injury which he was causing was likely to cause death but he had no intention to cause the death of the victim In such a circumstances it is not possible to uphold the conviction of the appellant under section 302 of the Penal Code Accordingly the conviction and sentence passed against the appellant under section 302 of the Penal Code are set aside The appellant is convicted under section 304 part 11 of the Penal Code and sentenced to undergo rigorous imprisonment for seven years The appeal is allowed in part to the extent indicated above The bail bond is cancelled NVK Appeal partly allowed

Recruitment to the Andhra Pradesh Higher Judicial Service is governed by The Andhra Pradesh State Higher Judicial Service Special Rules Rule 1 constitutes the service Category 1 consists of District and Sessions Judges 1st grade and Category 11 consists of District and Sessions Judges Second Grade Appointment to Category 1 is from Category 11 Appointment to Category 11 is from two sources by transfer from amongst the Subordinate Judges and by direct recruitment from the Bar The petitioner were direct recruits whereas respondents 4 to 16 were promoted from the Subordinate judiciary The respondents were Initially appointed on temporary basis in the yew 19781979 but they were made substantive in the year 1983 The petitioners who were appointed substantively in the year 1981 claimed seniority over the said respondents and riled the Writ Petition under Article 32 of the Constitution of India for relief It was contended on their behalf that 1 The Service consists of only permanent posts there is no provision under the Special Rules for adding temporary posts to the cadre consequently the appointment of respondents 4 to 16 to the post of District and Sessions Judges Second Grade on temporary basis can at best be treated under Rule 10ai of the Andhra Pradesh State and Subordinate Service Rules 2 The temporary service rendered by the respondents 4 to 16 being outside the cadre cannot be counted towards seniority 3 Porviso to Rule 2 and Rule 6 of the Special Rules have to be read together and as such the permanent vacancies having been made available for them in the year 1983 their service 548 prior to that date cannot be counted towards seniority The respondents constested the writ petition by contending that the petitioners were appointed in the year 1981 and since then till the year 1988 twelve seniority lists have been published showing the petitioners below respondents 4 to 16 and at no point of time they challenged the seniority lists in the Court Even when the Writ Petition THB Chalapathi Ors vs High Court of Andhra Pradesh Ors was pending in the High Court they did not intervene The petitioners were thus guilty of gross delay and latches and as such are not entitled to get relief in the Writ Petition Dismissing the writ petition this Court HELD 1 i Rule 1 has to be interpreted to mean that the service under the Special Rules consists of all the posts permanent and temporary which have been designated as District and Sessions Judge Second Grade Even otherwise in the absence of any prohibition under the Special Rules the State Government can always create temporary posts as addi tions to the cadre 554 B ii Rule 10ai of the Andhra Pradesh State and Subordinate Service Rules has no application to the Andhra Pradesh Higher Judicial Service which is governed by the Special Rules Rule 10ai provides for emergency appointments made on stop gap basis to meet a temporary exigency Apart from that the temporary appointments under the said Rules are made without following the procedure prescribed under the Rules governing the relevant Service 554 C D In the instant case the appointments of respondents 4 to 16 were made under Rule 2 of the Special Rules by the State Government in consultation with the High Court The Special Rules provide a complete scheme for the appointment and seniority of the members of the Service 554 D 2 Temporary posts of District and Sessions Judges Second Grade being part of the Service the seniority has to be counted on the basis of length of service including the service against the temporary posts 554 F 3 Rule 6 of the Special Rules is in no way dependent on the proviso to Rule 2 of the Special Rules Both are to be operative independently In 549 the scheme of the rules the seniority rule is not dependent on the quota Rule Quota has been provided for the direct recruits only against permanent posts The seniority rule permits the counting of total period of service from the date a person is on duty against a post in the category 554 G H In the instant case even though the petitioners were appointed substantively to the service earlier to respondents 4 to 16 but in view of Rule 6 they cannot be declared senior on the basis of continuous length of service Respondents 4 to 16 have been rightly given seniority above the petitioners 555 A

Crl No 488 of 1988 Under Article 32 of the Constitution of India MS Ganesh for the Petitioner Altaf Ahmed Addl Solicitor General AK Panda and Naresh Kumar Sharma for the Respondents The Judgments of the Court were delivered by VERMA J A letter dated 1491988 sent to this Court by Smt Nilabati Behera alias Lalita Behera was treated as a Writ Petition under Article 32 of the Constitution for determining the claim of compensation made therein consequent upon the death of petitioner s son Suman Behera aged about 22 years in police custody The said Suman Behera was taken from his home in police custody at about 8 am on 1121987 by respondent No6 Sarat Chandra Barik Assistant Sub Inspector of Police of Jaraikela Police Outpost under Police Station Bisra Distt Sundergarh in Orissa in connection with the investigation of an offence of theft and detained at the Police Outpost At about 2 pm the next day on 2121987 the petitioner came to know that the dead body of her son Suman Behera was found on the railway track near a bridge at some distance from the Jaraikela railway station There were multiple injuries on the body of Suman Behera when it was found and obviously his death was unnatural caused by those injuries The allegation made is that it is a case of custodial death since Suman Behera died as a result of the multiple injuries inflicted to him while he was in police custody and thereafter his dead body was thrown on the railway track The prayer made in the petition is for award of compensation to the petitioner the mother of Suman Behera for contravention of the fundamental right to life guaranteed under Article 21 of the Constitution The State of Orissa and its police officers including Sarat Chandra 590 Barik Assistant Sub Inspector of Police and Constable No127 Chhabil Kujur of Police Outpost Jeraikela Police Station Bisra are impleaded as respondents in this petition The defence of the respondents is that Suman Behera managed to escape from police custody at about 3 am on the night between the 1st and 2nd December 1987 from the Police Outpost Jeraikela where he was detained and guarded by Police Constable Chhabil Kujur he could not be apprehended thereafter in spite of a search and the dead body of Suman Behera was found on the railway track the next day with multiple injuries which indicated that he was run over by a passing train after he had escaped from police custody In short on this basis the allegation of custodial death was denied and consequently the respondents responsibility for the unnatural death of Suman Behera In view of the controversy relating to the cause of death of Suman Behera a direction was given by this Court on 431991 to the District Judge Sundergarh in Orissa to hold an inquiry into the matter and submit a report The parties were directed to appear before the District Judge and lead the evidence on which they rely Accordingly evidence was led by the parties and the District Judge has submitted the Inquiry Report dated 491991 containing his finding based on that evidence that Suman Behera had died on account of multiple injuries inflicted to him while he was in police custody at the Police Outpost Jeraikela The correctness of this finding and Report of the District Judge being disputed by the respondents the matter was examined afresh by us in the light of the objections raised to the Inquiry Report The admitted facts are that Suman Behera was taken in police custody on 1121987 at 8 am and he was found dead the next day on the railway track near the Police Outpost Jeraikela without being released from custody and his death was unnatural caused by multiple injuries sustained by him The burden is therefore clearly on the respondents to explain how Suman Behera sustained those injuries which caused his death Unless a plausible explanation is given by the respondents which is consistent with their innocence the obvious inference is that the fatal injuries were inflicted to Suman Behera in police custody resulting in his death for which the respondents are responsible and liable To avoid this obvious and logical inference of custodial death the learned Additional Solicitor General relied on the respondent s defence 591 that Suman Behera had managed to escape from police custody at about 3 am on the night between the 1st and 2nd December 1987 and it was likely that he was run over by a passing train when he sustained the fatal injuries The evidence adduced by the respondents is relied on by the learned Additional Solicitor General to support this defence and to contend that the responsibility of the respondents for the safety of Suman Behera came to an end the moment Suman Behera escaped from police custody The learned Additional Solicitor General however rightly does not dispute the liability of the State for payment of compensation in this proceeding for violation of the fundamental right to life under Article 21 in case it is found to be a custodial death The argument is that the factual foundation for such a liability of the State is absent Shri MS Ganesh who appeared as amicus curiae for the petitioner however contended that the evidence adduced during the inquiry does not support the defence of respondents and there is no reason to reject the finding of the learned District Judge that Suman Behera died in police custody as a result of injuries inflicted to him The first question is Whether it is a case of custodial death as alleged by the petitioner The admitted facts are Suman Behera was taken in police custody at about 8 am on 1121987 by Sarat Chandra Barik Asstt Sub Inspector of Police during investigation of an offence of theft in the village and was detained at Police Outpost Jeraikela Suman Behera and Mahi Sethi another accused were handcuffed tied together and kept in custody at the police station Suman Behera s mother the petitioner and grand mother went to the Police Outpost at about 8 pm with food for Suman Behera which he ate and thereafter these women came away while Suman Behera continued to remain in police custody Police Constable Chhabil Kujur and some other persons were present at the Police Outpost that night and the dead body of Suman Behera with a handcuff and multiple injuries was found lying on the railway track at Kilometer No38529 between Jeraikela and Bhalulata railway stations on the morning of 2121987 It is significant that there is no cogent independent evidence of any search made by the police to apprehend Suman Behera if the defence of his escape from police custody be true On the contrary after discovery of the dead body on the railway track in the morning by some railwaymen it was much later in the day that the police reached the spot to take charge of the dead body This conduct of the concerned police 592 officers is also a significant circumstance to assess credibility of the defence version Before discussing the other evidence adduced by the parties during the inquiry reference may be made to the injuries found on the dead body of Suman Behera during postmortem These injuries were the following Extemal injuries 1 Laceration over with margin of damaged face 2 Laceration of size 3 x 2 over the left temporal region upto bone 3 Laceration 2 above mastoid process on the right side of size 1 12 x 14 bone exposed 4 Laceration on the forehead left side of size 1 12 x 14 upto bone in the mid line on the forehead 12 x 14 bone deep on the left lateral to it 1 x 14 bone exposed 5 Laceration 1 x 12 on the anterior aspect of middle of left arm fractured bone protruding 6 Laceration 1 x 12 x V2 on medial aspect of left thigh 4 above the knee joint 7 Laceration 12 x 12 x 12 over left knee joint 8 Laceration 1 x 12 x 12 on the medial aspect of right knee joint 9 Laceration 1 x 12 x 12 on the posterior aspect of left leg 4 below knee joint 10 Laceration 1 x 14 x 12 on the plantar aspect of 3rd and 4th toe of right side 11 Laceration of 1 x 14 x 12 on the dorsum of left foot Injury on the neck 593 1 Bruises of size 3 x 1 obliquely alongwith sternocleidomastoid muscle 1 above the clavical left side 2 lateral to this 2 x 1 bruise 3 and 1 x 1 above the clavial left side 4 posterial aspect of the neck 1 x 1 obliquely placed right to mid line Right shoulder a Bruise 2 x 2 1 above the right scapula b Bruise 1 x 1 on the tip of right shoulder c Bruise on the dorsum of right palm 2 x 1 d Bruise extenses surface of forearm left side e Bruise on right elbow 4 x 1 f Bruise on the dorsum of left palm 2 x 1 g Bruise over left patela 2 x 1 h Bruise 1 above left patel 1 x 1 i Bruise on the right illiac spine 1 x 12 j Bruise over left scapula 4 x 1 k Bruise 1 below right scapula 5 x 1 l Bruise 3 medial to inferior angle of right scapula 2x 1 m Bruise 2 below left scapula of size 4 x 2 n Bruise 2 x 6 below 12th rib left side o Bruise 4 x 2 on the left lumber region p Bruise on the buttock of left side 3 x 2 q On dissection found l Fracture of skull on right side parietal and occipital bone 6 length 594 2 Fracture of frontal bone below laceration 2 depressed fracture 3 Fracture of left temporal bone 2 in length below external injury No2 ie laceration 2 above left mastoid process 4 Membrane ruptured below depressed fracture brain matter protruding through the membrane 5 Intracraneal haemorrhage present 6 Brain lacerated below external injury No3 1 x 12 x 12 7 Bone chips present on temporal surface of both sides 8 Fracture of left humerous 3 above elbow 9 Fracture of left femur 3 above knee joint 10 Fracture of mendible at the angle mendible both sides 11 Fracture of maxillary The face was completely damaged eye ball present nose lips cheeks absent Maxila and a portion of mendible absent No injury was present on the front side of body trunk There is rupture and laceration of brain The doctor deposed that all the injuries were caused by hard and blunt object the injuries on the face and left temporal region were postmortem while the rest were ante mortem The doctor excluded the possibility of the injuries resulting from dragging of the body by a running train and stated that all the ante mortem injuries could be caused by lathi blows It was further stated by the doctor that while all the injuries could not be caused in a train accident it was possible to cause all the injuries by lathi blows Thus the medical evidence comprising the testimony of the doctor who conducted the postmortem excludes the possibility of all the injuries 595 to Suman Behera being caused in a train accident while indicating that all of them could result form the merciless beating given to him The learned Additional Solicitor General placed strong reliance ore the written opinion of Dr KK Mishra Professor Head of the Department of Forensic Medicine Medical College Cuttack given on 1521988 on a reference made to him wherein he stated on the basis of the documents that the injuries found on the dead body of Suman Behera could have been caused by rolling on the railway track in between the rail and by coming into forceful contact with projecting part of the moving trainengine While adding that it did not appear to be a case of suicide he indicated that there was more likelihood of accidental fall on the railway track followed by the running enginetrain In our view the opinion of Dr KK Mishra not examined as a witness is not of much assistance and does not reduce the weight of the testimony of the doctor who conducted the postmortem and deposed as a witness during the inquiry The opinion of Dr KK Mishra is cryptic based on conjectures for which there is no basis and says nothing about the injuries being both anti mortem and post mortem We have no hesitation in reaching this conclusion and preferring the testimony of the doctor who conducted the postmortem We may also refer to the Report dated 19121988 containing the findings in a joint inquiry conducted by the Executive Magistrate and the Circle Inspector of Police This Report is stated to have been made under Section 176 Cr PC and was strongly relied on by the learned Additional Solicitor General as a statutory report relating to the cause of death In the first place an inquiry under Section 176 Cr PC is contemplated independently by a Magistrate and not jointly with a police officer when the role of the police officers itself is a matter of inquiry The joint finding recorded is that Suman Behera escaped from police custody at about 3 am on 2121987 and died in a train accident as a result of injuries sustained therein There was hand cuff on the hands of the deceased when his body was found on the railway track with rope around it It is significant that the Report dated 1131988 of the Regional Forensic Science Laboratory Annexure R 8 at p 108 of the paper book mentions that the two cut ends of the two pieces of rope which were sent for examination do not match with each other in respect of physical appearance This finding about the rope negatives the respondents suggestion that Suman Behera managed to escape from police custody by chewing off the rope with which he was tied It is no necessary for us to refer to the other evidence including 596 the oral evidence adduced during the inquiry from which the learned District Judge reached the conclusion that it is a case of custodial death and Suman Behera died as a result of the injuries inflicted to him voluntarily while he was in police custody at the Police Outpost Jeraikela We have reached the same conclusion on a reappraisal of the evidence adduced at the inquiry taking into account the circumstances which also support that conclusion This was done in view of the vehemence with which the learned Additional Solicitor General urged that it is not a case of custodial death but of death of Suman Behera caused by injuries sustained by him in a train accident after he had managed to escape from police custody by chewing off the rope with which he had been tied for being detained at the Police Outpost On this conclusion the question now is of the liability of the respondents for compensation to Suman Behera s mother the petitioner for Suman Behera s custodial death In view of the decisions of this Court in Rudul Sah vs State of Bihar and Another Sebastian M Hongray vs Union of India and Others and Bhim Singh vs State of JK 1984 Supp SCC 504 and Saheli A Women s Resources Centre and Others vs Commissioner of Police Delhi Police Headquarters and Others and State of Maharashtra and Others vs Ravikant SPatil the liability of the State of Orissa in the present case to pay the compensation cannot be doubted and was rightly not disputed by the learned Additional Solicitor General It would however be appropriate to spell out clearly the principle on which the liability of the State arises in such cases for payment of compensation and the distinction between this liability and the liability in private law for payment of compensation in an action on tort It may be mentioned straightaway that award of compensation in a proceeding under Article 32 by this court or by the High Court under Article 226 of the Constitution is a remedy available in public law based on strict liability for contravention of fundamental rights to which the principle of sovereign immunity does not apply even though it may be available as a defence in private law in an action based on tort This is a distinction between the two remedies to be borne in mind which also indicates the basis on which compensation is awarded in such proceedings We shall now refer to the earlier decisions of this Court as well as some other decisions before further discussion of this principle 597 In Rudul Sah supra it was held that in a petition under Article 32 of the Constitution this Court can grant compensation for deprivation of a fundamental right That was a case of violation of the petitioner s right to personal liberty under Article 21 of the Constitution Chandrachud CJ dealing with this aspect stated as under It is true that Article 32 cannot be used as a substitute for the enforcement of rights and obligations which can be enforced effecaciously through the ordinary processes of Courts Civil and Criminal A money claim has therefore to be agitated in and adjudicated upon in a suit instituted in a court of lowest grade competent to try it But the important question for our consideration is whether in the exercise of its jurisdiction under article 32 this Court can pass an order for the payment of money if such an order is in the nature of compensation consequential upon the deprivation of a fundamental right The instant case is illustrative of such cases ordinary remedy of a suit if his claim to compensation was factually controversial in the sense that a civil court may or may not have upheld his claim But we have no doubt that if the petitioner files a suit to recover damages for his illegal detention a decree for damages would have to be passed in that suit though it is not possible to predicate in the absence of evidence the precise amount which would be decreed in his favour In these circumstances the refusal of this Court to pass an order of compensation in favour of the petitioner will be doing mere lip service to his fundamental right to liberty which the State Government has so grossly violated Article 21 which guarantees the right to life and liberty will be denuded of its significant content if the power of this Court were limited to passing orders to release from illegal detention One of the telling ways in which the violation of that right can reasonably be prevented and due compliance with the mandate of Article 21 secured is to mulct its violaters in the payment of monetary compensation Administrative sclerosis lead 598 ing to flagrant infringements of fundamental rights cannot be corrected by any other method open to the judiciary to adopt The right to compensation is some palliative for the unlawful acts of instrumentalities which act in the name of public interest and which present for their protection the powers of the state as shield If Civilisation is not to perish in this country as it has perished in some others too well known to suffer mention it is necessary to educate ourselves into accepting that respect for the rights of in dividuals is the true bastion of democracy Therefore the State must repair the damage done by its officers to the petitioner s rights It may have recourse against those officers pp513 14 emphasis supplied It does appear from the above extract that even though it was held that compensation could be awarded under Article 32 for contravention of a fundamental right yet it was also stated that the petitioner could have been relegated to the ordinary remedy of a suit if his claim to compensation was factually controversial and Article 32 cannot be used as a substitute for the enforcement of rights and obligations which can be enforced efficaciously through the ordinary processes These observation may tend to raise a doubt that the remedy under Article 32 could be denied if the claim to compensation was factually controversial and therefore optional not being a distinct remedy available to the petitioner in addition to the ordinary processes The later decisions of this Court proceed on the assumption that monetary compensation can be awarded for violation of constitutional rights under Article 32 or Article 226 of the Constitution but this aspect has not been adverted to It is therefore necessary to clear this doubt and to indicate the precise nature of this remedy which is distinct and in addition to the available ordinary processes in case of violation of the fundamental rights Reference may also be made to the other decisions of this Court after Rudul Sah In Sebastian M Hongray vs Union of India and Others 1 it was indicated that in a petition for writ of habeas 599 corpus the burden was obviously on the respondents to make good the positive stand of the respondents in response to the notice issued by the court by offering proof of the stand taken when it is shown that the person detained was last seen alive under the surveillance control and command of the detaining authority In Sebastian M Hongray vs Union of India Ors 11 in such a writ petition exemplary costs were awarded on failure of the detaining authority to produce the missing persons on the conclusion that they were not alive and had met an unnatural death The award was made in Sebastian M Hongray II apparently following Rudul Sah but without indicating anything more In Bhim Singh vs State of JK and Others illegal detention in police custody of the petitioner Bhim Singh was held to constitute violation of his rights under Articles 21 and 222 and this Court exercising its power to award compensation under Article 32 directed the State to pay monetary compensation to the petitioner for violation of his constitutional right by way of exemplary costs or otherwise taking this power to be settled by the decisions in Rudul Sah and Sebastian M Hongray In Saheli the State was held liable to pay compensation payable to the mother of the deceased who died as a result of beating and assault by the police However the principle indicated therein was that the State is responsible for the tortious acts of its employees In State of Maharashtra and Others vs Ravikant section Patil the award of compensation by the High Court for violation of the fundamental right under Article 21 of an undertrial prisoner who was handcuffed and taken through the streets in a procession by the police during investigation was upheld However in none of these cases except Rudul Sah anything more was said In Saheli reference was made to the State s liability for tortious acts of its servants without any reference being made to the decision of this Court in Kasturilal Ralia Ram fain vs The State of Uttar Pradesh wherein sovereign immunity was upheld in the case of vicarious liability of the State for the tort of its employees The decision in Saheli is therefore more in accord with the principle indicated in Rudul Sah In this context it is sufficient to say that the decision of this Court in Kasturilal upholding the State s plea of sovereign immunity for tortious acts of its servants is confined to the sphere of liability in tort which is distinct from the State s liability for contravention of fundamental rights to 600 which the doctrine of sovereign immunity has no application in the constitutional scheme and is no defence to the constitutional remedy under Articles 32 and 226 of the Constitution which enables award of compensation for contravention of fundamental rights when the only practicable mode of enforcement of the fundamental rights can be the award of compensation The decisions of this Court in Rudul Sah and others in that line relate to award of compensation for contravention of fundamental rights in the constitutional remedy under Articles 32 and 226 of the Constitution On the other hand Kasturilal related to value of goods seized and not returned to he owner due to the fault of Government servants the claim being of damages for the tort of conversion under the ordinary process and not a claim for compensation for violation of fundamental rights Kasturilal is therefore inapplicable in this context and distinguishable The decision of Privy Council in Maharaj vs Attomey General of Trinidad and Tobago No2 is useful in this context That case related to Section 6 of the Constitution of Trinidad and Tobago 1962 in the chapter pertaining to human rights and fundamental freedoms wherein Section 6 provided for an application to the High Court for redress The question was whether the provision permitted an order for monetary compensation The contention of the Attorney General therein that an order for payment of compensation did not amount to the enforcement of the rights that had been contravened was expressly rejected It was held that an order for payment of compensation when a right protected had been contravened is clearly a form of redress which a person is entitled to claim under Section 6 and may well be the only practicable form of redress Lord Diplock who delivered the majority opinion at page 679 stated It was argued on behalf of the Attorney General that s62 does not permit of an order for monetary compensation despite the fact that this kind of redress was ordered in Jaundoo vs Attorney General of Guyana Reliance was placed on the reference in the subsection to enforcing or securing the enforcement of any of the provisions of the said foregoing sections as the purpose for which orders etc could be made An order for payment of compensation it was submitted did not 601 amount to the enforcement of the rights that had been contravened In their Lordships view an order for payment of compensation when a right protected under s1 has been contravened is dearly a form of redress which a person is entitled to claim under section 61 and may well be the only practicable form of redress as by now it is in the instant case The jurisdiction to make such an order is conferred on the High Court by para a of s62 viz jurisdiction to hear and determine any application made by any person in pursuance of sub section 1 of this section The very wide powers to make orders issue writs and give directions are to this Lord Diplock further stated at page 680 as under Finally their Lordships would say something about the measure of monetary compensation recoverable under s6 where the contravention of the claimant s constitutional rights consists of deprivation of liberty otherwise than by due process of law The claim is not a claim in private law for damages for the tort of false imprisonment under which the damages recoverable are at would include damages for loss of reputation It is a claim in public law for compensation for deprivation of liberty alone emphasis supplied Lord Hailsham while dissenting from the majority regarding the liability for compensation in that case concurred with the majority opinion on this principle and stated at page 687 thus expression redress in sub s1 of s6 and the expression enforcement in sub s2 although capable of embracing damages where damages are available as part of the legal consequences of contravention do not confer and are not in the context capable of being construed so as to confer a right of damages where they have not hitherto been available in this case against the state for the judicial errors of a judge 602 Thus on this principle the view was unanimous that enforcement of the constitutional right and grant of redress embraces award of compensation as part of the legal consequences of its contravention It follows that a claim in public law for compensation for contravention of human rights and fundamental freedoms the protection of which is guaranteed in the Constitution is an acknowledged remedy for enforcement and protection of such rights and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is distinct from and in addition to the remedy in private law for damages for the tort resulting from the contravention of the fundamental right The defence of sovereign immunity being inap plicable and alien to the concept of guarantee of fundamental rights there can be no question of such a defence being available in the constitutional remedy It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaranteed by the Constitution when that is the only practicable mode of redress available for the contravention made by the State or its servants in the purported exercise of their powers and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Articles 32 and 226 of the Constitution This is what was indicated in Rudul Sah and is the basis of the subsequent decisions in which compensation was awarded under Articles 32 and 226 of the Constitution for contravention of fundamental rights A useful discussion on this topic which brings out the distinction between the remedy in public law based on strict liability for violation of a fundamental right enabling award of compensation to which the defence of sovereign immunity is inapplicable and the private law remedy wherein vicarious liability of the State in tort may arise is to be found in Ratanlal Dhirajlal s Law of Torts 22nd Edition 1992 by Justice GP Singh at pages 44 to 48 This view finds support from the decisions of this Court in the Bhagalpur blinding cases Kharti and Others II vs State of Bihar and Others and Kharti and Other TV vs State of Bihar and Others 1981 2 SCC 493 wherein it was said that the court is not helpless to grant relief in a case of violation of the right to life and personal liberty and it should be prepared to forge new tools and devise new remedies for 603 the purpose of vindicating these precious fundamental rights It was also indicated that the procedure suitable in the facts of the case must be adopted for conducting the inquiry needed to ascertain the necessary facts for granting the relief as the available mode of redress for enforcement of the guaranteed fundamental rights More recently in Union Carbide Corporation and Others vs Union of India and Others Misra CJ stated that we have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future there is no reason why we should hesitate to evolve such principle of liability To the same effect are the observations of Venkatachaliah J as he then was who rendered the leading judgment in the Bhopal gas case with regard to the court s power to grant relief We respectfully concur with the view that the court is not helpless and the wide powers given to this Court by Article 32 which itself is a fundamental right imposes a constitutional obligation on this Court to forge such new tools which may be necessary for doing complete justice and enforcing the fundamental rights guaranteed in the Constitution which enable the award of monetary compensation in appropriate cases where that is the only mode of redress available The power available to this Court under Article 142 is also an enabling provision in this behalf The contrary view would not merely render the court powerless and the constitutional guarantee a mirage but may in certain situations be an incentive to extinguish life if for the extreme contravention the court is powerless to grant any relief against the State except by punishment of the wrongdoer for the resulting offence and recovery of damages under private law by the ordinary process It the guarantee that deprivation of life and personal liberty cannot be made except in accordance with law is to be real the enforcement of the right in case of every contravention must also be possible in the constitutional scheme the mode of redress being that which is appropriate in the facts of each case This remedy in public law has to be more readily available when invoked by the have not who are not possessed of the wherewithal for enforcement of their rights in private law even though its exercise is to be tempered by judicial restraint to avoid circumvention of private law remedies where more appropriate We may also refer to Article 95 of the International Covenant on Civil and Political Rights 1966 which indicates that an enforceable right to 604 compensation is not alien to the concept of enforcement of a guaranteed right Article 95 reads as under Anyone who has been the victim of unlawful arrest or detention shall have an enforceable right to compensation The above discussion indicates the principles on which the Court s power under Articles 32 and 226 of the Constitution is exercised to award monetary compensation for contravention of a fundamental right This was indicated in Rudul Sah and certain further observations therein adverted to earlier which may tend to minimise the effect of the principle indicated therein do not really detract from that principle This is how the decisions of this Court in Rudul Sah and others in that line have to be understood and Kasturilal distinguished therefrom We have considered this question at some length in view of the doubt raised at times about the propriety of awarding compensation in such proceedings instead of directing the claimant to resort to the ordinary process of recovery of damages by recourse to an action in tort In the present case on the finding reached it is a clear case for award of compensation to the petitioner for the custodial death of her son The question now is of the quantum of compensation The deceased Suman Behera was aged about 22 years and had a monthly income between Rs1200 to Rs1500 This is the finding based on evidence recorded by the District Judge and there is no reason to doubt its correctness In our opinion a total amount of Rs150000 would be appropriate as compensation to be awarded to the petitioner in the present case We may however observe that the award of compensation in this proceeding would be taken into account for adjustment in the event of any other proceeding taken by the petitioner for recovery of compensation on the same ground so that the amount to this extent is not recovered by the petitioner twice over Apart from the fact that such an order is just it is also in consonance with the statutory recognition of this principle of adjustment provided in Section 3575 Cr PC and Section 1413 of the Accordingly we direct the respondent State of Orissa to pay the sum of Rs150000 to the petitioner and a further sum of Rs10000 as to be paid to the Supreme Court Legal Aid Committee The mode of payment of Rs150000 to the petitioner would be by making a term 605 deposit of that amount in a scheduled bank in the petitioner s name for a period of three years during which she would receive only the interest payable thereon the principal amount being payable to her on expiry of the term The Collector of the District will take the necessary steps in this behalf and report compliance to the Registrar Judicial of this Court within three months We clarify that the award of this compensation apart from the direction for adjustment of the amount as indicated will not affect any other liability of the respondents or any other person flowing from the custodial death of petitioner s son Suman Behera We also expect that the State of Orissa would take the necessary further action in this behalf to ascertain and fix the responsibility of the individuals responsible for the custodial death of Suman Behera and also take all available appropriate actions against each of them including their prosecution for the offence committed thereby The writ petition is allowed in these terms ANAND J CONCURRING The lucid and elaborate judgment recorded by my learned brother Verma J obviates the necessity of noticing facts or reviewing the case law referred to by him I would however like to record a few observations of my own while concurring with his Lordship s judgment This Court was bestirred by the unfortunate mother of deceased Suman Behera through a letter dated 1491988 bringing to the notice of the Court the death of her son while in police custody The letter was treated as a Writ Petition under Article 32 of the Constitution As noticed by Brother Verma J an inquiry was got conducted by this Court through the District Judge Sundergarh who after recording the evidence submitted his inquiry report containing the finding that the deceased Suman Behera had died on account of multiple injuries inflicted on him while in police custody Considering that it was alleged to be a case of custodial death at the hands of those who are supposed to protect the life and liberty of the citizen and which if established was enough to lower the flag of civilization to fly half mast the report of the District Judge was scrutinized and analysed by us with the assistance of Mr MS Ganesh appearing amicus 606 curiae for the Supreme Court Legal Aid Committee and Mr Altaf Ahmad the learned Additional Solicitor General carefully Verma J while dealing with the first question ie whether it was a case of custodial death has referred to the evidence and the circumstances of the case as also the stand taken by the State about the manner in which injuries were caused and has come to the conclusion that the case put up by the police of the alleged escape of Suman Behera from police custody and his sustaining the injuries in a train accident was not acceptable I respectfully agree A strenuous effort was made by the learned Additional Solicitor General by reference to the injuries on the head and the face of the deceased to urge that those injuries could not be possible by the alleged police torture and the finding recorded by the District Judge in his report to the contrary was erroneous It was urged on behalf of the State that the medical evidence did establish that the injuries had been caused to the deceased by lathi blows but it was asserted that the nature of injuries on the face and left temporal region could not have been caused by the lathis and therefore the death had occurred in the manner suggested by the police in a train accident and that it was not caused by the police while the deceased was in their custody In this connection it would suffice to notice that the Doctor who conducted the postmortem examination excluded the possibility of the injuries to Suman Behera being caused in a train accident The injuries on the face and the left temporal region were found to be post mortem injuries while the rest were ante mortem This aspect of the medical evidence would go to show that after inflicting other injuries which resulted in the death of Suman Behera the police with a view to cover up their crime threw the body on the rail track and the injuries on the face and left temporal region were received by the deceased after he had died This aspect further exposes not only the barbaric attitude of the police but also its crude attempt to fabricate false clues and create false evidence with a view to screen its offence The falsity of the claim of escape stands also exposed by the report from the Regional Forensic Science Laboratory dated 1131988 Annexure R 8 which mentions that the two pieces of rope sent for examination to it did not tally in respect of physical appearance thereby belying the police case that the deceased escaped from the police custody by chewing the rope The theory of escape has thus been rightly disbelieved and I agree with the view of Brother Verma J that the death of Suman Behera was caused while he was in custody of the police by police torture A custodial death is perhaps one of the worst 607 crimes in a civilised society governed by the Rule of Law It is not our concern at this stage however to determine as to which police officer or officers were responsible for the torture and ultimately the death of Suman Behera That is a matter which shall have to be decided by the competent court I respectfully agree with the directions given to the State by Brother Verma J in this behalf On basis of the above conclusion we have now to examine whether to seek the right of redressal under Article 32 of the Constitution which is without prejudice to any other action with respect to the same matter which way be lawfully available extends merely to a declaration that there has been contravention and infringement of the guaranteed fundamental rights and rest content at that by relegating the party to seek relief through civil and criminal proceedings or can it go further and grant redress also by the only practicable form of redress by awarding monetary damages for the infraction of the right to life It is exiomatic that convicts prisoners or under trials are not denuded of their fundamental rights under Article 21 and it is only such restrictions as are permitted by law which can be imposed on the enjoyment of the fundamental right by such persons It is an obligation of the State to ensure that there is no infringement of the indefeasible rights of a citizen to life except in accordance with law while the citizen is in its custody The precious right guaranteed by Article 21 of the Constitution of India cannot be denied to convicts under trials or other prisoners in custody except according to procedure established by law There is a great responsibility on the police or prison authorities to ensure that the citizen in its custody is not deprived of his right to life His liberty is in the very nature of things circumscribed by the very fact of his confinement and therefore his interest in the limited liberty left to him is rather precious The duty of care on the part of the State is strict and admits of no exceptions The wrongdoer is accountable and the State is responsible if the person in custody of the police is deprived of his life except according to the procedure established by law I agree with Brother Verma J that the defence of sovereign immunity in such cases is not available to the State and in fairness to Mr Altaf Ahmed it may be recorded that he raised no such defence either 608 Adverting to the grant of relief to the heirs of a victim of custodial death for the infraction or invasion of his rights guaranteed under Article 21 of the Constitution of India it is not always enough to relegate him to the ordinary remedy of a civil suit to claim damages for the tortuous act of the State as that remedy in private law indeed is available to the aggrieved party The citizen complaining of the infringement of the indefeasible right under Article 21 of the Constitution cannot be told that for the established violation of the fundamental right to fife he cannot get any relief under the public law by the courts exercising writ jurisdiction The primary source of the public law proceedings stems from the prerogative writs and the courts have therefore to evolve new tools to give relief in public law by molding it according to the situation with a view to preserve and protect the Rule of Law While concluding his first Hamlyn Lecture in 1949 under the title Freedom under the Law Lord Denning in his own style warned No one can suppose that the executive will never be guilty of the sins that are common to all of us You may be sure that they will sometimes do things which they ought not to do and will not do things that they ought to do But if and when wrongs are thereby suffered by any of us what is the remedy Our procedure for securing our personal freedom is efficient our procedure for preventing the abuse of power is not Just as the pick and shovel is no longer suitable for the winning of coal so also the procedure of mandamus certiorari and actions on the case are not suitable for the winning of freedom in the new age They must be replaced by new and up to date machinery by declarations injunctions and actions for negligence This is not the task for Parliament the courts must do this Of all the great tasks that lie ahead this is the greatest Properly exercised the new powers of the executive lead to the welfare state but abused they lead to a totalitarian state None such must ever be allowed in this Country The old doctrine of only relegating the aggrieved to the remedies available in civil law limits the role of the courts too much as protector and guarantor of the indefeasible Fights of the citizens The courts have the obligation to satisfy the social aspirations of the citizens because the courts 609 and the law are for the people and expected to respond to their aspirations The public law proceedings serve a different purpose than the private law proceedings The relief of monetary compensation as exemplary damages in proceedings under Article 32 by this Court or under Article 226 by the High Courts for established infringement of the indefeasible right guaranteed under Article 21 of the Constitution is a remedy available in public law and is based on the strict liability for contravention of the guaranteed basic and indefeasible rights of the citizen The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights Therefore when the court molds the relief by granting compensation in proceedings under Article 32 or 226 of the Constitution seeking enforcement or protection of fundamental rights it does so under the public law by way of penalising the wrongdoer and fixing the liability for the public wrong on the State which has failed in its public duty to protect the fundamental rights of the citizen The payment of compensation in such cases is not to be understood as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making monetary amends under the public law for the wrong done due to breach of public duty of not protecting the fundamental rights of the citizen The compensation is in the nature of exempellary damages awarded against the wrong doer for the breach of its public law duty and is independent of the rights available to the aggrieved party to claim compensation under the private law in an action based on tort through a suit instituted in a court of competent jurisdiction orand persecute the offender under the penal law This Court and the High Courts being the protectors of the civil liberties of the citizen have not only the power and jurisdiction but also an obligation to grant relief in exercise of its jurisdiction under Articles 32 and 226 of the Constitution to the victim or the heir of the victim whose fundamental rights under Article 21 of the Constitution of India are established to have been flagrantly infringed by calling upon the State to repair the damage done by its officersto the fundamental rights of the citizen notwithstanding the right of the citizen to the remedy by way of a civil suit or criminal proceedings The State of course has the right to be indemnified by and take such action as may be available to it against the wrongdoer in accordance with law through appropriate proceedings Of 610 course relief in exercise of the power under Article 32 or 226 would be granted only once it is established that there has been an infringement of the fundamental rights of the citizen and no other form of appropriate redressal by the court in the facts and circumstances of the case is possible The decisions of this Court in the line of cases starting with Rudul Sah vs State of Bihar and Anr granted monetary relief to the victims for deprivation of their fundamental rights in proceedings through petitions filed under Article 32 or 226 of the Constitution of India notwithstanding the rights available under the civil law to the aggrieved party where the courts found that grant of such relief was warranted It is a sound policy to punish the wrongdoer and it is in that spirit that the Courts have molded the relief by granting compensation to the victims in exercise of their writ jurisdiction In doing so the courts take into account not only the interest of the applicant and the respondent but also the interests of the public as a whole with a view to ensure that public bodies or officials do not act unlawfully and do perform their public duties properly particularly where the fundamental rights of a citizen under Article 21 is concerned Law is in the process of development and the process necessitates developing separate public law procedures as also public law principles It may be necessary to identify the situations to which separate proceedings and principles apply And the courts have to act firmly but with certain amount of circumspection and self restraint lest proceedings under Article 32 or 226 are misused as a disguised substitute for civil action in private law Some of those situations have been identified by this Court in the cases referred to by Brother Verma J In the facts of the present case on the findings already recorded the mode of redress which commends appropriate is to make an order of monetary amend in favour of the petitioner for the custodial death of her son by ordering payment of compensation by way of exemplary damages For the reasons recorded by Brother Verma J I agree that the State of Orissa should pay a sum of Rs150000 to the petitioner and a sum of Rs10000 by way of costs to the Supreme Court Legal Aid Committee Board I concur with the view expressed by Brother Verma J and the directions given by him in the judgment in all respects VPR Petition allowed

The appellant a Public Limited Company issued prospectus Inviting public subscriptions of equity shares and preference shares The prospectus stated that application was being made to the Stock Exchange for enlisting the shares of the Company for official quotation Though the application was rejected by the Stock Exchange the share money collected from different investors was held by the appellants and the share holders were neither informed of the rejection by the Stock Exchange nor paid back the share money Further the money was transferred to another account of the Company The Secretary Industrial Development and Company Affairs lodged a complaint with the CBI against the Company CBI started investigations and submitted a charge sheet against the appellant along with some others for trial for the offence under s409 IPC The Special Judicial Magistrate CBI cases rejected the prayers made before it discharge the appellants The validity of the said order was challenged by the appellants by filing an application under S482 Cr PC and the High Court rejected the same Hence these appeals It was contended that the provisions of the Companies Act took care of the investors by putting restrictions on the misbehavior of the promoters and the Directors of the Company for any lapse on their part In such matters and they could not be summoned to stand trial for offenses under the Penal Code Dismissing the appeals this Court 700 HELD11 The modern share holder in many companies has simply become supplier of capital The savings and earnings of individuals are being utilised by persons behind such corporate bodies but there is no direct contact between them The promoters of such companies are not even known to many investors in shares of such companies In some cases later it transpires to the investors that the promoters had the sole object to form a bogus company and foist it off on the public to the latter s detriment and for their own wrongful gain In this process the public becomes victim of the evil design of the promoters who enrich themselves by dishonest means without there being any real intention to do any business 703 D G 12From time to time amendments have been introduced in the Companies Act to safeguard the interest of the share holders and to provide regulatory and penal provisions for misuse of the power by those who are in charge of the management of such companies The persons managing the affairs of such company cannot use the juristic entity and corporate personality of the company as a shield to evade themselves from prosecution for offenses under the Penal Code if it is established that the primary object of the incorporation and existence of the company is to defraud public 703 G H 704 A B 21While taking cognizance of alleged offenses in connection with the registration issuance of prospectus collection of moneys from the investors and the misappropriation of the fund collected from the shareholders which constitute one or the other offence under the Penal Code court must be satisfied that prima facie an offence under the Penal Code has been disclosed on the materials produced before the court 704 C 22In the present case the prosecution has to prove that the appellants as promoters or directors had dishonest intention since the very beginning while collecting the moneys from the applicants for the shares and debentures or that having collected such moneys they dishonestly misappropriated the same 704 G 23The prosecution pending against the appellants cannot be quashed only on the ground that it was open to the applicants for shares to take recourse to the provisions of the Companies Act 705 D 3The power under section 482 Cr PC has been vested in the High Court to quash a prosecution which amounts to abuse of the process of 701 the court But that power cannot be exercised by the High Court to hold a parallel trial only on the basis of the statements and documents collected during investigation or enquiry for the purpose of expressing an opinion whether the accused concerned is likely to be punished if the trial is allowed to proceed 705 G H 4It will be for the trial court to examine whether on the materials produced in behalf of the prosecution it is established that the appellants had issued the prospectus inviting applications in respect of shares of the Company with a dishonest intention or having received the moneys from the applicants they had dishonestly retained or misappropriated the same That exercise cannot be performed either by the High Court or by this Court 705 E F

C No 655 of 1991 Under Article 32 of the Constitution of India Santosh Kumar Rungta and RP Gupta for the Petitioner VC Mahajan Ms Niranjana Singh and Ms A Subhashini for the Respondents The Judgment of he Court was delivered by KULDIP SINGH J National Federation of Blind a representative body of visually handicapped persons in India has filed this petition under Article 32 of the Constitution of India seeking a writ in the nature of mandamus directing the Union of India and the Union Public Service Commission to permit the blind candidates to compete for the Indian Administrative Service and the Allied Services and further to provide them the facility of writing and civil services examination either in Braille script or with the help of a Scribe Braille is a system of writing for the blind in which the characters consist of raised dots to be read by the fingers Further relief sought in the petition is that Group A and B posts in Government and public sector undertakings which have already been identified for the visually handicapped persons be offered to them on preferential basis The visually handicapped constitute a significant section of our society and as such it is necessary to encourage their participation in every walk of life The Ministry of Welfare Government of India has been undertaking various measures to utilise the potentialities of the visually handicapped persons The Central as well as the State Governments have launched several schemes to educate train and provide useful employment to the handicapped The Central Government has provided reservations to the extent of 3 vacancies in Group C and D posts for the physically handicapped including blind and partially blind There has been a growing demand from the visually handicapped persons to provide reservations for them in Group A and B posts under the Central Government The Ministry of Welfare Government of India has a standing Committee or identification of jobs in various Mini striesDepartments and public sector undertakings for the physically hand 559 icapped By an order dated December 30 1985 the Government of India directed the Standing Committee to undertake the identification of jobs for the handicapped in Group A and B Services under the Government and public sector undertakings The Committee submitted its report which was published on October 31 1986 Copy of the report has been placed on the record of this petition In the introduction to the report given by Mr MC Narsimhan Joint Secretary to Government of India and Chairman Stating committee on identification of jobs for handicapped it has been stated as under A Sub Committee which was set up to assist the Standing Committee visited a large number of Public Sector Undertakings and observed people actually working in a variety of jobs and the working conditions in which these jobs are performed The Sub Committee had detailed discussions with the Chiefs and Senior Officers of the Public Sector Undertakings as also with officers of the Central Government Departments A fist of the public sector undertakings and the list of the officers of the Undertakings with whom the Sub Committee had discussions is annexed to the report The Committee after detailed discussions and on the spot study has prepared a comprehensive list of 416 categories in Group A and B posts in Government Offices and Public Sector Undertakings with their jobs descriptions the physical requirement of each group of job and matched them with various categories of disabilities The Committee devoted special attention to the visually handicapped Para 8 of the report which relates to the blind is as under However in the case of the blind the position is somewhat different Seeing reading writing and movement are essential ingredients of most Government jobs Therefore a similar approach in respect of blind persons may be difficult It would not be possible to generalise that blind person can do most jobs as we have found for those with locomotor and hearing disabilities The Committee found 560 that in higher posts is Government the help of a personal assistant or a stenographer is generally available But this facility is not available even in higher posts in public sector undertakings Wherever this facility is available a blind person may not find it difficult in certain groups of posts to handle the job It is also possible in relation to other posts where stenographic assistance is not available that some other facilities can be provided to a blind employee To compensate reading deficiency readers allowance can be provided to blind employees to enable them to engage a reader Similarly to compensate for writing deficiency the blind employee should be required to know typing Adequate knowledge of typing should be prescribed as an essential qualification for blind employees for public employment Where mobility may also be one of the main ingredients of a job it is difficult to compensate blind employees for this deficiency The Committee would also emphasise that the blind employee should be fully responsible for the duties assigned to them despite the provision of reader s allowance and typing skill The Committee would also suggest that the maximum reader s allowance should be limited to Rs200 pm to blind employees recruited to Group A and B post The Committee has identified about 416 categories of Group A and B posts which are suitable for the handicapped The Committee has further specified that the visually handicapped blind and partially blind are suitable for appointment to the following categories of Group A and B post No in the List Category of Group Annexed to the Post Report 178 to 187 Hindi officers A B 191 to 192 Job Analyst A B 193 to 199 Labour Welfare Officers A B 200 to 209 Law Officers A B 561 237 to 242 Personal Assistants B 243 to 256 Personnel Officers A B 279 to 291 Public Relations Officers A B 295 to 317 Research Officers A B 354 to 363 Training Officers A B 364 to 376 Administrative Officer Non Secretarial A 377 to 384 Administrative Officers Secretarial Sr A 385 to 401 Administrative Officers Secretarial Junior A B 409 Asstt Admin Officer We have only quoted the list of categories from the report to illustrate the point that the Committee appointed by the Government has in its report identified certain categories of posts to which the blind and the partially blind can be appointed Government of India Through Ministry of Personnel issued office memorandum dated November 25 1986 wherein it accepted the report of the Committee and took a policy decision that in respect of the posts identified by the Committee the handicapped persons shall be given preference in the matter of recruitment to those posts The office memorandum is re produced hereunder No F36034486 EsttSCT Government of India Ministry of Personnel Public Grievances Pensions Department of Personnel Training New Delhi the 25th November 1986 OFFICE MEMORANDUM Subject Identification of jobs for the physically handicapped persons in Groups A and B posts filled by direct recruitment in the Central Government services and Public Sector Undertakings 562 The undersigned is directed to say that with a view to effecting optimum utilisation of potentialities of physically handicapped which constitutes a significant section of the population in the country the Ministry of Welfare constituted a Standing Committee for identification of jobs for the physically handicapped in the Central Government services and Public Sector Undertakings The Standing Committee on identification of jobs set up a sub Committee for on the spot identification of jobs for the physically handicapped persons in Group A and B posts after making an in depth study of Undertakings as well as in consultation with the concerned authorities This subCommittee in its Report submitted to the parent Committee identified 420 jobs in Group A and Group postsservices alongwith the physical requirements and functional classifications of disabilities indicating what jobs can be held by each category of disabled people and with what disability It has been decided that in respect of identified posts which can be held by physically handicapped persons preferences to physically handicapped persons will be given in the matter of recruitment to those posts A copy of the report of the Committee referred to in para 1 is enclosed for information guidance and necessary action The list of jobs identified by the Committee on suitable for being held by physically handicapped persons is not exhaustive The MinistriesDepartments can further supplement the list based on their knowledge for jobs requirements essential qualifications etc The MinistriesDepartments after identifying all the posts which can be held by physically handicapped persons may inform the UPSC at the time of sending their requisitions for filling vacancies in respect of those posts that preference is to be given to physically handicapped persons in the matter of recruitment The UPSC have agreed in principle to give preference to physically handicapped persons in filling the identified posts The Depart 563 ment of Personnel and Training will be issuing general instructions to enable preference being given to the physically handicapped persons in such cases The Ministry of Finance etc are requested to bring these instructions to the notice of all concerned Sd BATA K DEY DIRECTOR JCA From the office memorandum quoted above it is obvious that the Government of India has taken the following policy decisions to implement the Committee report 1 The Government of India has taken cognizance of the fact that the Standing Committee on identification of jobs through its Sub Committee has identified 420 jobs in Group A and Group B postsservices along with the physical requirements and functional Classifications of disabilities indicating what jobs can be held by each category of disabled people and with what disability The decision has been taken that in respect of identified posts which can be held by physically handicapped persons preference to physically handicapped persons will be given in the matter of recruitment to those posts The list of jobs identified by the Committee is not exhaustive the MinistriesDepartments can further supplement the list based on their knowledge of job requirements essential qualifications etc The MinistriesDepartments after identifying all the posts which can be held by physically handicapped persons may inform the Union Public Service Commission at the time of sending their requisitions for filling vacancies in respect of those posts that preference is to be given to physically handicapped persons in the matter of recruitment The Union Public Service Commission has agreed in principle to give preference to physically handicapped persons in filling identified posts 564 6 The Department of Personnel and Training will be issuing general instructions to enable preference being given to the physically handicapped persons in such cases Mr SK Rungta learned counsel for the petitioner has contended that the memorandum dated November 25 1986 was issued more than seven years back but so far the decisions taken therein have not been implemented Mr Rungta himself visually handicapped has argued his case with utmost clarity Mr Rungta was fully conversant with all the relevant annexures to the petition He referred to the relevant pages in the bulky paper book with perfect ease We did not feel even for a moment that the case was being argued by a visually handicapped lawyer Mr Rungta s performance before us amply proves the point that the visually handicapped persons can perform the jobs entrusted to them with equal efficiency The question of giving preference to the handicapped in the matter of recruitment to the identified posts is a matter for the Government of India to decide The matter is pending for decision with the Government of India for the last several years While appreciating various measures undertaken by the Government to provide useful employment to the handicapped persons we commend the Government of India to decide the question of providing preferencereservation to the handicapped in Group A and B posts as expeditiously as possible So far as the claim of visually handicapped for writing the civil services examinations in Braille script or with the help of Scribe is concerned we are of the view that their demand is legally justified The fist of category A and B posts identified as suitable for the visually handicapped by the Committee includes number of posts which are filled as a result of the civil services examinations When there are posts to which blind and partially blind can be appointed we see no ground to deprive them of their right to compete for those posts along with other candidates belonging to general category Mr VK Cherian Under Secretary to Government of India Ministry of Personnel in his affidavit dated March 10 1992 filed before this Court has stated as under 565 If there were Group A and B jobs which could be filled up by the blind the same should also be identified Once the jobs were identified they could be filled up from among the blind and also other handicapped persons such as deaf and orthopaedically handicapped Going by the Report of the Committee and the posts identified by it the Union Public Service Commission made the observation that the posts identified as suitable to be held by the physically handicapped persons particularly those iden tified for the blind are not such which are required to be filled on the basis of competitive examination conducted by the Commission The observations of the Union Public Service Commission as projected by Mr VK Cherian in his above quoted affidavit do not seem to be correct After going through the list of the posts identified as suitable for visually handicapped blind and partially blind it is obvious that there are number of posts which are required to be filled through the civil services examination and other competitive examinations conducted by the Commission Group A and B posts in the category of Administrative Officers Secretarial Senior and Administrative Officer Secretarial Junior are necessarily to be filled as a result of civil services examination by the Union Public Service Commission If some of the posts in the Indian Administrative Service and other Allied Services as identified by the Committee can be filled from amongst the visually handicapped persons then we see no reason why they should not be permitted to sit and write the civil services examination We make it clear that once recruited to the lowest level of the service the visually handicapped persons shall not be entitled to claim promotion to the higher posts in the service irrespective of the physical requirements of the jobs If in the hierarchy of promotional posts it is found by the Government that a particular post is not suitable for the visually handicapped person he shall not have any right to claim the said post In the light of the above discussion we partly allow the writ petition and direct the Government of India and the Union Public Service Commission to permit the visually handicapped blind and partially blind eligible candidates to compete and write the civil services examination which is ordinarily held yearly by the Union Public Service Commission 566 We further direct that they shall be permitted to write the examination in Braille script or with the help of a Scribe There shall be no orders as to costs SPS Petition allowed partly

The appellant along with others was tried for offences under Section 302 read with Sections 148 149 and 323 of the Indian Penal Code The case of the prosecution was that on 16980 Mammed Kutty at 600 am in the morning pelted stones at the house of the deceased At about 1200 noon while Mammed Kutty and his brother Abdulla Kutty were passing in front of the house of the deceased a protest was made by the deceased in respect of the morning incident which was denied At about 200 pm when the deceased was sitting with his wife PW 4 and others on the varandah of his house 5 persons including the appellant came to his courtyard and challenged him to come out if he wanted to beat Mammed Kutty and Abdulla The deceased stepped out into his courtyard and asked the accused persons not to create a scene when the appellant and the other accused gave some blows to the deceased on his hand Thereafter the deceased raised his hand to give a blow to the appellant when the appellant took out a dagger from his waist and gave an injury on the upper part of the chest of the deceased near the left shoulder and above the armpit The deceased ran towards the house of PW1 and fell on the varandah Therefore the accused persons escaped The victim was removed to the Medical Hospital where he was examined by PW 9 but soon thereafter expired The FIR was lodged at 715 pm and after investigation the chargesheet was submitted against the five accused persons At the trial the prosecution examined 4 eye witnesses PW1 to PW4 and PW8 the doctor who held the post mortem examination 693 The trial court on consideration of the materials on record came to the conclusion that the charges leveled against the accused persons had not been established beyond all reasonable doubt and on that finding acquitted all the accused including the appellant Great importance was attached to the injury found on the person of Abdulla and adverse inference was drawn against the prosecution case On appeal by the State the High Court convicted the appellant under Section 302 and sentenced him to undergo rigorous imprisonment for life Another accused Alavi was convicted under Section 323 of the Penal Code and sentenced to payment of fine of Rs 250 The acquittal of the remaining 3 accused persons by the Trial Court was affirmed The High Court held that mere non disclosure of the superficial injuries on the person of Abdulla even if those injuries had been caused in the same occurrence do not in any manner affect the persecution case In the appeal to this court it was contended on behalf of the appellants that the statements made in the First Information Report the evidence of the eye witnesses in connection with the morning incident of pelting of stones show that it was a concoction and that none had pelted any stone on the house of the deceased and that if this part of the prosecution case is disbelieved then it has a bearing on the main occurrence itself It was further submitted that the prosecution had suppressed the real manner of occurrence in as much as Abdulla was first assaulted by the prosecution party on the same day at about 130 pm and that he was hospitalised after receiving the injuries reliance being placed on the evidence of DW1 who had stated that he had examined the injuries on the person of Abdulla on 16980 at 430 pm Allowing the appeal in part this Court HELD1 It is well settled that if the evidence of the eye witnesses is held to be reliable and inspires confidence then the accused cannot be acquitted solely on the ground that some superficial injuries found on the person of the accused concerned had not been explained by the prosecution 696 H In the instant case so far as the four eye witness are concerned they have been named in the FIR The FIR was lodged at 715 pm the same evening within two hours of the death of the victim The FIR mentions the 694 details of the occurrence and the version disclosed therein had been supported by the eye witness before the Court No reason has been shown as to why the evidence of these PWs should not be accepted 697 C 2The prosecution has admitted that the accused persons were not carrying any weapon in their hands and during the protest made a sudden quarrel and fight took place between the prosecution party and the accused persons This part of the version had been admitted at the trial by the eye witnesses in their evidence who also stated that first the appellant and the other co accused gave blows on the hand of the deceased and that the knife blow was given by the appellant when the deceased was trying to give a counter blow to the appellant 697 F In view of the admitted position that a sudden right and quarrel preceded the giving of the knife blow by the appellant to the victim which in all probability was given not while the victim and the appellant were standing face to face but during struggle between them causing tailing of the injury it shall not be just and proper to hold that the appellant had an intention to cause the death of the victim but only knowledge that injury which he was causing was likely to cause death In such a circumstance it is not possible to uphold the conviction of appellant under Section 302 of the Indian Penal Code It is therefore set aside and the appellant convicted under Section 304 Part 11 of the Indian Penal Code and sentenced to undergo rigorous imprisonment for 7 years 697 H698 A C

Appeal Nos 5073751985 From the Judgment and Order dated 991985 of the Kerala High Court in TRC Nos 29 30 and 31 of 1985 AS Nambiar Mrs Shanta Vasudevan PK Manohar and CN Sreekumar for the Appellants BP JEEVAN REDDY J Civil Appeal Nos 5073 75185 These appeals arise from a common judgment of the Kerala High Court in a batch of three tax revision cases The question relates to the interpretation of Section 82A of the 658 In exercise of the power conferred upon it by Section 10 of the Kerala Sales Tax Act the State of Kerala issued a notification RS0415 of 1971 providing for an exemption in respect of the tax payable under the said Act in regard to the turn over of the sales of newsprint by the newsprint plant in the State for the period of two years from the date of starting production of the newsprint by the said plant The appellant Hindustan Paper Corporation Limited entered into an agreement with the Government of Kerala in the year 1974 reiterating the said exemption The relevant portion of the agreement reads thus The Government of Kerala with a view to help the project to tide over the difficulties in the initial stages and to establish itself agree to exempt the turnover relating to the sale of the products by the corporation from the payment of sales tax for a period of two years from the date of starting of production of the newsprint A major portion of the newsprint manufactured at the factory located within Kerala is sold in the course of inter state trade and commerce During the assessment years relevant to the period of the two years from the date of commencement of production at the Kerala Factory the appellant claimed exemption not only from the State sales tax by virtue of the aforesaid notification and agreement but also from Central Sales Tax under and by virtue of sub section 2A of Section 8 of the The Sales Tax Officer accepted the claim under the State Sales Tax Act but rejected the claim under the The appeals preferred by the appellant to the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal were dismissed whereupon it approached the High Court by way of revisions under Section 41 of the State Sales Tax Act The High Court too disagreed with the contentions urged by the appellant and dismissed the tax revision cases Hence these appeals The dispute between the parties in brief is thus the appellant says that exemption granted to it by the aforesaid notification issued under the Kerala Sales Tax is a general exemption within the meaning of Section 82A and therefore the inter state sales effected by it are equally exempt from Central Sales Tax by virtue of Section 82A On the other hand the 659 case of the Government of Kerala is that the exemption granted to the appellant under the State Sales Tax Act is not a general exemption but a conditional one further the exemption operates only in certain specified circumstances Accordingly they say the provision contained in Section 82A does not go to exempt the inter state sales of the appellant The inter state sales effected by the appellant are those failing under Section 3A of the The liability to pay Central Sales Tax on inter state sales arises by virtue of sub section 1 of Section 6 Sub section 1A of Sec 6 says that a dealer shall be liable to pay tax under the Central Act on sale of goods effected by him in the course of inter state trade or commerce notwithstanding that no tax would have been leviable under the Sales Tax law of the appropriate State if such sale had taken place inside the State Sub section 1 of Section 8 prescribes the rate at which the Central Sales Tax is chargeable where the goods are sold to persons and authorities mentioned therein while sub section 2 prescribes the rate in cases other than those falling under sub section 1 Sub section 2A of Section 8 which is material for our purpose reads thus 2A Notwithstanding anything contained in sub section lA of Section 6 or sub section 1 or clause b of sub section 2 of this section the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods the sale or as the case may be the purchase of which is under the sales tax law of the appropriate State exempt from tax generally or subject to tax generally at a rate which is lower than four per cent Whether called a tax or fee or by any other name shall be nill or as the case may be shall be calculated at the lower rate Explanation For the purpose of this sub section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in special circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods 660 What does sub section 2A says It opens with a non obstante clause which gives it an overriding effect over the provisions contained in Sections lA and over sub section 1 as well as clause b of sub section 2 of section 8 b section seeks to provide exemption to a dealer with expect to his turnover in so far as his turnover or any part thereof relates a sale of any goods the sale or as the case may be the purchase of which is under the sales tax law of the appropriate State exempt from tax generally or b where his turnover or any part thereof relates to the sale of any goods the sale or purchase of which is subject to tax generally at a rate which is lower than four per cent In a case covered by a the Central Sales Tax will be nil while in a case falling under b Central Sales Tax shall he chargeable at the same lower rate at which the State sales tax is charge able The explanation appended to sub section seeks to define the words exempt from tax generally The explanation is couched in negative terms It says that for the purposes of the said sub section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the State Sales Tax law if i under the State law the sale or purchase of such goods is exempt only in specified circumstances or ii if under the State law the sale or purchase of such goods is exempt only under specified conditions or iii if under the State law the tax is levied on the sale or purchase of such goods at specified stages or iv where under the State law the tax is levied otherwise than with reference to the turnover of the goods The sole question in this case is whether the exemption granted under the aforesaid notification exempting the produce of a factory manufacturing newsprint from the State sales tax for a period of two years from the date of commencement of production in the factory can be called an exemption from tax generally To put it differently the question is whether the said exemption is one operative only in specified circumstances or whether the exemption is one which is operative only under specified conditions in which case it cannot be said to be an exemption generally The learned counsel for the appellant relies upon the decision of this Court in Pine Chemicals Limited vs Assessing Authority a decision rendered by section Ranganathan V Ramaswami and ND Ojha J According to him the said decision is conclusive on the question 661 The counsel for the State of Kerala on the other hand seeks to distinguish the said decision According to him the said decision does not consider the precise question and aspect which really arises in these appeals The learned counsel for the State of Kerala Sri G Vishwanath lyer puts his case thus if one is asked whether the exemption granted under the aforesaid notification is a general exemption his obvious answer would be No It is not an exemption which operates generally but an exemption limited to two years from the date of commencement of the production of newsprint in the factory Similarly if a person is asked whether newsprint is exempt generally from the State sales tax in Kerala none would answer in the affirmative He would say that the sale of newsprint in Kerala is exempt only in certain circumstances or subject only to a condition viz that newsprint is produced within two years of the commencement of the production in the factory located in Kerala It is therefore idle to contend says Sri lyer that the sale of newsprint within Kerala is exempt generally from the State sales tax In such a case says the counsel the provision contained in sub section 2A does not come into operation and the inter state sales of such newsprint cannot be said to be exempt from the Central Sales Tax Mr lyer further says that the exemption notification issued by the Government of Kerala under Section 10 of the State Act does not exempt newsprint from the State sales tax al together It grants exemption only in a specified situation viz in respect of the newsprint produced within the period of two years from the date of commencement of production by a factory manufacturing newsprint in the State of Kerala The exemption would thus operate for different periods in the case of different assessees inasmuch as the date of commencement of production by all the manufacturers of newsprint may not be the same Moreover the benefit of the said notification is available only where a factory goes into production after the commencement of the said notifica tion says Sri lyer He elaborates his submission saying that the exemption granted by the said notification is only in favour of certain dealers or a class of dealers in certain circumstances and is not in the nature of a general exemption An exemption given under Section 10 of the State Act with reference to dealers or a class of dealers ie referable to clause ii of sub section 1 says the counsel can never be called a general exemption nor can it be characterised as an exemption operating generally A general exemption according to the learned counsel means a general unqualifiedunconditional exemption Counsel says that the decisions of 662 this Court in Indian Aluminum Cables vs State of Haryana 38 STC 108 and in Industrial Cables Corporation V Commercial Tax Officer 35 STC 1 support his contention The learned counsel places strong reliance upon the object and reasons appended to the bill proposing the substitution of sub section 2A in the year 1972 The objects and reasons relied upon by the learned counsel read thus Clause 5 Sub Clause a of this clause seeks to substitute a new sub section for the existing sub section 2A of Section 8 of the Principal Act The new sub section seeks to bring out more clearly that an exemption or lower rate of levy under the local sales tax law of the appropriate State would be available in respect of an inter state sale of goods only if such exemption or lower levy is available generally with reference to such goods or such class of goods under the local sales tax law According to Sri Iyer the said statement of objects and reasons puts the meaning purpose and object of the sub section beyond any doubt On the other hand Sri AS Nambiar learned counsel for the appellant corporation submits adopting the reasoning in Pine Chemicals that the circumstances or conditions contemplated by the explanation to sub section must be the circumstances and conditions attaching to the sale and not to the dealer The exemption notification merely serves to identify the dealer and the goods entitled to exemption but it does not lay down any circumstances or conditions attaching to the sale of goods Newsprint Sri Nambiar says that once the goods are identified viz that it is a newsprint manufactured by a factory within two years of its commencing production there is no further condition attaching to the exemption the goods are exempt generally It is not a case where the exemption is hedged in by certain conditions nor is it a case where the exemption operates only in certain circumstances The learned counsel submits that the decisions of this court in Indian Aluminum and Industrial Cables have been considered and explained by this Court in Pine Chemicals and therefore the principle of those decisions cannot be read as supporting the State s submissions While we see the force in the submissions of Sri Iyer learned counsel for the State of Kerala we cannot give effect to the same in the light of 663 the binding decision in Pine Chemicals which deals with an almost similar exemption notification The Government of Jammu Kashmir had issued orders providing for exemption from the State sales tax both on raw materials and finished products for a period of five years from the date the unit goes into production Question had arisen whether the said exemption attracts the exemption contained in Section 82A of the Central Act The said question was answered in the affirmative by V Ramaswami J speaking for the Bench The learned Judge examined the scheme of sub section 1 and lA of Section 6 as well as of sub sections 1 2 and 2A of Section 8 and then observed On a plain reading of Section 82 A of the Central Sales tax Act it deals with the liability of a dealer to pay tax under the Act on his interstate sales turnover relating to any goods on the turnover relating to such goods if the sale had taken place inside the State is exempt from payment of sales tax under the sales tax law of the appropriate State It provides that if an intrastate sale or purchase of a commodity by the dealer is exempt from tax generally or subject to tax generally at a rate which is lower than 4 per cent than his liability to tax under the when such commodity is sold on inter state trade would be either nil or as the case may be shall be calculated at a lower rate Explanation states as to when the sale or purchase shall not be deemed as to be exempt from tax generally under the sales tax law That is to say an intrastate sale or purchase shall not be deemed as to be exempt from tax generally under the sales tax law That is to say an intrastate sale or purchase of a commodity shall not be deemed as exempt from State tax generally if the exemption is given only 1 in specified circumstances or under specified conditions or 2 the tax is leviable on the sale or purchase of such goods at specified stages or 3 otherwise than with reference to the turnover of the goods These conditions or limitations are therefore with reference to the transaction of sale or purchase The main clause deals with the turnover of a dealer which term would include any dealer or any class of dealers The existence or otherwise of the three Limitations under the 664 explanation above referred to on claiming exemption under Section 82 A of the will therefore have to be tested with reference to the transaction of sale or purchase as the case may be of the dealer who claims the exemption in respect of his intrastate sale or purchase of the same goods Thus the specified circumstances and the specified conditions referred to in the explanation should be with reference to the local turnover of the same dealer who claims exemption under Section 82 A of the The learned Advocate General for the State contended that the conditions that the industr y should have been set up and commissioned subsequent to the Government Orders 159 and 414 above referred to and the commodity sold by him in order to claim the exemption under the said government order shall be those manufactured by that industry are conditions or specified circumstances within the meaning of the explanation and therefore the dealer Pine Chemicals is not entitled to any exemption under Section 82 A of the We are unable to agree with this submission of the learned counsel for the State The facts which the dealer has to prove to get the benefit of the government orders are intended only to identify the dealer and the goods in respect of which the exemption is sought and they are not conditions or specifications of circumstances relating to the turnover sought to be exempted from payment of tax within the meaning of those provision The specified circumstances and the specified conditions referred to in the explanation should relate to the transaction of sale of the commodity and not identification of the dealer or the commodity in respect of the exemption is claimed These conditions relating to identity of the goods and the dealer are always there in every exemption and that cannot be put as a condition of sale We have already held that not only sale by the manufacturer to dealer that is exempt under the government orders but since the General Sales Tax Act had adopted only a single point levy even the sub 665 sequent sales would be covered by the exemption order Therefore the question whether the tax is leviable on the sale or purchase at specified stage does not arise for consideration This is not also a case where the exemption is with reference to something other than the turnover of the goods emphasis added The learned Judge then dealt with the decisions of this Court in Indian Aluminum and Industrial Cables and distinguished them pointing out that the exemption concerned in those cases was clearly a conditional one The learned Judge pointed out that the exemption concerned therein was with respect to sales of an undertaking supplying electrical energy to the public under a licence or sanction granted or deemed to have been granted under the 9 of 1910 of goods for use by it in generation or distribution of such energy The learned Judge pointed out that the two conditions mentioned in the said notification related to purchaser company being a licensed undertaking supplying electrical energy to the public and further that the goods sold to it are for use by the said undertaking in generation or distribution of such energy Following the decision in Pine Chemicals we must and accordingly we do allow these appeals No orders as to costs NVK Appeals allowed

Petitioner s son aged about 22 years was taken from his home In police custody at about 8 am on 1121987 by respondent No6 Assistant Sub Inspector of Police of the Police Outpost in connection with the investigation of an offence of theft He was detained at the Police outpost On 2121987 at about 2 pm the petitioner came to know that the dead body of her son was found on the railway track There were multiple injuries on the body and his death was unnatural caused by those injuries The petitioner alleged in her letter dated 1491988 which was treated as a writ petition under Article 32 of the Constitution that it was a case of custodial death since her son died as a result of the multiple injuries inflicted to him while he was in police custody and thereafter his dead body was thrown on the railway track It was prayed in the petition that award of compensation be made to her for contravention of the fundamental right to life guaranteed under Article 21 of the Constitution The defence of the respondents was that petitioner s son managed to 582 escape from police custody at about 3 am on 2121987 from the Police Outpost where he was detained that thereafter he could not be apprehended in spite of a search and that his dead body was found on the railway track on 2121987 with multiple injuries which indicated that he was run over by a train The respondents denied the allegation of custodial death and their responsibility for the unnatural death of petitioner s son On 431991 this Court directed the District Judge to hold an inquiry into the matter and to submit a report After hearing the parties and appreciating the evidence the District Judge submitted the Inquiry Report dated 491991 The District Judge found that petitioner s son died on account of multiple injuries inflicted to him while he was in police custody at the Police Outpost The correctness of the finding of the District Judge in his report was assailed in this Court The respondents contended that petitioner s son managed to escape from police custody at about 3 am on 2121987 that he was run over by a passing train and sustained the fatal injuries that the responsibility of the respondents for his safety came to an end the moment he escaped from police custody and that the factual foundation for State s liability for payment of compensation for violation of the fundamental right to life under Article 21 was absent Allowing the petition this Court HELD per LS Verma J on his behalf and on behalf of N Venkatachala J 101 There is no cogent independent evidence of any search made by the police to apprehend petitioner s son if the defence of his escape from police custody be true On the contrary after discovery of the dead body on the railway track in the morning by some railwaymen it was much later in the day that the police reached the spot to take charge of the dead body This conduct of the concerned police officers is also a significant circumstance to assess credibility of the defence version 591 G H 102 The medical evidence comprising the testimony of the doctor who conducted the postmortem excludes the possibility of all the injuries to the deceased being caused in a train accident while indicating that all of 583 them could result from the merciless beating given to him 594 H 595 A 103 An inquiry under Section 176 Cr PC is contemplated independently by a Magistrate and not jointly with a police officer when the role of the police officers itself is a matter of inquiry There was hand cuff on the hands of the deceased when his body was found on the railway track with rope around it It is significant that the Report dated 1131988 of the Regional Forensic Science Laboratory mentions that the two cut ends of the two pieces of rope which were sent for examination do not match with each other in respect of physical appearance This finding about the rope negatives the respondents suggestion that the petitioner s son managed to escape from police custody by chewing off the rope with which he was tied 1595 G H 105 It is a case of custodial death and the deceased died as a result of the injuries inflicted to him voluntarily while he was In police custody at the Police Outpost 596 A 201 Award of compensation in a proceeding under Article 32 by this Court or by the High Court under Article 226 of the Constitution is a remedy available in public law based on strict liability for contravention of fundamental rights to which the principle of sovereign immunity does not apply even though it may be available as a defence in private law in an action based on tort This is a distinction between the two remedies to be borne in mind which also indicates the basis on which compensation is awarded in such proceedings 596 G 202 Enforcement of the constitutional right and grant of redress embraces award of compensation as part of the legal consequences of its contravention 602 A 203 A claim in public law for compensation for contravention of human rights and fundamental freedoms the protection of which is guaranteed in the Constitution is an acknowledged remedy for enforcement and protection of such rights and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is distinct from and in addition to the remedy in private law for damages for the tort resulting from the contravention of the fundamental right The defence of sovereign immunity 584 being inapplicable and alien to the concept of guarantee of fundamental rights there can be no question of such a defence being available in the constitutional remedy It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaran teed by the Constitution when that is the only practicable mode of redress available for the contravention made by the State or its servants in the purported exercise of their powers and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Articles 32 and 226 of the Constitution 602 B D 204 The Court is not helpless and the wide powers given to this Court by Article 32 which itself is a fundamental right imposes a constitutional obligation on this Court to forge such new tools which may be necessary for doing complete justice and enforcing the fundamental rights guaranteed in the Constitution which enable the award of monetary compensation In appropriate cases where that is the only mode of redress available 603 D 205 The power available to this Court under Article 142 is also an enabling provision in this behalf The contrary view would not merely render the court powerless and the constitutional guarantee a mirage but may in certain situations be an incentive to extinguish life if for the extreme contravention the court is powerless to grant any relief against the State except by punishment of the wrongdoer for the resulting offence and recovery of damages under private law by the ordinary process 603 E F 206 If the guarantee that deprivation of life and personal liberty cannot be made except in accordance with law is to be real the enforcement of the right in case of every contravention must also be possible in the constitutional scheme the mode of redress being that which is appropriate In the facts of each case This remedy in public law has to be more readily available when invoked by the havenots who are not possessed of the wherewithal for enforcement of their rights in private law even though its exercise is to be tempered by judicial restraint to avoid circumvention of private law remedies where more appropriate 603 G 208 The principle of which the Court s power under Articles 32 and 226 of the Constitution is exercised to award monetary compensation for 585 contravention of a fundamental right 604 B Rudul Sah vs State of Bihar and Another 1983 3 SCR 508 Sebastian M Hongray vs Union of India and Others and Bhim Singh vs State of J K 1984 Supp SCC 504 and Saheli A Women s Resources Centre and Others vs Commissioner of Police Delhi Police Headquarters and Others State of Maharashtra and Others vs Ravikant section Patil Maharaj vs Attomey General of Trinidad and Tobago No2 Khatri and Others IV vs State of Bihar and Others and Union Carbide Corporation and Others vs Union India and Others referred to Kasturilal Ralia Rain Jain vs The State of Uttar Pradesh distinguished Ratanlal Dhirajlal s Law of Torts 22nd Edition 1992 by Justice GP Singh at pages 44 to 48 referred to In the present case on the finding reached It Is a clear case for award of compensation to the petitioner for the custodial death of her son 604 D 210 The deceased was aged about 22 years and had a monthly income between Rs1200 to Rs1500 A total amount of Rs150000 would be appropriate as compensation to be awarded to the petitioner in the present case 604 E 211 The respondent State of Orissa is directed to pay the sum of Rs150000 lo the petitioner as compensation and a further sum of Rs10000 as costs to be paid to the Supreme Court Legal Aid Committee The mode of payment of Rs150000 to the petitioner would be by making a term deposit of that amount in a scheduled bank in the petitioner s name for a period of three years during which she would receive only the Interest payable thereon the principal amount being payable to her on expiry of the term The Collector of the District will take the necessary steps in this behalf and report compliance to the Register judicial of this Court within three months 604 H 605 A 212The State of Orissa is expected to take the necessary further action to ascertain and fix the responsibility of the Individuals responsible 586 for the custodial death of petitioner s son and also take all available appropriate actions against each of them 605 C Per Dr AS Anand J Concurring 101 Convicts prisoners or under trials are not denuded of their fundamental rights under Article 21 and It is only such restrictions as are permitted by law which can be imposed on the enjoyment of the fundamental rights by such persons It is an obligation of the State to ensure that there is no infringement of the indefeasable rights of a citizen to life except in accordance with law while the citizen is in its custody 607 E 102 The precious right guaranteed by Article 21 of the Constitution of India cannot be denied to convicts under trials or other prisoners in custody except according to procedure established by law 607 E 103 There is a great responsibility on the police or prison authorities to ensure that the citizen in its custody is not deprived of his right to life His liberty is in the very nature of things circumscribed by the very fact of his confinement and therefore his interest in the limited liberty left to him is rather precious The duty of care on the part of the State is strict and admits of no exceptions wrongdoer is accountable and the State is responsible if the person in custody of the police is deprived of his life except according to the procedure established by law 607 G 105The death of petitioner s son was caused while he was in custody of the police by police torture A custodial death is perhaps one of the worst crimes in a civilised society governed by the Rule of Law The defence of sovereign immunityin such cases is not available to the State 607 G 201 Adverting to the grant of relief to the heirs of a victim of custodial death foe the infraction or invasion of his rights guaranteed under Article 21 of the Constitution of India it is not always enough to relegate him to the ordinary remedy of a civil suit to claim damages for the tortious act of the State as that remedy in private law indeed is available to the aggrieved party 608 A 587 202 The citizen complaining of the infringement of the indefeasable right under Article 21 of the Constitution cannot be told that for the established violation of the fundamental right to life he cannot get any relief under the public law by the courts exercising writ jurisdiction 608 B 203 The primary source of the public law proceedings stems from the prerogative writs and the courts have therefore to evolve new tools to give relief in public law by moulding it according to the situation with a view to preserve and protect the Rule of Law 608 C 204 The old doctrine of only relegating the aggrieved to the remedies available in civil law limits the role of the courts too much as protector and guarantor of the indefeasable rights of the citizens The courts have the obligation to satisfy the social aspirations of the citizens because the courts and the law are for the people and expected to respond to their aspirations 608 H 609 A 205 The public law proceedings serve a different purpose than the private law proceedings The relief of monetary compensation as exemplary damages in proceedings under Article 32 by this Court or under Article 226 by the High Courts for established infringement of the indefeasable right guaranteed under Article 21 of the Constitution is a remedy available in public law and is based on the strict liability for contravention of the guaranteed basic and indefeasable rights of the citizen 609 B 206 The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights Therefore which the court moulds the relief by granting compensation in proceedings under Article 32 or 226 of the Constitution seeking enforcement or protection of fundamental rights it does so under the public law by way of penalising the wrongdoer and fixing the liability for the public wrong on the State which has failed in its public duty to protect the fundamental rights of the citizen 1609 C 207 The payment of compensation in such cases is not to be understood as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making monetary amends under the public law for the wrong done due to breach of public duty of not protecting the fundamental rights 588 of the citizen 609 D 208The compensation is in the nature of the exemplary damages awarded against the wrong doer for the breach of its public law duty and is independent of the rights available to the aggrieved party to claim compensation under the private law in an action based on tort through a suit instituted in a court of competent jurisdiction orand prosecute the offender under the penal law 609 E 209 This Court and the High Courts being the protectors of the civil liberties of the citizen have not only the power and jurisdiction but also an obligation to grant relief in exercise of its jurisdiction under Articles 32 and 226 of the Constitution to the victim or the heir of the victim whose fundamental rights under Article 21 of the Constitution of India are established to have been flagrantly infringed by calling upon the State to repair the damage done by its officers to the fundamental rights of the citizen notwithstanding the right of the citizen to the remedy by way of a civil suit or criminal proceedings 609 F G 210 The State of course has the right to be indemnified by and take such action as may be available to it against the wrongdoer in accordance with law through appropriate proceeding Of course relief in exercise of the power under Article 32 or 226 would be granted only once it is established that there has been an infringement of the fundamental rights of the citizen and no other form of appropriate redressal by the court in the facts and circumstances of the case is possible 609 H 610 A 211 Law is in the process of development and the process necessitates developing separate public law procedures as also public law principles It may be necessary to identify the situations to which separate proceedings and principles apply and the courts have to act firmly but with certain amount of circumspection and self restraint lest proceedings under Article 32 or 226 are misused as a disguised substitute for civil action in private law 610 D E Freedom under the Law By Lord Denning First Hamlan Lecture 1949 referred to Rudul Sah vs State of Bihar and Anr referred to In the facts of the present case the mode of redress which 589 commends appropriate is to make an order of monetary amend in favour of the petitioner for the custodial death of her son by ordering payment of compensation by way of exemplary damages The State of Orissa should pay a sum of Rs150000 to the petitioner and a sum of Rs10000 by way of costs to the Supreme Court Legal Aid Committee 610 G

minal Appeal No 629 of 1985 From the Judgment and Order dated 2561985 of the Andhra Pradesh High Court in Criminal Appeal No 637 of 1983 KMadhava Reddy A Subba Rao and ADN Rao for the Appellants G Prabhakar for the Respondent The Judgment of the Court was delivered by DRANAND J The curse of dowry has claimed yet another victim Kundula Bala Subrahmanyam the husband of the deceased Kundula Koti Nagbani and his mother Kundula Annapurna mother in law of the deceased have filed this appeal under Section 2a of the against the judgment of the High Court of Andhra Pradesh Hyderabad dated 2561985 setting aside the judgment of acquittal passed by the Sessions Judge East Godavari Division and convicting both the appellants for an offence under Section 30234 IPC and sentencing each of them to suffer imprisonment for life On 23rd of August 1981 between 1230100 pm on hearing screams and cry of deceased Kundula Koti Nagbani at that time aged about 18 years Pulapa Lakshmi PW2 Vempati Paparao PW3 and Vempati Radha PW4 rushed to the house of the appellant and found both the appellants along with the father of appellant No 1 father in law of the deceased hurriedly coming out of the kitchen while the deceased was lying on the floor engulfed in flames Since the appellants or the father in law of the deceased were making no attempts to put off the flames PW2 asked appellant No 1 to give her something so that she could extinguish the fire He however did not respond She then requested first appellant s father to give something to her so that the fire could be put off The father of appellant No 1 enquired if he should get a bucket of water PW2 thereupon requested him to give either a bed sheet or a blanket The father of appellant No 1 then brought out a bed sheet Bontha from the cot and 675 as he was passing it on to PW2 the mother in law of the deceased appellant No 2 told her husband not to give the bontha to PW2 PW2 in the meanwhile took the bontha from the father of the first appellant and tried to extinguish the fire The deceased turned her side She was alive The deceased asked PW2 for some water Since the petticoat of the deceased was burning PW3 the father of PW2 who had also rushed along with her to the house of the appellant broke the thread of the petticoat to save her from further burning and threw away the burning garments In the process he also received some burn injuries PW2 poured water into the mouth of the deceased and enquired from her as to what had happened The deceased told her that her mother in law had poured kerosene over her and her husband had set fire to her The deceased again felt thirsty and asked for more water which was again given to her by PW2 The above statement made by the deceased to PW2 was overheard by PW3 and some others who had also reached on hearing the cries Vempati Nagabhushanam PW5 another immediate neighbor of the appellants living only about 2 yards away also heard the cries of the deceased and rushed to the house of the appellant He noticed PW3 was pulling out the petticoat of the deceased while PW2 was attempting to extinguish fire He saw PW2 pouring water into the mouth of the deceased He also heard the statement made by the deceased to PW2 about the manner in which she had been set on fire PW5 thereupon went away to inform the maternal uncle of the deceased at Malakapalli On the way he met one Ramakrishna coming on a motor cycle and at his request Ramakrishna gave him a ride to Malakapalli On reaching the house of the maternal uncle of the deceased they found the brother of the deceased Vempati Sreerama Krishna Sreeram PWl was also present there He conveyed to them the information regarding the burning of the deceased and also what he had heard the deceased telling PW2 Ramarao and PWl then went on the same motorcycle to Dharmavaram PWl reached the house of the appellant and saw a number of persons including PWs 2 and 3 gathered there The deceased was lying on the floor and at that time she had no clothes on her He noticed that she had received burn injuries from her breasts downwards to her legs On seeing her plight PW1 started crying and hitting his head against a pillar When the deceased noticed that PW1 had come she asked PW2 to call her brother PWl inside PW2 thereupon went out and brought PW1 to the kitchen where the deceased took the palm of PWl into her own palms and told him in Hindi please tell mother and father as I am 676 telling you My mother in law poured kerosene on me and my husband set fire You tell father and mother about this Don t fight Anyhow I am dying She also told her brother PW1 to take back the cash given to her and divide it amongst the sisters in equal share and get them married off to nice persons At this juncture the first appellant husband of the deceased came inside the kitchen and with folded hands begged the deceased for forgiveness saying that he would not repeat what he had done and therefore he may be pardoned PWl got wild and caught hold of the neck of the first appellant PW2 and PW3 rushed towards them and released the first appellant from the hold of PW1 and sent PWl to another uncle s house and told the uncle that since PWl was in an agitated mood he should take care of him Within an hour however PWl went back to the house of the deceased and by that time a local Doctor PW6 Dr R Radha krishnamurthy had arrived at the house and was giving first aid to her and she was lying on a cot in the verandah PW6 at about 330 pm advised the removal of the deceased to the Government Hospital at Kovvur A matador van was secured and at about 430 pm PW1 Ramarao his maternal uncle the wife of Ramarao and some other neighbors took the deceased to the Government Hospital at Kovvur in the matador van reaching there at about 5 pm At about 530 pm Dr K Parameswaradas PW9 examined the deceased and declared her dead PWl thereupon went to the police station which is adjacent to the hospital alongwith his uncle and lodged the report exhibit P4 with the Head Constable Md Navabjani PW12 A case under section 302 IPC was registered and information was sent to Inspector of Police G Scendavce Rao PW14 on telephone After collecting a copy of the FIR PW14 proceeded to the Government Hospital and from there went to the scene of occurrence He seized M0 s 1 to 3 drew the site plan of the scene of occurrence and examined PWs 1 to 5 and PW9 at Dharmavaram He also held the inquest proceedings from 630 am to 830 am on August 24 1981 and after getting the postmortem conducted handed over the dead body to the family of the deceased PW9 Dr K Parameswaradas who conducted the postmortem examination in his report ExPl8 noted extensive burns to the extent of 90 on the body of the deceased and opined that the deceased had died due to the extensive burns all over the body and that the injuries were sufficient in the ordinary course of nature to cause death During the investigation the investigating officer made a request for the preservation of viscera of the deceased so that it could be sent for chemical examination as according to the state 677 ment of PW6 the deceased had allegedly told him that she had consumed dettol to commit suicide and since she could not bear the pain she had set herself on fire The report of the chemical examiner exhibit Pl6 however revealed that no poison was detected and that the death had been caused due to extensive burns Further investigation into the case was carried out by Md Baduruddin PW15 Inspector of the Crime Branch During the investigation the father of the deceased Venkataramana handed over letters Exs Pl P3 to the investigating officer Both the appellants had made themselves scarce and were not found in the village when search for them was made by the investigating officer The first appellant surrendered in the court on 10111981 while the second appellant surrendered in the court on 7th of December 1981 After the investigation was over challan was filed and both the appellants were sent up for trial in the Court of Sessions Judge East Godavari Division at Rajahmundry At the trial the prosecution inter alia relied upon the following circumstances with a view to connect the appellant with the crime 1 Motive 2 Two dying declarations made to PW2 and to PW1 3 Medical Evidence 4 Conduct of the appellant immediately and after the occurrence 5 Absconding of the appellants The appellants when examined under Section 313 of the Criminal Procedure Code denied their involvement and stated the case to be a false one They however produced no defence The learned Trial Court did not accept the prosecution version and held that there was no motive for the appellant to commit the crime that the evidence of PWs 2 to 4 could not be relied upon that PWI had made improvements in his statements recorded at the trial and therefore the oral dying declaration made to him could not be relied upon The Trial court also held that there had been unexplained delay in lodging report with the police The Trial Court placed reliance on the testimony of hostile 678 witness PW6 and held that the case was one of suicide and not of murder On those findings the learned Sessions Judge acquitted both the appellants On an appeal filed by the State a Division Bench of the High Court of Andhra Pradesh set aside the judgment of the learned Sessions Judge and convicted both the appellants for an offence under Section 30234 IPC Speaking for the Division Bench K Ramaswamy J as His Lordship then was found no hesitation to hold PWl as a witness of truth and a wholly reliable witness and also opined that the evidence of PWs 2 and 3 was trustworthy and reliable The dying declarations made by the deceased to PW2 and subsequently to PWl were believed and relied upon It was held that report exhibit P4 had been given by PWl immediately after the deceased was declared dead by the Doctor and therefore there was no delay much less unexplained delay in lodging the report While dealing with the conduct of the appellant it was opined that their conduct was inconsistent with their innocence and consistent only with the hypothesis that appellant No 2 had committed the act of pouring kerosene on the deceased and appellant No 1 had lit fire With regard to the existence of motive it was held that the appellants were actuated with a motive to do away with the life of the deceased for not getting the land registered in the name of the first appellant Finally the High Court found that the chain of the established circumstances was complete and the circumstances were sufficient to conclusive establish that the appellants and the appellants alone had committed the crime of murder of the deceased The High Court held that the consideration of evidence on record and the reasoning of the Trial Court was most unsatisfactory and could not be sustained and therefore set aside the order of acquittal and convicted both the appellants for the offence under Section 30234 IPC and sentenced each one of them to imprisonment for life Appearing for the appellants before us Mr Madhav Reddy the learned Senior Counsel urged that since the Trial Court had acquitted the appellants the High Court was not justified in recording an order of conviction as the findings recorded by the Trial Court could not be said to be perverse It was argued that the dying declarations were not worthy of reliance and the motive was feeble and not established Learned counsel submitted that the surrendering of the appellants themselves in the court on 10111981 and 7121981 itself was enough to show that they had no 679 guilty conscious and the prosecution was not justified in relying upon the conduct as an adverse conduct against the appellants While explaining the conduct of the appellants at the time of and after the occurrence he submitted that since all neighbors had become hostile out of fear the appellants did not act either to put off the fire or remove the deceased to the hospital In reply learned counsel for the State argued that the findings of the Trial Court were not only conjectural but also perverse and the evidence of the witnesses was disbelieved on mere surmises It was submitted that the Trial Court did not property discuss the two dying declarations mad by the deceased and since the dying declarations have been proved by reliable evidence those by themselves could form the basis of conviction of the appellants It was then submitted that the High Court after a careful appraisal of the evidence had rightly set aside the judgment of the Trial Court which suffered from illegality as well as manifest error and perversity Learned counsel submitted that the prosecution had established the case against the appellants beyond every reasonable doubt and their appeals deserve to be dismissed Admittedly there is no eye witness in the case The case is sought to be established by the prosecution from circumstantial evidence In a case based on circumstantial evidence the settled law is that the circumstance from which the conclusion of guilt is drawn should be fully proved an these circumstances must be conclusive in nature Moreover all the established circumstances should be complete and there should be no gap in the chain of evidence The proved circumstances must be consistent only wit the hypothesis of the guilt of the accused alone and totally inconsistent wit his innocence The courts have therefore the duty to carefully scrutinize the evidence and deal with each circumstance carefully and thereafter fin whether the chain of the established circumstances is complete or no before passing an order of conviction It is in the light of the above principles that we shall deal with various circumstances relied upon by the prosecution 1Motive In a case based on circumstantial evidence motive as sums great significance as its existence is an enlightening factor in process of presumptive reasoning The motive in this case is alleged to be the greed of dowry 680 On 1851979 marriage between the appellant and the deceased was solemnised The deceased aged about 18 years was prosecuting her Intermediate course of study at that time She was the eldest of the five children of one Vempati Venkataramana who at the relevant time was working as an Assistant Engineer with the Railways at Gorakhpur At the time of the marriage the parents of the deceased had agreed to give Rs 50000 in cash 50 sovereigns of gold and two acres of land as dowry The cash was paid at the time of the marriage itself alongwith 15 sovereigns of gold The parents of the deceased had promised to give the remaining 35 gold sovereigns and get the land also registered subsequently though the possession of the land measuring about 370 acres was given to the appellant No 1 The mother in law of the deceased and her husband had been pressurising the deceased all along to bring the remaining sovereigns and also to get the land registered in the name of the first appellant She conveyed it to her mother PW7 While the parents of the deceased agreed to get the land registered in the name of the deceased the first appellant and his parents were insisting that the land should be got registered in his name and not in the name of the deceased Since that desire was not fulfilled the deceased was being continuously harassed and ill treated A strick vigil was kept on her at the house of her in laws and she was not even allowed to meet anybody nor were the neighbors permitted to come and meet or talk to her She was being prevented from writing letters to her family also but stealthy she wrote letters Exs Pl 3 and got them posted through a neighbor The contents of those letters are rather revealing and expose the extent of the harassment to which the deceased was being subjected to by her mother in law and her husband After seeing the contents of the letters and with a view to find out the cause of her distress PW1 her brother went to Dharmavaram on August 22 1981 to the house of the deceased The deceased however was so terrorised that she could not speak to him freely She was surrounded by her husband and her mother in law who did not talk to PWl at all to show their indifference From the evidence of the prosecution witnesses and particularly that of the mother of the deceased PW7 the immediate provocation was the insistence of the appellants that the land be got registered in the name of the husband and the reluctance of the parents of the deceased to do so and instead their desire to get it registered in the name of the deceased The oral evidence led by the prosecution in this behalf is wholly consistent In her letter exhibit P2 the 681 deceased had clearly mentioned that she was getting her letters posted through PW4 She requested her sisters to write letters to her in Hindi so that her in laws who did not know Hindi could not know what was being written In one of her letters a part of which was addressed to her sister she wrote I am not going to anybody s house One day I went to the house of sister in law Radha to deliver the letter secretly Their mood was changed on account of going to their house That is why I stopped going Do not mention even a single word in your letter that I have been writing to you Ask mother not to worry On hearing about your results write a letter without fail If I get an opportunity I will definitely write a letter In her letter exhibit P1 to her father she wrote Father I am feeling much bore here because no one come to our house nor I am allowed to go their house Please always write letters So that I may be satisfied in seeing your letters If I may not give reply to your letter then you please don t mind it You know here s conditions Rest is OK Father you also take care of your health In the same letter while addressing her sisters she wrote The lock is opened I am writing this letter secretly In reply do not write that you have received the letter If you write like that these people will become more angry She also wrote to her sister not at house and there is no watch over me I am getting the letters posted through sister in law Radha secretly You write letters mostly in Hindi only so that even if they chanced to fall in the hands of any one they cannot understand The tenor of her letters disclose the distressing state of affairs at the house 682 of her in laws These letters coupled with the evidence of her mother go to show how the deceased was being tormented and harassed It is indeed a shame and pity that within just two years of her marriage her dream of a happy married life was shattered and she found herself almost as a prisoner and a frightened chicken who had to write letters to her parents and sisters secretly for the fear that if her in laws came to know they would become more angry She had to request her sisters to reply to her letters in Hindi so that even if they chanced to fall in the hands of anyone they cannot understand One can only imagine the plight of this young bride and the sadistic behavior born out of greed for dowry of her husband and mother in law Not having been able to get the land registered in the name of the first appellant appears to have frustrated them to the extent of murdering the young wife The evidence led by the prosecution to establish the existence of motive is wholly reliable and is also consistent The prosecution has successfully established that the appellants had strong and compelling motive to commit the crime because of her parents not agreeing to get the land registered in the name of the first appellant and their insistence to have the land registered in the name of their own daughter instead The motive has been conclusively established by the prosecution and we have no hesitation to hold that the prosecution has succeeded in establishing the existence of the motive for both the appellants to commit the crime conclusively and positively and we agree with the finding of the High Court in that behalf 2Dying Declarations The next piece of circumstantial evidence relied upon by the prosecution are two dying declarations made by the deceased According to the prosecution case the deceased made the first dying declara tion before PW2 when she after hearing her cries came to the house and found both the appellants and the father of appellant No 1 coming out of the kitchen and the deceased lying on the floor engulfed in flames According to PW2 the deceased told her that her mother in law had poured kerosene on her and her husband had set her on fire This statement was also heard by PW3 PW5 The second dying declaration was made by the deceased to her brother PW1 after he was called by her to the kitchen The deceased according to the prosecution case on meeting her brother took the palm of PWl into her own palms and inter alia told to him that her mother in law poured kerosene on her and her husband set fire to her The statement made by the deceased to 683 PW1 was in Hindi Both the statements as noticed above relate to the circumstances leading to the cause of her death as according to the medical evidence the deceased died of 90 burn injuries Both the dying declarations are oral They have been made to friends and to the brother of the deceased respectively In view of the close relationship of the witnesses to whom the oral dying declarations were made it becomes necessary for us to carefully scrutinize and appreciate the evidence of the witnesses to the dying declaration We have already adverted to the evidence of these witnesses PW1 PW2 PW3 while narrating the prosecution case Indeed PWl is the brother of the deceased and therefore a very close relation but mere relationship cannot be a ground to discard his testimony if it is otherwise found to be reliable and trustworthy In the natural course of events the deceased who was on the verge of her death would have conveyed to her near and dear ones the circumstances leading to her receiving the burn injuries PW1 has given a very consistent statement and has reproduced the words of the deceased clearly and truthfully Nothing has been brought out in the cross examination to discredit his testimony at all He had at the earliest point of time disclosed as to what the deceased had told to him The discrepancy pointed out by learned counsel for the appellants as to whether the dying declaration was made to him by his sister when she was lying on the cot in the verandah as stated in FIR ExP4 or while she was lying on the floor of the kitchen is of an insignificant nature and could be either out of confusion or the gap of time between the making of the two statements Moreover PW1 was not at all cross examined on the alleged discrepancy when he gave evidence in Court No explanation whatsoever was sought from him about the so called discrepancy PW1 the brother of the deceased appears to us to be a truthful witness and his testimony has impressed us He did not implicate the father of the appellant and gave evidence only about what he was actually told by his sister From our appreciation of the evidence of PW1 we agree with the view expressed by the High Court that considering the case from all perspectives we have no hesitation to hold that PW1 is a witness of truth worthy of acceptance and so he is wholly a reliable witness exhibit P4 is a voluntary statement given by PW1 and it lends corroboration to the evidence of PW1 Coming now to the evidence of PWs2 and 3 The substratum of their evidence with regard to the dying declaration is that while that they were 684 in the kitchen of their own house taking tea they heard the cry of a lady and rushed to the house of the deceased being her close neighbors They saw the deceased engulfed in flames sprawled on the floor of the kitchen They also saw both the appellants as well as the father of appellant No 1 coming out of the kitchen to the verandah The distance between the house of PWs2 and 3 from the house of appellant is only 2 yards After PW2 took a bontha from the father in law of the deceased to the annoyance of appellant No 2 with a view to extinguish the fire the deceased on enquiry by the witness as to what had happened told her that my mother in law poured kerosene on me and my husband set me on fire The deceased had not implicated her father in law though he was also present there PW3 father of PW2 had assisted PW2 to extinguish the flames and it was he who broke the string of the petticoat of the deceased and threw it away In the process PW3 himself suffered burn injuries His injuries were examined by the Doctor and found to be caused by fire The Trial Court doubted the testimony of PW3 on the ground that he had made some improvement in his evidence in court when he stated that he had heard the deceased screaming and saying that she was being killed He had not stated so in his statement recorded during the investigation This in our opinion is hardly an improvement of any consequence because both in his statement in court as well as the one recorded under Section 161 Cr PC he has deposed that it was on hearing the screams of the deceased that he and his daughter rushed to the house of the decased In any event the so called improvement was not sufficient to discard his testimony Despite searching cross examination of both these witnesses nothing has been brought out in their cross examination to discredit them or doubt their veracity at all After carefully analysing their evidence we find PWs 2 and 3 as witnesses worthy of credence and trustworthy From the evidence of PWs 1 2 and 3 both the dying declarations are proved to have been made by the deceased They are the statements made by the deceased and relate to the circumstances leading to her death Both the dying declarations are consistent with each other and appear to have been made by the deceased voluntarily and in the natural course of events They have a ring of truth about them Section 321 of the Evidence Act is an exception to the general rule that hearsay evidence is not admissible evidence and unless evidence is tested by cross examination it is not credit worthy Under Section 32 when 685 a statement is made by a person as to the cause of death or as to any of the circumstances which result in his death in cases in which the cause of that person s death comes into question such a statement oral or in writing made by the deceased to the witness is a relevant fact and is admissible in evidence The statement made by the deceased called the dying declaration falls in that category provided it has been made by the deceased while in a fit mental condition A dying declaration made by person on the verge of his death has a special sanctity as at that solemn moment a person is most unlikely to make any untrue statement The shadow of impending death is by itself the guarantee of the truth of the statement made by the deceased regarding the causes or circumstances leading to his death A dying declaration therefore enjoys almost a sacrosanct status as a piece of evidence coming as it does from the mouth of the deceased victim Once the statement of the dying person and the evidence of the witnesses testifying to the same passes the test of careful scrutiny of the courts it becomes a very important and a reliable piece of evidence and if the court is satisfied that the dying declaration is true and free from any embellishment such a dying declaration by itself can be sufficient for recording conviction even without looking for any corroboration If there are more than one dying declarations then the court has also to scrutinise all the dying declarations to find out if each one of these passes the test of being trustworthy The Court must further find out whether the different dying declarations are consistent with each other in material particulars before accepting and relying upon the same Having read the evidence of PWs 1 3 with great care and attention we are of the view that their testimony is based on intrinsic truth Both the dying declarations are consistent with each other in all material facts and particulars That the deceased was in a proper mental condition to make the dying declaration or that they were voluntary has neither been doubted by the defence in the course of cross examination of the witnesses nor even in the course of arguments both in the High Court and before us Both the dying declarations have passed the test of creditworthiness and they suffer from no infirmity whatsoever We have therefore no hesitation to hold that the prosecution has successfully established a very crucial piece of circumstantial evidence in the case that the deceased had voluntarily made the dying declarations implicating both the appellants and disclosing the manner in which she had been put on fire shortly before her death This circumstance therefore has been established by the prosecution beyond every reasonable 686 doubt by clear and cogent evidence 3Medical Evidence The next circumstance relied upon by the prosecution is the medical evidence which has been provided by the testimony of Dr Parameswaradas PW9 He deposed that the deceased had died of 90 burns and that kerosene smell was emitting from the deadbody According to the report of the chemical examiner no poison was found in the viscera The chemical examiner s report coupled with the other evidence on record belies the suggestion made by the defence during the cross examination of some witnesses that with a view to commit suicide the deceased had drunk dettol and when she could not bear the pain on account of consumption of dettol she herself poured kerosene oil on herself and set herself on fire Rightly this defence case was not pursued before us with any amount of seriousness by the learned counsel for the appellants The medical evidence therefore fully corroborates the prosecution case and lends support to the dying declaration and more particularly the manner in which the deceased had been set on fire Conduct of the appellant immediately and after the evidence The conduct of the appellants son and mother both at the time when the deceased lay burning on the floor of the kitchen and afterwards till she succumbed to the burn injuries is the next circumstance relied upon by the prosecution to connect the appellants with the crime From the testimony of PWs 2 3 and 4 who are the immediate neighbors of the appellant and the deceased they had heard the cry of the deceased and rushed to her house PWs 2 and 3 found the deceased lying on the floor of the kitchen engulfed in flames while both the appellants and father in law of the deceased were coming out of the kitchen in the verandah None of the two appellants or the father in law made any attempt whatsoever to extinguish the fire and save the deceased The raised no alarm They stood there as if waiting for her death rather than make any effort to save her Their conduct thus runs consistent with the hypothesis of their guilt and betrays that of an innocent persons In their statements under Section 313 of Cr PC they did not deny their presence in the house at the time of the occurrence but denied their involvement in the crime The normal human conduct of any person finding someone engulfed in flames would be to make all efforts to put off the flames and save the life of the person Though the appellants were the closest relations 687 of the deceased they did not do anything of the kind Let alone making any effort to extinguish the fire according to PW2 when the father in law of the deceased at her request was giving her the bontha to extinguish the flames appellant No 2 the mother in law of the deceased objected to the same This conduct speaks volumes about the extent of hatred which the mother in law exhibited towards her daughter in law They rendered no first aid to the deceased Their conduct at the time of the occurrence therefore clearly points towards their guilt and is inconsistent with their ingnocence the appellants did not even accompany the deceased to the hospital in the matador van Had the husband not been a party to the crime one would have expected that he would be the first person to take steps to remove the deceased to the hospital and leave no stone unturned to save her life An innocent mother in law would have also done the same even if she had no love or emotional feelings for her daughter in law Neither the husband nor the mother in law of the deceased took any steps to remove the deceased to the hospital let alone accompany her to the hospital This conduct also is inconsistent with their innocence and consistent only with the hypothesis as stated by the deceased in her dying declarations that the mother in law had poured kerosene on her while her husband had lit fire and put her on flames Mr Reddy the learned senior counsel appearing for the appellants submitted that since the neighbors and other relations of the deceased had almost taken over the house and the person of the daughter in law the appellants were afraid of being beaten and as such they rendered no aid to the deceased needs a notice only to be rejected No suggestion whatsoever on these lines was made to any of the witnesses and in any event such an explanation betrays common sense Since the deceased had admittedly suffered burn injuries in the kitchen of her house there was an obligation on the part of the appellants and the father in law of the deceased who have admitted their presence in the house at the time of occurrence to explain the circumstances leading to the deceased dying of 90 burn injuries None has been offered The theory of suicide was put up only as an argument of despair While discussing the motive and the dying declarations we have come to the conclusion that the deceased died as a result of the designed move on the part of both the appellants to put an end to her life and she did not commit suicide as was sought to be suggested during cross examination by the defence to some witnesses The theory of suicide has no legs to stand upon The conduct of the appellants who did not try to extinguish the fire or 688 render any first aid to her also totally betrays the theory of suicide and we agree with the High Court that the theory as set up by the appellants is highly unbelievable or acceptable The prosecution has thus successfully established that the conduct of both the appellants both at the time of the occurrence and immediately thereafter is consistent only with the hypothesis of the guilt of the appellants and inconsistent with their innoncence 5 Absconding Prosecution has also relied upon the circumstances of the absconding of the appellants to prove its case A closer link with the conduct of the appellants both at the time of the occurrence and immediately thereafter is also the circumstance relating to their absconding Md Badruddin PW15 the investigating officer deposed that he had taken up the investigation of the case and having examined PWsl 4 had caused search to be made for the accused but they were not found in the village and despite search they could not be traced Appellant No 1 surrendered before the court on 10111981 while appellant No 2 surrundered in the court on 7121981 No explanation worth the name much less a satisfactory explanation has been furnished by the appellants about their absence from the village till they surrendered in the court in the face of such a gruesome tragedy Indeed absconding by itself may not be a positive circumstance consistent only with the hypothesis of guilt of the accused because it is not unknown that even innocent persons may run away for fear of being falsely involved in a criminal case and arrested by the police but coupled with the other circumstances which we have discussed above the absconding of the appellants assumes importance and significance The prosecution has successfully established this circumstance also to connect the appellants with the crime In view of the above discussion and our appraisal and analysis of the evidence on record we have no hesitation to hold that theprosecution has successfully established all the circumstances appearing in the evidence against the appellants by clear cogent and reliable evidence and the chain of the established circumstances is complete and has no gaps whatsoever and the same conclusively establishes that the appellants and appellants alone committed the crime of murdering the deceased on the fateful day in the manner suggested by the prosecution All the established circumstances are consistent only with the hypothesis that it was the appellants alone 689 who committedthe crime And the circumstances are inconsistent with any hypothesis other than their guilt It is most unfortunate that the husband of the deceased not only failed to perform his duties and obligations as husband to protect and take care of his wife as per the marriage vows and instead joined his mother in the most degrading and cold blooded murder of the young innocent bride Of late there has been an alarming increase in cases relating to harassment torture abetted suicides and dowry deaths of young innocent brides This growing cult of violence and exploitation of the young brides though keeps on sending shock waves to the civilised society whenever it happens continues unabated There is a constant erosion of the basic human values of tolerance and the spirit of live and let live Lack of education and economic dependence of women have encouraged the greedy perpetrators of the crime It is more disturbing and sad that in most of such reported cases it is the woman who plays a pivotal role in this crime against the younger woman as in this case with the husband either acting as a mute spectator or even an active participant in the crime in utter disregard of his matrimonial obligations In many cases it has been noticed that the husband even after marriage continues to be Mamma s baby and the umbilical cord appears not to have been cut even at that stage We are here tempted to recall the observations of RN Mishra J as His Lordship then was in State Delhi Administration vs Laxman Ors Appeals 93 and 94 of 1984 decided on 2391985 while dealing with a bride burning case It was observed Marriage according to the community to which parties belong is sacramental and is believed to have been ordained in heaven The religious rites performed at the marriage altar clearly indicate that the man accepts the woman as his better half by assuring her protection as guardian ensuring food and necessaries of life as the provider guaranteeing companionship as the mate and by resolving that the pleasures and sorrows in the pursuit of life shall be shared with her and Dharma shall be observed If this be the concept marriage there would be no scope to look for worldly considerations particularly dowry When a girl is transplanted from her natural setting into 690 an alien family the care expected is bound to be more than in the case of a plant Plant has fife but the girl has a more developed one Human emotions are unknown to the plant life In the growing years in the natural setting the girl now a bride has formed her own habits gathered her own impressions developed her own aptitudes and got used to a way of life In the new setting some of these have to be accepted and some she has to surrender This process of adaptation is not and cannot be one sided Give and take live and let live are the ways of life and when the bride is received in the new family she must have a feeling of welcome and by the fond bonds of love and affection grace and generosity attachment and consideration that she may receive in the family of the husband she will get into a new mould the mould which would last for her life She has to get used to a new set of relationships one type with the husband another with the parents in law a different one with the other superiors and yet a different one with the younger ones in the family For this she would require loving guidance The elders in the family including the mother in law are expected to show her the way The husband has to stand as a mountain of support ready to protect her and espouse her cause where she is on the right and equally ready to cover her either by pulling her up or protecting her willingly taking the responsibility on to himself when she is At fault The process has to be a natural one and there has to be exhibition of cooperation and willingness from every side Otherwise how would the transplant succeed Awakening of the collective consciousness is the need of the day Change of heart and attittide is what is needed If man were to regain his harmony with others and replace hatred greed selfishness and anger by mutual love trust and understanding and if woman were to receive education and become economically independent the possibility of this pernicious social evit dying a natural death may not remain a dream only The legislature realising the gravity of the situation has amended the laws and provided for stringent punishments in such cases and even permitted the raising of presumptions against an accused in cases of unnatural deaths of 691 the brides within the first seven years of their marriage The was enacted in 1961 and has been amended from time to time but this piece of soicial legislation keeping in view the growing menance of the social evil also does not appear to have served much purpose as dowry seekers are hardly brought to book and convictions recorded are rather few Laws are not enough to combat the evil A wider social movement of educating women of their rights to conquer the menance is what is needed more particularly in rural areas where women are still largely uneducated and less aware of their rights and fall an easy prey to their exploitation The role of courts under the circumstances assumes greater importance and it is expected that the courts would deal with such cases in a more realistic manner and not allow the criminals to escape on account of procedural technicalities or insignificant lacunas in the evidence as otherwise the criminals would receive encouragement and the victims of crime would be totally discouraged by the crime going unpunished The courts are expected to be sensitive in cases involving crime against women The verdict of acquittal made by the Trial Court in this cast is an apt illustration of the lack of sensitivity on the part of the Trial Court It recorded the verdict of acquittal on mere surmises and conjectures and disregarded the evidence of the witnesses for wholly insufficient and insignificant reasons It ignored the vital factors of the case without even properly discussing the same The High Court was therefore perfectly justified in convicting the appellants for the offence of murder punishable under Section 302 readwith Section 34 IPC and sentencing each one of them to suffer imprisonment for life We uphold the conviction and sentence of the appellants for the offence under Section 30234 IPC and dismiss their appeal The appellants were directed to be released on bail by this Court on 3031989 Their bail bonds are cancelled and they are directed to be taken in to custody to suffer the remaining period of their sentence VPR Appeal dismissed

The visually handicapped constitute a significant section of our society As it is necessary to encourage their participation in every walk of life The Central Ministry of Welfare has been undertaking various measures to utilise their potentialities The Governments have launched schemes to educate train and provide them with useful employment The Central Government has provided 3 reservation in Group C and D posts for physically handicapped including blind and partially blind while demand is growing for reservations in Group A and B posts The Standing Committee of the Ministry of Welfare undertook identification of jobs in these categories and submitted its report on October 31 1986 Para 8 thereof related to the blind It took note of reading and writing deficiency and suggested the provision of allowance And found that the specified 416 posts in Group A and B are suitable for blind and partially blind So the Ministry of Personnel issued office memorandum dated November 25 1986 a accepting the report and took policy decision regarding identification of jobs for the physically handicapped persons in Group A and B posts filled to be by direct recruitment in Central Govern ment Services and Public Sector Undertakings This court examined the memorandum and found that the Government had taken cognizance of the identified jobs that the Government had 557 decided about the recruitment of handicapped lessons to these posts that the departments would supplement the list further that the MinistriesDepartments would inform the UPSC about preferential treatment to handicapped candidates that the UPSC had agreed in principle to give preference and that the Department of Personnel and Training would be issuing general instructions for the purpose However the decisions were not implemented for seven years So the petitioner approached this Court seeking a writ in the nature of mandamus directing the Union of India and the UPSC to permit the blind candidates to compete for the IAS and Allied Services and to provide them facility of writing the civil services examination either in Braille Script or with the help of a scribe On hearing the counsel for the petitioner himself visually handicapped this Court HELD The performance of the counsel for the petitioner before us has amply proved the point that the visually handicapped persons can perform the jobs entrusted to them with equal efficiency However the question of giving preference to the handicapped in the matter of recruitment to the identified posts is a matter for the Government of India to decide The Government of India is commended to decide the question of providing preferencereservation to the handicapped in Group A and B Posts 564 C D E This Court further held that there are number of post which are required to be filled through the civil services examinations and other competitive examinations conducted by the Commission so the observations of the UPSC that the posts identified as suitable to be held by the physically handicapped persons particularly those identified for the blind were not required to be filled on the basis of competitive examination conducted by the Commission appeared to be incorrect 565 D Group A and B posts in the category of Administrative Officers are necessarily to be filled as a result of civil services examination held by the UPSC If some of the identified posts in the Indian Administrative Service and other Allied Services can be filled from amongst the visually handicapped persons there was no reason why they should not be permitted to sit and write the civil services examination 565 E 558

Appeal No 1359 of 1993 From the Judgment and Order dated 161192 of the Patna High Court in CWJC No 446 of 1992 KN Chaubey K Pandeya and Mohan Pandey for the Appellant 523 Gobinda Mukhoty NN Goswami SK Bhattacharya CVS Rao Ms KK Manglam L R Singh Vikas Singh Yunus Malik BB Singh Ms Vimal Sinha and Ms Kumud L Das for the Respondents The Judgment of the Court was delivered by SAWANT J Leave granted The appellant is a member of the Bar He had field a petition in the nature of a public interest litigation under Article 226 of the Constitution of India before the High Court of Patna praying for a writ of quo warranto challenging the appointment of respondent No 6 Dr Shiva Jatan Thakur as a Member of the Bihar State Public Service Commission The High Court dismissed the writ petition Hence the present appeal The attack against the appointment of respondent No 6 is based on two grounds a on the date of his appointment ie 4th March 1991 respond No 6 was the seventh non service member The total strength of the Public Service Commission being eleven uncluding the Chairman the appointment of the seventh member from the non service category was violative of the proviso to article 3161 of the Constitution which requires that as nearly as may be one half of the members shall be persons who have held office for at least ten years either under the Government of India or under a Government of the State b respondent no6 was totally blind even from a date prior to his appointment and was unfit to be appointed by reason of the said physical infirmity We are accordingly required to consider whether these two grounds were sufficient to disqualify respondent No 6 from being appointed as a member of the commission In his counter affidavit respondent No 6 has stated among other or things that he happens to be the son of a peon retired form the Railway We are informed by Shri Mukhoty the learned counsel appearing for him 524 that he belongs to the backward community of barbers He has been blind since the age of eight years In spite of his blindness he was able to pursue his educational career successfully and he earned degrees and diplomas He is a PhD in English of the Patna University He has been a University college teacher in English and he was promoted to the post of Reader in English on the completion of bare eight years of service He was the first teacher of the Patna University who was unanimously recommended for the award of D Litt on account of the excellence of his thesis written for PhD As a scholar in English he has submitted papers to national and international conferences He is a life member of the organisations who sponsor these conferences The Government of Bihar vide its DO letter No 2740 dated 22nd October 1991 sent to the Union Ministry of Home Affairs had recommended him for the prestigious national award of Padmashree for his services as a Member of the Public Service Commission The President of India on 15th March 1992 conferred on him National Award which reads this national award is given to Dr Shiva Jatan Thakur in public recognition of his outstanding performance as the most efficient employee He has also referred to the circumstances under which his present appointment came to be challenged nearly 9 12 months after it was made While he was appointed on 4th March 1991 the writ petition was filed in the High Court on 14th January 1992 According to him he had made a representation to the President of India the Governor of Bihar and others against the serious misconduct gross malpractice and wilful violation of the constitutional mandate by the Chairman of the Commission The present writ petition was filed in the High Court 18 days after a copy of the representation was received by the Chairman among others It is his dispute with the Chairman who according to him is backed by the Chief Minister of the State which has led to the present writ petition He has also stated that the Chief Minister in his press interview given to the local Urdu daily viz Qaumi Tanzeem and published on 27th March 1992 had made his intentions public to move this Court against his ap pointment Those averments are not controverted According to him further it was on account of his academic distinctions and with the full knowledge that he was totally blind from childhood that he was appointed as a Member of the Public Service Commission He has also stated that his blindness never came in his way either in the pursuit of his studies or in his service as a teacher His experience in the public Commission also showed that the said defect did not come in his way of 525 discharging his duties effectively In this connection he points out that the only thing he cannot do is to assess the individual s external personality on the basis of the candidates external appearance which is not a material requirement for the candidates for many posts He has further added that the Commission sits in Committees or interview boards and every Committee usually consists of four or five persons including members of the Commission and experts from the respective departments The marks awarded to the candidates are agreed upon after due discussions and deliberations in the interview board The advice of the experts is a determinative factor in such decisions When the members of the interview board with non technical and non professional qualifications interview candidates for technical and professional posts they do so with the aid and advice of the experts from the concerned departments Hence if he is required to depend upon the opinion of the other members of the interview board for the external appearance of the candidates that is not a dependence of a kind which vitiates the assessment of the interview board as a whole In any case the dependence is not worse than the dependence of the members of the board on the opinion of the experts when they are not qualified to adjudge the candidates for posts requiring the relevant expertise The State Government has lent a tragicomic touch to the controversy by filing its affidavit the relevant contents of which deserve reproduction here for reasons more than one The pathos is made poignant by the fact that the affiant Shri RC Vaish Resident Commissioner of the State at New Delhi in his letter which is placed on record has stated that the draft affidavit was approved by Hon ble the Chief Minister of the State He has also stated that he has been authorised by the Secretary of the concerned department to swear the affidavit The relevant portion of the affidavit reads as follows That the respondent State upon reconsideration of the entire matter under controversy feels that the words of the Constitution have to be interpreted in letter and spirit and any departure from the express words of the Constitution wherever such departure seems to be permissible under the Constitution should be done only for sound and good reasons In the instant case the departure with regard to appointment of members of the Bihar Public 526 Service Commission was made only because the proviso to Article 316 1 of the Constitution is not mandatory Accordingly while appointment the respondent No 6 as the seventh non government member of the BPSC the mandate of proviso to Article 316 1 was not followed it is felt that the fact that proviso to Article 3161 not being mandatory is by itself not a good ground for departing from the suggestion of the Constitution and accordingly the appointment of respondent No 6 as member of the State Public Service Commission cannot be justified At the time of appointment of respondent No 6 as a member of the Bihar Public Service Commission he was the seventh nongovernment member when at that time there were only four government members in a total strength of eleven members in the BPSC That with ragard to the infirmity of the respondent No 6 it is submitted that at the time of appointment of respondent No 6the aspect about his blindness was not specifically considered the same was stated in the Bio data of the respondent No 6 in a very casual way and in such a manner that in had escaped the attention of the Constitutional authorities at the time of recommending the respondent No6 for appointment to the post of member the BPSC In this regard it is submitted that the respondent No 6 in his Bio data while praising his achievements had only stated that he is the first blind person to have been awarded PhD There was no mention whether such blindness was subsequent to birth or whether such blindness was congenial There was also no details in the Bio data stating whether such blindness was complete or the some was partial temporary curable or not curable In thesefacts the aspect about the blindness of the respondent No 6 was not specifically considered by any of the Constitutional Authorities who are involved in the appointment of a member to the State Public Service Commission That in this regard it is further submitted that the nature of duty of a member of a Public Service Commis 527 sion is primarily to make selections for appointments the various Govt jobs of the State and accordinly while making such recommendations the member of the State Public Service Commission has to interview the eligible candidates While conducting such interview the member of the State Public Commission is to visually interview each candidate to determine his suitable After the appointment of the respondent of the respondent No 6 it has come to the notice of the respondent No 6 it has come to the respondent No 6 is clearly hampering the effective discharge of official duties by the respondent No 6 Emphasis supplied To appreciate the first attack against the appointment it is necessary to reproduce the provisions of Article 3161 and 2 of the Constitution which relate to the appointment and the term of office of the members of the Public Service Commissions 316 Appointment and term of office of members 1 The Chairman and other members of a Public Service Commission shall be appointed in the case of the Union Commission or a Joint Commission by the President and in the case of a State Commission by the Government of the State Provided that as nearly as may be one half of the members of every Public Service Commission shall be persons who at the dates of their respective appointments have held office for at least ten years either under the igovernnient of India or under the Government of a State and in computing the said period of ten years any period before the commencement of this Constitution during which a person has held office under the Crown in India or under the Government of an Indian State shall be included 1 A x x x x x 2 A member of a Public Service Commission shall hold 528 office for a term of six years from the date on which he enters upon his office or until he attains in the case of the Union Commission the age of sixty five years and in the case of State Commission or a Joint Commission the age of sixty two years whichever is earlier Provided that a a member of a Public Service Commission may by writing under his hand addressed in he case of the Union Commission or a Joint Commission to the President and in the case of a State Commission to the Governor of the State resign his office b a member of a Public Service Commission may be removed from his office in the manner provided in clause 1 or clause 3 of Article 317 3 x x x x XI It is apparent from these provisions that the Chairman and other members of the State Public Service Commission are appointed by the Governor of the State The appointments are obviously made on the advice of the Council of Ministers of the State The proviso to Clause 11 of the Article requires that as nearly as may be one half of the members of the Commission shall be persons who on the dates of their respective appointments have held office for at least ten years either under the Government of India or under the Government of a State For brevity s sake we may refer to this category of members as service members The expression as nearly as may be itself suggest that the proportion of 50 of the service members is not exact but approximate and is meant not to be mandatory but directory The said proviso does not in terms say that in no case and at no point of time the said proportion should either go above or fall below 50 In the very nature of things a strict adherence to the said direction is not practicable at any particular point of time In the first instance the superannauation age of the member of the Commission is 62 years and his total tenure as a member cannot exceed six years He has to vacate his office either when his tenure comes to an end or when he attains the age of 62 years whichever is earlier When the members are appointed they are bound to differ in age whether they belong to the service category 529 or the non service category In the normal course they would retire at different points of time If it is insisted as is done on behalf of the appellant that the said requirement must be followed strictly at all times it would be well nigh impossible to do so Every time a member whether belonging to the service or the non service category retires there should be available a suitable person from the same category to be appointed in his place It is not always possible to make an advance list of persons of either category who are suitable for such appointments Hence the total strength of the Commission as well as the number from each of the categories are bound to vary from time to time At any given point of time therefore it may not be possible to maintain the proportion between the two categories strictly in accordance with the direction given in the Constitution It appears that it is for this reason that the words at least half used in the proviso to Section 265 1 of the Government of India Act 1935 corresponding to the present proviso to Article 316 11 have been substituted by the words as nearly as may be one half The learned counsel appearing for the appellant however submitted that the expression as nearly as may be one half has been used to convey that a fraction may be ignored if the total number of members cannot be exactly halved between service and non service categories We are afraid that this argument is too simplistic The fraction is and ran be taken care of without the aid of such expression and a document like the Constitution does not have to incorporate the normal rules of interpretation It is clear that the framers of the Constitution realised that to make the provision rigid was both inadvisable and unnecessary We have already demonstrated its impracticability It can further hardly be suggested that the need to have 50 from the service category is of such paramount importance to the composition of the Commission that the breach of it at any particular point of time would defeat the very object of constituting the Commission The purpose for which the said provision is made is obvious It was realised by the framers of the Constitution that the democratic system can be maintain only if civil servants are appointed solely on the basis of their merit adjudged by open competition and only if they can carry of the administration according to law independently instead of under pressure of their political superiors Hence they provided for Public Service Commissions as both the Union and the State level as autonomous bodies to enable then to carry on their functions independently fairly and impartially Since the Commission s main task was to recruit administrative personnel it was 530 necessary to have on the Commission members with sufficient administrative experience To induct persons of experience it was imperative to provide that a certain proportion of the members of the Commission should have had an actual experience of running the administration so that the Commission is better able to adjudge the fairness of firness of persons to be recruited in the administration However the very fact that the Service Commission was not proposed to be constituted of the members from the service category exclusively also shows that the framers of the Constitution did not desire that the outlook of the service members alone should prevail while recruiting the personnel The view of the persons from outside the administration was also considered to be equally imperative in selecting the personnel A balance was therefore sought to be struck by providing the e in Detecting the proportion between the two categories of members It would however be naive to suggest on that account that the framers of the Constitution presumed to ensure that on all occasions there shall be an exact balance of views It is unrealistic to believe that individuals with different backgrounds always insist on the acceptance of the outlook dictated by their background alone and refuse to share the view point of others It is certainly not expected of the members of such high ranking Constitutional body as the Public Service Commission We cannot also lose sight of the fact that the Service Commissions mostly sit in Committees and are aided and assisted by the experts from the concerned faculties disciplines and departments The Committees take their decision collectively after due deliberations and discussions It is therefore the composition of these Committees and not so much the composition of the Commission at any particular point of time that matters Hence we are unable to subscribe to the view that the proviso to Article 316 1 requiring that as nearly as may be one half of the members of the Public Service Commission shall be from service category leaves no option to the Appointing Authority under any circumstance whatever to allow reduction of representation from that category and a breach of the said requirement by reason of appointment of a member from non service category vitiates such appointment or the duties performed by such appointee as a member of the Public Service Commission The learned counsel for the appellant went so far as to contend that the said requirement constituted a qualification of the member to be appointed every time a vacancy is to be filled According to him depending 531 upon the shortfall in the representation of the respective category the member to be appointed has to be either form the service or non service category as the case may be and that is an essential qualification for his appointment The argument was that is an essential as in the present case the representation of the service members of the Commission fell short of 50 then all persons to the appointed on the Commission till the said proposition was made up had to be from the service ctegory that being their necessary qualification It is not possible to accept this contention for the simple reason that as pointed out earlier it may be possible to get a suitable person either from service or non service category over a period of time and for want of suitable candidates from the concerned category the vacancies on the Commission may remain unfilled during that period The persons from the other category are available during that period The reasonable interpretation of the said proviso therefore is to treat it not as a strict rule to be enforced but as a binding gudeline to be followed in practice in spirit as far as possible and without deliberately flouting it Hence it is not possible to hold that merely because at the time of appointment of respondent No 6 there were four service members and six non service members he was disqualified for being appointed as the 7th member from the non service category The second attack which is based upon the blindness of respondent No6 is equally myopic As has been pointed out earlier respondent no6 been blind from his childhood In spite of his blindness he acquired high educational qualifications and in fact at the time of his appointment he was an Associate Professor in the Patna University He is an acknowledged scholar of English Although the Government has now come forward to disown any knowledge about his complete blindness from the childhood with which we will deal instantly they must be presumed to have known the said infirmity and should be deemed to have formed the opinion that in spite of his blindness he was fit to be a member of thel Commission We see no reason to hold otherwise in the circimstances pointed out by respondent No 6 in his affidavit to which we have already referred Nothing concrete has also been brought on record to show that he has failed ot perform his duties as a member of the Commission efficiently because of his blindness On the other hand as has been pointed out earlier the State Government itself had recommended him for Padmashree for his efficient discharge of the work as a member of the Commission and that too over a short span of few months We are also in agreement with the contentin advanced on his behalf that 532 except the external appearance of the candidates appearing before him he is able to ascertain the required merits or demerits of the Candidates as do the other members of the Commission The Commission as it normally should operates through Committees and as regards the external appearance the other members of the Committees give him the required information on the basis of which he is able to assess the overall merit of the candidates The external appearance of the candidates is also not of importance in all ap pointments What is futher necessary to note is that for selecting the candidates for almost all disciplines and departments the experts from the concerned departments do sit in the Committees and the opinion of the experts ordinarily prevails in such appointments since the members of the Committees who are the members of the Commission do not have the expertise in the relevant fields This shows that all members of the Commission sitting on the interview Committees have also to be guided in their opinion by the experts If respondent No 6 has to take guidance only in the matter of external appearance of the candidates all members of the Commission have to be guided by the experts with regard to the most vital equipment of the candidates viz the intellectual calibre and the proficiency of the candidates in the relevant subjects There is therefore nothing wrong if only for external appearance for which only a small percentage of the total marks is reserved respondent No 6 has to depend on the advice opinion or guidance of the other members of the Committees and the Commission The decision of the interview board is always a collective one and is taken after deliberation on the merits and demerits of the candidates which are evaluated on the basis of various factors We are therefore unable to see as to how in the circumstances respondent No 6 is unfit to carry on his duties as a member of the Commission because of his blindness The attack however was sought to be strengthened by relying on the provisions of sub clause c of Clause 3 of Article 317 of the Constitution which provides for removal of a member of the Public Service Commission on the ground that he is in the opinion of the President unfit to continue in office by reason of infirmity of mind or body The argument was that the blindness was infirmity of body and if it is a ground for removal from office it is much more a disqualification for appointment and hence respondent No 6 should be prevented from continuing in his office We are afraid that the first premise on which this limb of the argument is based misses the obvious fact viz that by infirmity of body 533 what is spoken of in the sub clause in question is an infirmity which disables the Member from discharging his functions as such member effectively It is not every infirmity of body or every loss of use of any limb of the body The defect or deficiency must be such as would disable the Member from carrying out his duties satisfactorily and consistent with the trust reposed in him We have already pointed out that not only the blandness of respondent No 6 does not prevent him from discharging his duties expected of him but in fact the services rendered by him as such member have been eulogised and commended for a National Award by no other than the State Government itself and the Chairman of the Commission who had the first hand knowledge of his functioning This is apart from the fact that the Governor who appointed him on the advice of the Council of Ministers is presumed to have done so after satisfying himself that the loss of eye sight was not an infirmity which would impede him in the discharge of his duties The infirmity of body or mind which is referred to in the sub clause further must necessarily be such as has arisen after the appointment and not the one which existed at the time of the appointment unless of course the Government was unaware of the same at the time of the appointment We may now turn to the affidavit filed on behalf of the State Government A reading of the said affidavit leaves no doubt in our mind that it has been filed only to prejudice the case of respondent No 6 before us because for some reasons he has fallen foul some persons in power As is evident from the portions of the affidavit reproduced above firstly a case is sought to be made out there that respondent No6 was appointed as the non Government member of the Commission only because the proviso of Article 316 11 is not mandatory That may be so But the affidavit then proceeds to state almost in relenting terms that although the said proviso is not mandatory that by itself is not a good ground for departing from the suggestion of the Constitution and hence the appointment of respondent No 6 as the 7th non Government member was not justified It is not clear as to when this wisdom dawned on the Government for the first time The record further does not show as to who had suggested his name to the Governor and whether the decision was taken by the Council of Ministers as a whole or by the Chief Minister or any of his colleagues alone and what advice was received or obtained by them if at all while making the appointment We are however happy to know that 534 the State Government upon reconsideration of the entire matter under controversy feels that the words of the Constitution have to be interpreted in letter and spirit and any departure from the express words of Constitu tion should be done only for sound and good reasons We only hope that the State Government keeps that solemn declaration in mind for all purpose and for all times to come and does not forget it the moment the ink in the present proceedings dries But more breast beating of the Government is on the second issue viz the blindness of respondent no6 The affidavit states that at the time of the appointment the aspect about his blindness was not specifically considered as the same was stated in the Bio data of the respondent No 6 in a very casual way and in such a manner that it had escaped the attention of the Constitutional authorities at the time of recommending the respondent no6 for appointment not to be outdone by this ludicrous averment the affidavit proceeds to state that respondent No 6 in his bio data while praising his achievements had only stated that he is the first blind person to have been awarded PhD There was no mention whether such blindness was subsequent to birth or whether such blindness was congenital There was sic also no details in the Bio data stating whether such blindness was complete or the same was partial temporary curable or not curable It is then the case of the State Government that in the view of these facts the aspect above the blindness of the respondent No 6 was not specifically considered by any of the Constituitonal authorities who are involved in the appointment of a member to state Public Service Commission Since the affiant himself has brought into picture the Constitutional Authorities who are involved in the appointment the aspect of the blindness of respondent no6 was not specifically of a member to the State Public Service Commission and has Stated that considered by them we cannot help observing that the affiant by making such statement as made the Constitution authorities look ridiculous and their functioning a mockery in the eyes of the public We are anguished more on account of the that state Government should have considered it compulsive to allow such blatantly rabid statement s to be made on the oath with impunity No responsible public authority could have aware the that respondent No6 was totally blindly from his childhood when that made the client that none of the constitutional functionaries concerned was fact must have been widely known in the State and in all probability the extra ordinary abilities exhibited by him despite his blindness must have 535 been the main reason for his appointment as a member of the Public Service Commission Any statement seems to be good enough whether true or untrue so long as it is considered serviceable for thee immediate purpose in hand We refrain from making more comments which certainly such affidavits deserve in ample measure and let the affidavit speak for itself The affidavit further states that while conducting the interviews members of the Commission have to visually interview each of the candidates to determine his suitability and after the appointment of respondent No 6 it has come to the notice of the respondent State that the blindness of the respondent No 6 is clearly hampering the effective discharge of official duties by him It is necessary to remember in this connection that this affidavit has been filled on 23rd January 1993 Respondent No6 had filed his affidavit on 7th October 1992In that affidavit respondent No 6 has among other things referred tothe certificate given by respondent No5 Dr Ram Ashray Yadav Chairma of the Public Service Commission on 11th September 1991 where he has stated that respondent No 6 has been performing his duties with exceptional excel lence without letting his blindness hinder his work I strongly recommend that Dr Thakur be awarded National Award in recognition of his excellence despite his blindness He has also referred in his affidavit to the letter of 22nd October 1991 of the State Government to the Union Home Ministry recommending him forthe award of Padmashree for his services as a Member of the Public Service Commission Neither the certificate nor the letter has been controverted by the Chairman and the Government In the face of the certificate and the Said recommendatory letter it is difficult to understand the basis on which it is now stated in the affidavit that the blindness of respondent No6 is hampering his work There is therefore no doubt in our mind that the affidavit has been filed for the only purpose of seeking somehow the removal of respondent no6 Respondent No 6 in his affidavit has alleged that he has since fallen but the respondent No 5 the Chairman of the Commission and the Chairman is bent upon ousting him from the Commission To shows the animosity of the Chairman towards him he has given a list of events alongwith his affidavit These events have not been in controverted The High Court has referred to some of these events in paragraph 6 of its judgment Since they have a bearing On the Governments comments on his performance we may reproduce the events catalogued by the High Court 536 1 His PA has been replaced 2 His chamber which contains two almirahs containing documents has been locked up 3 The service of the reader who is to read to him documents and journals and other papers is not being provided to him and his services have been terminated 4 The use of staff car by him has been stopped 5 His orderly has been transferred 6 The Chairman of the Commission has issued instructions not to receive any document from him or to obey his orders 7 His telephone bill for the month of Oct 1991 for Rs 598 only has not been paid though a sum of Rs 18154 on account of telephone bill of the Chairman s residence has been paid The newspaper allowance payable to him is not being paid 9 He has not been allowed to attend the meetings of the Commission held on 11th December 20th December and 31st December 1991 and he is not aware when any other meeting has been held thereafter or not in as much as he has not been provided with any notice in respect of the same 10 He has been physically prevented from going to inside sic the campus of the Commission since 28th of November 1991 In the list of events accompanying his counter affidavit he has also referred to other incidents such as the attempted physical assault on him by the Chairman during a meeting of the Commission the threats of physical liquidation administered from the telephonic line of the Chairman the complaints made by him to the police to the Chief Minister and to the 537 Governor etc We do not desire to burden this judgement with the said details it is also not necessary to make any comment upon the aforesaid events since they speak for themselves They only reinforce the conclusion that the belated claim of the State Government that the appointment of respondent No6 is invalid and that his blindness hampers the discharge of his duties has its obvious roots in the strained relations between him on the one hand and the Chairman and the State Government on the other While therefore dismissing appeal in the special facts of the case we also direct both the appellant and the respondent State of pay the costs of this appeal to respondent No6 in the amounts of Rs 5000 and Rs 10000 respectively PSS Anneal dismissed

The State of Kerala issued Notification RSO 415 of 1971 under Section 10 of the Kerala General Sales Tax Act providing for an exemption in respect of tax in regard to the turn over of the sales of newsprint for a period of two years from the date of starting production of the newsprint plant The appellant entered into an agreement with the State Government in 1974 giving the said exemption A major portion of the newsprint manufactured at the factory located within the State was sold in the course of inter state trade and commerce and during the assessment years relevant to the period of the two years from the date of the commencement of the production the appellant claimed exemption not only from the State Sales Tax by virtue of the 1971 Notification and the 1974 agreement but also from the Central Sales Tax under and by virtue of sub section 2A of Section 8 of the The Sales Tax Officer accepted the claim under the State Sales Tax Act but rejected the claim under the Appeals preferred by the appellant to the Appellant Assistant Commissioner and the Sales Tax Appellant Tribunal were dismissed and when the appellant approached the High Court by way of revision under Section 41 of the State Sales Tax Act the High Court also dismissed the revisions petitions 656 In the appeals to this Court it was contended on behalf of the appellant relying on Pine Chemicals Limited vs Assessing Authority 199 2 SCC 683 that the exemption granted to It by the 1971 State Government notification Issued under the Kerala Sales Tax Act Is a general exemption within the meaning of Section 82A and therefore the inter state sales effected by it are equally exempt from Central Sales Tax by virtue of Section 82A The State contested the appeals by contending that the exemption granted to the appellant under the State Sales Tax is not a general exemption but a conditional one and that the exemption operates only in certain specified circumstances and that the provision contained in Section 82A does not go to exempt the inter state sales of the appellant On the question whether the exemption granted under the 1971 State notification exempting the produce of the appellant factory manufacturing newsprint from the State Sales Tax for a period of two years from the date of commencement of production in the factory can be called An exemption from tax generally Allowing the appeals this Court HELD1 The inter state sales effected by the appellant are those failing under Section 3a of the Central Sales Tax Act The liability to pay Central Sales Tax on inter state sales arises by virtue of sub section 1 of Section 6 Sub section 2A of section 8 seeks to provide exemption to a dealer with respect to his turnover The explanation appended to the sub section is couched in negative terms and seeks to define the words exempt from tax generally and indicates when a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the State Sales Tax Law 659 B 660 B C 2An inter state sale or purchase of a commodity shall not be deemed as exempt from State Tax generally if the exemption is given only 1 in specified circumstances or under specified conditions or 2 the tax is leviable on the sale or purchase of such goods at specified stages or 3 otherwise than with reference to the turnover of the goods These conditions or limitations are with reference to the transaction of sale or purchase 663 F G 657 3The existence or otherwise of the aforesaid three limitations on claiming exemption the explanation under Section S2 A of the will have to be tested with reference to the transaction of sale or purchase as the case may be of the dealer who claims the exemption in respect of his intrastate sale or purchase of the same goods 663 H 664 A 4The facts which the dealer has to prove to get the benefit of the government orders are intended only to identify the dealer and the goods in respect of which the exemption is sought and they are not conditions or specifications of circumstances relating to the turnover sought to be exempted from payment of tax within the meaning of Section 82 A 664 E 5The conditions relating to identity of the goods and the dealer are always there in every exemption and that cannot be put as a condition of sale 664 G Pine Chemicals Limited vs Assessing Authority explained and followed 660 H Indian Aluminum Cables vs State of Haryana 38 STC 108 Industrial Cables Corporation vs Commercial Tax Officer 35 STC 1 distinguished 662 A

ON Civil Appeal No 340 of 1957 Appeal from the judgment and order dated November 29 1954 of the Hyderabad High Court in Reference No 2345 of 1953 54 K N Rajagopala Sastri B H Dhebar and D Gupta for the appellant 48 378 A V Viswanatha Sastri P Rama Reddy and R Mahalinga Iyer for the respondents March 20 The Judgment of Bhagwati and Sinha JJ was delivered by Bbagwati J Kapur J delivered a separate Judgment BHAGWATI J This appeal with a certificate from the High Court of Judicature at Hyderabad raises the question whether the sum of Rs 219343 received by the assessee in the year of account relevant for the assessment year 1951 52 was a revenue receipt or a capital receipt The facts leading up to this appeal may be shortly stated The assessee is a registered firm consisting of five brothers and the wife of a deceased brother having equal shares in the profit and loss of the partnership The firm was appointed the sole selling agents and sole distributors for the Hyderabad State for the cigarettes manufactured by Ms Vazir Sultan Tobacco Co Ltd under the terms of a resolution of the Board of Directors dated January 6 1931 Mr Baker reported that an arrangement had been come to for the time being whereby the firm of Vazir Sultan Sons were given the distributorship of Charminar Cigarettes within the H E H the Nizam s Dominions and that they were allowed a discount of 2 on the gross selling price No written agreement was entered into between the Company and the assessee in respect of the above mentioned arrangement nor was there any correspondence exchanged between them in this behalf In 1939 another arrangement was arrived at between the assessee and the company whereby the assessee was given a discount of 2 not only on the goods sold in the Hyderabad State but on all the goods sold in the Hyderabad State and outside Hyderabad State It does not appear that the Board of Directors passed any resolution in support of this new arrangement nor was any agreement drawn up between the parties incorporating the said new ar rangement 379 On June 16 1950 the Board of Directors passed the following resolution reverting to the old arrangement embodied in the resolution dated January 61931 The Chairman having referred to resolution No 24 passed at the board meeting held on 6 1 31 and having reported that Vazir Sultan Sons had agreed to revert to the arrangement outlined in that resolution with effect from 1 6 50 it was on the proposition of Mr section N Bilgrami seconded by Mr N B Chenoy resolved that payment of the sum of O section Rs 226263 be made to Vazir Sultan Sons by way of compensa tion Vazir Sultan Sons to pay D B Akki Co out of that amount the sum of O section Rs 6920 also by way of compensation Mr Mohd Sultan Mr Hameed Sultan stated that as partners in the firm of Vazir Sultan Sons they did not take part in this resolution although they had accepted on behalf of Vazir Sultan Sons the terms thereof The sum of Rs 219343 was accordingly received by the assessee in the year of account 1359 F The Income tax Officer included this sum in the assessee s total income and taxed it as a revenue receipt On appeal the Appellate Assistant Commissioner held that the sum of Rs 219343 was not a revenue receipt but a capital receipt being compensation for the loss of the agency and as such not liable to tax The Income tax Officer C Ward Hyderabad thereupon preferred an appeal to the Income tax Appellate Tribunal Bombay which held that the said sum received by the assessee was a revenue receipt and liable to tax The assessee then applied to the Appellate Tribunal for a reference to the High Court under sec 661 of the Income tax Act and the Tribunal accordingly referred the following question of law to the High Court Whether the sum of O section Rs 219343 received by the assessee Firm from Vazir Sultan Tobacco Co Ltd is a revenue receipt or a capital receipt The High Court answered the question in favour of the assessee stating the question in a different form viz 380 Whether the sum of O section Rs 219343 received by the assessee firm from Vazir Sultan Tobacco Co Ltd is liable to be taxed under the Indian Incometax Act The appellant thereafter applied to the High Court for a certificate of fitness which was granted by the High Court on February 21 1955 and hence this appeal The question that falls to be determined is whether the sum which was in express terms of the resolution mentioned by way of compensation for the loss of the agency was a revenue receipt trading receipt or an income receipt as contended by the Revenue or a capital receipt as contended by the assessee It was urged on behalf of the appellant that the sole selling agency which was granted by the Company to the assessee in the year 1931 was merely expanded as regards territory in 1939 and what was done in 1951 was to revert to the old arrangement and the structure or the profit making apparatus of the assessee s business was not affected thereby The expansion as well as the restriction of the assessee s territory were in the ordinary course of the assessee s business and were mere accidents of the business which the assessee carried on and the sum of Rs 219343 received by the assessee as and by way of compensation for the restriction of the territory was a trading or an income receipt and was therefore liable to tax It was on the other hand contended on behalf of the assessee that it did not carry on business of acquiring and working agencies that the agency acquired in 1931 was a capital asset of the assessee s business of distributing Charminar cigarettes in the Hyderabad State that the expansion of territory outside the Hyderabad State in 1939 was an accretion to the capital asset already acquired by the assessee that the resolution of 1950 was in substance a termination or cancellation of the agency qua territory outside the Hyderabad State and resulted in the sterilisation of the capital asset qua that territory that the sum of 381 Rs 219343 received by the assessee in the year of account was by way of compensation for the termination or cancellation of the agency outside Hyderabad State and being therefore compensation for the sterilisation pro tanto of a capital asset of the assessee s business was a capital receipt and was therefore not liable to tax The question whether a particular receipt is a revenue receipt or a capital receipt or a particular expenditure is a capital expenditure or a revenue expenditure is beset with considerable difficulty and one finds the Revenue and the assessee ranged on different sides taking up alternate contentions as it suits their purposes As was observed by Lord Macmillan in Van Den Berghs Limited vs Clark1 The reported cases fall into two categories those in which the subject is found claiming that an item of receipt ought not to be included in computing his profits and those in which the subject is found claiming that an item of disbursement ought to be included among the admissible deductions in computing his profits In the former case the Crown is found maintaining that the item is an item of income in the latter that it is a capital item Consequently the argumentative position alternates according as it is an item of receipt or an item of disbursement that is in question and the taxpayer and the Crown are found alternately arguing for the restriction or the expansion of the conception of income The question has therefore to be dealt with irrespective of the one stand or the other which is taken by the Revenue or the assessee and the Court has got to determine what is the true character of the receipt or the expenditure In the case of the Commissioner of Income tax and Excess Profits Tax Madras vs The South India Pictures Ltd Karaikudi 2 this Court endorsed the following statement of Lord Macmillan in Ven Den Berghs Ltd vs Clark 1 That though in general the distinction between an income and a capital receipt was well recognised 1 429 2 228 382 and easily applied cases did arise where the item lay on the border line and the problem had to be solved on the particular facts of each case No infallible criterion or test can be or has been laid down and the decided cases are only helpful in that they indicate the kind of consideration which may relevantly be borne in mind in approaching the problem The character of the payment received may vary according to the circumstances Thus the amount received as consideration for the sale of a plot of land may ordinarily be a capital receipt but if the business of the recipient is to buy and sell lands it may well be his income While considering the case law it is necessary to bear in mind that the Indian Income tax Act is not in pari materia with the British Income Tax statutes it is less elaborate in many ways subject to fewer refinements and in arrangement and language it differs greatly from the provisions with which the courts in England have had to deal Little help can therefore be gained by attempting to construe the Indian Income tax Act in the light of decisions bearing upon the meaning of the Income tax legislation in England But on analogous provisions fundamental concepts and general principles unaffected by the specialities of the English Income tax statutes English authorities may be useful guides Vide the observations of the Privy Council in the Commissioner of Income tax vs Shaw Wallace Co 1 Gopal Saran Narain Singh vs Commissioner of Income tax 2 Commissioner of Income tax Bombay Presideney and Aden vs Chunnilal B Mehta 3 and Raja Bahadur Kamakshya Narain Singh of Ramgarh vs C I T Bihar Orissa 4 Before embarking upon a discussion of the principles emerging from the various decisions bearing upon this question it is necessary to advert to an argument which was addressed to us by the learned counsel for the appellant in connection with the Privy Council decision in the Commissioner of Income tax vs Shaw Wallace Co 1 That case was relied upon by the 1 1932 LR 59 IA 206 212 2 1935 LR 62 IA 207 214 3 1938 LR 65 I A 332 349 4 1943 LR 70 IA 180 188 383 Appellate Assistant Commissioner and the High Court as determinative of the question in favour of the assessee and it was strenuously urged before us on behalf of the Revenue that the authority of that decision was considerably shaken not only by the later privy Council decision in Raja Bahadur Kamakshya Narain Singh vs C I T Bihar and Orissa 1 but also by a decision of this Court in Raghuvansi Mills Ltd vs Commissioner of Income tax Bombay City 2 It may be remembered that the term income was understood by their Lordships of the Privy Council in Shaw Wallace s Case3 to connote a periodical monetary return coming in with some sort of regularity or expected regularity from definite sources The source may not necessarily be one which is expected to be continuously productive but it must be one whose object is the production of a definite return excluding anything in the nature of a mere windfall Income was thus likened pictorially to the fruit of a tree or the crop of a field lbid p 212 This concept of income was adopted and in substance repeated by the Privy Council in Gopal Saran Narain Singh s Case 4 at p 213 though Lord Russell of Killowen pronouncing the opinion of the Privy Council pithily remarked that anything which can properly be described as income is taxable under the Act unless properly exempted The case of Raja Bahadur Kama kshya Narain Singh 1struck a discordant note and Lord Wright delivering the opinion of the Board observed at p 192 that it was not in their Lordships opinion correct to regard as an essential element in any of these or like definitions a reference to the analogy of fruit or increase or sowing or reaping or periodical harvests and that such picturesque similes cannot be used to limit the true character of income in general Lord Wright further observed at p 194 Its applicability may in particular cases differ because the circumstances though similar in some respects may be different in others Thus the profit realised on a sale of shares may be capital if the seller 1 1943 LR 70 IA 180 188 2 1953 SCR 177 3 1932 LR 59 I A 206 212 4 1935 LR 62 IA 207 2I4 384 is an ordinary investor changing his securities but in some instances at any rate it may be income if the seller of the shares is an investment or an insurance company Income is not necessarily the recurrent return from a definite source though it is generally of that character Income again may consist of a series of separate receipts as it generally does in the case of professional earnings The multiplicity of forms which income may assume is beyond enumeration Generally however the mere fact that the income flows from some capital assets of which the simplest illustration is the purchase of an annuity for a lump sum does not prevent it from being income though in some analogous cases the true view may be that the payments though spread over a period are not income but instalments payable at specified future dates of a purchase price Vide Secretary of State for India vs Scoble 1 This Court in Raghuvansi Mill s Case 2 also observed that the definition of income in Shaw Wallaces Case 3 as a periodical monetary return coming in with some sort of regularity or expected regularity from definite sources must be read with reference to the particular facts of that case It was therefore urged on behalf of the Revenue that periodicity or recurring nature of the receipt was not a necessary ingredient of income nor was the existence of a material external source capable of producing a recurrent return necessary before a receipt could be treated as income chargeable to tax We are not unmindful of this criticism of the definition of income adopted by the Privy Council in Shaw Wallace Co s Case 3 and the concept of income may have to be thus revised But even granting the proposition that is contended for by the Revenue the result is no different in the present case because the head of income under which the assessee before us has been assessed to Income tax is business a definite source from which the income in question sought to be assessed is alleged to have been 1 2 3 1932 LR 59 IA 206 212 385 derived and whether it is of a recurring or non recurring nature therefore does not enter into the picture The exemption from liability in regard to that income is claimed by the assessee not on the ground of the applicability of section 43vii of the Income tax Act but on the ground that it is not a revenue receipt but a capital receipt being compensation paid by the Company to the assessee for the termination or cancellation of the agency qua territory outside Hyderabad State a capital asset of the assessee s business What then are the considerations which have to be borne in mind in determining these vexed questions The distinction between a capital expenditure and a revenue expenditure came up for consideration before this Court in Assam Bengal Cement Co Ltd vs The Commissioner of Income tax West Bengal 1 and this Court laid down certain criteria for the determination as to whether a particular expenditure incurred by the assessee was a capital expenditure or a revenue expenditure We need not therefore discuss that problem any further As to whether a particular receipt in the hands of an assessee is a capital receipt or a revenue receipt we had occasion to consider the same in the Commissioner of Income tax and Excess Profits Tax Madras vs The South India Pictures Ltd Karaikudi 2 The assessee there carried on the business of distribution of films In some instances the assessee used to produce or purchase films and then distribute the same for exhibition in different cinema halls and in other cases used to advance monies to producers of films produced with the help of monies so advanced In the course of such business it advanced monies to the Jupiter Pictures for the production of these films and acquired the rights of distribution of the three films under three agreements in writing dated September 1941 July 1942 and May 1943 In the accounting year ending March 31 1946 and in the previous years the assessee had exploited its rights of distribution of the three pictures On October 31 1945 the 1 2 228 49 386 assessee and the Jupiter Pictures entered into an agreement cancelling the three agreements relating to the distribution rights in respect of the three films and in consideration of such cancellation the assessee was paid Rs 26000 in all by the Jupiter Pictures as compensation It was held by the Majority of this Court that the sum received by the assessee was a revenue receipt and not a capital receipt assessable under the Indian Income tax Act inasmuch as 1 the sum paid to the assessee was not truly compensation for not carrying on its business but was a sum paid in the ordinary course of business to adjust the relation between the assessee and the producers of the films 2the agreements which were cancelled were by no means agreements on which the whole trade of the assessee had for all practical purposes been built and the payment received by the assessee was not for the loss of such a fundamental asset as was the ship managership of the assessee in Barr Crombie Co Ltd vs Commissioners of Inland Revenue 1 and 3one could not say that the cancelled agreements constituted the framework or whole structure of the assessee s profit making apparatus in the same sense as the agreement between the two margarine dealers in Van Den Berghs Ltd vs Clark 2 was The criteria laid down by the majority judgment for determining whether the particular payment received by the assessee was income or was to be regarded as a capital receipt were iwhether the agreements in question were entered into by the assessee in the course of carrying on its business of distribution of films and ii whether the termination of the agreements in question could be said to have been brought about in the ordinary course of business so that money received by the assessee as a result of or in connection with such termination of agreements could be regarded as having been received in the ordinary course of its business and therefore a trading receipt 1 2 429 387 A similar question arose in Commissioner of Incometax Nagpur vs Rai Bahadur Jairam Valji1 where this Court followed the same line of reasoning The question there related to a sum of Rs 250000 received by the assessee as damages or compensation for the premature termination of a contract dated May 9 1940 The High Court on a reference under section 661 of the Income tax Act had held that the sum was a capital receipt in the hands of the assessee and as such not liable to be taxed It was contended on behalf of the Revenue that the contract dated May 9 1940 was one entered into by the assessee in the ordinary course of his business that the sum of Rs 250000 was paid admittedly as solatium for the cancellation of that contract and that it was therefore a revenue receipt The assessee on the other hand contended that the contract dated May 9 1940 was for a period of 25 years of which more than 23 years had still to run at the time of the settlement and it was therefore capital in character Moreover the true character of the agreement was that it brought into existence an arrangement which would enable him to carry on a business and was not itself any business and any payment made for the termination of such an agreement was a capital receipt This Court on the facts and circumstances of the case came to the conclusion that the contract in question was entered into by the assessee in the ordinary course of business and was one entered into in the carrying on of that business The arrangement ultimately entered into between the parties in regard to the payment of the said sum of Rs 250000 was accordingly treated as an adjustment made in the ordinary course of business and the receipt was therefore held to be an amount paid as solatium for the cancellation of a contract entered into by a person in the ordinary course of business In the course of the discussion reference was made to agency agreements and this Court observed In an agency contract the actual business consists in the dealings between the principal and his 1 1959 Supp 1 SCR 110 163 388 customers and the work of the agent is only to bring about that business In other words what he does is not the business itself but something which is intimately and directly linked up with it It is therefore possible to view the agency as the apparatus which leads to business rather than as the business itself on the analogy of the agreements in Van Den Berghs Ltd vs Clark 1 Considered in this light the agency right can be held to be of the nature of a capital asset invested in business But this cannot be said of a contract entered into in the ordinary course of business Such a contract is part of the business itself not anything outside it as is the agency and any receipt on account of such a contract can only be a trading receipt This Court further emphasised the distinction between an agency agreement and a contract made in the usual course of business and pointed out that the agreement could in any event be regarded as a capital asset of the agent which would be saleable Such a concept would certainly be out of place with reference to a contract entered into in the course of business and any payment made for the non performance or cancellation of such a contract could only be damages or Compensation and could not in law or fact be regarded as an assignment of the rights under the contract Once it was found that the contract was entered into in the ordinary course of business any compensation received for its termination would be a revenue receipt irrespective of whether its performance was to consist of a single act or a series of acts spread over a period While thus indicating that an agency could be treated as a capital asset of the business this Court guarded itself against its being understood as deciding that the compensation paid for cancellation of an agency contract must always and as a matter of law be held to be a capital receipt and it made the following pertinent observations Such a conclusion will be directly opposed to the decision in Kelsall s case 2 and the Commissioner 1 429 2 389 of Income tax and Excess Profits Tax Madras vs The South India Pictures Ltd Karaikudi 1 The fact is that an agency contract which has the character of a capital asset in the hands of one person may assume the character of a trading receipt in the hands of another as for example when the agent is found to make a trade of acquiring agencies and dealing with them The principle was thus stated by Romer L J in Golden Horse Shoe New Ltd vs Thurgood 2 The determining factor must be the nature of the trade in which the asset is employed The land upon which a manufacturer carries on his business is part of his fixed capital The land with which a dealer in real estate carries on his business is part of his circulating capital The machinery with which a manufacturer makes the articles that he sells is part of his fixed capital The machinery that a dealer in machinery buys and sells is part of his circulating capital as is the coal that a coal merchant buys and sells in the course of his trade So too is the coal that a manufacturer of gas buys and from which he extracts his gas Therefore when a question arises whether a payment of compensation for termination of an agency is a capital or a revenue receipt it would have to be considered whether the agency was in the nature of capital asset in the hands of the assessee or whether it was only part of his stock in trade Thus in Barr Crombie Sons Ltd vs Commissioners of Inland Revenue 3 the agency was found to be practically the sole business of the assessee and the receipt of compensation on account of it was accordingly held to be a capital receipt while in Kelsall s case the agency which was terminated was one of several agencies held by the assessee and the compensation amount received therefor was held to be a revenue receipt and that was also the case in the Commissioner of Income tax and Excess Profits Tax Madras vs The South India Pictures Ltd Karaikudi 1 We may in this context also note the further observations made by this Court 1 228 2 300 3 390 But apart from these and similar instances it might in general be stated that payments made in settlement of rights under a trading contract are trading receipts and are assessable to revenue But where a person who is carrying on business is prevented from doing so by an external authority in the exercise of a paramount power and is awarded compensation therefor whether that receipt is a capital receipt or a revenue receipt will depend upon whether it is compensation for injury inflicted on a capital asset or on a stock in trade The decision in the Glenboig Union Fireclay Co Ltd vs The Commissioners of Inland Revenue 1 applies to this category of cases There the assessee was carrying on business in the manufacture of fire clay goods and had for the performance of that business acquired a fire clay field on lease The Caledonian Railway which passed over the field prohibited the assessee from excavating the field within a certain distance of the rails and paid compensation therefor in accordance with the provisions of a statute It was held by the House of Lords that this was a capital receipt and was not taxable on the ground that the compensation was really the price paid for sterilising the asset from which otherwise profit might have been obtained That is to say the fire clay field was a capital asset which was to be utilised for the carrying on of the business of manufacturing fire clay goods and when the assessee was prohibited from exploiting the field it was an injury inflicted on his capital asset Where however the compensation is referable to injury inflicted on the stock in trade it would be a revenue receipt Vide the Commissioners of Inland Revenue vs Newcastle Breweries Ltd 2 It is no doubt true that this Court was not concerned with any agency agreement in the last mentioned case and the observations made by this Court there were by way of obiter dicta The obiter dicta of this Court however are entitled to considerable weight and we on our part fully endorse the same The earlier case of Commissioner of Income tax and Excess Profits Tax 1 2 391 Madras vs The South India Pictures Ltd 1 was indeed a case where the assessee had entered into agency agreements for the exploitation of the three films in question but in that case the conclusion was reached that entering into such agency agreements for acquiring the films was a part of the assessee s business and the agreements in question having been entered into by the assessee in the ordinary course of business the cancellation of those agreements was also a part of the assessee s business and was resorted to in order to adjust the relation between the assessee and the producer of those films It would not be profitable to review the various English decisions bearing on this question as they have been exhaustively reviewed in the above decisions of this Court The position as it emerges on a consideration of these authorities may now be summarised The first question to consider would be whether the agency agreement in question for cancellation of which the payment was received by the assessee was a capital asset of the assessee s business constituted its profit making apparatus and was in the nature of its fixed capital or was a trading asset or circulating capital or stock in trade of his business If it was the former the payment received would be undoubtedly a capital receipt if however the same was entered into by the assessee in the ordinary course of business and for the purpose of carrying on that business it would fall into the latter category and the compensation or payment received for its cancellation would merely be an adjustment made in the ordinary course of business of the relation between the parties and would constitute a trading or a revenue receipt and not a capital receipt We may perhaps appropriately refer at this stage to an aspect of this question which was canvassed before us with some force and it was that there was no enforceable agreement as between the assessee and the Company which could be made the subject matter of a legal claim for damages or compensation at his instance in the event of its termination or cancellation by the Company The agency agreement was 1 228 392 terminable at the will of the Company and if the Company chose to do so the assessee had no remedy at law in regard to the same It is however to be remembered that in all these cases one has really got to look to the nature of the receipt in the hands of the assessee irrespective of any consideration as to what was actuating the mind of the other party As Rowlatt J observed in the case of Chibbett vs Joseph Robinson Sons 1 As Sir Richard Henn Collins said you must not look at the point of view of the person who pays and see whether he is compellable to pay or not you have to look at the point of view of the person who receives to see whether he receives it in respect of his services if it is a question of an office and in respect of his trade if it is a question of trade and so on You have to look at his point of view to see whether he receives it in respect of those considerations This is perfectly true But when you look at that question from what is described as the point of view of the recipient that sends you back again looking for that purpose to the point of view of the payer not from the point of view of compellability or liability but from the point of view of a person inquiring what is this payment for and you have to see whether the maker of the payment makes it for the services and the receiver receives it for the services The learned Judge further observed at p 61 But at any rate it does seem to me that compensation for loss of an employment which need not continue but which was likely to continue is not an annual profit within the scope of the Income tax at all See also W A Guff vs Commissioner of Incometax Bombay City 2 where the question whether the amount paid was compensation for which the employer was liable or was a payment made ex gratia was considered immaterial for the purpose of the decision in that case It was also urged that the agency in question before us was not an enduring asset of the assessee s business as in its very nature it was terminable at will 1 60 2 393 there being no agreement or arrangement for a fixed term between the assessee and the Company On the analogy of the test laid down by this Court in Assam Bengal Cement Co Ltd vs The Commissioner of Income tax West Bengal 1 while considering the distinction between a capital expenditure and a revenue expenditure it was argued that the agency agreement in question could not be a capital asset of the assessee s business in so far as it was not of an enduring character and the compensation paid for its termination could not therefore be a capital receipt in the hands of the assessee Whatever be the position however in the case of the acquisition of an asset by the assessee by making a disbursement for the purchase of the same similar considerations would not necessarily operate when the amount is received by the assessee for the termination or cancellation of an asset of his business The character of such a receipt would indeed have to be determined having regard to the fact whether the asset in question was a capital asset of the business or a trading asset thereof For this purpose it will be immaterial whether that asset was of an enduring character or was one which was terminable at will We have therefore got to determine whether the agency in question before us was a capital asset of the assessee s business One of the relevant considerations in the matter of such determination has been whether the asset was in the nature of fixed capital or constituted the circulating capital or stock in trade of the assessee s business This question was thus dealt with by Viscount Haldane in John Smith Sons vs Moore 2 But what was the nature of what the Appellant here had to deal with He had bought as part of the capital of the business his father s contracts These enabled him to purchase coal from the colliery owners at what we were told was a very advantageous price about fourteen shillings per ton He was able to buy at this price because the right to do so was part of the 1 2 282 50 394 assets of the business Was it circulating capital My Lords it is not necessary to draw an exact line of demarcation between fixed and circulating capital Since Adam Smith drew the distinction in the Second Book of his Wealth of Nations which appears in the chapter on the Division of Stock a distinction which has since become classical economists have never been able to define much more precisely what the line of demarcation is Adam Smith described fixed capital as what the owner turns to profit by keeping it in his own possession circulating capital as what he makes profit of by parting with it and letting it change masters The latter capital circulates in this sense My Lords in the case before us the Appellant of course made profit with circulating capital by buying coal under the contracts he had acquired from his father s estate at the stipulated price of fourteen shillings and reselling it for more but he was able to do this simply because he had acquired among other assets of his business including the goodwill the contracts in question It was not by selling these contracts of limited duration though they were it was not by parting with them to other masters but by retaining them that he was able to employ his cir culating capital in buying under them I am accordingly of opinion that though they may have been of short duration they were none the less part of his fixed capital In the case before us the agency agreement in respect of territory outside the Hyderabad State was as much an asset of the assessee s business as the agency agreement within the Hyderabad State and though expansion of the territory of the agency in 1939 and the restriction thereof in 1950 could very well be treated as grant of additional territory in 1939 and the withdrawal thereof in 1950 both these agency agreements constituted but one employment of the assessee as the sole selling agents of the Company There is nothing on the record to show that the acquisition of such agencies constituted the assessee s business or that these agency agreements were entered into by the assessee in the carrying on of any such business 395 The agency agreements in fact formed a capital asset of the assessee s business worked or exploited by the assessee by entering into contracts for the sale of the charminar cigarettes manufactured by the Company to the various customers and dealers in the respective territories This asset really formed part of the fixed capital of the assessee s business It did not constitute the business of the assessee but was the means by which the assessee entered into the business transactions by way of distributing those cigarettes within the respective territories It really formed the profit making apparatus of the assessee s business of distribution of the cigarettes manufactured by the Company If it was thus neither circulating capital nor stock in trade of the business carried on by the assessee it could certainly not be anything but a capital asset of its business and any payment made by the Company as and by way of compensation for terminating or cancelling the same would only be a capital receipt in the hands of the assessee It would not make the slightest difference for this purpose whether either one or both of the agency agreements were terminated or cancelled by the Company The position would be the same in either event As was observed by Lord Wrenbury in the Glenboig Union Fire Clay Co Ltd vs The Commissioners of Inland Revenne 1 at p 465 The matter may be regarded from another point Of view the right to work the area in which the working was to be abandoned was part of the capital asset consisting of the right to work the whole area demised Had the abandonment extended to the whole area all subsequent profit by working would of course have been impossible but it would be impossible to contend that the compensation would be other than capital It was the price paid for sterilising the asset from which otherwise profit might have been obtained What is true of the whole must be equally true of part If both the agency agreements viz one for the territory within the Hyderabad State and the other for the territory outside Hyderabad State had been 1 396 terminated or cancelled on payment of compensation the whole profit making structure of the assessee s business would have been destroyed Even if one of these agency agreements was thus terminated it would result in the destruction of the profit making apparatus or sterilisation of the capital asset pro tanto and if in the former case the receipt in the hands of the assessee would only be a capital receipt equally would it be a capital receipt if compensation was obtained by the assessee for the termination or cancellation of one of these agency agreements which formed a capital asset of the assessee s business The facts of the present case are closely similar to those which obtained in the Commissioner of Incometax vs Shaw Wallace Co 1 In that case also the assessees had for a number of years prior to 1928 acted as distributing agents in India of the Burma Oil Company and the Anglo Persian Oil Company but had no formal agreement with either Company In or about the year 1927 the two companies combined and decided to make other arrangements for the distribution of their products The assessee s agency of the Burma Company was accordingly terminated on December 31 1927 and that of the AngloPersian Company on June 30 following Some time in the early part of 1928 the Burma Company paid to the assessee a sum of Rs 1200000 as full compensation for cessation of the agency and in August of the same year the Anglo Persian Company paid them another sum of Rs 325000 as compensation for the loss of your office as agents to the company On the facts and circumstances of the case the Privy Council came to the conclusion that the sums could only be taxable if they were the produce or the result of carrying on the agencies of the oil companies in the year in which they were received by the assessees But when once it was admitted that they were sums received not for carrying on that business but as some Sort of solatium for its compulsory cessation the answer seemed fairly plain Whatever be the criticism in regard to the concept of income adopted in this case noted 1 1932 LR 59 I A 206212 397 earlier in this judgment the decision could just as well be supported on the grounds which we have hereinbefore discussed and was quite correct the payments having been received by the assessees as and by way of compensation for the termination Or cancellation of the agency agreements in question which were in fact the capital assets of the assessee s business The Appellate Assistant Commissioner as well as the High Court were thus justified in the conclusion to which they came viz that the sum of Rs 219343 received by the assessee from the Company was a capital receipt The result therefore is that the appeal fails and will stand dismissed with costs throughout KAPUR J I have had the advantage of perusing the judgment prepared by my learned brother Bhagwati J but with great respect I am unable to agree and my reasons are these The sole question for determination in this case is as to whether a sum of Rs 226263 received by the assessees from Vazir Sultan Tobacoo Co Ltd as compensation for the termination of their agency for the distribution of charminar cigarettes in areas of India other than Hyderabad State is or is not taxable in the hands of the assessees The answer to this question depends on whether the amount has been received by the assessees as a capital or a revenue receipts In 1931 the assessees were appointed distributing agents for Hyderabad State only and for the rest of India in 1939 the agency commission in each case being a discount of 2 on the gross selling price The agency of 1939 was terminated by a resolution dated June 16 1950 on payment of the compensation amount already mentioned but the assessees continued to be distributors for Hyderabad State It must here be mentioned that the agency in question was terminable at will and that any compensation paid for it would prima facie be revenue During the accounting year the amount of income profits and gains of the assessees from the cigarette distribution business and from another source i e 398 Acid Factory within the State of Hyderabad was Rs 453159 The order of the Income tax Officer or the Appellate Tribunal does not show bow much of this sum was attributable to the Cigarette distribution business and how much to the other source There is no finding as to how and to what extent if any the business of the assessees was affected by the cesser of distribution business outside that State The question now arises did the assessees receive the compensation in lieu of the commission they otherwise might or would have earned if the agreement had continued or did they receive it as compensation for the destruction of a profit making asset The answer to this question would again be dependent upon whether the receipt in question is attributable to a fixed capital asset or to circulating capital These two terms have been used in a number of cases but as applied to agencies compensation will be a capital receipt if it is received as the value of the agency ie it is a price of the business as if it is brought to sale On the other band it is revenue receipt if it is paid in lieu of profits or commission In Van Den Berghs Ltd vs Clark 1 Lord Macmillan described circulating capital as capital which is turned over and in the process of being turned over yields profit or loss Fixed capital is not involved directly in that process and remains unaffected by it As was said by Lord Macmillan in the same case it is not possible to lay down any single test as infallible or any single criterion as decisive in the determination of the question Ultimately it must depend upon the facts of a particular case The assessees rested then case on the decision of the Privy Council in Commissioner of Income tax vs Shaw Wallace Co 2 on which the High Court has mainly relied In that case the assessees carried on business in India as merchants and agents for various companies They were distributing agents for two on companies These two agencies were terminated and a sum of Rs 1200000 was paid as compensation for the loss of these agency rights and the question was 1 2 1932 LR 59 IA 206 399 whether this was a capital payment It was held to be a capital and not a revenue receipt because the sum received was not the result of carrying on the agencies of the oil companies in other words it could 1 not be regarded as profits or gains from carrying on the business but was received in the nature of a solatium for cessation The case was decided on the interpretation of the word business as defined in section 24 of the Income tax Act under which it includes any trade commerce or manufacture or any adventure or concern in the nature of trade commerce or manufacture These words it was held were wide but underlying each of them is the fundamental idea of the continuous exercise of an activity which was also the idea underlying the relevant words of section 101 of the Act in respect of the profits or gains of any business carried on by him i e it is to be the profit earned by a process of production The test of income was its periodicity because it connotes a periodical monetary return This test of periodicity was not accepted by the Privy Council itself in Raja Bahadur Kamakshya Narain Singh s case 1 Lord Wright there said income is not necessarily the recurrent return from a definite source though it is generally so The test of periodicity was rejected by this Court in Raghuvanshi Mills Ltd vs Commissioner of Income tax 2 where Bose J said that the remarks of periodical monetary return must be confined to the facts of that case and it was held that money received from an insurance company for insurance against losses was income representing loss of profits as opposed to loss of capital In a later case The Commissioner of Income tax vs The South India Pictures Ltd 3 it was said that if Shaw Wallace Co had other agencies similar to those of the two oil companies it would be difficult to reconcile the decision in that case with the later decisions in Kelsall Parsons Co vs Commissioners of Inland Revenue 4 and other cases Per Das C J In view of the decision in the South India Pictures case and the observations of Bose J in the 1 1943 LR 70 IA 180 2 183 3 232 4 400 case of Raghuvanshi Mills Ltd 1 the authority of Shaw Wallace Co s case 2 must be taken to be considerably shaken We have then to see how the question has to be determined Various tests have been laid down in decided cases According to Lord Cave L C an expenditure made not only once and for all but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade has been treated as properly attributable to capital and not to revenue British Insulated Cables 3 According to Lord Atkinson the word asset need not be confined to something material and Romer L J has added that the advantage paid for need not be of a positive character and may consist in the getting rid of an item of fixed capital that is of an onerous character Anglo Persian Oil Co vs Dale 4 If the receipt represents the aggregate of profits which an assesee would otherwise have received over a series of years the lump sum might be regarded as of the same nature as the ingredients of which it was composed at p 431 5 but it is not necessarily in itself an item of income per Lord Buckmaster in Glenboig Union Fireclay Co 6 In Van Den Berghs case 7 there were three agreements between a British and a Dutch company operative till 1940 making it possible for them to carry on their business in friendly alliance and providing for the sharing of profits in certain proportions The agreements were terminated in 1927 and the Dutch company paid the English company a sum of pound 450000 as compensation The question was the charac ter of the receipt whether capital or revenue It was held by the House of Lords that it was the former because the agreements were not ordinary commercial contracts in the course of carrying on their trade they were not contracts for the disposal of their employees or for the engagement of agents or other employees 1 183 2 1932 LR 59 IA 206 3 213 222 4 146 5 Van Den Berghs Ltd v Clark 6 1922 12 Tax Cas 427 464 7 401 for the conduct of their business nor were they merely agreements as to how their trading profits when earned should be distributed as between the contracting parties On the contrary the agreements related to the whole structure of the recipient s profit making apparatus They regulated its activities defined what it might or it might not do and affected the whole conduct of its business According to Lord Macmillan if the agreements formed the fixed framework within which the circulating capital operated then they are not incidental to the working of its profit making machine but were essential parts of the mechanism itself and therefore they would result in a capital receipt and not revenue receipt Thus the agreements were designed to ensure that the business was carried on to the best advantage but they did not themselves form part of the business They were not agreements which must be regarded as pertinent to trading activities which yielded profits As such the totality of payments on account of those agreements were held to be a capital receipt The various decided cases demarcate the areas on the two sides of the line in which a receipt may lie and in every case it has to be determined as to whether it falls on one side or the other The simplest case is of income from property or business as distinct from something received in lieu of property or business itself One illustration of this is insurance against fire destruction or damage and insurance against loss of profit the former would bring in compensation in the nature of a capital Another instance is where the whole business is bought over and the receipt is the price of the business itself as opposed to a lump sum payment for the loss of profit calculated on a proper basis The test of income i e periodicity or recurrence at fixed intervals has been doubted in this Court Raghuvanshi Mills 1 Another test is afforded by cases of tangible immoveable property If an owner of such property is paid compensation for not working a part of his property 1 183 51 402 e g a part of the demised premises the compensation is not profit because it is payment for sterilising that part of the asset from which otherwise profit might have been obtained Glenboig Union Fireclay case 1 at p 464 There is no difference in cases of this kind whether the abandonment extends to the whole area or is circumscribed to a part because in either case it is sterilising an asset from which otherwise profit might have been obtained It makes no difference whether it may be regarded as a sale of the asset out and out or it be treated merely as a means of preventing the acquisition of profit that would otherwise be gained In either case the asset of the company to that extent has been sterilised or destroyed Another test is whether the agreement related to the whole structure of recipient s profit making apparatus and affected the whole conduct of his business or was the loss of a part of the fixed framework of the business If it is it is capital Van Den Bergh s case 2 But compensation for temporary and variable elements of the recipient s profit making apparatus would be revenue MacDonald s case 3 If the agreement affects the whole structure and character of the recipient s business then it is capital but not if the structure of the business is so designed as to absorb the shocks as by the cancellation of one agency Kelsall Parson s case4 In Bush Beach and Gent Ltd vs Road5 again the test of how the cancellation of the agreement affected the recipient s business was applied Barr Crombie s case 6 is a case of capital asset as there the recipient lost his entire business which resulted in reduction of staff salaries and even in office accom modation The result was the cesser of its trading existence The transaction took the form of a transfer for a price from one party to another of something that formed part of the enduring asset of one of them Compensation for the loss of an agency would be for the loss of a capital asset if the termination of the 1 464 2 3 4 1938 21 Tax Cas 5 6 1945 26 Tax Cas 406 403 agency was a damage to the recipient s business structure such as to destroy or materially cripple the whole structure involving serious dislocation of the normal commercial organisation but if it was merely compensation for the loss of trading profit i e in respect of commissions or it took the place of commission that would have been earned if the engagement had continued then it is revenue Wiseburg vs Domville 1 So that the decision as to whether compensation was capital or revenue would depend upon whether the cessation of the agency destroys or materially cripples the whole structure of the recipient s profit making apparatus or whether the loss is of the whole or part of the framework of business If we apply these tests to the agreement which has been terminated in the present case it does not fall in any of the class of cases of destruction of a capital asset For the appellant reliance was placed on the observations of Venkatarama Aiyar J in Commissioner of Income tax vs Rai Bahadur Jairam Valji 2 where it was pointed out that in an agency contract the actual business consists in the dealings between the principal and his customers and the work of the agent is only to bring about that business In other words what the agent does is not business itself but something which is intimately and directly linked with it But an examination of the context shows that that is not what these observations mean The point that was to be decided in that case was whether a payment of compensation for the cancellation of a trading contract was a capital or revenue receipt and dealing with decisions relating to the cancellation of agency contracts which were quoted in support of the contention that they were capital the learned Judge_ observed that considerations applicable to agency contracts were inapplicable to trading contracts because the two classes of contracts were essentially different and these differences were there pointed out The purpose of these observations was to show that receipts from 1 2 1959 SUPP 1 SCR 110 161 163 404 trading contracts were revenue and not that receipts from agency contracts are capital That that is the true scope of these observations is clear from the following passage In holding that compensation paid on the cancellation of a trading contract differs in character from compensation paid for cancellation of an agency contract we should not be understood as deciding that the latter must always and as a matter of law be held to be a capital receipt Such a conclusion will be directly opposed to the decisions in Kelsall s case 1 and Commissioner of Income tax vs South India Pictures Ltd 2 The fact is that an agency contract which has the character of a capital asset in the hands of one person may assume the character of a trading receipt in the hands of another as for example when the agent is found to make a trade of acquiring agencies and dealing with them The Court there observed that when the assessee holds a number of agencies the compensation paid for cancellation of any of them could be regarded as revenue receipt This is inconsistent with the conclusion that an agency contract must always be regarded as a capital asset The learned Judges further observed that they were not elaborating this part as they were there concerned with a trading contract and therefore the statement as to when receipts from agency contracts could be regarded as revenue receipts cannot be read as exhausting the circumstances under which they could be held to be revenue As a matter of fact there are three kinds of cases of agencies shown by the decided cases 1 Kelsall Parsons case 1 where the recipient was carrying on several agencies and the test laid down was whether the business structure could absorb a shock of the terminate on of one 2 The other is where the compensation is for a temporary and variable element of assessee s profit making apparatus MacDonald s case 3 3 The third class of cases is represented by 1 2 232 3 405 Fleming Co s case1 where the rights and advantages surrendered were such as to destroy or materially cripple the whole structure of the profit making apparatus The agencies themselves are of different kinds1 where the agent himself carries on the business and sells the product of the principal and gets commission for it 2 where the agent s function is confined to bringing the principal and the customer together and be gets agency commission for the performance of only that service 3 where the agent is a distributor and distributes the products of the principal through his sub agents and charges commission for the distribution work Cases 1 and 3 would not strictly fall within the scope of the observations in Commissioner of Income tax vs R B Jairam Valji 2 and case 2 would fall within the second class of agreements mentioned in Van Den Bergh s case 3 The agreement which is now before us and which was surrendered was terminable at will The amount of profit which the assessee made from working the agency contract in Hyderabad State alone was much more than the amount which the assees received for the termination of the whole of their agency outside the State Thus it is clear that the termination did not affect the trading activities of the assessees and therefore the termination of the contract viewed against the background of the assessee s business Organisation and profit making structure appears to be no more than compensation for the loss of future profit and commission The true effect of the facts of this case appears to be this that in 1939 the assessee s area of distribution was increased from the State of Hyderabad to the whole of India and in 1950 it was again reduced to the original area of 1931 The assessees never lost their agency As a result of this contraction of area they at the most have lost some agency commission The compensation therefore was in the nature of surrogatum and in this view of the matter it is revenue and not capital 1 2 1959 Supp 1 SCR 110 161 163 3 406 I would therefore allow this appeal with costs throughout By COURT In accordance with the majority judgment of the Court the appeal is dismissed with costs throughout Appeal dismissed

The prosecution case was that on 2381981 between 12 30 100 pm on hearing screams and cry of the deceased aged about 18 years PW2 alongwith her father PW3 and PW4 rushed to the house of the appellant They saw the father of appellant No 1 father in law of the deceased alongwith the husband and mother in law of the deceased hurriedly com ing out of the kitchen while the deceased was lying on the floor engulfed in flames As the appellant No 1 did not respond to the request of PW2 to give her something to extinguish the fire PW2 requested the father of the appellant No 1 to give a bed sheet or blanket while the father of the appellant No 1 was passing on a bed sheet to PW2 the appellant No 2 mother in law of the deceased objected In the meanwhile PW2 took the bed sheet from the father of the appellant No 1 and tried to extinguish the fire The deceased asked PW2 for some water PW3 removed the burning petticoat from the body of the deceased to save her from further burning While doing so he also received some burn injuries PW2 poured water into the deceased s mouth and enquired from her as to what had happened 667 The deceased told PW2 that her mother in law had poured kerosene over her and her husband had set fire to her The deceased asked for more water which was again given to her by PW2 The deceased s statement made to PW2 was overheard by PW3 PW5 and some others who also reached the spot on hearing her cries PW5 went away to inform the matenal uncle of the deceased with one Ramakrishna on his motor cycle There PW5 found PW1 the brother of the deceased and informed about the burning of the deceased and also what he had heard the deceased telling PW2 PW1 reached the house of the appellant with Ramakrishna on his motor cycle He saw a number of persons including PWs 2 and 3 gathered there The deceased was lying on the floor and she had no clothes on her PWl noticed that she had received burn injuries from her breasts downwards to her legs On seeing her plight PWl started crying and hitting his head against a piller When the deceased noticed PW1 had come she asked PW2 to bring her brother inside PW2 went out and brought PWI to the kitchen The deceased took the palm of her brother PWl into her own palms and told him to tell mother and father that her mother in law poured kerosene on her and her husband set her or fire She requested him that he should not fight anyhow she was dying She also told PWl to take back the cash given to her and to divide it amongst her sisters in equal share and to get them married to nice persons The appellant No 1 the husband of the deceased came inside the kitchen with folded hands and begged her for forgiveness saying that he would not repeat what he had done PWI got wild and caught hold of the neck of the appellant No 1 FIW2 and PW3 rushed towards them and released the appellant No 1 from the hold of PW1 They sent PWI to another uncle s house and told the uncle to take care of PW1 When PWI returned to the house of the deceased after one hour he saw that PW6 a local Doctor was giving first aid to the deceased and she was lying on a cot in the verandah PW6 advised at about 330 pm to remove the deceased to the Government Hospital The deceased was brought to the hospital at about 5 pm At about 530 pm PW9 a doctor examined the deceased and declared her dead PWl along with his uncle went to the Police Station adjacent to the hospital and lodged the FIR A case under section 302 IPC was registered 668 and police investigation was started Both the appellants were not found in the village when search for them was made by the investigating officer The appellant No 1 surrendered in the Court on 10111981 while the appellant No 2 surrendered in the Court on 7121981 The Trial Court held that there was no motive for the appellant to commit the crime that the evidence of PWs 2 to 4 could not be relied upon that PW1 had made improvements in his statements recorded at the trial and therefore the oral dying declaration made to him could not be relied upon The Trial Court also held that there was unexplained delay in lodging report with the policy It acquitted the appellants holding that the case was one of suicide and not of murder The State filed appeal in the High Court The High Court held that the chain of the established circumstances was complete and the circumstances were sufficient to establish that the appellants alone had committed the crime of murder of the deceased The High Court convicted both the appellants for the offence under section 30234 IPC and sentenced each one of them to imprisonment for life Hence this appeal before this Court under section 2a of the The appellants contended that since the Trial Court had acquitted the appellants the High Court was not justified in recording an order or conviction as the findings recorded by the Trial Court could not be said to be perverse that the dying declarations were not worthy of reliance and the motive was feeble and not established that the surrendering of the appellants themselves in the court on 10111981 and 7121981 itself was enough to show that they had no guilty conscious and the prosecution was not justified in relying upon this conduct as an adverse conduct against the appellants and that since all neighbors had become hostile out of fear the appellants did not act either to put off the fire or remove the deceased to the hospital The respondent State submitted that the findings of the Trial Court were not only conjectural but also perverse and the evidence of the wit 669 nesses was disbelieved on mere surmises that the Trial Court didnot properly discuss the two dying declarations made by the deceased and since the dying declarations have been proved by reliable evidence these by themselves could form the basis of conviction of the appellants that the High Court after a careful appraisal of the evidence had rightly set aside the judgment of the Trial Court which suffered from illegality as well as manifest error and perversity and that the prosecution had established the case against the appellants beyond every reasonable doubt and their appeal deserved to be dismissed Dismissing the appeal this Court HELD101 In a case based on circumstantial evidence the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and these circumstances must be conclusive in nature Moreover all the established circumstances should be complete and there should be no gap in the chain of evidence The proved circumstances must be consistent only with the hypothesis of the guilt of the accused alone and totally inconsistent with his innocence The courts have therefore the duty to carefully scrutinize the evidence and deal with each circumstance carefully and thereafter find whether the chain of the established circumstances is complete or not before passing an order of conviction 679 E F 102In a case based on circumstantial evidence motive assumes great significance as its existence is an enlightening factor in a process of presumptive reasoning The motive in this case is alleged to be the greed of dowry 679 H 103The evidence led by the prosecution to establish the existence of motive is wholly reliable and is also consistent The prosecution has successfully established that the appellants had strong and compelling motive to commit the crime because of her parents not agreeing to get the land registered in the name of the first appellant and their insistence to have the land registered in the name of their own daughter instead The motive has been conclusively established by the prosecution 682 D 104Both the dying declarations are oral They have been made to friends and to the brother of the deceased respectively In view of the close relationship of the witnesses to whom the oral dying declarations were 670 made it becomes necessary for the court to carefully scruitinize and appreciate the evidence of the witnesses to the dying declarations 683 B 105PW1 is the brother of the deceased and therefore a very close relation but mere relationship cannot be a ground to discard his testimony if it is otherwise found to be reliable and trustworthy In the natural course of events the deceased who was on the verge of her death would have conveyed to her near and dear ones the circumstances leading to her receiving the burn injuries PW1 has given a very consistent statement and has reproduced the words of the deceased clearly and truthfully Nothing has been brought out in the cross examination to discredit his testimony at all 683 C D 16Despite searching cross examination of both PW2 and PW3 nothing has been brought out in their cross examination to discredit them or doubt their veracity at all After carefully analysing their evidence it is found that PWs 2 and 3 as witnesses worthy of credence and trustworthy684 F 107From the evidence of PWs 12 and 3 both the dying declarations are provedto have been made by the deceased They are the statements made by thedeceased and relate to the circumstances leading to her death Both the dying declarations are consistent with each other and appear to have been made by the deceased voluntarily and in the natural course of events They have a ring of truth about them 684 G 108The medical evidence fully corroborates the prosecution case and lendssupport to the dying declaration and more particularly the manner inwhich the deceased had been set on fire686 D 109The normal human conduct of any person finding someone engulfed in flames would be to make all efforts to put off the flames and save the life of the person Though the appellants were the closest relations of the deceased they did not do anything of the kind They rendered no first aid to the deceased Their conduct at the time of the occurrence therefore clearly points towards their guilt and is inconsistent with their innocence The appellants did not even accompany the deceased to the hospital in the matador van Had the husband not been a party to the crime one would have expected that he would be the first person to take steps to remove the deceased to the hospital and leave no stone unturned 671 to save her life An innocent mother in law would have also done the same even if she had no love or emotional feelings for her daughter in law Neither the husband nor the mother in law of the deceased took any steps to remove the deceased to the hospital let alone accompany her to the hospital This conduct also is inconsistent with their innocence and consistent only with the hypothesis as stated by the deceased in her dying declarations that the mother in law had poured kerosene on her while her husband had lit fire and put her on flames 686 H 687 A D 110The prosecution has thus successfully established that the conduct ofboth the appellants both at the time of the occurrence and immediatelythereafter is consistent only with the hypothesis of the guilt of the appellants and inconsistent with their innocence 688 B 111Absconding by itself may not be a positive circumstance consistent only with the hypothesis of guilt of the accused because it is not unknown that even innocent persons may run away for fear of being falsely involved in a criminal case and arrested by the police but coupled with the other circumstances the absconding of the appellants assumes Importance and significance The prosecution has successfully established this circumstance also to connect the appellants with the crime 688 E F 112The prosecution has successfully established all the circumstances appearing in the evidence against the appellants by clear cogent and reliable evidence and the chain of the established circumstances is complete and has no gaps whatsoever and the same conclusively establishes that the appellants and appellants alone committed the crime of murdering the deceased on the fateful day in the manner suggested by the prosecution All the established circumstances are consistent only with the hypothesis that it was the appellants alone who committed the crime and the circumstances are inconsistent with any hypothesis other than their guilt 688 G H 687 A 201Under Section 32 when a statement Is made by a person as to the cause of death or as to any of the circumstances which result In his death in cases in which the cause of that person s death comes into question such a statement oral or in writing made by the deceased to the witness is a relevant fact and is admissible in evidence The statement made by the deceased called the dying declaration falls in that category provided it has been made by the deceased while in a lit mental condition 684 H 685 A B 672 202A dying declaration made by person on the verge of his death has a special sanctity as at that solemn moment a person is most unlikely to make any untrue statement The shadow of impending death is by itself the guarantee of the truth of the statement made by the deceased regarding the causes or circumstances leading to his death A dying declaration therefore enjoys almost a sacrosanct status as a piece of evidence coming as it does from the mouth of the deceased victim Once the statement of the dying person and the evidence of the witnesses testifying to the same passes the test of careful scrutiny of the courts it becomes a very important and a reliable piece of evidence and if the court is satisfied that the dying declaration is true and free from any embelishment such a dying declaration by itself can be sufficient for recording conviction even without looking for any coroboration If there are more than one dying declarations then the court has also to scrutinise all the dying declarations to find out if each one of these passes the test of being trustworthy The Court must further find out whether the different dying declarations are consistent with each other in material particulars before accepting and relying upon the same 685 C E 203Both the dying declarations are consistent with each other in all material facts and particulars That the deceased was in a proper mental condition to make the dying declaration or that they were voluntary has neither been doubted by the defence in the course of cross examination of the witnesses nor even in the course of arguments both in the High Court and before this Court Both the dying declarations have passed the test of credit worthiness and they suffer from no infirmity whatsoever 685 F G 204The prosecution has successfully established a very crucial piece of circumstantial evidence in the case that the deceased had voluntarily made the dying declarations implicating both the appellants and disclosing the manner in which she had been put on fire shortly before her death This circumstance therefore has been established by the prosecution beyond every reasonable doubt by clear and cogent evidence 685 G H 301There has been an alarming increase in cases relating to harassment torture abetted suicides and dowry deaths of young innocent brides This growing cult of violence and exploitation of the young brides though keeps on sending shock waves to the civilised society whenever it happens continues unabated There is a constant erosion of the basic 673 human values of tolerance and the spirit of live and let live Lack of education and economic dependence of women have encouraged the greedy perpetrators of the crime It is the woman who plays a pivotal role in this crime against the younger woman as in this case with the husband either acting as a mute spectator or even an active participant in the crime in utter disregard of his matrimonial obligations 689 C D 302Awakening of the collective consciousness is the need of the day Change of heart and attitude is what is needed If man were to regain his harmony with others and replace hatred greed selfishness and anger by mutual love trust and understanding and if woman were to receive education and become economically independent the possibility of this pernicious social evil dying a natural death may not remain a dream only 690 D 303The legislature realising the gravity of the situation has amended the laws and provided for stringent punishments in such case and even permitted the raising of presumptions against the accused in cases of unnatural deaths of the brides within the first seven years of their marriage 690 H 304The was enacted in 1961 and has been amended from time to time but this piece of social legislation keeping in view the growing menance of the social evil also does not appear to have served much purpose as dowry seekers are hardly brought to book and convictions recorded are rather few 691 A 305Laws are not enough to combat the evil A wider social movement of educating women of their rights to conquer the menace is what is needed more particularly in rural areas where women are still largely uneducated and less aware of their rights and fall an easy prey to their exploitation 691 B 306The role of courts under the circumstances assumes greater importance and it is expected that the courts would deal with such cases in a more realistic manner and not allow the criminals to escape on account of procedural technicalities or insignificant lacune in the evidence as otherwise the criminals would receive encouragement and the victims of crime would be totally discouraged by the crime going unpunished The courts are expected to be sensitive in cases involving crime against women 691 C 674 State Delhi Administration vs Lavnan Ors Crl Appeals 93 and 94 of 1984 decided on 2391985 referred to

minal Appeal No 781 of 1985 From the Judgment and Order dated 881984 of the Kerala High Court in Crl RPNo 459 of 1981 TSK Iyer Ms Prasanthi Prasad and N Sudhakaran for the Appellant MT George for the Respondents ANAND J The appellant was convicted for an offence under Section 71 read with Section 16 1 A i of the hereinafter the Act by the Additional Judicial Magistrate 1st Class Trivandrum on 1771981 and sentenced to suffer one year RI and to pay a fine of Rs 2000 and in default to undergo imprisonment for three months The conviction and sentence were upheld by the Additional Sessions Judge Trivandrum who dismissed his appeal on 28101981 Criminal Revision Petition No 459 of 1981 filed in the High Court of Kerala also failed on 8th August 1984 It is thereafter that he has come up to this court by appeal on special leave being granted On 1221980 the Food Inspector of the Corporation of Trivandrum after disclosing his identity purchased from the appellant 600 gms of ice stick and paid Rs 125 One of the samples was sent to the Public Analyst at Trivandrum who vide report dated 631980 opined that the said sample contains artificial sweeteners saccharin and dulcin and is therefore adulterated The Public Analyst also stated in his report that the use of dulcin in food articles is not permitted on account of the fact that its consumption is injurious to health According to the report of the Public Analyst dulcin to the extent of 1000 parts per million and saccharin to the extent of 900 parts per million was found present in the sample sent for analysis A complaint was accordingly filed before the Additional Judicial 1st Class Magistrate Trivandrum The appellant pleaded not guilty and also exercised his right to have the sample analysed from the Central 710 Food Laboratory The sample was then set to the Central Food Laboratory and after analysis of the sample it opined that the sample does not conform to the standards laid down for ice candy under the provisions of PFA Act 1954 and the Rules thereunder It was found by the Central Food Laboratory that the sample contained an artificial sweetener identified as saccharin to the extent of 190 parts per million The sample had also tested positive for presence of cane sugar Before the trial court it was urged that the ice stick sold by the appellant to the Food Inspector PWl could not be treated as ice candy and since no standard for ice stick had been prescribed in the Act the conviction of the appellant was not warranted It was also argued that for the offence committed by the appellant the sentence imposed was not justified The trial court negatived both the contentions and recorded a finding of fact to the effect that the appellant had sold an article of food ice stick to PWl for purposes of analysis and that the ingredients of the ice candy and the ice tick were the same and the standards prescribed for ice candy etc were applicable to the article sold by the appellant also It was further held that since the sample did not conform to the standards laid down for ice candy under the provisions of the Act and the Rules framed thereunder as per the certificate of the Public Analyst the sample was adulterated and in view of presence of dulcin the adulterant was injurious to health The trial court held that the offence of the appellant squarely fell under Section 7 read with Section 16 I A i of the Act The sentence imposed is the minimum prescribed for the said offence Similar arguments were raised in the appeal before the Sessions Court also It was once again found on facts that the ice stick sold by the appellant was an article of food and that the ingredients of the ice candy and the ice stick were the same It was also found that since the sample contained the prohibited artificial sweetener saccharin it was adulterated and the conviction and sentence were justified Similar grounds were once again raised before the High Court which also found In this case therefore from the evidence available especially Ext P9 report it is clear that the petitioner sold ice candy which is described as ice stick for it was frozen ice containing sugar In this view it did not conform to the standard prescribed under the Rules 711 Undeterred by the finding of fact recorded by all the three courts below to the effect that the ice stick sold by the appellant was covered by the articles mentioned in Item A0704 of Appendix B and was required to conform to the standards laid therein a strenuous argument was once again raised before us to the effect that the ice stick sold by the appellant could not be treated to be ice candy and therefore the standards prescribed in Item A0704 of Appendix B were not applicable to it We are afraid we cannot agree with this submission All the three courts hive carefully gone into the matter and found that the article sold by the appellant was an article of food covered by the Item A0704 of Appendix B Their finding is supported by the entry itself Item A0704 of Appendix B as it stood at the relevant time reads thus A0704 Ice candy or Ice Lollies or Edible Ice by whatever name it is sold means the frozen ice produce which may contained the permitted flavors and colors sugar syrup fruit fruit juice nuts cocoa citric acid stabilizers or emulsifiers not exceeding 05 per cent It shall not contain any artificia l sweetener Considering the nature of the article sold we have no doubt in our mind that the ice stick was edible ice and sold as frozen ice in the shape of a stick It admittedly contained sugar and coloring as is evident from the report of the Central Food Laboratory It was therefore required to conform to the standards prescribed in Item A0704 of Appendix B and since according to the report of the Public Analyst as also the Central Food Laboratory the article contained an artificial sweetener saccharin it did not conform to the standard laid down in the entry which specifically prohibits the use of any artificial sweetener Faced with this situation learned counsel for the appellant then submitted that since the report of the Public Analyst Trivandrum which had found the presence of dulcin in the sample stood superseded by the report of the Central Food Laboratory which had not found the presence of dulcin an article the consumption of which is injurious to health under the Rules the conviction of the appellant for an offence under Section 16 1 A was not justified Learned counsel submitted that the mere presence of artificial sweetener like saccharin in the sample which has not been declared as injurious to health could not attract the provisions of Section 712 16 1 A of the Act We find force in this submission The report of the Central Food Laboratory definitely excluded the presence of dulcin in the sample It only found presence of the prohibited artificial sweetener saccharin Section 16 1 A provides 1A If any person whether by himself or by any other person on his behalf imports into India or manufactures for sale or stores sells or distributes iany article of food which is adulterated within the meaning of any of the sub clauses e to 1 both inclusive of clause ia of section 2 or ii any adulterant which is injurious to health he shall in addition to the penalty to which he may be liable under the provisions of section 6 be punishable with imprisonment for a term which shall not be less than one year but which may extend to six years and with fine which shall not be less than two thousand rupees It would be seen from the above provision that in order to maintain a conviction under the said provision the article of food which is adulterated should fall either in one of the sub clauses e to 1 of clause ia of Section 2 or should contain an adulterant which is injurious to health The adulterated article of food sold in this case admittedly does not fall in any of the sub clauses e to 1 of Section 2 ia According to the report of Central Food Laboratory it also does not contain any adulterant declared as injurious to health Thus on the face of it is not possible to hold that the appellant had committed an offence punishable under Section 161 A of the Act and the conviction of the appellant for an offence under Section 161 A of the Act cannot be sustained The article of food sold by the appellant however has been found by the Central Food Laboratory to contain an artificial sweetener the use whereof in such article of food is prohibited It therefore does not conform to the standards prescribed in Item A0704 of Appendix B Section 161ai of the Act makes a person liable to punishment if whether by himself or by any other person on his behalf he inter alia manufactures for sale or stores or sells any article of food which is 713 adulterated within the meaning of sub clause m of clause ia of Section 2 of the Act Section 2 ia m reads thus 2ia adulterated an article of food shall be deemed to be adulterated m if the quality or purity of the article falls below the prescribed standard or its constituents are present in quantities not within the prescribed limits of variability but which does not render it injurious to health Keeping in view the fact that the article of food ice stick sold by the appellant did not conform to the standard prescribed for it in Appendix B and contained an artificial sweetener saccharin it is obvious that the article of food sold by the appellant was adulterated within the Meaning of Section 2iam of the Act and the same would therefore be punishable under Section 16 1ai of the Act We are unable to accept the argument of the learned counsel for the appellant that since the appellant had been charged for an offence under Section 16 I A of the Act he could not be convicted for an offence under Section 161ai of the Act There is no basis for such an argument The penalty for an offense under Section 161ai is admittedly less than the penalty prescribed for the offence under Section 161 A which is a graver offence and therefore there is no impediment in the way of the court on the findings of the fact recorded by it to convert the conviction of the appellant from the one under Section 161 A to the one under Section 161ai of the Act notwithstanding the fact that the appellant had been charge sheeted for an offence under Section 161 A of the Act In view of our findings recorded above we alter the conviction of the appellant from the one under Section 71 read with Section 161 A of the Act to the one under Section 71 read with Section 161ai of the Act The argument of the learned counsel for the appellant that since the appellant has been on bail in this court and the occurrence took place more than a decade ago a sympathetic view be taken and his appeal be accepted and he be acquitted is to say the least a rather ambitious submission and we cannot agree Indeed there has been some lapse of time since the offence was committed in 1981 but that lapse of time alone cannot come to the aid of the appellant because having found the appellant guilty of an 714 offence under Section 16iai read with Section 71 of the Act this Court is obliged to convict the appellant and not let the crime go unpunished The appellant has been prosecuting the case in appeal and revision and the High Court dismissed his revision petition in 1985 The appeal has remained pending in this Court ever since and as the appellant had obtained an order of bail he obviously was not interested in an early disposal of the appeal and took no steps in that behalf The pendency of the appeal in this Court for about six years does not by itself render the conviction bad or raise any other equity in his favour We can take even a judicial notice of the fact that the type of adulterated article sold by the appellant is the one generally consumed by children and it is not only illegal but even immoral to serve them with articles containing artificial sweeteners use whereof has been prohibited by the statute Just because the appeal has remained pending here since 1985 the society cannot be made to suffer for this delay by letting the criminal go unpunished as a crime of this nature being a crime against the society at large cannot be ignored Sympathy in such cases is totally misplaced As a result of the above discussion the conviction of the appellant is altered from the one under Section 161 A read with Section 71 of the Act to the one under Section 161ai read with Section 71 of the Act and the sentence is reduced from one year RI and a fine of Rs 2000 to the minimum prescribed for the said offence ie to six months RI and a fine of Rs 1000 In default of payment of fine the appellant shall further suffer imprisonment for one month more The appeal succeeds and is partly allowed to the extent indicated above The appellant is on bail His bail bonds shall stand cancelled He shall be taken into custody to suffer the remaining period of the sentence GN Appeal partly allowed

The proviso to clause 1 of Article 316 of the Constitution requires that as nearly as may be one half of the members of the Public Service Commission shall be from service category Clause 2 of the Article entities a member of a Public Service Commission to hold office for a term of six years from the date on which he enters upon his office or he attains the age of superannuation provided therein whichever is earlier Subclause c of clause 3 of Article 317 provides for removal of a member of the Public Service Commission by reason of infirmity of mind or body Respondent No 6 a blind acknowledged scholar of English and Associate Professor in the Patna University was appointed the seventh non service member of the Bihar State Public Service Commission on 4th March 1991 The total strength of the Public Service Commission was eleven The other four members belonged to the services category On 11th September 1991 respondent No5 the Chairman of the said Commission gave a certificate stating that the respondent has been performing his duties with exceptional excellence without letting his blindness hinder his work and strongly recommended conferment of a national award in recognition of his excellence despite his blindness On 22nd October 1991 the State Government addressed a letter to the Union Ministry of Home Affairs recommending him for the prestigious national award of 518 Padamshree for his services as a member of the Public Service Commission On 15th March 1992 the President of India conferred on him the National Award On 14th January 1992 the appellant in a public interest ligigation challenged the appointment of respondent No 6 as a member of the Bihar Public Service Commission The High Court dismissed the writ petition In the appeal by special leave it was contended that the appointment of the seventh member from the non service category was violative of the proviso to Article 3161 of the Constitution It was submitted that the expression as nearly as may be one half occurring in the said proviso has been used to convey that a fraction may be ignored if the total number of members cannot be exactly halved between service and non service categories The argument was that if the representation of the service members of the Commission fell short of 50 then all persons to be appointed on the Commission till the said proportion was made up had to be from the service category that being their necessary qualification It was further contended that respondent No 6 was totally blind even from a date prior to his appointment and was unfit to be appointed by reason of the said physical infirmity The argument was that the blindness was an infirmity of body and if it was a ground for removal from office under Article 3173 c it was much more a disqualification for appointment and hence respondent No 6 should be prevented from continuing in his office In the affidavit riled on behalf of the State Government on 23rd January 1993 it was stated that although the proviso to Article 3161 was not mandatory that by itself was not a good ground for departing from the suggestion of the Constitution and hence the appointment of respondent No 6 as the 7th non Government member was not justified It was further stated that at the time of the appointment the aspect about his blindness was not specifically considered as the same was stated in the bio data of respondent No 6 in very causal way and in such a manner that it had escaped the attention of the constitutional authorities at the time of recommending respondent No 6 for appointment The affidavit further stated that while conducting the interviews members of the Commission had to visually interview each of the candidates to determine his suitability and after the appointment of respondent No 6 it had come to 519 the notice of the respondent State that the blindness of respondent No 6 was clearly hampering the effective discharge of official duties by him It was contended for respondent No 6 that it was on account of his academic distinctions and with the full knowledge that he was totally blind from childhood that he was appointed as a member of the Public Service Commission that his blindness did not come in his way of discharging his duties effectively that the only thing he could not do was to assess the individuals external personality on the basis of the candidate s external appearance which was not a material requirement for the candidates for many posts that his dependence upon the opinion of the other members of the interview board for this aspect was not of a kind which vitiated the assessment of the interview board as a whole that he had made a representation to the President of India the Governor of Bihar and others against the serious misconduct gross malpractices and wilful violation of the constitutional mandate by the Chairman of the Commission and that it was this dispute with the Chairman who was backed by the Chief Minister of the State which had led to the writ petition Dismissing the appeal the Court HELD 11 Merely because at the time of appointment of respondent No 6 there were four service members and six non service members it cannot be said that he was disqualified for being appointed as the 7th member from the non service category 531D 12 The reasonable interpretation of the proviso to Article 3161 of the Constitution requiring that as nearly as may be one half of the members of the Public Service Commission shall be from service category is to treat it not as a strict rule to be enforced but as a binding guideline to be followed in practice in spirit as far as possible and without deliberately flouting it 531D 13 The expression as nearly as may be used in the proviso itself suggests that the proportion of 50 of the service members is not exact but approximate and is meant not to be mandatory but directory The said proviso does not in terms say that In no case and at no point of time the said proportion should either go above or fall below 50 The fraction is and can be taken care of without the aid of the expression as nearly as may bell and a document like Constitution does not have to Incorporate 520 normal rules of interpretation The need to have 50 members from the service category also cannot be said to be of such paramount importance to the composition of the Commission that the breach of it at any particular point of time would defeat the very object of constituting the Commission 528F G 529F 14 Furthermore when the members are appointed they are bound to differ in age whether they belong to the service category or the non service category In the normal course they would retire at different points of time At that time a suitable person from the same category may not be available to be appointed in their place It is not always possible to make an advance list of persons of either category who are suitable for such appointment Hence the total strength of the Commission as well as the number from each of the categories are bound to vary from time to time At any given point of time therefore it may not be possible to maintain the proportion between the two categories strictly in accordance with the direction given in the Constitution 529B C 15 By providing the proportion between the service and non service members of the Commission the framers of the Constitution sought to strike a balance amongst the two categories However on that account the framers of the Constitution cannot be presumed to ensure that on all occasions there shall be an exact balance of views between these two categories of members It is unrealistic to believe that individuals with different backgrounds always insist on the acceptance of the outlook dictated by their background alone and refuse to share the viewpoint of others It is certainly not expected of the members of such high ranking constitutional body as the Public Service Commission Furthermore the Service Commissions mostly sit in Committees and are aided and assisted by experts from the concerned faculties disciplines and departments The Committees take their decision collectively after due deliberations and discussion It is therefore the composition of these Committees and not so much the composition of the Commission at any particular point of time that matters 530C E 16 The appointing authority therefore cannot be said to have no option under any circumstance whatever to allow reduction of representation from the service category and a breach of the requirement contained in the proviso to Article 3161 by reasons of appointment of a 521 member from non service category would vitiate such appointment or the duties performed by such appointee as a member of the Public Service Commission 530G 2 Respondent No 6 cannot be said to be unfit to carry on his duties as a member of the Commission because of his blindness Nothing concrete has been brought on record to show that he had failed to perform his duties as a member of the Commission efficiently Except the external appearance of the candidates appearing before him he is able to ascertain the required merits or demerits of the candidates as to the other members of the Commission The Commission operates through Committees For selecting the candidates for almost all disciplines and departments the experts from the concerned departments sit in these Committees and the opinion of the experts ordinarily prevails in such appointments since the members of the Committees who are the members of the Commission do not have the expertise in the relevant fields This shows that all members of the Commission sitting on the interview Committees have also to be guided in their opinion by the experts If respondent No 6 has to take guidance only in the matter of external appearance of the candidates all members of the Commission have to be guided by the experts with regard to the most vital equipment of the candidates viz the intellectual caliber and the proficiency of the candidates in the relevant subjects There is therefore nothing wrong if only for external appearance for which only a small percentage of the total marks is reserved respondent No 6 has to depend on the advice opinion or guidance of other members of the Committees and the Commission 532B E 31 By infirmity of body what is spoken of in sub clause c of clause 3 of Article 317 of the Constitution is an infirmity which disables the member from discharging his functions as such member effectively It is not every infirmity of body or every loss of use of every limb of the body The defect or deficiency must be such as would disable the member from carrying out his duties satisfactorily and consistent with the trust reposed in him The said infirmity further must necessarily be such as has arisen after the appointment and not the one which existed at the time of the appointment unless of course the Government was unaware of the same at the time of appointment 533A B D 32 In the instant case not only the blindness of respondent No 6 522 does not prevent him from discharging his duties expected of him but in fact the services rendered by him as such member have been eulogised and commended for a national award by no other than the State Government itself and the Chairman of the Commission who had first hand knowledge of his functioning This is apart from the fact that the Governor who appointed him on the advice of the Council of Ministers is presumed to have done so after satisfying himself that the loss of eyesight was not an infirmity which would impede him in the discharge of his duties 533C 41 No responsible public authority could have made the claim that none of the constitutional functionaries concerned was aware that respondent No 6 was totally blind from his childhood when that fact must have been widely known in the State and in all probability the extra ordinary Abilities exhibited by him despite his blindness must have been the main reason for his appointment as a member of the Public Service Commission The State Government should not have considered it compulsive to allow such blatantly rabid statements to be made on oath with impunity The affiant by making such statement has made the constitutional authorities look ridiculous and their functioning a mockery 534H G 42 Neither the certificate given by respondent No 5 the Chairman of the Public Service Commission on 11th September 1991 nor the letter of the State Government to the Union Home Ministry dated 22nd October 1991 has been controverted by the Chairman and the State Government The averment in the affidavit that the blindness of respondent No 6 is hampering his work therefore has no basis The belated claim of the State Government against respondent No 6 has its obvious roots in the strained relations between him on the one hand and the Chairman and the State Government on the other 535E F 5 The appellant and the respondent State is directed to pay the costs of the appeal to respondent No 6 537C

l Appeal Nos 1840 and 1841 of 1979 From the Judgment and Order dated 2411979 of the Madras High Court in Appeal Nos 67 and 68 of 1975 JRamamurthy K Ram Kumar N Sridhar and Ms Anjani for the Appellant 891 ATM Sampath Ms Pushpa Rajan section Balakrishnan Srinivasan and Ms Revathy Raghavan for the Respondents The Judgment of the Court was delivered by KASLIWAL J These appeals by grant of special leave are directed against the judgment of the Madras High Court dated 2411979 Abdul Salam and his mother Razia Begum sold their agricultural lands measuring 3 acres and 25 acres respectively by executing two sale deeds Exhibits A2 and A1 dated 1741962 in favour of Satyanarayana Rao and his father Mahadeva Rao The consideration of the respective sale deeds was Rs10000 and Rs75000 On the same day both the vendees took Rs500 back and executed two separate agreements in favour of the respective vendors under Exhibits A3 and A4 giving a right of repurchase to the vendors at any time after 1741969 but before 1641972 Thereafter Razia Begum and Abdul Salam executed agreements of sale in favour of the appellant TM Balakrishna Mudaliar on 411963 for a consideration of Rs130000 in all The appellant also paid an amount of Rs30000 from time to time till April 1963 to Razia Begum and Abdul Salam towards the said agreements For the balance of Rs100000 which was to be apportioned between Razia Begum and Abdul Salam Exhibits A10 dated 1541963 and A11 dated 1531963 registered deeds of agreement of sale were executed by Razia Begum and Abdul Salam respectively for Rs87500 and Rs12500 The appellant paid further sums of Rs4000 under Exhibit A10 to Razia Begum and Rs1000 under Exhibit A11 to Abdul Salam and Exhibits A3 And A4 were handed over to the appellant Mahadeva Rao died leaving behind his widow Pushpavathi Ammal and Satyanarayana Rao his son as his legal representatives In view of the fact that Satyanarayana Rao and his mother Pushpavathi Ammal refused to execute the reconveyance deed the appellant TM Balakrishna Mudaliar filed two suits for specific performance of the agreements of reconveyance delivery of possession and mesne profits in the Court of Subordinate Judge Tirupattur OS No67 of 1969 was filed against Satyanarayana Rao Pushpavathi Ammal and Abdul Salam and OSNo73 of 1969 was filed against Satyanarayana Rao Pushpavathi Ammal and Razia Begum In OS No67 of 1969 the appellant deposited the amount of Rs9900 in the Court for payment to Satyanarayana Rao and Pushpavathi Ammal and Rs 1600 for payment to Abdul Salam In OS No73 of 1969 the appellant deposited 892 Rs74500 for payment to Satyanarayana Rao and Pushpavathi Ammal and Rs9000 to Razia Begum Both the above suits were decreed ex parte on 711974 Razia Begum and Abdul Salam did not file any application for setting aside the ex parte decree and as such the decrees passed against them became final On an application filed by Satyanarayana Rao and Pushpavathi Ammal the ex parte decrees passed against them were set aside and they were allowed to contest the Suit The trial court after recording the evidence decreed the suit against Satyanarayana Rao and Pushpavathi Ammal also Satyanarayana Rao and Pushpavathi Ammal aggrieved against the judgment of the trial court filed appeal Nos67 and 68 of 1975 in the High Court The High Court by its judgment dated 2411979 allowed the appeals and set aside the judgments of the trial court and dismissed both the suits TM Balakrishna Mudaliar the plaintiff aggrieved against the judgments of the High Court has filed the aforesaid two appeals The facts are almost admitted and there is no controversy as regards the execution of Exhibits A4 and A3 the deeds of reconveyance by Satyanarayana Rao and Mahadeva Rao in favour of Razia Begum and Abdul Salam respectively and Exhibits A10 and A11 registered deeds of agreement of sale by Razia Begum and Abdul Salam in favour of the appellant The High Court however took the view that under the terms and conditions set out in Exhibit A10 and A11 Razia Begum and Abdul Salam had not assigned the rights of reconveyance of the properties which they had got under Exhibits A4 and A3 According to the High Court Exhibits A10 and A11 contemplated the performance of agreements of sale within a period of two years namely 1741969 to 1641971 while under the terms and conditions of Exhibits A3 and A4 such period for reconveyance in favour of Abdul Salam and Razia Begum was three years ie from 1741969 to 1641972 According to the High Court this difference relating to the period was important from the point of view of considering the question whether the plaintiff could stand in the shoes of Razia Begum and Abdul Salam to enforce the agreement entered into between Razia Begum and Abdul Salam on the one hand and Satyanarayana Rao and Mahadeva Rao on the other The High Court took the view that on account of such curtailment of the period in Exhibits A10 and A11 it was reasonable to infer that if the plaintiff did not enforce his rights under Exhibits A10 and A11 within the period of two years me 893 tioned therein still Razia Begum and Abdul Salam in their own right would be in a position to enforce their right under Exhibits A3 and A4 because there was still one more year available to them to enforce the obligations undertaken by Satyanarayana Rao and Mahadeva Rao under Exhibits A3 and A4 The High Court further took the view that from the terms of the documents Exhibits A10 and A11 it was clear that no privity was intended between the plaintiff on the one hand and Satyanarayana Rao and Mahadeva Rao directly and it was only Razia Begum and Abdul Salam who could have enforced the terms of the contract of reconveyance under Exhibits A4 and A3 The High Court also took the view that the plaintiff did not fall within the expression representative in interest as contemplated under Section 15 clause b of the hereinafter referred to as the Act and as such was not entitled to bring a suit for specific performance of the contract on the basis of the deeds of reconveyance Exhibits A3 and A4 It was also held that having regard to the language of Exhibits A10 and A11 no question of assignment of any right in favour of the plaintiff can arise We have heard learned counsel for the parties and have thoroughly perused the record as well as the contents of Exhibits A3 A4 and A10 and A11 on which the entire case hinges Exhibits A3 and A4 are agreements of resale executed on 1741962 by Mahadeva Rao and Satyanarayana Rao in favour of Abdul Salam and Razia Begum respectively Both the documents contained the terms of the resale at any time after 7 years but within 10 years of the date of execution of the documents It was clearly stipulated that after 1741969 but before 1741972 Mahadeva Rao and Satyanarayana Rao shall sign the sale deed on receiving the sum of Rs74500 in favour of Razia Begum and on receiving Rs9900 in favour of Abdul Salam Both these documents Exhibits A3 and A4 do not contain any condition that such right was personal and was in favour of Abdul Salam and Razia Begum and such right could not be exercised by a stranger The documents also do not contain any condition that such right could be exercised by the heirs of such persons or any other named persons and that such right could not be assigned by Abdul Salam and Razia Begum in favour of any other person The High Court was wrong in taking the view that the plaintiff Balakrishna Mudaliar was not a representative in interest of Abdul Salam and Razia Begum even after such right being assigned in his favour by agreements Exhibits A10 and A11 Exhibits A10 is a sale agreement for Rs87500 executed on 1541963 by Razia Begum 894 in favour of the plaintiff Balakrishna Mudaliar It has been clearly stated in the aforesaid deed that in order to raise funds for expenses required for the family and also for repayment of the amount of Rs75000 and recover back the properties from Ms Mahadeva Rao and Satyanarayana Rao and that Razia Begum party No1 had a right to have it reconveyed as per reconveyance agreement she agreed to assign such right in favour of Balakrishna Mudaliar the second party It further provided that Razia Begum had received Rs4000 and out of the balance amount of Rs83500 an amount of Rs74500 shall be paid to Mahadeva Rao and Satyanarayana Rao and the balance amount of Rs9000 shall be paid to Razia Begum It was also mentioned that in case Mahadeva Rao and Satyanarayana Rao who had already executed the agreement of resale refuse to receive the sum of Rs74500 as per the said resale agreement Razia Begum at her own expense shall get the sale deed executed by the said Mahadeva Rao and Satyanarayana Rao in her favour and then shall execute the sale deed in favour of the plaintiff At the time of executing Exhibit A10 a copy of the sale deed made in favour of Mahadeva Rao and Satyanarayana Rao and the agreement for resale executed by them in favour of Razia Begum was also handed over to the plaintiff Exhibit A11 has been executed by Abdul Salam in favour of the plaintiff and contains identical terms and conditions as in Exhibit A10 except the difference of amount Thus a combined reading of the documents Exhibits A3 A4 A10 and A11 there remains no manner of doubt that Razia Begum and Abdul Salam had made an agreement to sell the properties in favour of the plaintiff and had also given a right to make the payment of such amount to Mahadeva Rao and Satyanarayana Rao which they were entitled under the terms and conditions of Exhibits A3 and A4 the agreements of resale made in favour of Abdul Salam and Razia Begum respectively The plaintiff had filed a suit for specific performance of the agreement for sale impleading Razia Begum and Mahadeva Rao and Satyanarayana Rao as defendants in the one case and Abdul Salam and Mahadeva Rao and Satyanarayana Rao in another care and had also deposited the amount of consideration in Court which clearly proved that the plaintiff was always ready and willing to perform his part of the contract In our view there was no ground or justification for the High Court to dismiss the suits filed by the plaintiff The High Court was wrong in taking the view that it was only Razia Begum and Abdul Salam who were entitled to get reconveyance from Mahadeva Rao and Satyanarayana Rao and the plaintiff was not entitled 895 to enforce such right by a suit for specific performance against Mahadev Rao and Satyanarayana Rao The High Court further erred in holding that the restriction of the period during which the plaintiff could have got the sale deeds executed in his favour was two years while Razia Begum and Abdul Salam under Exhibits A3 and A4 could have exercised such right within a period of three years and such difference in the period deprived the plaintiff of his right to enforce the agreement of specific performance Admittedly the plaintiff was exercising the right of specific performance of agreement of sale within the stipulated period of two years and we are unable to accept the reasoning of the High Court as to how the period of three years granted in favour of Razia Begum and Abdul Salam in any manner affected of took away the right of the plaintiff to bring a suit for specific performance It may also be noted that an ex parte decree for specific performance of sale had become final against Razia Begum and Abdul Salam and so far as Mahadeva Rao and Satyanarayana Rao are concerned they were bound to make a resale or reconveyance of the property in favour of Abdul Salam and Razia Begum as well as their assignee under Exhibits A3 and A4 So far as Mahadeva Rao and Satyanarayana Rao are concerned they have not pleaded that they had not executed Exhibit A3 and Exhibit A4 or that Razia Begum and Abdul Salam had lost the right of repurchase or reconveyance of the property in question in their favour The Privy Council in Sakalaguna vs Munnuswami AIR 1928 PC 174 has held that the benefit of a contract of repurchase which did not show that it was intended only for the benefit of the parties contracting could be assigned and such contract is enforceable Beaumount CJ in Vishweshwar vs Durgappa AIR 1946 Bombay 339 held that the both under the common law as well as under Section 23 b of the an option given to repurchase the property sold would prima facie be assignable though it might also be so worded as to show that it was to be personal to the grantee and not assignable On the particular facts of that case it was held that the contract was assignable In Sinnakaruppa vs Karuppuswami AIR 1965 Madras 506 it was held In our view generally speaking the benefits of a contract of repurchase must be assignable unless the terms of the contract are such as to show that the right of repurchase 896 is personal to the vendor In the latter case it will be for the person who pleads that the contract is not enforceable to show that the intention of the parties thereto was that it was to be enforced only by the persons named therein and not by the assignee In our view the above statement of law appears to be correct We have already held above that under the terms and conditions laid down in Exhibits A3 and A4 the right of repurchase was not given as personal to Razia Begum and Abdul Salam and they were entitled to assign such right and the plaintiff having got such right under Exhibits A10 and A11 was entitled to enforce such contract by filing a suit for specific performance The plaintiff in the present case also falls within the meaning of representative in interest as contemplated under Clause b of Section 15 of the Act On such assignment the plaintiff appellant acquired a valid titled to claim specific performance In the result we allow these appeals with costs and set aside the Judgment of the High Court and restore and Judgments and decrees passed by the trial court VPR Appeal allowed

In 1931 the respondent a registered firm was appointed the sole selling agents and distributors for the Hyderabad State of 376 cigarettes manufactured by V a limited company under the terms of a resolution of the Board of Directors the agency commission being a discount of 2 on the gross selling price In 1939 another arrangement was made whereby the respondent s agency was extended to the rest of India By a resolution dated June 16 1950 the agency of 1939 was terminated on payment of Rs 226263 to the respondent by way of compensation but the respondent continued to be distributors for the Hyderabad State For the assessment year 1951 52 the Income tax Officer included the aforesaid sum in the respondent s total income and taxed it as a revenue receipt under the head of business The respondent claimed that it did not carry on business of acquiring and working agencies that the agency acquired in 1931 was a capital asset of its business of distributing cigarettes in the Hyderabad State that the expansion of territory outside the Hyderabad State in 1939 was an accretion to the capital asset already acquired by it that the resolution Of 1950 was in substance a termination of the agency qua territory outside the Hyderabad State which resulted in the sterilisation of the capital asset qua that territory that the sum of Rs 219343 received by it in the year of account was by way of compensation for the termination of the agency outside Hyderabad State and being therefore compensation for the sterilisation Pro tanto of a capital asset of its business was a capital receipt and therefore was not liable to tax It was contended on behalf of the Incometax Authorities that the sole selling agency which was granted by the company to the assessee in the year 1931 was merely expanded as regards territory in 1939 and what was done in 1950 was to revert to the old arrangement that the structure or the profit making apparatus of assessee s business was not affected thereby that the expansion as well as the restriction of the assessee s territory were in the ordinary course of the assessee s business and were mere accidents of the business which the assessee carried on and that the sum of Rs 219343 received by the assessee as and by way of compensation for the restriction of the territory was a trading or an income receipt and was therefore liable to tax It was also urged that the agency agreement between the respondent and the company was terminable at the will of the latter and so it could not be considered as an enduring asset Held per Bhagwati and Sinha JJ Kapur J dissenting that the agency agreements in question did not constitute the business of the respondent but formed a capital asset being the profit making apparatus of its business of distribution of the cigarettes manufactured by the company within the respective territories and consequently any payment made by the company as compensation for terminating the agency would only be a capital receipt in the hands of the respondent Commissioner of Income tax vs Shaw Wallace Co 1932 LR 59 I A 206 relied on 377 Commissioner of Income Tax and Excess Profits Tax Madras vs The South India Pictures Ltd Karaikudi and Commissioner of Income tax Nagpur vs Rai Bahadur jairam Valji 1959 Supp 1 SCR 110 distinguished Case law reviewed Held further that the fact that the agency agreements were terminable at will or that only one of them was terminated would not make any difference because in either case when the agency was terminated and the amount was paid as compensation for such termination it resulted in the sterilisation of the capital asset Pro tanto and it was received as a capital receipt in the hands of the respondent Glenboig Union Fire Clay Co Ltd vs The Commissioners of Inland Revenne relied on Per Kapur J The true effect of the facts of the present case was that in 1939 the respondent s area of distribution was increased from the State of Hyderabad to the whole of India and in 1950 it was again reduced to the original area of 1931 so that the respondent did not lose its agency Consequently the termination of the agency in 1950 did not affect the trading activities of the respondent and therefore viewed against the background of the respondent s business Organisation and profitmaking structure the compensation for the termination of the agency was no more than that for the loss of future profit and commission The compensation therefore was in the nature of surrogatum and in this view of the matter it was revenue and not capital The answer to the question as applied to agencies whether the compensation is capital or revenue is that it will be a capital receipt if it is received as the value of the agency i e it is a price of the business as if it is brought to sale On the other hand it is revenue receipt if it is paid in lieu of profits or commission In view of the decision The Commissioner of Income tax vs The South India Pictures Ltd Karaikudi and the observations of Bose J in the case of Raghuvanshi Mills Ltd vs Commissioner of Income tax the authority of Commissioner of Income tax vs Shaw Wallace considerably shaken

ON Civil Appeal Nos 1454 56 of 1993 etc From the Judgment and Order dated 1521991 of the Karnataka High Court in Writ Appeal Nos 2083 2084 and 2085 of 1989 KMadhava Reddy PP Rao NDB Raju Guntur Prabhakar Dr Sumand Bhardwaj Yatish Mohan Verma and Ranjit Kumar for the Appellants Soli J Sorabjee NB Shetye RN Narasimha murthy SGanesh Vineet Kumar M Veerappa Nobin Singh PR Ramasesh P Mahale NP SK Kulkarni and Surya Kant for the Respondents The Judgment of the Court was delivered by SAWANT J Leave granted 2These appeals arise out of the same facts and judgments of the Karnataka High Court and are being disposed of by this common judgment For the sake of the narration of events Civil Appeal Nos 1461 72 1993 arising out of SLP Civil Nos 7230 41 of 1991 may be referred to The 2nd respondent Ms Naryanaswamy Sons is a partnership firm While it was carrying on the business of manufacturing and selling of polished granites it acquired on 3091953 6 acres and 4 gunthas of land in Survey Nos 61 and 62 of Dasarahalli in the heart of Jayanagar Exten sion of the city of Bangalore Out of the said land 1 acre and 2 gunthas had already been acquired by the 1st respondent State Government under notification dated 141948 The acquisition proceedings had culminated in an award granting compensation to the land owner on 331955 In a small portion of the said land the 2nd respondent firm hereinafter referred to as the firm established a granite factory and the rest of the land was vacant when the Urban Land Ceiling and Regulation Act 1976 the Act was made applicable to the Bangalore Agglomeration consisting of the area within the jurisdiction of the Bangalore City Municipal Corporation and the Trust Board and the peripheral area of 5 kms 3On 961983 the firm preferred an application to the State Government for exemption of the vacant land from the provisions of Chapter III of the Act By an order of 1771985 the State Government granted 725 exemption under Section 20 of the Act for industrial use of a granite factory The exemption related to 16194 sq mtrs of land and was granted on the following conditions i The entire land utilisation shall be completed within a period of two years from the date of the order ii The exempted land shall be exclusively used for the purpose for which the exemption was granted and for the purposes related thereto iii The land shall not be transferred by way of sale mortgage gift lease or otherwise without prior permission of the Government and that such permission when given shall be subject to such conditions as the Government may deem fit to impose 4The 3rd respondent partnership firm Ms Reevajethu Builders and Developers the builders was constituted on 611987 with Smt Shobha Makhija as the major partner with 50 share and other 18 partners mainly to develop the immovable property to be acquired by the firm of an extent of 5 acres and 24 gunthas situated at Survey Nos 61 and 62 of Dasarahalli of Bangalore City and to carry on the business as builders and developers of flats shops commercial complexes and other types of buildings dealers in real estate and all other allied business and activities and to carry on any other business as may be mutually agreed upon by all the partners It is not in dispute that Smt Shobha Makhija is the sister of the son in law of the 4th respondent who was then the Chief Minister of the State of Karnataka 5On 911987 the competent authority under the Act came to the conclusion that the excess vacant land out of the said Survey Nos 61 and 62 after the grant of exemption by the Government Order dated 1771985 was 3444 sq mtrs The competent authority accordingly directed the publication of a notification under Section 10 1 of the Act for the acquisition of the said excess vacant land 6On the same day ie 911987 the firm made an application to the State Government for permission to sell land to the extent of 5 acres and 24 gunthas comprised in the said Survey Nos 61 and 62 to the 726 builders The grounds made out in the application were that due to stiff competition and nationalisation of black and pink granite by the southern States including Karnataka the firm was running under losses that its Woodlands Hotel at Madras was also not making profits since the hotel building had become very old and there were no funds for modernising it that its theaters in Madras were also not yielding profits due to unhealthy competition by the video piracy and the advent of the television that the partners of the firm individually and jointly were indebted to Andhra Bank of India State Bank of Mysore and Dena Bank that the said debts were of more than Rs 1 crore 65 lakhs that suits had been filed in the High Court of Madras against the partners that the business of the partners had been suffering huge losses specially due to continuing heavy interest burden that the families of the seven partners of the firm had no other source of income and had been over drawing from the firms for their maintenance and that one of the partners was seriously ill in a hospital at Bangalore and he had to borrow money for taking medical treatment 7On 631987 the State Government under Section 20 1 of the Act permitted the firm to sell land to the extent of 16194 sq mtrs to the builders subject to certain conditions 8On 2331987 the firm filed another application before the State Government seeking permission to transfer the remaining 3444 sq mtrs of vacant land from Survey Nos 61 and 62 to the builders on the ground of undue hardship since the firm had incurred debts On 1841987 the State Government under Section 20 1a of the Act granted exemption for the said land from the purview of Chapter Ill of the Act and also permitted the firm to sell the said 3444 sq of vacant land from Survey Nos 61 and 62 subject to certain conditions 9By a sale deed of 3091987 ie a day before the extension of Chapter XXC of the Income tax Act providing for preemptive purchase by the Central Government of immovable property in certain cases on transfer the firm entered into a deed of absolute sale for the sale of the property consisting of land to the extent of 5 acres and 24 gunthas situated in the said Survey Nos 61 and 62 10On this undisputed factual matrix writ petitions were filed by way of public interest litigation under Article 226 and 227 of the Constitution before the High Court for issue of a writ of mandamus a directing the respondent Government to take action for forfeiture of the land for con 727 travention of Section 79 of the Karnataka Land Reforms Act b for acquiring the land for the purpose of weaker sections under the provisions of the Act c for quashing the orders dated 631987 and 1841987 granting exemption to the land in question from the purview of the Act under Section 20 111a b of the Act and for declaring the sale deeds dated 3091987 executed by the firm in favour of the builders as void and inoperative d for directing the State Government to take action under Section 6 of the Karnataka Parks Play fields and Open Space Reservation and Regulation Act 1985 and for other reliefs The learned Single Judge by his judgment and order dated 891989allowed the writ petition and among others 1 quashed the Group Housing Policy of the State Government as embodied in the decision of the Committee held on 22101986 and communicated under letter dated 24111986 insofar as it encouraged the Group Housing Scheme through individuals and partnership of individuals by transferring vacant land to such persons ii restrained the State Government from enforcing the said Policy through individuals and partnership of individuals against the vacant land iii declared as null and void and quashed the orders dated 631987 and 1841987 granting exemption iv declared the sale deed dated 3091987 executed by the firm in favour of the builders as nun and void so far as it related to the extent of land admeasuring 19368 Sq covered by the exemption orders of 631987 and 1841987 The validity of the sale deed so far as it related to the remaining land mentioned therein was however saved by the said declaration v directed the State Government the Special Deputy Commissioner under the Act the Bangalore Development Authority and the Municipal Corporation of Ban galore to identify the extent of 1 acre 2 gunthas and 58 square yards which was acquired in 1948 out of the said Survey No 61 and to set them apart for the purpose of road and Boulevard and use it only for said purpose vi remitted the applications dated 911987 and 2431987 made by the firm to the State Government with the direction to consider them in accordance with law under Section 20 1b of the Act and to exempt them in the light of the extent of the debt owed by the firm to the creditors prior to the coming into force of the Act vii directed that even if after examining the application in the aforesaid light the State Government granted permission to the firm to sell the vacant land on the ground of hardship the Government should see that in the vacant land sites are formed of various dimensions not exceeding 60 x 90 keeping in view the sites already formed 728 in the locality The learned Judge further directed that each such site should be sold by public auction by the competent authority with the condition that no person is entitled to purchase in public auction more than one site and to credit the sale proceeds in the office of the competent authority under the Act who would pay the amount to the creditors of the firm The learned Judge also further directed that only such number of sites should be sold which are necessary to discharge the debts and the remaining portion of the vacant land should be acquired under the Act It may be noted here that the learned Judge held that the allegations of mala fides in granting exemptions by the orders of 631987 and 1841987 against respondents 4 and 8 were not proved 12Against the said decision of the learned Single Judge appeals were preferred before the Division Bench of the High Court among others by writ petitioners as well as the firm and the builders All the appeals were heard together and the learned Judges of the Division Bench gave separate but concurring judgments and set aside the findings as well as the directions given by the learned Single Judge and dismissed the writ petitions 13The precise questions which arise for our consideration in these appeals are i Were the permissions granted by the State Government to sell land admeasuring 16194 sq mtrs and 3444 sq mtrs by its orders of 631987 and 1841987 respectively valid under the Act ii Were the said orders motivated by mala fides and iii Is the sale deed executed by the firm in favour of the builders on 3091987 void and inoperative 14In order to appreciate the answer to the first and the third question it is necessary to understand the scheme of the Act which came into force on 1721976 As the preamble of the Act states it has been placed on the statute book i to provide for the imposition of a ceiling on vacant land in urban agglomerations ii to provide for the acquisition of which vacant land in excess of the ceiling limit and iii to regulate the construction of buildings on such land and for matters connected therewith with a view to a preventing the concentration of urban land in the hands 729 of a few persons and speculation and profiteering therein and b bringing about an equitable distribution of land in urban agglomerations to subserve the common good These objects which are otherwise clear from the preamble of the Act have been explained in the statement of objects and reasons accompanying the Bill which among other things states as follows There has been a demand for imposing a ceiling on urban property also especially after the imposition of a ceiling on agricultural lands by the State Governments With the growth of population and increasing urbanisation a need for orderly development of urban areas has also been felt It is therefore considered necessary to take measures for exercising social control over the scarce resource of urban land with a view to ensuring its equitable distribution amongst the various sections of society and also avoiding speculative transactions relating to land in urban agglomerations xx xx xx The Bill is intended to achieve the following objectives i to prevent concentration of urban property in the hands of a few persons and speculation and profiteering therein iito bring about socialisation of urban land in urban agglomerations to subserve the common good by ensuring its equitable distribution iii to discourage construction of luxury housing leading to conspicuous consumption of scarce building materials and to ensure the equitable utilisation of such materials and iv to secure orderly urbanisation The Bill mainly provides for the following i imposition of a ceiling on both ownership and posses 730 sion of vacant land in urban agglomerations the ceiling being on a graded basis according to the classification of the urban agglomeration ii acquisition of the excess vacant land by the State Government with powers to dispose of the vacant land to subserve the common good iii payment of an amount for the acquisition of the excess vacant land in cash and in bonds iv granting exemptions in respect of certain specific categories of vacant land v regulating the transfer of vacant land within the ceiling limit vi regulating the transfer of urban or urbanisable land with any building whether constructed before or after the commencement of the proposed legislation for a period o f 10 years from the commencement of the legislation or the construction of the building whichever is later vii restricting the plinth area for the construction of future residential buildings and viii other procedural and miscellaneous matters It is needless to emphasise that while interpreting the various provisions of the Act the said objects will have to be kept in view constantly However only those provisions of the Act which have a bearing on the controversy before us may be referred to The vacant land has been defined in Section 2 q as follows vacant land means land not being land mainly used for the purpose of agriculture in an urban agglomeration but does not include i land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated 731 iiin an area where there are building regulations the land occupied by any building which has been constructed before or is being constructed on the appointed day with the approval of the appropriate authority and the land appurtenant to such building and iii in an area where there are no building regulations the land occupied by any building which has been constructed before or is being constructed on the appointed day and the land appurtenant to such building Provided The land appurtenant in relation to any building has been defined in Section 2g as follows land appurtenant in relation to any building means i in an area where there are building regulations the minimum extent of land required under such regulations to be kept as open space for the enjoyment of such building which in no case shall exceed five hundred square metres or ii in an area where there are no building regulations an extent of five hundred square metres contiguous to the land occupied by such building and includes in the case of any budding constructed before the appointed day with a dwelling unit therein an additional extent not exceeding five hundred square metres of land if any contiguous to the minimum extent referred to in sub clause i or the extent referred to in sub clause ii as the case may be Section 3 states that except as provided in the Act on and from the commencement of the Act no person shall be entitled to hold any vacant land in excess of the ceiling limit The ceiling limit is prescribed in Section 4 The provisions of Section 4 so far as they are relevant for our purpose 732 may be reproduced verbatim 4 Ceeling Limit 1 Subject to the other provisions of this section in the case of every person the ceiling limit shall be a x x x x x x b where such land is situated in an urban agglomeration falling within category B specified in Schedule 1 one thousand square metres c x x x x x x x d x x x x x x x 2 x x x x x x x 3Notwithstanding anything contained in sub section 1 where in respect of any vacant land any scheme for group housing has been sanctioned by any authority competent in this behalf immediately before the commencement of this Act then the person holding such vacant land at such commencement shall be entitled to continue to hold such land for thepurpose of group housing Provided that no more than one dwelling unit in the group housing shall be owned by one single person Provided further that the extent of vacant land which such person shall be entitled to hold shall in no case exceed a the extent required under any building regulations governing such group housing or b the extent calculated by multiplying the number of dwelling units in the group housin g and the appropriate ceiling limit referred to in sub section 1 whichever is less 733 Section 53 prohibits transfer of the vacant land in excess of the ceiling limit or any part thereof by way of sale mortgage gift lease or otherwise until the land holder has furnished a statement under Section 6 of the Act and a notification regarding the excess vacant land held by him has been published under sub section 1 of Section 10 Any such transfer is deemed to be null and void Section 61 requires every person holding vacant land in excess of the ceiling limit at the commencement of the Act to file a statement before the competent authority under the Act Read with Section 7 it is clear that the statement to be filed under Section 61 has to include vacant land not only situate in the same State but also in other States to which the Act applies In the present case admittedly the firm held land also in Madras in addition to the land in dispute in the city of Bangalore It is not known whether the firm had vacant land in its possession in Madras in addition to the land in dispute and whether it had shown such land in its return However that is not the subject matter of dispute before us Section 8 provides for a draft statement to be prepared by the competent authority as regards the vacant land held by the person concerned and calculated on the basis of the statement filed by him under Section 6 after holding an inquiry into the matter The draft statement is to be served on the person concerned with the notice requiring him to prefer his objections if any Section 9 provides for the final statement with regard to the vacant land in excess of the ceiling limit to be prepared by the competent authority and to be served on the person concerned After the service of the final statement under Section 9 on the person concerned the competent authority is required by Section 101 to cause a notification to be published in Official Gazette giving the particulars of such vacant land and stating therein i that such land is to be acquired by the concerned State Government and ii the claims of all the persons interested in such vacant land be made by them giving particulars of the nature of their interest in the land Under Section 102 the competent authority is required to determine the nature and extent of such claims and pass such orders as it deems fit Section 103 provides that at any time after the publication of the notification under Section 101 the competent authority may by another notification published in the Official 734 Gazette of the State concerned declare that the excess vacant land referred to in the notification published under Section 101 shall with effect from such date as may be specified in the declaration be deemed to have been acquired by the State Government Upon the publication of such declaration the vacant land is deemed to have been vested absolutely in the State Government free from all encumbrances with effect from the date so specified Section 10 4 then prohibits transfer of the excess vacant land and also the alteration of the use of such land between the date of notification published under Section 101 and that of the notification published under Section 103 Section 105 enables the competent authority to pass an order requiring the person in possession of the excess vacant land to surrender the same to the State Government Section 11 requires the State Government to pay compensation to the person or persons having interest in the vacant land acquired under Section 103 at the rates mentioned therein Section 19 exempts certain lands from the provisions of Chapter III of the Act which comprises Sections 3 to 24 Then come the provisions of Section 20 to 24 of Chapter 111 We are directly concerned in the present appeals with the said sections along with the provisions of chapter IV of the Act Section 20 permits the State Government to give exemption to any vacant land in excess of the ceiling limit from the provisions of Chapter III for two distinct purposes It is necessary to reproduce here the said section 20Power to exempt 1 Notwithstanding anything contained in any of the foregoing provisions of this Chapter a where any person holds vacant land in excess of the ceiling limit and the State Government is satisfied either on its own motion or otherwise that having regard to the location of such land the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require it is necessary or expedient in the public interest so to do that Government may by order exempt subject to such con 735 ditions if any as may be specified in the order such vacant land from the provisions of this Chapter b where any person holds vacant land in excess of the ceiling limit and the State Government either on its own motion or otherwise is satisfied that the application of the provisions of this Chapter would cause undue hardship to such person that Government may by order exempt subject to such conditions if any as may be specified in the order such vacant land from the provisions of this Chapter Provided that no order under this clause shall be made unless the reasons for doing so are recorded in writing 2 If at any time the State Government is satisfied that any of the conditions subject to which any exemption under clause a or clause b of sub section 1 is granted is not complied with by any person it shall be competent for the State Government to withdraw by order such exemption after giving a reasonable opportunity to such person for making a representation against the proposed withdrawal and thereupon the provisions of this Chapter shall apply accordingly It would be apparent from clause a of sub section 1 of the section that under it the State Government is given power to exempt the excess vacant land from the operation of Chapter III only if the State Government is satisfied that having regard to i the location of the land and ii the purpose for which it is being or is proposed to be used it is necessary or expedient in the public interest to exempt it The paramount consideration is the public interest The exemption granted under this provision may be subject to certain conditions But it does not appear that it is obligatory to impose such conditions Nor is it necessary to record reasons when exemption is granted under this clause The power to exempt such land under clause b of sub section 1 can be exercised by the State Government if it is satisfied that the application of Chapter III would cause undue hardship to the landholder The exemption may be granted under this clause subject to such conditions if 736 any as may be specified in the order But unlike under clause a there is no obligation to prescribe the conditions The permission given under this clause however has to be supported by reasons to be recorded in writing Sub section 2 of the section enables the government to withdraw the exemption granted either under clause a or b if is satisfied that any of the conditions subject to which the exemption is given is not complied with Clauses a and b of sub section 1 read with subsection 2 make it clear that the exemption may either be conditional or absolute Where it is conditional it may be withdrawn if any of the conditions are not complied with The very fact however that the legislature has con templated imposition of conditions on exemptions granted under both the clauses shows that the purpose of the exemption under either of the clauses cannot be the transfer of the land The exemption under clause a is obviously for the land being put to a particular use which use is also necessary or expedient in the public interest while exemption under clause b is for relieving the person concerned from any undue hardship which may be caused to him personally by the withdrawal of the excess land from his possession probably such as when the person may require the land for the expansion of the use to which he has already put it such as his growing business or activities or to accommodate his growing family The clause unfortunately is completely silent on what it intends to convey by the expression undue hardship Section 21 also contemplates exemption of the excess vacant land from the operation of the said Chapter but for a purpose other than for the use of the holder of the land The purpose contemplated there is the construction of dwelling units of the plinth area of not more than 80 sq mtrs for accommodation of the weaker sections of the society and in accordance with a scheme approved by such authority as the State Government may specify in that behalf The person desiring exemption under this Section has further to declare his intention for construction of such dwelling units for weaker sections within such time in such form and in such manner as may be prescribed Such declaration is to be made before the competent authority The competent authority after receiving such declaration may after making such inquiry as it deems fit declare such land not to be excess land for the purposes of the said Chapter and permit such person to continue to hold such land for the aforesaid purpose subject to 737 such terms and conditions as may be prescribed Where any such condition is contravened the competent authority has been given power to declare the land to be excess land and on such declaration the provisions of Chapter III of the Act are to apply The distinction between Sections 20 and 21 may be noticed at this stage In the first instance the power given under Section 20 is to the State Government and not to the competent authority The power given is to exempt the land and the exemption is to be granted to a person The purpose of exemption is either public interest or relief from personal undue hardship It does not appear to be obligatory on the State Government to prescribe any conditions while granting the exemption However if any conditions are specified and if the State Government later satisfied that there is non compliance of any of the conditions the State Government is given power to withdraw the exemption As far as Section 21 is concerned the power conferred by it is not to exempt the land but to declare it not to be excess for the purposes of Chapter III The power is given to the competent authority itself It is to be exercised by it only under one circumstance That circumstance is that the holder of the vacant land should declare before it within a specified time and in the prescribed form and manner that he desires to utilise the land for the construction of the dwelling units of not more than the particular size mentioned therein for accommodating the weaker sections and in accordance with any scheme approved by the specified authority it is the competent authority which is required to make inquiry as it deems fit into such a declaration and if it is satisfied to declare that such land shall not be excess within the meaning of the said Chapter However it appears that the competent authority is required to prescribe certain terms and conditions while declaring the land not to be an excess land including a condition with regard to the time limit within which such buildings are to be constructed and on the breach of any of the conditions the competent authority is also given power to declare the land to be an excess land Section 22 enables a person to hold the vacant land on which there stood a building which he demolished or destroyed or which was demolished or destroyed on account of natural causes The holder of such land is required to file a statement in that behalf within the specified time 738 and if the competent authority is satisfied that such land is required by the holder for the purpose of redevelopment in accordance with the master plan the authority may subject to such conditions and restrictions permit the holder to retain such land for such purpose However if the competent authority is not so satisfied and does not therefore give permission for redevelopment the provisions of Sections 6 to 14 of the Act become applicable even to such land Section 23 provides for the disposal by the State Government of the vacant land acquired under the Act or acquired under any other law The State Government may allot such land to any person for any purpose relating to or in connection with any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry The industry is defined for the purpose to mean any business profession trade undertaking or manufacture While making such allotment the State Government may impose such conditions as may be specified in the order of allotment A breach of any of the conditions imposed enables the State Government to cancel the allotment and on such cancellation the land revests in the State Government free from all encumbrances Sub section 4 thereof also enjoins the State Government to dispose of the vacant lands to subserve the common good on such terms and conditions as the State Government may deem fit to impose Sub section 15 thereof gives the State Government an overriding power and enables it to retain or reserve any vacant land acquired under the Act for the benefit of the public notwithstanding anything contained in sub sections 1 to 4 Section 24 enables the State Government to assign a part or whole of the acquired land to those persons who had leased out or mortgaged with possession of the said land or had given such land under a hire purchase agreement and as a consequence of which they are left with no vacant land or are left with vacant land which is less in extent than the ceiling limit Chapter IV of the Act deals with the regulation of transfer and use of urban property Section 26 prohibits the sale of vacant land within the ceiling limit except after giving notice in writing to the competent authority of the intended transfer Where the notice is given the competent authority shall have the first option to purchase the land on behalf of the State 739 Government at a price calculated in accordance with the provisions of the Land Acquisition Act 1894 or of any other corresponding law for the time being in force The option has however to be exercised within a period of sixty days from the date of the receipt of the notice and if no such option is exercised it will be presumed that the competent authority has no intention to purchase the land and it shall then be lawful for such person to transfer the land to whomsoever he may like Section 27 prohibits transfer of any urban or urbanisable land by way of sale mortgage gift lease for a period exceeding ten years or otherwise if such land is with a building whether constructed before or after the commencement of the Act It also prohibits a similar transfer of the land with a portion only of such building The restriction on the transfer of Such land is for a period of ten years of the commencement of the Act or from the date on which the building is constructed whichever is later except with the previous permission of the competent authority The competent authority is given power to grant or refuse permission to transfer after holding an inquiry If the permission is not refused within sixty days of the receipt of the application the permission is deemed to have been granted If the permission applied for is for the transfer of such land by way of sale the competent authority is given the first option to purchase such land with the building or a portion of the building as the case may be and if the option is not exercised within sixty days the applicant is free to sell the land to any person he may like For the purpose of calculating the price where the purchase is made by the authority the provisions of the Land Acquisition Act 1894 or of the corresponding law are made applicable This Section has since been struck down by this Court in Maharao Sahib Shri Bhim Singhji etc vs Union of India Ors to the extent it operates on the vacant lands within the ceiling limit In other words as the law stands today the section applies only to transfer of the urban and urbanisable lands in excess of the ceiling limit and which have a building or a portion of building constructed thereon Section 29 prohibit s construction of buildings with dwelling units with a plinth area exceeding particular dimensions depending upon the category to which the urban agglomerations belong Section 30 gives power to the competent authority to stop or demolish construction which is being made or made in contravention of 740 Section 29 Section 35 gives power to the State Government to issue orders and directions of a general character as it may consider necessary in respect of any matter relating to the powers and duties of the competent authority and the competent authority has to give effect to such orders and directions Section 36 gives power to the Central Government to give such directions to any State as may appear to it to be necessary for carrying into execution in the State concerned any of the provisions of the Act or of any rules made thereunder The Central Government may also under this Section require any State Government to furnish such returns statistics accounts and other information as may be deemed necessary 15The examination of the aforesaid relevant provisions of the Act shows a clear intention of the legislature and reveals a definite scheme It has to be admitted that the provisions of the Act as are drafted have not succeeded in translating into words the clear intention of the legislature and to that extent the Act is an inelegant and confused piece of drafting However since the intention is clear a harmonious reading of all the provisions consistent with that intention is necessary to interpret and understand each of the said provisions The intention of the legislature is to acquire all vacant land in excess of the ceiling limit prescribed by the Act and the main purpose of the Act as stated earlier is three fold viz i to prevent concentration of the urban land in the hands of a few persons and to prevent speculation and profiteering therein ii to distribute the urban land equitably and iii to regulate the construction of buildings on the urban lands Consistent with these objectives the Act provides for acquisition of all urban vacant land in excess of the ceiling limit and prohibits its transfer in any form absolutely All that the Act permits in the case of such excess vacant land is either express exemption from the operation of Sections 3 to 19 of Chapter III of the Act by the State Government under Section 20 or non declaration of such land as an excess vacant land by the competent authority under Section 21 or the retention of such land with the land holder to be permitted by the competent authority under Section 22 of the Act The effect of exemption of the land from the provisions of Sections 3 to 19 or of the non declaration of the land as excess land or of the 741 retention of the land with the land holder under Sections 20 21 and 22 respectively is not to permit the land holder to deal with it as he likes including to transfer it In fact the exemption the non declaration an the retention permitted is on certain conditions which are required to be prescribed by the State Government or the competent authority as the case may be If those conditions are not complied with or are contravened the State Government or the competent authority is given power to withdraw the exemption or to declare the land as excess This power given to the State Government and the competent authority itself negatives either power to permit the transfer or the right to transfer What is more Chapter IV which alone makes provisions for transfer and use of urban property makes provision for transfer of vacant land within the ceiling limit subject to certain conditions It also makes provisions for the transfer of land in excess of the ceiling limit with a building thereon or with a portion of such building It makes however no provision for transfer of land in excess of the ceiling limit without a building or a portion of a building thereon That is consistent with the object of the Act since the Act does not contemplate transfer of the vacant land in excess of the ceiling limit It only provides for exemption of such land from being acquired and vested in the State Government or for non declaration of it as an excess land or for the retention of the same with the holder and that too subject to certain conditions which may be prescribed as stated earlier 16It is against the background of the aforesaid provisions of the Act that we have to consider whether the two permissions given by the State Government to the firm on 631987 and 1841987 to sell land admeasuring 16194 sqmtrs and 3444 Sq mtrs respectively under Section 20 1 are legal 17Taking first the order dated 631987 it does not mention under which provision of Section 20 1 the exemption is granted viz whether under clause a or b thereof It is however conceded before us on behalf of the respondents that the exemption is not under clause a but is under clause b We have therefore to examine the said exemption with reference to the provisions of clause b Section 20 1b as stated earlier permits the State Government to exempt the vacant land from the provisions of Chapter III of the Act if either on its own motion or otherwise it is satisfied that the application of the said Chapter would cause undue hardship to such person The order of exemption may further 742 be subject to such conditions if any as in any be specified in it The reasons for passing the order have further to be recorded in writing The preamble of the present order states that by the earlier order dated 1771985 the firm was granted exemption of the very same land for locating industry on conditions contained in it One of the conditions was that the declarant shall not transfer the land in question without prior permission of the Government The order then proceeds to refer to a letter dated 2011987 of the Special Deputy Commissioner Bangalore recommending the grant if permission to sell the said land on certain conditions The order states that the Government has considered the undue hardship of the applicants and agrees to grant permission to sell the said land The order does not discuss the undue hardship of the applicants It is possible that the Government for that purpose relied upon the report of the Special Deputy Commissioner It appears from the record that the report of the Special Deputy Commissioner is of 2911987 and not of 2011987 It is possible that there is a typographical error either in the record or in the order Be that as it may The said report of the Special Deputy Commissioner refers to the application made by the firm for grant of permission for the sale of the land for their undue hardship The report then mentions the properties declared by the firm All the properties which are four in number and one of which is the land in dispute are situate in Bangalore There is no mention of the properties which admittedly the appellants had in Madras What is necessary to note here is that it is also stated in the report that the land in dispute has a building of dwelling units and non dwelling units over a plinth area of 161880 sq mtrs constructed prior to the commencement of the Act It also states that there is a factory on the land running since 50 years which manufactures the polished stones exported to foreign countries The report then refers to what the firm had stated in its application for permission to sell the land The application had mentioned among other things as follows a due to lot of competition and nationalisation of the black and pink granites by southern States including Karnataka the firm had been suffering losses in the abovesaid business b the partners of this firm are the partners of a firm known as Woodlands which has been carrying business in hoteliers and the said hotel is not making profits due 743 to the fact that the buildings are very old and due to paucity of funds el that firm has constructed twin theatres on the front side of the hotel just to diversify the business d that they have incurred heavy loans from banks and private parties for the purpose of construction of theaters and the partners who are the partners of the applicant firm are responsible to liquidate the loans e the Madras firm has suffered heavy loss to a tune of Rs 222301626 as on 3131986 The firm has under this head shown term loan if Rs 5757 lakhs from the Andhra Bank and Rs 1903 lakhs from the Bank of India and Rs 1729 lakhs from the State Bank of Mysore They have also mentioned Rs 5180 lakhs from private parties but their names are not disclosed They have also mentioned other liabilities to the tune of Rs 387 lakhs but their details are not given f that the net capital and current accounts show a debit balance of Rs 4794 lakhs They also further state that if the loan from 14J986 to 31121986 is taken into account the debit balance of the partners would b e about Rs 68 lakhs g that the bank authorities have filed suits in the High Court of Madras to attach their properties both in Bangalore and Madras h that a private party by the name of Sri PL Narayanaswamy Reddivar has also filed a suit in the Karnataka High Court to recover the loan due to them from the Madras firm The application had further stated that the Madras firm is not able even to pay the interest as it is running at a huge loss It had also been stated that it had become a mental torture to clear the liabilities and to 744 face the court cases pending for attachment It had then gone on to state that there was no other way to dispose of the property in Bangalore ie the disputed property to clear the above debts and that even the amount derived from the sale of the land in question would not be sufficient to liquidate the liabilities The report further states that the firm had produced the statement of profit and loss account and balance sheet as on 3131986 and copies of suits filed by the Bank of India in Madras and by the said Sri PD Narayanaswamy Reddiyar in the High Court of Karnataka After only reciting the above facts but without mentioning even the price at which the land in dispute was proposed to be sold the Special Deputy Commissioner has proceeded to recommend the permission to sell the land to the builders under Section 20 of the Act The application for permission itself had not mentioned the price The recommendation is in respect of not only 16194 sq mtrs but also in respect of 3444 sq mtrs It may be mentioned here that the firm had not made any application for exemption or permission to sell the said 3444 sq mtrs till at least 24th March 1987 Yet the Special Deputy Commissioner recommended in his report of 2029187 that the earlier exempted land of 16194 sq mtrs may be permitted to be sold along with the said 3444 sq mtrs He has of course recommended conditions to be imposed while granting the permission to sell The State Government has also not independently enquired into the genuineness of the debts the value of all the assets of the firm held by it in Bangalore Madras or elsewhere and whether the debts were as on the date of the commencement of the Act and whether any of the debts were incurred subsequent to the said date what was the price at which the land was proposed to be sold whether the assets other than the land in question could not have been sold to meet the debts and if at all it was necessary to sell the land in question whether the sale only of a part of the land would not have relieved the firm of its obligations Without such inquiry the Government by its order in question granted permission to sell 16194 sq of land Close on the heels however followed another order dated 1841987 by which the balance of 3444 sq mtrs was permitted to be sold relying upon another report of the Special Deputy Commissioner The record before us shows that the said report is of 2731989 We may however presume a typographical error and construe it as a report of 2731987However what is worth nothing is that the application for 745 permission to sell the said 3444 sq was filed by the firm allegedly on 24387 It seems that with commendable alacrity the Special Deputy Commissioner made his report on the said application on 2731987 if we are to read the year as 1987 instead of 1989 as the document shows What he has stated in his report may be summarised as under That the Government by its order dated 631987 had already accorded permission to sell excess vacant land admeasuring 16194 sq mtrs The remaining excess vacant land held by the firm is 3444 sq Orders had been passed as required under Section 84 of the Act on 911987 confirming the said excess vacant land In the meanwhile the firm presented another application on 2431987 to the Government requesting for grant of exemption under Section 20 with permission to sell the said excess land admeasuring 3444 sq mtrs and another land admeasuring 5648 sq which consisted of land with building as per Section 4 1b of the Act to the builders That the firm stated that they had got the liabilities to the private parties who were for the first time named there They are 13 in number The liabilities were shown as having arisen between 2011975 and 7121977 with a specific mention that the liabilities were from a date prior to the coming into force of the Act These liabilities to the private parties amounted to Rs 41127956 In addition to 13 private creditors Dena Bank is the 14th and the last editor shown there to whom Rs 6542044 were owed from 1541969 The firm had produced certificates from the creditors and a certificate from the auditors in support of the said liabilities The report ends by stating that in the cir cumstances explained above the requests of the firm to grant exemption under Section 20 with permission to sell the said balance vacant land of 3444 sq mtrs to the builders may be considered It is not known when the reference of the said application was made to the Special Deputy Commissioner for giving his report All that is known is that on 1841987 the Government passed an order permitting the firm to sell the land admeasuring 3444 sq mtrs on the conditions mentioned therein This order also does not discuss like the earlier order of 631987 the various factors which need to be considered while granting permission to sell It is however not necessary to discuss this aspect of the matter since we are allowing the appeals on the primary ground that the State Government had no power to grant permission to the firm to sell the land in question If however it was necessary to go into the said question it must be stated that there is much force in the contention of the appellants that the State Government had 746 not applied its mind to the relevant factors relating to the alleged indebtedness of the firm and hence the permission granted to the firm to sell the land was liable to be struck down on that ground also 18The first question that arises is whether the provisions of Section 20111 b permit the State Government to permit the sale of the excess vacant land to a third party According to us the answer has to be in the negative for reasons more than one In the first instance the central object of the Act as is evident both from the preamble as well as the statement of objects and reasons is to acquire vacant land in excess of the ceiling area and to prevent speculation and profiteering in the same and also to distribute the land equitably to subserve the common good It is therefore per se against the said object to permit the sale of the excess vacant land for whatever reasons including the undue hardship of the land holder To construe the provisions of Section 20 1 b so as to read in them the conferment of such power on the State Government for whatever reasons is to distort and defeat the whole purpose of the legislation Further neither the plain language of the clause nor its context and intendment merit such construction Section 20 itself is titled Power to exempt The power given to the State Governments under the Section is only to exempt certain excess vacant lands from the operation of the provisions of Sections 3 to 19 of Chapter III none of which refers to the subject of transfer or restrictions on transfer Those provisions relate to the calculation declaration acquisition and vesting of the excess vacant land It is Chapter IV which relates to the transfers of vacant lands and the restrictions thereon Further from the scheme of the Act it is evident that the transfers of the vacant land were to be regulated by the specific provisions made in it They were not to be left to be governed by the unguided discretion of any authority including the State Government The specific provisions for regulating the transfer have been incorporated in Sections 20 to 28 of the Act Those provisions permit transfer of only vacant lands within the ceiling limit but without buildings and of vacant lands in excess of the ceiling limit but with buildings thereon and subject to the conditions laid down there It cannot be suggested that in defiance of the said provisions Section 20 1b vests power in the State Government to sanction sales of excess vacant lands with or without building thereon Under Section 20 1b the State Government can only exempt such excess vacant land from being acquired by it The Government 747 cannot permit its transfer when the Act does not even by implication authorises it to do so but permits the transfer subject only to the conditions prescribed by Section 27 The legislature cannot be presumed to have prescribed different conditions for transfer of the same or similar lands Secondly Section 20 begins with the non obstante clause notwithstanding anything contained in any of the foregoing provisions of this Chapter meaning thereby Chapter III of the Act The foregoing provisions of Chapter III viz Sections 3 to 19 as stated earlier do not contain any provision permitting or restricting the transfer of the vacant land in excess of the ceiling limit The provisions relating to the transfer of the vacant land are contained in Sections 26 to 28 of Chapter IV Section 26 lays down restrictions on the transfer of the vacant land even if it is within the ceiling limit while Section 27 places restriction on the transfer of any urban or urbanisable land with a building or portion of such building thereon for a period of ten years from the commencement of the Act or from the date on which the building is constructed whichever is later except with the previous permission of the competent authority Section 27 as couched is wide in its implication and hence this Court by its decision in Bhuimsinghji s case Supral restricted its operation to lands with buildings which are above the ceiling limit However the court has upheld the validity of the rest of the Act including that of Section 26 The result is the restriction on transfer even of vacant land within the ceiling limit but without building is deemed to be valid Thus the transfer of the vacant land without building even if it is within the ceiling limit and of the vacant land in excess of the ceiling limit with a building or a portion of the building are subject to the restrictions placed by the Act Section 20 as pointed out earlier is subject to the provisions of sections which follow it including Sections 26 to 28 Hence no construction can be placed on clause b of sub section 1 thereof which will be in conflict with the provisions of Sections 26 to 28 Thirdly the provisions of clauses a and b of sub section 1 of Section 20 make it clear that what the legislature has in mind is an exemption for the purposes of the use of the land and not for the purposes of selling it Sub section Ill a speaks of exemption of such land having regard to its location the purposes for which the land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require The said provisions further require that even after taking into consideration the said circumstances the State Government has to examine before giving ex 748 emption whether it is necessary or expedient in the public interest to do so The Government is also empowered under the said provisions to grant such exemption conditionally Sub section 1 b similarly speaks of the undue hardship caused on account of the application of the provisions of Chapter III Since as per the definition of person in Section 2 i the said provision is applicable not only to individuals but also to a family a firm a company or an association or body of individuals whether incorporated or not the hardship spoken of there is obviously one related to the user of the land In fact it is difficult to understand the precise purpose for which clause b has been enacted and the meaning of the expression undue hardship there We are left only to speculate on the subject The speculation itself may not be valid The lands are held by companies trusts and associations for industrial and commercial use for the use of medical and educational institutes sports clubs cultural activities gardens exhibitions etc There is no special provision made in the Act to protect or take care of such users The only provision under which a relief can be given to preserve and safeguard such user is Section 20 1 a But that provision can be pressed into service only on the basis of the location of the land and its present or prospective user and only if it passes the test of public interest However all lands in excess of the ceiling limit may not strictly be necessary for such user even if the user is in the public interest Nevertheless the withdrawal of a part of the land found to be in excess may cause an avoidable hardship to the land holder which may be disproportionate to the benefit that is to accrue to the public on account of such withdrawal The excess of land may be meager or the severance of such excess land itself may result in unnecessary hardship The hardship further has to be undue and not merely an ordinary hardship which is bound to be caused on account of the application of the Act to every holder of the excess vacant land The undue hardship must be one which cannot be avoided except by granting a relief of exemption as contemplated by the said provision The relief from financial hardship or from indebtedness to the land holder of such land is alien both to the object and the scheme of the Act Even the debates in the Parliament do not refer to financial hardship or to the power of the State Government to exempt the land to permit its transfer on that account To hold that indebtedness and financial hardship would entitle the landholder to get exemption for sale of the excess vacant land in his possession is to place the holders of land with debts in an advantageous position as against those who were unwise enough to manage their affairs with financial discipline The classification of the owners of land for this purpose between debtors and 749 non debtors is itself irrational and has no plausible nexus with the object of the Act Such a classification is therefore discriminatory and violative of Article 14 of the Constitution It is not therefore possible to agree with the view taken by the Gujarat High Court in Thakorbhai Dajibhai Desai vs State of Gujarat AIR 1980 Guj 189 that the indebtedness of the land holder on the date of the commencement of the Act can be a ground for exemption under Section 20 1 b Much less can such a ground vest the State Government with the power to permit the sale of the land As has been explained earlier under the Act no transfer of vacant land in excess of the ceiling limit is permitted whether with or without condition if it is not encumbered with a building or a portion of a building It can either be acquired by the State Government under Section 10 3 of the Act or exempted from being acquired or permitted to be retained under Sections 20 21 and 22 respectively It can in no case be transferred However if it is so encumbered the provisions of Section 27 become ap plicable to the transfer of the land and no transfer of such land can be effected in contravention of the provisions of the said section There is nothing either in Section 20 or Section 27 which exempts the transfer of such land from the operation of the provisions of Section 27 assuming that Section 20 1 b gives power to the State Government to permit the sale of such land Fourthly the exemption which is granted under Section 20 1 b has to be supported by reasons to be recorded in writing This requirement also contemplates an exemption which is related to and prompted by the use or better use of the land If it is the financial hardship which was under the contemplation of the legislature there was nothing easier than to make a reference to the same in clause b itself and to lay down guidelines for the inquiry into such hardship Fifthly the provisions of sub section 2 of Section 20 directly negative either exemption on account of financial hardship or for the purpose of the transfer of the land since that sub section empowers the State Government to withdraw the exemption already granted if the State Government is satisfied that any of the conditions subject to which the exemption is granted either under clause a or clause b of sub section 1 is not complied with It is inconceivable that the legislature had in mind the cancellation of the transfer including sale which cannot be done when it has already taken place Sixthly as pointed out earlier when the legislature wanted to provide 750 for sale or transfer of the vacant land it has done so specifically in Chapter IV which exclusively deals with the Regulation of transfer and use of urban property Sections 2627 and 28 of the said Chapter together provide for sales of vacant land and for the registration of such sales Section 26 restricts the sale of land even if it is within the ceiling limit except after giving notice in writing of the intended transfer to the competent authority When such notice is given the competent authority has the first option to purchase the land on behalf of the State Government and at a price calculated in accordance with the provisions of the Land Acquisition Act 1894 or of any other corresponding law for the time being in force It is only when the competent authority does not exercise its option to purchase the land within sixty days from the date of receipt of the notice that it is lawful for the holder of the land to transfer the same to whomsoever he may like The provisions of Section 26 further show that the price to be calculated for the purchase of the land when the competent authority exercises its option is on the basis that the notification under sub section 1 of Section 4 of the Land Acquisition Act or under the relevant provision of any other corresponding law had been issued on the date on which the notice was given of the intended transfer by the holder of the land to the competent authority This provision makes it abundantly clear that the exemption to be granted under Section 20 1 11 b is not for the sale of the excess vacant land It is difficult to hold that the legislature which places restrictions on the transfer of the land within the ceiling limit would at the same time give a carte blanch for the sale of the land in excess of the ceiling limit For it would mean firstly that the State Government cannot have an option to purchase such land and secondly the sale can be made by the holder of the excess land at any price that he chooses In the first instance such a reading of Section 20 Ill b would militate against one of the objects of the Act viz to prevent speculation and profiteering in the sale and purchase of land Secondly it would be patently discriminatory Whereas the holder of vacant land within the ceiling limit would have to suffer the restrictions placed by Section 26 the holder of the vacant land in excess of the ceiling limit has not to do so He would in fact be in a better position The provisions with regard to granting such exemption subject to certain conditions contained in Section 20 1 b do not in any way mitigate the discrimination Firstly when the statute itself places specific restrictions under Section 26 on the sale of land within the ceiling limit it is not possible to hold that the conditions on which the State Government is empowered to permit the sale can be left to the discretion of the State Government In fact such discretion given to the State Government 751 would itself be violative of Article 14 of the Constitution the same being unguided and untrammeled This also shows that the legislature has not given power to the State Government under Section 20 ill b to permit exemption for sale of the land Otherwise it would have provided in the section itself for the conditions on which the permission to sell can be given and such conditions could not be less onerous than those provided under Section 26 of the Act Secondly if the power to permit sale of the land was intended to be given only for relieving the land holder of his financial hardship the section could very well have provided for sale of such land under Section 26 of the Act or made provision in Section 20 ill b itself for the first option of the State Government to purchase it It is not suggested that by not making such provision either in Section 20 111 b or Section 26 the legislature intended to permit the sale of such land at a price above the fair market price payable under the Land Acquisition Act 1894 or the corresponding law and thereby encourage speculation and profiteering the very evils which the Act intended to curb Seventhly section 27 in Chapter IV is another provision which prohibits the transfer of any urban or urbanisable land with a building whether constructed before or after the commencement of the Act or a portion only of such building for a period of ten years from the commencement of the Act or from the date on which the building is constructed whichever is later except with the previous permission of the competent authority Sub section 151 thereof again gives the first option to the competent authority to purchase such land and at a price either as agreed upon between the competent authority and the land holder or where there is no such agreement at a price to be calculated in accordance with the provisions of the Land Acquisition Act 1894 or any other corresponding law for the time being in force It is only if the option is not exercised within sixty days or the competent authority has not refused permission to sell the land that the holder of the land can legally transfer the same to whomsoever he may like These provisions of Section 27 also militate against the conferment of the power on the State Government to permit exemption of land for the purpose of its transfer for the same reasons as are based on the provisions of Section 26 discussed above The provisions of Section 27 refer to any urban or urbanisable land with a building The vacant land in excess of the ceiling limit may be with or without a building In fact the provisions of Section 27 directly negative the conferment of such power for the said provisions show firstly that the legislature did not want the 752 sale of any urban or urbanisable land with a building whether it is within or without the ceiling limit except in accordance with the provisions of Section 27 For Section 27 speaks of transfer of any urban or urbanisable land with a building or a portion only of such building only with the permission of the competent authority and on the terms mentioned therein This Court as stated earlier has invalidated the provisions of the said section to the extent they apply to the vacant land with a building when the land is within the ceiling limit But it does apply to land in excess of the ceiling limit and with a building or a portion of it thereon It is not possible to hold that there are two provisions viz Section 20 ill b and Section 27 operating at the same time in the same area For the land permitted to be transferred under Section 20 1 b may also be a land with a building or a portion of a building thereon In one case the restriction imposed by Section 27 on the transfer would not apply and the State Government will be deemed to have been given power to permit the sale even in contravention of the provisions of Section 27 In another case the holder of similar land will have to suffer the restrictions placed by Section 27 There is nothing either in Section 20 1 b or Section 27 to exclude the operation of the section as pointed out earlier Eighthly the provisions of Section 28 require a special procedure to be followed by the registering officer under the while registering documents under Section 17 1 a to e of that Act when the transfer of the land is either under Section 26 or Section 27 Section 28 does not make any reference to the transfer permitted by the State Government under Section 20 1 b In other words the holder of the vacant land in excess of the ceiling limit has not to face the restriction on the registration of the document of transfer of his land provided under Section 28 when such transfer is permitted by the State Government under Section 20 1 b whereas the holder of similar lend who does not approach the State Government has to suffer the same when he transfers the land held by him The discrimination between the transfers under the different provisions is irrational and has no nexus with the object ought to be achieved by the classification Lastly if the power to exempt the land for sale is read in Section 20 1 b with such conditions as the State Government may choose to place and if either the State Government chooses not to place any conditions or to place such conditions as are inconsistent with the provisions of Sections 29 and 30 it would create two sets of lands one where no restriction are applicable to the 753 construction thereon or only such restrictions as the State Government may choose to impose and the other where the restrictions on constructions as provided by Sections 29 and 30 would be applicable It is therefore more than clear that the provisions of Section 20 11 b do not permit the State Government to exempt vacant land in excess of the ceiling limit for the purposes of transfer NP SINGH J I agree with brother Sawant J that it is not possible to hold that State Government can grant exemption under Section 20 1 b of the Act to the holder of the excess vacant land so that he may transfer the same in the manner he desires The object of the Act being imposition of ceiling on vacant land in urban agglomerations and for acquisition of such land in excess of ceiling limit with a view to prevent the concentration of urban land in the hands of a few persons speculations and profiteering therein will that object be not defeated if it is held that power under Section 201 of the Act can be exercised by the State Government to exempt the excess vacant lands from the application of Chapter III of the Act so that the holder thereof can transfer such lands Sub section 1 of section 20 is in two parts The exemption under clause a of the said sub section is to be granted in the public interest whereas under clause b the exemption is to be granted taking into consideration the undue hardship of the holder of the land in excess of the ceiling limit Both the expressions public interest and undue hardship are com prehensive in nature But at the same time it is not easy even for courts to say as to whether under different circumstances the exemption was in the public interest or was necessary in the interest of the holder of the land because of his undue hardship Under Indian conditions expression undue hardship is normally related to economic hardship That is why from time to time many holders of lands in excess of the ceiling limit while claiming exemption under clause b put forth their bad economic condition and indebtedness to claim exemption along with permission to sell such excess lands In the modern set up many holders of such excess lands having undertaken commercial or industrial ventures with the help of the loans from the Banks and other financial institutions put the plea of repayment of such loans as undue hardship for claiming exemption under clause b of section 201 aforesaid How the holders of excess lands having incurred losses or having failed to discharge their debts can 754 claim exemption on the ground of undue hardship in such a situation Section 4 while fixing the ceiling limit under subsection 3 takes note of the fact that where in respect of any vacant land any scheme for group housing has been sanctioned by an authority competent in this behalf immediately before the commencement of this Act then the person holding such vacant land at such commencement shall be entitled to continue to hold such land for the purpose of group housing But at the same time under sub section 4 of section 4 it has been specified that if on or after the 17th day of February 1975 but before the appointed day any person has made any transfer by way of sale mortgage gift lease or otherwise other than a bona fide sale under a registered deed for valuable consideration of any vacant land held by him and situated in such State to any other person whether or not for consideration then for the purposes of calculating the extent of vacant land held by such person the land so transferred shall be taken into account without prejudice to the rights or interests of the transferee in the land so transferred Similarly in section 5 it has been provided that where any person who had held vacant land in excess of the ceiling limit at any time during the period commencing on the appointed day and ending with the commencement of this Act has transferred such land or part thereof by way of sale mortgage gift lease or otherwise the extent of the land so transferred shall also be taken into account in calculating the extent of vacant land held by such person When different provisions take into consideration the lands already transferred by the holder i between the period 17th February 1975 and the appointed day ii as well as between the period commencing from the appointed day and ending with the commencement of the Act it should not be easily inferred that the framers of the Act desired that after the commencement of the Act while exercising the power of exemption under section 201b permission should be granted to holders of such excess lands to transfer such lands to third parties in order to meet their financial liabilities Section 21 is yet another provision in the Act under which excess vacant land is not to be treated as excess Under the said Section exemption is to be granted in respect of such excess vacant land if the holder undertakes to utilise the same for the constructions of dwelling units for accommodation of the weaker sections of the society in accordance with the scheme approved by the competent authority or the State Government subject to such terms and conditions as may be prescribed If Section 21 provides for granting exemption in respect of excess land held by the holder only on a specific condition that the holder shall utilise the same 755 for the construction of dwelling units for weaker section to serve a public cause how the framers of the Act could have conceived the grant of exemption under Section 201 b to the holder of the excess land only to serve his interest by selling such excess lands If it is held that the State Government can exempt the vacant land held by the land holder in excess of the ceiling limit from the applicability of the provisions of Chapter III of the Act in order that the said holder sells such land to liquidate his debts which amounts to an undue hardship then there will be an apparent conflict between the interest of the land holder and the public interest In the interest of the land holder the maximum price fetched by sale of such land will be the solution of his hardship whereas that will run counter to the object of the Act to prevent speculations and profiteering It is futile to urge that even in such transfers the dominant purpose of the legislation to prevent the concentration of urban land in hands of few persons is none the less served The concentration of urban land in hands of few persons has to be prevented with a view to bring about an equitable distribution of land in urban agglomerations to subserve the common good Section 23 prescribes the priorities for disposal or distribution of excess vacant lands after such lands vest in the State under the provisions of the Act In the case of Bhim Singhji vs Union of India it has been said The definition of the word industry in clause b of the Explanation to that section is undoubtedly unduly wide since it includes any business profession trade undertaking or manufacture If sub section 1 of Section 23 were to stand alone no doubt could have arisen that the Urban Land Ceiling Act is a facade of a social welfare legislation and that its true though concealed purpose Is to benefit favored private individuals or associations of individuals But the preponderating provision governing the disposal of excess vacant land acquired under the Act is the one contained in sub section 4 of Section 23 whereby all vacant lands deemed to have been acquired by the State Government under the Act shall be disposed of to subserve the common good The provisions of sub section 4 are subject to the provisions of sub sections 1 2 and 3 but the provisions of sub section 1 756 are enabling and not compulsive and those of sub sections 2 and 3 are incidental to the provisions of sub section 1 The disposal of excess vacant lands must therefore be made strictly in accordance with the mandate of sub section 4 of Section 23 subject to this that in a given case such land may be allotted to any person for any purpose relating to or in connection with any industry or for the other purposes mentioned in sub section 1 provided that by such allotment common good will be subserved The governing test of disposal of excess land being social good any disposal in any particular case or cases which does not subserve that purpose will be liable to be struck down as being contrary to the scheme and intendment of the Act If the vacant lands which have vested in the State are also to be disposed of strictly keeping in view the spirit and object of the Act how under section 201b exemption can be granted to holders of such lands to dispose of such lands in the manner they like the persons they prefer the price they dictate for clearing their debts If it is conceded that indebtedness amounts to an undue hardship then it may cover the debts incurred even after the commencement of the Act The ceiling limit has been fixed by section 3 with reference to the date of the commencement of the Act but exception can be granted till such excess lands vest in the State Government under sub section 3 of section 10 after publication of the notification in terms of the said sub section Although it was not possible even for the framers of the Act to exhaustively indicate as to what shall be deemed to be undue hardship within the meaning of section 201b but it would have been better if it had been illustratively indicated leaving the rest for the courts to decide 201 have made no reference to Section 26 or Section 27 of the Act while considering the question whether on the ground of undue hardship the holder of the excess vacant land can be granted exemption and then permission to sell such excess land because he is financially crippled or burdened with liabilities In the case of Blim Singhji vs Union of India supra this court held that Section 271 in so far as it imposes restriction on transfer of any urban or urbanisable land with a building or of a portion of such building which is within ceiling area was invalid The said sub section 1 of Section 27 757 was struck down being unconstitutional Section 26 of the Act also imposes certain restrictions on transfer of vacant land even within ceding limit It can be urged that Section 261 suffers from the same vice which was pointed out in respect of sub section 1 of Section 27 of Act in the aforesaid case of bhim Singhji vs Union of India supra by this Court But neither in the aforesaid case nor in this case this court was or is concerned with Section 26 and as such according to me it is not necessary to express any opinion in respect of Section 26 of the Act while considering the issue involved in the present appeals ORDER 21For the reasons given by us above we are of view that the provisions of Section 20 1 b of the Act do not permit the State Government to give exemption to the vacant in excess of the ceiling limit for the purposes of transferring the same 22In view of our conclusion as above it is not necessary to go into the further question viz if the State Government has such power in which circumstances it can be exercised and whether financial hardship such as the indebtedness of the land holder is sufficient to warrant such exemption or not and with respect to which date such indebtedness is to be assessed and in what manner and whether in the present case the said aspects of the indebtedness were investigated or properly investigated or not For this very reason we also do not propose to go into the other question regarding the mala fides on the part of the authorities while granting permission to the firm to sell the land to the builders in question 23 Since we have come to the conclusion that the State Government has no power to grant permission to sell the land under Section 20 1 b the orders dated 6387 and 18487 granting exemption and permission to the firm for sale of the land are void ab initio having been passed without jurisdiction Accordingly the sale deed dated 3091987 executed by the 2nd respondent firm in favour of the 3rd respondent builders is held invalid and inoperative as the respondent firm had no legal right to transfer the land in favour of the builders We accordiigly allow the appeals and set aside the impugned order of the High Court The respondents State of Karnataka Ms Narayanaswamy Sons and Ms Reevajethu Builders Developers will pay the costs to the appellants in one set GN Appeals allowed

The appellant was selling ice sticks The Food inspector took samples and sent one sample to the Public Analyst who opined that it contained artificial sweeteners viz saccharin and dulcin and was therefore adulterated A complaint was filed before the Judicial Magistrate Appellant pleaded not guilty and exercised his right to have the sample analysed by the Central Food Laboratory According to the report of the Central Food Laboratory the sample contained artificial sweetener identified as saccharin The Magistrate convicted the appellant for an offence under sec 161 a read with see 71 of the Act sentenced him to suffer one year rigorous imprisonment and to pay a fine of Rs 2000 and in default to undergo imprisonment for three months The appeal preferred by the appellant was dismissed by the Sessions Judge The Criminal Revision petition riled before the High Court was also dismissed Hence the present appeal On behalf of the appellant it was contended that since the report of the Public Analyst which had found the presence of dulcin in the sample stood superseded by the report of the Central Food Laboratory which had not found the presence of dulcin the consumption of which was injurious to health under the Rules the conviction of the appellant for an offence under Section 161 A of the was not justified and that the presence of artificial sweetener like saccharin which has not been declared as injurious to health could not attract the provisions of S161A of the Act Partly allowing the appeal this Court 708 HELD1 It would be seen from Section 161 A of the that in order to maintain a conviction under the said provision the article of food which is adulterated should fall either in one of the sub clausese to 1 of clause ia of Section 2 or should contain an adulterant which is injurious to health The adulterated article of food sold in this case admittedly does not fall in any of the sub clauses e to 1 of Section 2ia According to the report of Central Food Laboratory it also does not contain any adulterant declared as injurious to health 712 E F 2However keeping in view the fact that the Article of food ice stick sold by the appellant did not conform to the standard as prescribed in Item A0704 of Appendix B and contained an artificial sweetener saccharin it is obvious that the article of food sold by the appellant was adulterated within the meaning of Section 2iam of the Act and the same would therefore be punishable under Section 161 a i of the Act 713 C 3It cannot be said that since the appellant had been charged for an offence under Section 161 A of the Act he could not be convicted for an offence under Section 161 a i of the Act The penalty for an offence under Section 161 a i admittedly is less than the penalty prescribed for the offence under Section 161 A which is a graver offence and therefore there is no impediment in the way of the court on the findings of the fact recorded by it to convert the conviction of the appellant from the one under Section 161 A to one under Section 161 a i of the Act notwithstanding the fact that the appellant had been charge sheeted for an offence under Section 161 A of the Act 713 E F 4Judicial notice is taken of the fact that the type of adulterated article sold by the appellant is the one generally consumed by children and it is not only illegal but even immoral to serve them with articles containing artificial sweeteners use whereof has been prohibited by the statute Just because the appeal has remained pending here since 1985 the society cannot be made to suffer for this delay by letting the criminal go unpunished as a crime of this nature being a crime against the society at large cannot be ignored Sympathy in such cases is totally misplaced 714 B D 5The conviction of the appellant is altered from the one under Section 161 A read with Section 71 of the Act to the one under Section 161 a i read with Section 71 of the Act and the sentence is reduced from one year 709 RI and a fine of Rs 2000 to the minimum prescribed for the said offence ie six months RI and a fine of Rs 1000 in default of which the appellant shall suffer imprisonment for one month more 714 E

Appeal No 5897 of 1983 From the Judgment and Order dated 2571979 of the Madras High Court in Tax Case No 5476 Reference No 3576 TA Ramachandran and Janki Ramachandran for the Appellant J Ramamurthy P Parmeswaran NP Ranbir Chandra NP TV Ratnam and Ms A Subhashini NP for the Respondent The Judgment of the Court was delivered by RM SAHAI J Legal issues that arise for consideration in this appeal directed against the decision of the High Court in Commissioner of Income Tax Tamil Nadu vs Universal Radiators on questions of law referred to it in a reference under the Income Tax Act in brief the Act are if the excess amount paid to the assessee due to fluctuation in exchange rate was taxable either because the payment being related to trading activity it could not be excluded under Section 103 of the Act even if it was casual and non recurring in nature or it was stock in trade therefore taxable as revenue receipt or in any case the compensation for the loss of goods could not be deemed anything but profit Shorn of details the assessee a manufacturer of radiators for automobiles booked copper ingots from a corporation in the United States of America for being brought to Bombay where it was to be rolled into strips and sheets and then despatched to assessee for being used for manufacture While the ingots were at sea hostilities broke out between India and Pakistan and the vessel carrving the goods was seized by the authorities in Pakistan The claim of the assessee for the price paid by it for the goods was ultimately settled in its favour by the insurer in America Meanwhile the Indian Rupee had been devalued and therefore in terms of rupees the appellant firm got Rs 343556 as against their payment 780 of Rs 200164 at the old rate The difference was credited to profit on devaluation in the Profit and Loss Account The claim of the appellant that the difference being a casual receipt and non recurring in nature it was not liable to tax was not accepted by the Income Tax Officer In appeal the Appellate Assistant Commissioner was of opinion that the receipt was one which did not arise directly from carrying on business by the assessee but was incidental to it But he did not find any merit in the submission that the ultimate realisation was in nature of capital gains and not revenue receipt In further appeal the Tribunal held that when the goods were seized by the Pakistan authorities the character of the goods changed and it became sterlised and therefore it ceased to be stock in trade of the assessee The Tribunal held that the devaluation surplus was in nature of capital receipt and not a profit made by the assessee in course of business It further found that the money which came to the assessee was as a result of the settlement of the insurance claim and therefore the profit that resulted from it could not be considered to have arisen in normal course of business When the matter came to the High Court in its advisory jurisdiction at the instance of the department on the following questions of law i Wether on the facts and in the circumstances of the case the Appellate Tribunal was right in law in holding that the devaluation surplus earned by the assessee consequent to the settlement of the claim by the insurance company is not assessable as revenue receipt for the assessment year 1967 68 iiWhether on the facts and in the circumstances of the case the Appellate Tribunal was right in holding that the profit earned by the assessee on account of devaluation of Indian Currency was not in the course of carrying on of the business or incidental to the business It did not agree with the Tribunal as according to it if the assessee had got the goods imported into India and sold them it would have got higher amount as a result of devaluation Therefore it held that there could be no dispute that the assessee was liable to pay tax on difference of the sale price and the cost The High Court further held that the nature of the amount which came in the hands of the assessee was revenue receipt It 781 did not agree that the payment made to the assessee was otherwise than for business as the whole transaction was part and parcel of the business carried on by the assessee and could not be described as extraneous to it The High Court thus negatived the claim of assessee for two reasons one the difference in the cost price and the sale price and the other that it was revenue receipt In observing that If the assessee had got the goods imported into India and had sold them at a higher rate which would have increased as a result of devaluation then there can be no dispute that the assessee would be liable to tax on the difference between the sale price and the cost the High Court oversimplified the issue May be any profit or gain accruing to an assessee as a result of difference between the sale price and the cost price in a year is income And by that yardstick the devaluation surplus irrespective of any other consideration may be receipt which in common parlance may be income But liability to pay tax under the Act arises on the income accruing to an assessee in a year The word income ordinarily in normal sense connotes any earning or profit or pin periodically regularly or even daily in whatever manner and from whatever source Thus it is a word of very wide import Clause 24 of Section 2 of the Act is legislative recognition of its elasticity Its scope has been widened from time to time by extending it to varied nature of income Even before it was defined as including profits gains dividends and contributions received by a trust it was held to be a word of broadest connotation which could not be understood in restricted or technical sense The wide meaning of the word was explained by this Court in Raghuvanshi Mills Ltd Bombay vs Commissioner of Income Tax Bombay city and it was emphasised that the expression from whatever source derived widened the net But exigibility to tax is not the same as liability to pay tax The former depends on charge created by the Act and latter on computation in accordance with the provisions in the Act and the rules Surplus in consequence of devaluation of the currency was undoubtedly receipt but the liability to pay tax on it could arise only if it was income for purposes of the Act and was not liable to be excluded from computation under any of the provisions of the Act or the rules framed thereunder Section 10 of the Act provided for exclusion of certain income from computation One of its subsection which is relevant for this appeal during the period under dispute stood as under In computing the total income of a previous year of any 782 person any income failing within any of the following clauses shall not be included 3 any receipts which are of a casual and non recurring nature unless they are i iireceipts arising from business or the exercise of a profession or occupation or iii In substantive clause an income which was casual and non recurring in nature was excluded from being charged as income of the assessee Due to use of word and existence of both the conditions was mandatory Absence of any disentitled the assessee from claiming any benefit under the clause C Casual according to dictionary means accidental or irregular this meaning was approved by this Court in Ramanathan Cheuiar vs Commissioner of Income Tax Madras Non recurring is one which is not likely to occur again in a year But an income even after satisfying the two conditions may still not have been liable to be excluded if it fell in one of the exceptions carved out by the proviso In other words the receipt should not only have been casual and non recurring only but it should not have been receipts arising from business To put it the other way if an income arose in the usual course of business then it would not have been liable for exclusion even if it was casual or non recurring in nature Casual as explained earlier means accidental or irregular But if the irregular or the accidental income arose as a result of business activity then even if it was non recurring it may not have fallen outside the revenue net The real test therefore was the nature and character of income which accrued to the assessee The casual nature of it or non recurring nature were only aids to decide if the nature of income was in the course of business or otherwise In Raghuvanshi Mills Ltd Supra it was held by this Court that a receipt even if it was casual and non recurring in nature would be liable to tax if it arose from business Business has been defined in Clause 13 of Section 2 of the Act as including any trade commerce or manfacture or any adventure or concern in the nature of trade commerce or manufacture In Barendra Prasad Ray and Ors vs Income Tax Officer it has been held by this Court that the expression 783 business is of very wide import and it means an activity carried on continuously and systematically by a person by the application of his labour and skill with a view to earning the income The width of the definition has been recognised by this Court even in SG Mercantile Corporation Pvt Ltd vs Commissioner of Income Tax and Commissioner of Income Tax vs Calcutta National Bank And even a single venture has been held to amount to business and the profit arising out of such a venture has been held to be taxable as income arising from business In Commissioner of Income Tax Mysore vs Canara Bank Ltd 1967 LXIII ITR 328 it was held by this Court that where money was lying idle and the blocked balance was not employed for internal operation or for business by the bank the profit accruing to the assessee on the blocked capital due to fluctuation in exchange rate could not be held to be income arising out of business activity or trading operation The ratio reflects the rationale implicit in sub section 3 of Section 10 of the Act An income which was casual in nature could be brought in the revenue net only if it arose from business In other words the receipt or profit of the nature covered by Section 103 could be brought to tax if it was result of any business activity carried on by the assessee The assessee carried on business of manufacturing radiators and not ingots They were imported to be converted into strips and sheets at Bombay The link which could create direct relationship between the finished goods and raw material was snapped even before it reached Bombay Payment made for loss of such goods did not bear any nexus with the assessee s business May be that if it would have reached it could have been after conversion into strips and sheets used as raw material But so long it did not reach Bombay and was not converted into raw material the connection it bore with the assessee s business was remote And any payment made in respect of it could not be said to accrue from business In Strong and Company of Romsay Limited vs Woodifield Surveyor of Taxes 5 Tax Cases p215 a converse case where the assessee claimed deduction of certain payments made to a customer for the injury caused to him by falling off a chimney due to the assessee s servant s negligence it was held it does not follow that if a loss is in any sense connected with the trade it must always be allowed as a deduction for it may be only remotely connected with the trade or 784 it may be connected with something else quite as much as or even more than with the trade I think only such losses can be deducted as are connected with it in the sense that they are really incidental to the trade itself The word from according to dictionary means out of The income thus should have accrued out of the business carried on by the assessee An income directly or ancillary to the business may be an income from business but any income to an assessee carrying on business does not become an income from business unless the necessary relationship between the two is established What was lost on the seas was not raw material but something which was capable of being converted into raw material The necessary nexus between ingots and radiators which could have resulted in income from ingots never came into being Thus any devaluation surplus arising out of payment paid for loss of ingots could not be treated as income from business of the assessee For deciding the next aspect namely if the excess payment due to devaluation could be treated as revenue receipt two questions arise one if the ingots were stock in trade and other the effect in law of its being blocked or sterlised Stock in trade is goods or commodity in which the assessee deals in course of business activity Good or commodity may be capital or revenue depending on if it is bought or sold or is used or exploited by the assessee Since the ingots by itself were not raw material and were not usable by the assessee for the business of manufacturing radiators unless they were converted into strips and sheets they could not be treated as stock in trade The buying of the ingots by the assessee was not a part of its trading activity Income from goods purchased for business is not an income from business Ratio in State Bank of India vs Commissioner of Income Tar Emakultam relied on behalf of department is not helpful as the Bank of Cochin as part of its banking business had been purchasing cheque payment orders mail transfers demand drafts etc drawn in foreign currencies which were sold or en cashed through assessee correspondent banks in foreign currencies concerned and proceeds credited to the current account of the assessee and therefore the foreign exchange was held to be stock in trade of the assessee and any increase in value of foreign currency resulting in excess credited to the a ssessee s account as a result of devaluation was held to be in consequence of assessee s business activity 785 Even assuming it was stock in trade it was held by this Court in Commissioner of Income Tax vs Canara Bank Lid supra that stock intrade if it gets blocked and sterlised and no trading activity could be carried with it then it ceased to be stock in trade and any devaluation surplus arising on such capital due to exchange rate would be capital and not revenue Applying the ratio of this case the copper ingots which even if assumed to be stock in trade were blocked and sterlised due to hostilities between India and Pakistan and therefore it ceased to be stockin trade and any surplus arising due to exchange ratio in the circumstances was capital receipt only Coming to the issue whether devaluation surplus earned by the assessee consequent on the settlement of the claim by the insurance company could be treated as revenue receipt it may be stated that taxability on profit or deduction for loss depends on whether profit or loss arises in course of business The courts have maintained a distinction between insurance against loss of goods and insurance against loss of profits The latter is undoubtedly taxable as is clear from the decision in Raghuvanshi Mills supra where any amount paid by the insurance company on account of loss of profit was held taxable But what happens where the insurance company pays any amount against loss of goods Does it by virtue of compensation become profit and is taxable as such Taxability of the amount paid on settlement of claim by the insurance company depends both on the nature of payment and purpose of insurance Raghuvanshi Mills decision is an authority for the proposition where the very purpose of insurance itself is profit or gain Result may be the same where the payment is made for goods in which the assessee carried on business Any payment being accretion from business the excess or surplus accruing for any reason may be nothing but profit see the King vs B C Fir and Cedar Lumber Company Ltd Green HM Inspector of Taxes vs J Gliksten Son Ltd Reports of Tax Gases Vol14 p365 Commissioner of Income Tax Bombay City III vs Popular Metal Works Rolling Mills 1983 ITR Vol 142 p361 But where payment is made to compensate for loss of use of any goods in which the assessee does not carry on any business or the payment is a just equivalent of the cost incurred by the assessee but excess accrues due to fortuitous circumstances or is a windfall then the accrual may be a receipt but it would not be income arising from business and therefore not taxable under the Act In Commissioner of Inland Revenue vs William s Executors 26 Tax Cases p23 786 the distinction was explained thus A manufacturer can of course insure his factory against fire The receipts from that insurance will obviously be capital receipts But supposing he goes further as the manufacturer did in that case and insures himself against the loss of profits which he will suffer while his factory is out of action it seems to me it is beyond question that sums received in respect of that insurance against loss of profits must be of a revenue nature The assessee did not carry on business of buying and selling ingots The compensation paid to the assessee was not for any trading or business activity but just equivalent in money of the goods lost by the assessee which it was prevented from using The excess arose onsuch payment in respect of goods in which the assessee did not carry on any business Due to fortuitous circumstances of devaluation of currency but not due to any business or trading activity the amount could not be brought to tax The Appellate Tribunal in the instant case had found the profit on account of devaluation is not business profit or income as it has nothing to do with the business or trading activity of the assessee The profit arose since the clai m was settled by the Insurance Company and the Indian rupee was devalued Even without paying for the goods contracted for the assessee by an extraordinary set of fortuitous circumstances earned a profit which by its very nature is causal and non recurring In this view of the matter the profit cannot be charged to tax The High Court of Kerala in Commissioner of Income Tax vs Union Engineering Works held In the instant case the excess profit as found by the Tribunal was not a receipt arising from business nor was it as admitted on both sides capital gains This was part of the compensation received by the assessee from the insurer for damage caused to its goods The claim for the compensation for damage caused to the goods had been 787 settled with the insurer and the sum so settled did am include any excess profit The excess profit arose entirely due to the devaluation This excess amount was in the nature of a windfall being the unexpected fruit of devaluation and it can not therefore be regarded as a receipt arising from business though it may be said in a sense to be a receipt in the course of business We hold that the Tribunal had correctly held that the sum of Rs1345575 received by the assessee was not a recipt arising from its business within the meaning of section 103ii of the Income Tax Act 1961 We are of the view that on the facts of that case the High Court of Kerala was right in law in upholding the findings of the Tribunal while on the facts found in the instant case the High Court of Madras was wrong in law in reversing the well considered order of the Tribunal For reasons stated by us this appeal suceeds and is allowed Both the questions referred by the Tribunal to the High Court are answered in the affirmative ie in favour of assessee and against the department The assessee shall be entitled to its costs N V K Appeal allowed

On 1741962 A and his mother B sold their agricultural lands measuring 3 acres and 25 acres respectively by executing two sale deeds in favour of Respondent No1 and his father for Rs10000 and Rs75000 respectively On the same day the respondents vendees taking Rs500 back executed two separate agreements in favour of A and B giving them the right of repurchase at any time after 1741969 but before 1641972 On 411963 A and B executed agreements of sale in favour of the appellant for a consideration of Rs130000 in all The appellant paid Rs 30000 till April 1963 to A and B The appellant latter paid Rs 12500 to A and Rs87500 to B and the registered deeds of agreement of sale were executed by A and B Again a sum of Rs1000 was paid to A and Rs 4000 was paid to B by the appellant A and B handed over the agreements executed by the respondent No1 and his father in favour of A and B to the appellant Respondent No 1 s father died leaving behind his widow and son respondent No1 They refused to execute the reconveyance deed The appellant in the Court of Subordinate Judge filed two suits for specific performance of the agreements of re conveyance delivery of possession and mesne profits one suit against the respondent No1 his 889 mother and A and the other one against the respondent No1 his mother and B In the first suit the appellant deposited the amount of Rs9900 in the Court for payment to respondent No1 and his mother and Rs1600 for payment to A and in the other suit he deposited Rs74500 for payment to respondent No1 and his mother and Rs9000 to B The suits were decreed ex parte As IV and B did not rile any application for setting aside the ex parte decree the decree passed against them became final Respondent No1 and his mother filed an application to set aside the ex parte decree and the Court set aside the decree and allowed them to contest the suits The suits were decreed against the respondent No1 and his mother against which they riled appeals in the High Court The High Court setting aside the decree and judgments of the trial Court allowed the appeals riled by the respondent No1 and his mother The plaintiff aggrieved against the judgments of the High Court preferred the present appeals by special leave before this Court Allowing the appeals this Court HELD101 A combined reading of the documents Exhibits A3 A4 A10 and A11 leaves no manner of doubt that A and B had made an agreement to sell the properties in favour of the plaintiff and had also given a right to make the payment of such amount to respondent No1 and his father which they were entitled under the terms and conditions of Exhibits A3 and A4 the agreements of resale made in favour of A and B respectively The plaintiff had filed a suit for specific performance of the agreement for sale impleading B and respondent No1 and his father as defendants in one case and A and respondent No1 and his father in another case and had also deposited the amount of consideration in the Court which clearly proved that the plaintiff was always ready and willing to perform his part of the contract There was no ground or justification for the High Court to dismiss the suits filed by the plaintiff 894 E G 890 102The High Court was wrong in taking the view that it was only IV and B who were entitled to get reconveyance from respondent No1 and his father and the plaintiff was not entitled to enforce such right by a suit for specific performance against respondent No1 and his father 894 H 103The High Court further erred in holding that the restriction of the period during which the plaintiff could have got the sale deeds executed in his favour was two years while A and B under Exhibits A3 and A4 could have exercised such rights within a period of three years and such difference in the period deprived the plaintiff of his right to enforce the agreement of specific performance 895 B 104The plaintiff was exercising the right of specific performance of agreement of sale within the stipulated period of two years and it is unable to accept the reasoning of the High Court as to how the period of three years granted in favour of Al and B in any manner affected or took away the right of the plaintiff to bring a suit for specific performance 895 C 105Under the terms and conditions laid down in Exhibits A3 and A4 the right of repurchase was not given as personal to Al and B and they were entitled to assign such right and the plaintiff having got such right under Exhibits A10 and A11 was entitled to enforce such contract by riling a suit for specific performance The plaintiff in the present case also falls within the meaning of representative in interest as contemplated under Clause b of Section 15 of the On such assignment the plaintiff appellant acquired a valid title to claim specific performance 896 C Sakalaguna vs Munnuswami AIR 1928 PC 174 VisHweshwar vs Durgappa AIR 1940 Bombay 339 and Sinnakaruppa vs Karuppuswami AIR 1965 Madras 506 approved 895 F

Appeal No 1718 of 1984 From the Order dated 171183 of the Customs Excise and Gold Control Appellate Tribunal New Delhi in Appeal No ED SB T 33878 D Order No 69883 D AK Ganguli B Sen AK Chitale BRL Iyengar J Ramamurti Mrs Radha Rangaswami P Parmeswaran CV Subba Rao C Ramesh Virender Kaushal Praveen Kumar Vivek Gambhir SK Gambhir PH Parekh BN Agarwal AV Phadnis Kh Nobin Singh M Veerappa Ashok Sagar Ravinder Narain DN Misra For JBD Co EC Vidyasagar for LR Singh R Vaigai and RK Maheshwari for the appearing parties The Judgment of the Court was delivered by BP JEEVAN REDDY J With a view to induce the Sugar Factories in the country to produce more and also to commence their operations early in the year the Government of India have been issuing notifications from time to time providing for rebate in the Excise Duty in certain circumstances These notifications were issued by the Central Government 763 in exercise of the power conferred by Sub Rule 1 of Rule 8 of the Central Excise Rules 1944 We are concerned in these appeals with four such notifications namely 1 the Notification dated 28972 applicable to the Sugar Year 1972 73 2 Notification dated 41073 applicable to the Sugar Year 1973 74 3 Notification dated 121074 applicable to the Sugar Year 1974 75 and 4 the Notification dated 30976 applicable to the Sugar Year 1976 77 Sugar year means the year commencing on and with 1st October and ending with the 30th of September of the following year The interpretation of these notifications is involved in this batch of appeals In so far as it is material the notification dated 28972 and the notification dated 41073 are similar So are the notifications dated 121074 and 30976 It would be appropriate if we set out the notification dated 28972 in its entirety Notification No 203172 dated 2891972 In exercise of the powers conferred by sub rule 1 of rule 8 of the Central Excise Rules 1944 the Central Government hereby exempts sugar described in column2 of the Table below and failing under sub item 1 of Item No1 of the First Schedule to the 1 of 1944 from so much of the duty of excise leviable thereon as is specified in the corresponding entry in column 3 of the said Table TABLE section No Description of Sugar Duty of Excise 1 2 3 1 Sugar produced in a factory during the Rupees period commencing from the 1st day of forty per October 1972 and ending with the 30th quintal day of November 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971 764 2Sugar produced in a factory during the period commencing from the 1st day of December 1972 and ending with the 30th day of April 1973 Rupees which is in excess of 115 of the quantity twenty of suggar produced during the period commencing per from the 1st day of Decmber 1971 and ending with quintal the 30th day of April 1972 3Sugar produced in a factory during the period commencing from the 1st day of May 1973 and Rupees ending with 30th day of June 1973 which is in twenty excess of the quantity of sugar produced per during the corresponding period in 1972 quintal 4Sugar produced in factory during the period commencing from the 1st day of July 1973 and ending with the 30th day of September 1973 Rupees which is in excess of the quantity of sugar twenty produced during the corresponding period in 1972 per quintal Provided that the exemption under this notification shall not be admissible to a factory a which did not work during the base period or b which had only a trial run in the base period or c which commences production for the first time on or after the 1st day of October 1972 Provided further that in computing the production of sugar during the periods mentioned in column 2 of the said Table a the data as furnished in Form RG 1 prescribed in Appendix I to the Central Excise Rules 1944 or in such other record as the Collector may prescribed under rule 53 or rule 173G of the said rules shall be adopted 765 b any sugar obtained from reprocessing of sugarhouse products left over in process at that end of the base period or earlier shall b e taken into account and c any sugar obtained by refining gur or Khandasari sugar or any sugar obtained by reprocessing of defective or damaged sugar or brown sugar if the same has already been included in the quantity of sugar produced shall not be taken into account Explanation I A factory shall be deemed to have had a trial run during the base period only if on first going into production the period during which actual crushing was done during the base period was less than 40 per cent of the average duration of the season in the State in which the factory is situated Explanation 11 In this notification the expression base period means the period commencing from the 1st day of October 1971 and ending with the 30th day of September 1972 Though the Sugar Year extends over a period of twelve months commencing from 1st of October the period commencing with 1st December and ending with 30th April is said to be the peak production period Most of the sugar factories were commencing their operations only in the month of December Either with a view to induce these sugar factories to produce more or with a view to induce them to commence their operation early in the sugar year the rebate provided for producing sugar in the months of October and November in excess of the corresponding period in the previous sugar year was kept relatively high The scheme of the notification dated 28972 appears to be this 1 If during the months of October and November 1972 in the Sugar Year 1972 73 a factory produced sugar in excess of the quantity of sugar produced by it during the months of October November 1971 such factory was granted rebate in the Excise Duty at the rate of rupees forty per quintal in so far as the excess production is concerned 2 Rebate for the period 1st December 1972 to 30th April 1973 was 766 available at the rate of rupees twenty per quintal provided the production of sugar during the said period was in excess of 115 of the quantity of sugar produced by the said factory during the corresponding period in the previous Sugar Year in so far as the excess production is concerned 3 For the months of May and June 1973 rebate at the rate of rupees twenty per quintal was available provided the factory produced more sugar than it produced during the corresponding months in the previous Sugar Year The said rebate was available again only with respect to the excess production 4 For the period commencing from 1st July 1973 and ending with 30th of September 1973 rebate was available at the rate of rupees twenty per quintal provided the factory produced sugar in excess of the quantity produced during the corresponding period in the previous Sugar Year This rebate too was confined to the excess production However the benefit of the rebate mentioned in any of the clauses aforesaid was not available to a factory which inter alia did not work during the base period The expression base period was defined in Explanation 11 It meant the period commencing from the 1st day of october 1971 and ending with the 30th day of September 1972 Previous Sugar Year The sugar factories concerned with the sugar year 1972 73 did not produce any sugar in one or the other of the four blocks mentioned in the table contained in the Notification in the base year previous sugar year During the current sugar year however they produced certain quantity of sugar during that block period To be more precise take factory A It produced 1000 quintals of sugar in the months of October November 1972 Block period 1 but had not produced any sugar whatsoever in the corresponding period October November 1971 in the base year The question arose whether in such a situation Factory A was entitled to the benefit of rebate provided in Clause 1 of the Table contained in the aforesaid notification with respect to the said 1000 quintals The contention of the factory was that it was so entitled whereas according to the Revenue it was not It is brought to our notice that even before the controversy actually arose between the parties the Committee of the Sugar Mill Owners Association addressed a letter to the Ministry of Finance Government of 767 India seeking a clarification as to the meaning and purport of the aforesaid notification The letter written by the Committee read as follows I am to refer to the Notification No GSR dated 28th September 1972 issued by the Union Ministry of Finance Department of Revenue Insurance New Delhi on the above subject copy enclosed for ready reference In this connection the Government had issued a similar Notification on 13th Oct 1971 on the same subject On this Notification in response to an enquiry made by the Committee of the Association the Board had clarified as per their letter No F No1433 71CX 1 dated 26th November 1971 that a factory which had worked during the base period ie during the period commencing from 1st day of October 1970 and ending with 30th day of September 1971 though it had not worked during the period from 1st October 1970 to 30th November 1970 and the production during this period was nil would be entitled to the excise rebate at the notified rate on its entire production achieved during the month of October and November 1971 As th e Notification issued this year is also on similar lines the Committee presume that the clarification given by the Board last year will apply to the Notification issued this year also ie where a factory has worked in the base period 1st October 1971 to 30th September 1972 it will be entitled to the full rebate on its entire production during the various periods mentioned in the Notification although during the corresponding periods in the last season the production may be nil The Committee shall be glad if you kindly confirm whether their above presumption is correct Thanking you for a line in reply In this letter dated 1st November 1972 the Ministry of Finance intimated the Committee that the presumption made by the Committee is confirmed in respect of the established factories only Later on however the Government of India revised their opinion which has led to the present controversy 768 It is brought to our notice that the sugar factories are governed by and follow the procedure prescribed by Rule 173 G of the Central Excise Rules which rule occurs in Chapter VII A Removal of Excisable Goods on Determination of Duty by producers Manufacturers or Private WareHouse Licencees Rule 173 G requires every assessee to keep an accountcurrent with the Collector separately for each excisable goods in the suc form and manner as the Collector may require The rule requires the assessee to make credit periodically in such account current by cash payment into the treasury so as to keep the balance in such account cumrent sufrent to cover the duties due on the goods intended to be removed at any time Every such assessee has to pay the duty determined for each consignment by debit to such account current before removal of goods The Rules further require every assessee to furnish a monthly return in the prescribed form on the basis of which assessment is completed by the appropriate officer Coming back to the facts of these appeals the claim for rebate made by these factories was allowed in the first instance but later proceedings were initiated to recover back or re adjust as the case may be the benefit already allowed This was the phenomenon all over the country These disputes were carried to High Courts The main dispute was the same as indicated hereinabove The factory has produced a certain quantity of sugar in block period i or for that matter any other block period in the sugar year 1972 73 but had not produced any sugar whatsoever in the corresponding period in the base year previous sugar year but has produced some quantity of sugar during the base year as such whether such factory is entitled to the rebate prescribed in clause i or such other clause as may be applicable of the said Notification Since the Notifications for 1972 73 and 1973 74 are more or less similar disputes raised before High Courts pertained to both these years Indeed the said issue is common to the other two notifications concerned herein as well with some difference as we shall indicate at the proper stage It appears that almost all the High Courts except Karnataka have held in favour of the factories In Patna High Court there appears to be a conflict of opinion Karnataka High Court has however held in favour of the Union of India The first of the reported decisions is of the Andhra Pradesh High Court Chinnappa Reddy J as he then was in Etikoppaka Co operative 769 Agricultural Society vs Union of Inida The reasoning in the said Judgment has been followed by most of the other High Courts See 1982 59 ELT 409 AHahabad Haryana and Shri Ganguli learned counsel for the Union of India contends as follows Language of the Notifications pertaining to the year 1972 73 and 1973 74 is quite clear and unambiguous The benefit of rebate is available only where the sugar produced in a factory during the period commencing from the 1st day of October 1972 and ending with the 30th day of November 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971 to take clause i of the Notification relating to 1972 73 The clause contemplates and is based on the premise that sugar is produced during October November 1972 as well as October November 1971 If no sugar was produced during the corresponding period in the previous sugar year October November 1971 the very clause is inapplicable The contention of the factory owners which has no doubt been accepted by a majority of High Court does voilence to the plain language of the clause The interpretation placed by the factoryowners leads to certain absurd consequences Learned counsel gave more than one illustration to emphasise his submission Take a case where a factory has produced one thousand quintals of sugars in October November 1971 and has also produced one thousand quintals in October November 1972 In such a situation the factory would not get any rebate in terms of the notification dated 28972 whereas another factory which may not have produced any sugar whatsoever in October November 1971 but has produced one thousand quintals of sugar in October November 1972 gets the rebate at the rate of rupees forty per quintal This would really amount to says the counsel punishing the first factory more efficient factory for producing the sugar in the previous year And to rewarding the second one the indolent factory which did not produce any sugar during OctoberNovember 1971 Another illustration given by the learned counsel is this a factory had produced five thousand quintals of sugar during the period 1st December 1971 to 30th April 1972 it produces the very some quantity again during the period 1st December 1972 to 30th April 1973 such a factory would not be entitled to any rebate under clause 2 of the said notification but another factory which had produced say just 1000 quintals during the period December 1 1971 to April 30 1972 but produces 770 five thousand quintals during the period December 1 1972 to April 30 1973 would get the benefit of rebate on 4000 quintals This again amounts to says the counsel rewarding the inefficient and indolent and punishing the efficient The learned counsel seeks to reinforce his argument by referring to clause 2 It relates to the period 1st December 1972 to 30th April 1973 Rebate in the sugar produced during this period is available only if it is in excess of 115 per cent of the quantity of sugar produced during the period December 1 1971 to April 30 1972 If the production is nil during the corresponding period in the previous sugar year asks the counsel how is one to work out 115 of it What is 115 of zero asks he For all these reasons counsel says nil production cannot be equated to the quantity of sugar produced in clause 1 Counsel also says that Clause 1 of the first Proviso in the said notification should be harmonised with the several clauses mentioned in the Table and that no interpretation should be adopted which renders any part of the said notification superfluous We find ourselves unable to agree with the learned counsel for the Union of India While we agree that the several clauses in the Notification must be read together harmonised and reasonably understood we cannot also ignore the underlying object and purpose of the notification We Also agree that an interpretation which leads to absurd consequences should be avoided Even so we are afraid we cannot agree with the learned counsel The object behind the notification was evidently not only to induce the factories to produce more sugar but also to induce them to start their production early in the sugar year The object appears to be also to induce the factories to keep on producing the sugar all the year round which they may perhaps not have done otherwise Running the factories during the off season we are told off season means October November period and then again the period from May June to September may have its own problems which may increase the cost of production Be that as it may the main issue is whether the words the quantity of sugar produced during the corresponding period do not take in the case of a factory which has not produced any sugar whatsoever during the relevant corresponding period On a consideration of the rival points of view we are of the opinion that it does take in Holding otherwise would have this absurd consequence a factory which has produced say just one quintal of sugar during the relevant corresponding period and has produced 1000 quintals during October November 1972 would qualify for the rebate on 999 quin 771 tals while another factory which has not produced any sugar nil production but has produced 1000 quintals during October November 1972 would not qualify How does this interpretation advance the purpose of the notification is difficult to appreciate Coming to the second illustration given by the learned counsel we must say that the idea behind the said notification is to induce the manufacturers to produce more in the current sugar year than what they have produced in the previous sugar year or during the previous corresponding period in the previous sugar year as the case may be If this is the object there is nothing absurd in saying that a factory which has produced five thousand tons during December 1 1971 to April 30 1972 and produces the very same quantity during the period December 1 1972 to April 30 1973 does not qualify for rebate under clause 2 There is no reason or occasion for granting him any rebate But where a factory has not produced any sugar or has produced a particular quantity of sugar during the said period in the previous sugar year but produces a larger quantity during the said period in the current sugar year it must be rewarded It may be remembered that no manufacturer produces sugar merely for the sake of rebate Rebate is an inducement an additional attraction It is not as if without rebate provided by these notifications no one would have produced sugar We are also unable to see any difficulty in operating clause 2 of the said notification There is no arithmetical difficulty in working out 115 of zero it is zero What applies to clause 1 applies equally to clauses 2 3 and 4 Our understanding is reinforced and supported by clause a of the first proviso It says that the benefit of the said rebate would not be available to a factory which did not work during the base period Why does it say so What is its meaning and implication It is only that the factory need not necessarily have worked during each of the corresponding periods in the base year it is enough if it has worked in the base year We may point out that a majority of the High Courts in the country have adopted the very same interpretation as has been placed by us It is then argued by the learned counsel for the appellant that exemption notifications should be strictly concluded There is no quarrel with the proposition but there is another equally valid principle that such notifications should be given their due effect keeping in view the purpose 772 underlying We must reiterate that no factory owner would keep his factory idle during a particular period only with a view to produce sugar during the same period in the next sugar year and earn rebate in the next year More particularly it can not reasonably be expected that a factory owner would deliberately keep his factory idle during the peak production period December to April only with a view to produce sugar during that period next year and earn rebate in such next year It would be unrealistic to say so Actually these notifications were being issued every year confined to that year They were being issued just on the eve of the sugar year or a few days after the commencement of the sugar year and there were variations in the relevant clauses from year to year Construed realistically we see no room for any absurdity resulting from our interpretation The case of October November appears to be rather an exception Normally it appears no factory owner commenced the production of sugar in these months because of several unfavorable factors Indeed these unfavorable factors appear to be present to a large extent even during the months June to September These notifications were evidently meant to compensate the factory owners for producing during these months as well As stated already one must proceed on the assumption that every industrialist and businessman would ordinarily like to produce as much more as possible since normally speaking more production means more profits For the above reasons we are of the opinion that the interpretation placed upon the said notifications by the majority of the High Courts is the correct one We do not agree with the view taken by the Karnataka High Court in its Judgment under appeal in Civil Appeal Nos 3831 32 of 1988 For the same reason we do not also agree with the view taken by the Patna High Court in Civil Writ Jurisdiction Case No 865 of 1966 Now coming to the Notifications for the years 1974 75 and 1976 77 the concept of base year is not to be found here otherwise they are similar to those relating to 1972 73 and 1973 74 In the notification dated 121074 relating to the sugar year 1974 75 the sugar year is divided into two blocksperiods The first block comprises October and November 1974 whereas the second block takes in December 1974 to September 1975 Here too the question is identical to that arising in the years 1972 73 and 1973 74 The answer too will naturally be the same 773 In view of the aforesaid conclusion it is not necessary for us to go into the other questions raised by the factory owners except the following There is a minor controversy with respect to the working of Clause 2 in Notification No 14674 dated 121074 relating to the sugar year 1974 75 Clause 2 the table contained in the notification reads as follows TABLE No Description of Sugar Duty of excise 1 2 Free Sale Levy of Sugar Sugar 3 4 1 2 Sugar produced in a factory during the period commencing on the 1st day of December 1974 and ending with the 30th day of September 1975 which is in excess of the average production of the corresponding period of the preceding five sugar years that is a on excess production upto Rs 20 per Rs 5 per 75 quintal quintal b on excess production on the Rs 40 per Rs 10 per next 10 quintal quintal c on excess production on the Rs501 per Rs 14 per next 10 quintal quintal d on excess production on the Rs60 per Rs 18 per next 10 quintal quintal e on excess production beyond Rs 82 per Rs 22 per 375 quintal quintal Mr Ganguli learned counsel for the Union of India says that some of the Courts have applied the percentages mentioned in sub clauses a to e to the excess production and not to the average production of the preceding five sugar years We may take an illustration to explain what the learned counsel says Take a case where the average production of a factory during the corresponding period December 1 to September 30 of 774 the preceding five sugar years is 1000 quintals That factory produces 2500 quintals during the period December 1 1974 to September 30 1975 In such a case the ascending percentages mentioned in sub clauses a to e of clause 2 have to be applied for working out the rebate According to us it must be done in the following manner keeping in mind that the basis for these percentages in the average production of the previous five years and not the excess production Out of 2500 quintals produced during the said period in the current sugar year December 1 1974 to September 30 1975 the average of the five previous sugar years ie 1000 quintals should be deducted first which means the excess production during the current year is 1500 quintals 75 of 1000 quintals is 75 quintals On this quantity of 75 quintals the rate of rebate as per sub clause a will be Rs 20 per quintal in the case of free sale sugar and Rs 5 per quintal in the case of levy sugar Next 10 of excess production means 100 quintals which would be eligible for rebate under sub clause b at the rate of Rs 40 per quintal in the case of free sale sugar and Rs 10 per quintal in the case of levy sugar The next 100 quintals would be eligible for rebate under sub clause c at the rate of Rs50 per quintal in the case of free sale sugar and Rs 14 per quintal in the case of levy sugar Then again the next 100 quintals would be eligible for rebate under sub clause d at the rate of Rs 60 per quintal in the case of free sale sugar and Rs 18 per quintal in the case of levy sugar The balance of 1125 quintals would qualify for rebate under sub clause e at the rate of Rs 82 per quintal in the case of free sale sugar and Rs 22 per quintal in the case of levy sugar This is the interpretation and understanding contended for by Shri Ganguli and we must say that none of the counsel for the factory owners disputed the same It is accordingly directed that the above method shall be followed in working out clause 2 of the notification dated 121074 Accordingly all the civil appeals except Civil Appeal Nos 3831 32 of 1988 fail and are dismissed Civil Appeals No 3831 32 of 1988 are allowed The authorities will take action in accordance with this judgment There will be no order as to costs VPR CA Nos 3831 3288 allowed Rest of the appeals dismissed

The second respondent a partnership firm was carrying on the business of manufacturing and selling polished granites It was running its factory in a small portion of the land owned by it and the rest of the land was vacant when the Urban Land Ceiling Regulation Act 1976 was made applicable to that area The firm made an application to the State Government for exemption of the vacant land from the provisions of 715 716 the said Act and the exemption was granted subject to certain conditions The Competent Authority under the Act came to the conclusion that there was some excess vacant land and directed the publication of a notification us 101 of the Act for acquisition of the same Later the firm made an application to the State Government for permission to sell the vacant land to the third respondent builders mainly on the ground that the firm had been incurring huge losses in its business On 631987 the State Government permitted the firm to sell the land to the builders only to the extent of 16194 sq mtrs Again the firm riled another application to transfer the remaining 3444 sq mtrs of land to the builders and on 1841987 the State Government permitted the same subject to certain conditions Consequently by a sale deed dated 3091987 the firm entered into a deed of absolute sale with the builders for sale of the entire vacant land Writ Petitions by way of Public Interest Litigation were riled in the High Court challenging the exemptions granted by the State Government for declaring the sale deed void and inoperative and for acquiring the land for the weaker sections A Single Judge allowed the Writ Petitions and gave certain directions including sale of plots to be carved out from the land and only such number of plots as would be necessary to discharge the debts of the firm were to be sold and the remaining portion of the vacant land was to be acquired under the Act He also held that there were no mala fides in the State Government granting exemptions by its orders date 631987and 1841987 Against the decision of the Single Judge appeals were preferred before the Division Bench of the High Court and the Division Bench set aside the findings as well as the direction given by the Single Judge Aggrieved by the Judgment of the Division Bench the appellants preferred the present appeals Allowing the appeals this Court HELD BY THE COURT IIThe provisions of Section 201b of the Urban Land Ceiling and Regulation Act 1976 do not permit the State Government to give exemption to the vacant land in excess of the ceiling limit for the purposes 717 of transferring the same 757 C 12The orders dated 631987 and 1841987 granting exemption and permission to the firm for sale of the land are void ab initio having been passed without jurisdiction Accordingly the sale deed dated 3091987 executed by the 2nd respondent firm in favour of the 3rd respondent builders is invalid and inoperative as the respondent firm had no legal right to transfer the land in favour of the builders 757 F G 13In view of the above conclusions it is not necessary to go into the questionsas to whether the State Government has the power to grant exemption thecircumstances in which it can be exercised and whether financial hardship such as the indebtedness of the land holder is sufficient to warrant such exemption or not and the date on which such indebtedness is to be assessed and in what manner and whether in the present case the said aspects of the indebtedness were properly investigated or not for this very reason there is no need to go into the other question regarding the mala fide on the part of the authorities while granting permission to the firm to sell the land to the builders in question 757 D E Per Sawant J 1The provisions of Section 201b of the Urban Land Ceiling Regulation Act 1976 do not permit the State Government to exempt vacant land in excess of the ceiling limit for the purposes of transfer 753 B 2The central object of the Act as is evident both from the preamble as well as the statement of objects and reasons is to acquire vacant land in excess of the ceiling area and to prevent speculation and profiteering in the same and also to distribute the land equitably to subserve the common good It is therefore per se against the said object to permit the sale of the excess vacant land for whatever reasons including the undue hardship of the land holder To construe the provisions of Section 20 1 b so as to read in them the conferment of such power on the State Government for whatever reasons is to distort and defeat the whole purpose of the legislation Further neither the plain language of the clause nor its context and intendment merit such construction Section 20 itself is titled Power to exempt The power given to the State Government under the Section is only to exempt certain excess vacant lands from the operation of the provisions of Sections 3 to 19 of Chapter 111 none of which refers to the subject of transfer or 718 restrictions on transfer Those provisions relate to the calculation declaration acquisition and vesting of the excess vacant land It is Chapter IV which relates to the transfers of vacant lands and the restrictions thereon Further from the scheme of the Act it is evident that the transfers of the vacant land were to be regulated by the specific provisions made in it They were not to be left to be governed by the unguided discretion of any authority including the State Government The specific provisions for regulating the transfer have been incorporated in Sections 26 to 28 of the Act Those provisions permit transfer of only vacant lands within the ceiling limit but without buildings and of vacant lands in excess of the ceiling limit but with buildings thereon and subject to the condition s laid down there It cannot be suggested that in defiance of the said provisions Section 201b vests power in the State Government to sanction sales of excess vacant lands with or without building thereon Under Section 201 b the State Government can only exempt such excess vacant land from being acquired by it The Government cannot permit its transfer when the Act does not even by implication authorise it to do so but permits the transfer subject only to the conditions prescribed by Section 27 The legislature cannot be presumed to have prescribed different conditions for transfer of the same or similar lands 746 C H 747 A 3 The restriction on transfer even of vacant land within the ceiling limit but without building is deemed to be valid Thus the transfer of the vacant land without building even if it is within the ceiling limit and of the vacant land in excess of the ceiling limit with a building or a portion of the building are subject to the restrictions placed by the Act Section 20 is subject to the provisions of sections which follow it including Sections 26 to 28 Hence no construction can be placed on clause b of sub section 1 thereof which will be in conflict with the provisions of sections 26 to 28 747 E F Maharao Sahib Shri Bhim Singhji vs Union of India referred to Since as per the definition of person in Section 2i the said provision viz S201 a is applicable not only to individuals but also to a family a firm a company or an association or body of individuals whether incorporated or not the hardship spoken of there is obviously one related to the user of the land In fact it is difficult to understand the precise purpose for which clause b has been enacted and the meaning of the expression undue hardship there One is left only to speculate on the subject The 719 speculation itself may not be valid The lands are held by companies trusts and associations for industrial and commercial use for the use of medical and educational institutes sports clubs cultural activities gardens exhibitions etc There is no special provision made in the Act to protect or take care of such users The only provision under which a relief can be given to preserve and safeguard such user is Section 201 a But that provision can be pressed into service only on the basis of the location of the land and its present or prospective user and only if it passes the test of public interest However all lands in excess of the ceiling limit may not strictly be necessary for such user even if the user is in the public interest Nevertheless the withdrawal of a part of the land found to be in excess may cause an avoidable hardship to the land holder which may be disproportionateto the benefit that is to accrue to the public on account of such withdrawal The excess of land may be meager or the severance of such excess land itself may result in unnecessary hardship The hardship further has to be undue and not merely an ordinary hardship which is bound to be caused on account of the application of the Act to every holder of the excess vacant land The undue hardship must be one which cannot be avoided except by granting a relief of exemption as contemplated by the said provision The relief from financial hardship or from indebtedness to the land holder of such land is alien both to the object and the scheme of the Act The classification of the owners of land for this purpose between debtors and non debtors is itself irrational and has no plausible nexus with the object of the Act Such a classification is therefore discriminatory and violative of Article 14 of the Constitution 748 B H 749 Al Thakorbhai Dajibhai Desai vs State of Gujarat AIR 1980 Guj 1891 overruled 5The exemption which is granted under Section 201b has to be supported by reasons to be recorded in writing This requirement also contemplates an exemption which is related to and promoted by the use or better use of the land If it is the financial hardship which was under the contemplation of the legislature them was nothing easier than to make a reference to the same in clause b itself and to lay down guidelines for the inquiry into such hardship The provisions of sub section 2 of Section 20 directly negative either exemption on account of financial hardship or for the purpose of the transfer of the land since that sub section empowers the State Government to withdraw the exemption already granted If the 720 State Government is satisfied that any of the conditions subject to which the exemption is granted either under clause a or clause b of sub section 1 is not complied with It is inconceivable that the legislature had in mind the cancellation of the transfer including sale which cannot be done when it has already taken place 749 E G 6It cannot be said that the legislature which places restrictions on the transfer of the land within the ceiling limit would at the same time give a carte blanche for the sale of the land in excess of the ceiling limit For it would mean that the State Government cannot have an option to purchase such land and that the sale can be made by the holder of the excess land at any price that he chooses Such a reading of Section 20ib would militate against one of the objects of the Act viz to prevent speculation and profiteering in the sale and purchase of land Moreover it would be patently discriminatory Whereas the holder of vacant land within the ceiling limit would have to suffer the restrictions placed by Section 26 the holder of the vacant land in excess of the ceiling limit has not to do so He would in fact be in a better position The provisions with regard to granting such exemption subject to certain conditions contained in Section 201b do not in any way mitigate the discrimination When the statute itself places specific restrictions under Section 26 on the sale of land within the ceiling limit it is not possible to reach a conclusion that the conditions on which the State Government is empowered to permit the sale can be left to the discretion of the State Government In fact such discretion given to the State Government would itself be violative of Article 14 of the Constitution the same being unguided and untrammeled This also shows that the legislature has not given power to the State Government under Section 201b to permit exemption for sale of the land Otherwise it would have provided in the section itself for the conditions on which the permission to sell can be given and such conditions could not be less onerous than those provided under Section 26 of the Act If the power to permit sale of the land was intended to be given only for relieving the land holder of his financial hardship the section could very well have provided for sale of such land under Section 26 of the Act or made provision in Section 201b itself for the first option of the State Government to purchase it It cannot be said that by not making such provision either in Section 201b or Section 26 the legislature intended to permit the sale of such land at a price above the fair market price payable under the Land Acquisition Act 1894 or the corresponding law and thereby encourage 721 speculation and profiteering the very evils which the Act intended to curb A 750 E H 751 A C 7The provisions of Section 27 also militate against the conferment of the power on the State Government to permit exemption of land for the purpose of its transfer The provisions of Section 27 refer to any urban or urbanisable land with a building The vacant land in excess of the ceiling limit may be with or without a building In fact the provisions of Section 27 directly negative the conferment of such power for the said provisions show that the legislature did not want the sale of any urban or urbanisable land with a building whether it is within or without the ceiling limit except in accordance with the provisions of Section 27 For Section 27 speaks of transfer of any urban or urbanisable land with a building or a portion only of such building only with the permission of the competent authority and on the terms mentioned therein This Court has invalidated the provisions of the said section to the extent they apply to the vacant land with a building when the land is within the ceiling limit But it does apply to land in excess of the ceiling limit and with a building or a portion of it thereon It is not possible to accept that there are two provisions viz Section 201b and Section 27 operating at the same time in the same area Also there is nothing either in Section 201b or Section 27 to exclude the operation of Section 27 751 G H 752 A Maharao Sahib Shri Bhim Singhji etc vs Union of India 8Section 28 does not make any reference to the transfer permitted by the State Government under Section 201 b The holder of the vacant land in excess of the ceiling limit has not to face the restriction on the registration of the document of transfer of his land provided under Section 28 when such transfer is permitted by the State Government under Section 201b whereas the holder of similar land who does not approach the State Government has to suffer the same when he transfers the land held by him The discrimination between the transfers under the different provisions is irrational and has no nexus with the object ought to be achieved by the classification 752 E G 9If the power to exempt the land for sale is read in Section 20 1 b with such conditions as the State Government may choose to place and if either the State Government chooses not to place any conditions or to 722 place such conditions as are inconsistent with the provisions of Sections 29 and 30 it would create two sets of lands one where no restrictions are applicable to the construction thereon or only such restrictions as the State Government may choose to impose and the other where the restrictions on constructions as provided by Section 29 and 30 would be applicable 752 G H 753 A Per NP Singh J Concurring 1The object of the Act being imposition of ceiling on vacant land in urban agglomerations and for acquisition of such land in excess of ceiling limit with a view to prevent the concentration of urban land in the hands of a few persons speculations and profiteering therein that object will be defeated if the power under Section 201 of the Act is exercised by the State Government to exempt the excess vacant lands from the application of Chapter III of the Act so that the holder thereof can transfer such lands 753 C D 2Under Indian conditions the expression undue hardship is normally related to economic hardship That is why from time to time many holders of lands in excess of the ceiling limit while claiming exemption under clause b put forth their bad economic condition and indebtedness to claim exemption along with permission to sell such excess lands In the modern set up many holders of such excess lands having undertaken commercial or industrial ventures with the help of the loans from the Banks and other financial institutions put the plea of repayment of such loans as undue hardship for claiming exemption under clause b of section 201 aforesaid When different provisions take into consideration the lands already transferred by the holder between the period 17th February 1975 as specified in sub 4 of S4 and the appointed day as well as between the period commencing from the appointed day and ending with the commencement of the Act it should not be easily inferred that the framers of the Act desired that after the commencement of the Act while exercising the power of exemption under section 201 b permission should be granted to holders of such excess lands to transfer such lands to third parties in order to meet their financial liabilities 753 G H 754 A F 3If Section 21 provides for granting exemption in respect of excess land held by the holder only on a specific condition that the holder shall utilise the same for the construction of dwelling units for weaker section to 723 serve a public cause the framers of the Act could not have conceived the grant of exemption under Section 201b to the holder of the excess land only to serve his interest by selling such excess lands 754 H 755 A F 4If the State Government can exempt the vacant land held by the land holder in excess of the ceiling limit from the applicability of the provisions of Chapter III of the Act in order that the said holder sells such land to liquidate his debts which amounts to an undue hardship then there will be an apparent conflict between the interest of the land holder and the public interest In the interest of the land holder the maximum price fetched by sale of such land will be the solution of his hardship whereas that will run counter to the object of the Act to prevent speculations and profiteering It cannot be said that even in such transfers the dominant purpose of the legislation to prevent the concentration of urban land in hands of few persons is nonetheless served The concentration of urban land in hands of few persons has to be prevented with a view to bring about an equitable distribution of land in urban agglomerations to subserve the common good 755 B D 5If the vacant lands which have vested in the State are also to be disposed of as stipulated under S23 strictly keeping in view the spirit and object or the Act exemption us201b cannot be granted to holders of such lands to dispose of the lands in the manner they like to the persons they prefer at the price they dictate for clearing their debts If it is conceded that indebtedness amounts to an undue hardship then it may cover the debts incurred even after the commencement of the Act 756 D E 6This Court has already held that Section 271 in so far as it imposes restriction on transfer of any urban or urbanisable land with a building or of a portion of such building which is within ceiling area was invalid The said sub section 1 of Section 27 was struck down being unconstitutional Section 26 of the Act also imposes certain restrictions on transfer of vacant land even within ceiling limit It can therefore be stated that Section 261 suffers from the same vice But neither in that case nor in this case this court was or is concerned with Section 26 As such it is not necessary to express any opinion in respect of Section 26 of the Act while considering the issue involved in the present appeals 756 G H 757 A B Maharao Sahib Shri Bhim Singhji etc vs Union of India Ors referred to

Appeal No 1496 of 1993 From the Judgment and Order dated 2021985 of the Orissa High Court in First Appeal No139 of 1974 Raj Kumar Mehta for the Appellant The Judgment of the Court was delivered by BP JEEVAN REDDY J Heard the counsel for the appellant None appears for the respondent though served Leave granted This appeal by the Orissa State Electricity Board is preferred against the judgment of the Orissa High Court allowing partly an appeal preferred by the respondent The dispute pertains to the liability of the consumer respondent in this appeal to pay the minimum charges during the period subsequent to the date of disconnection of supply of energy to him for the non payment of electricity dues The respondent is an industry It entered into an agreement with the appellant for supply of electricity on March 5 1965 The agreement was valid for a period of five years He started availing of the energy with effect from July 31 1965 The supply of his industry was disconnected on April 30 1968 for non payment of electricity charges Since the consumer also failed to pay the minimum charges for the period subsequent to the date of disconnection the Board filed a suit for the amount due on account of the electricity consumed between April 1 1968 and April 30 1968 and for the minimum charges for the period May 1 1968 to March 5 1970 It may be remembered that the agreement between parties was valid upto March 5 1970 The Trial Court decreed the suit as prayed for along with interest 862 of 6 per annum on the amount decreed from the date of suit till the date of decree and also future interest at the same rate till full satisfaction On appeal the High Court sustained the decree of the Trial Court only for the period upto the date of disconnection April 30 1968 but disallowed the claim for the period subsequent to the date of disconnection The reasoning of the High Court is that inasmuch as the supply was disconnected and the respondent consumer did not avail of any energy whatsoever during the period subsequent to the disconnection it is not liable to pay the minimum charges In this appeal it is contended by the learned counsel for the appellant that the question arising herein is concluded in favour of the Board by the decision of this Court in Bihar State Electricity Board Patna and Ors vs Ms Green Rubber Industries and Ors 1990 1 SCC 731 On a perusal of the judgment we find that was also a case where the claim inter alia pertained to the period subsequent to the date of disconnection till the expiry of the agreement In that case too minimum charges were claimed by the Board even for the period during which the supply remained disconnected and no energy whatsoever was availed of by the consumer We also find that clause 4 of the agreement considered in the said decision and clauses 6 and 13 of the agreement concerned herein are substantially same Clause 13 of the agreement between the parties hereto does oblige the consumer to pay a certain minimum charges in any event The clause reads as follows Clause 13 The consumer shall subject to the provisions hereinafter contained pay to the Engineer for the power demand and electrical energy supplied under this Agreement the charges to be ascertained as mentioned below viz Government resolution on tariff to be inserted here LARGE INDUSTRIES For demand of 125 KVA and above for supply at 11 KV at i Rs550 paise per KVA per month plus ii Rs008 paise per KWH per month subject to an overall maximum rate of Rs009 paise per KWH and 863 without prejudice to payment of minimum charge of 75 per cent of the contract demand at the above rate of Rs550 paise per KVA per month and subject further to absolute minimum payment on 125 KVA in the first part of the tariff For less than 250 KVA the demand may be metered in KW and charged for at Rs600 per KW per month Besides the charges for KWH consumed at the rate specified above For supply at MT less than 11 KVA and MT less that 11 KVA and MT the above rate will be increased by 10 The reasons for such a stipulation and its justifiability are duly and fully explained by this Court in the aforesaid decision It is not necessary for us to reiterate the same The appeal is accordingly allowed The Judgment of the High Court is set aside The judgment and decree of the Trial Court is restored No costs TNA Appeal allowed

The appellant assessee a manufacturers of radiators for automobiles booked copper ingots from a corporation In the United States of America for being brought to Bombay where it was to be rolled Into strips and sheets and then despatched to the assessee for being used for manufacture While the ingots were at sea hostilities broke out between India and Pakistan and the vessel carrying the goods was seized by the authorities in Pakistan The claim of the assessee for the price paid by it for the goods was ultimately settled in its favour by the Insurer in America The Indian Rupee In the meanwhile had been devalued and therefore in terms of rupees the appellant firm got Rs 343556 as against their payment of Rs 200164 at the old rates The differnece was credited to profit on devaluation in the Profit and Loss Account The claim of the appellant that the difference being a causal receipt and non recurring In nature and as such was not liable to tax was not accepted by the IncomeTax Officer The Appellate Assistant Commissioner rejected the appeal of the assessee being of the opinion that the receipt was one which did not arise directly from carrying on business by the assessee but was the incidental 776 to it and not finding any merit in the submission that the ultimate realisation was in the nature of capital gains and not revenue recipt In further appeal by the assessee the Tribunal held that when the goods were seized by the Pakistan authorities the character of the goods changed and it became sterilized and therefore it ceased to be stock intrade of the assessee that the devaluation surplus was in nature of capital receipt and not a profit made by the assessee in the course of business that the money which came to the assessee was as a result of the settlement of the insurance claim and therefore the profit that resulted from it could not be considered in the normal course of business The High Court in its advisory jurisdiction at the instance of the Department negatived the claim of the assessee for two reasons one the difference in the cost price and the sale price and the other that it was revenue receipt and did not agree with the Tribunal as according to it if the assessee had got the goods imported into India and sold them it would have got higher amount as a result of devaluation and held that there could be no dispute that the assessee was liable to pay tax on the difference of the sale price and the cost It further held that the nature of the amount which came in the hands of the assessee was a revenue receipt and did not agree that the payment made to the assessee was otherwise than for business as the whole transaction was part and parcel of the business carried on by the assessee and could not be described as extraneous to it In the assesses appeal to this Court on the question whether the excess amount paid to the assessee due to fluctuation in exchange rate was taxable or not Allowing the appeal this Court HELD 1 The word income ordinarily in normal sense connotes any earning or profit or gain periodically regularly or even daily in whatever manner and from whatever source It is thus a word of very wide import Section 224 of the Income Tax Act is legislative recognition of its elasticity Its scope has even widened from time to time by extending it to varied nature of income Even before it was defined as including profits gains dividends and contributions received by a trust it was held to be a word of broadest connotation which could not be understood in restricted or technical sense 781 D E 777 Raghuvanshi Mills Ltd Bombay vs Commissioner of Income Tax Bombay City referred to 781 E 2 Casual means accidental or irregular If the irregular or the accidental income arose as a result of business activity them even if it was non recurring it may not have fallen outside the revenue net The real test is therefore what was the nature and character of the income which accrued to the assessee The causal nature of it or non recurring nature were only aids to decide if the nature of income was in the course of business or otherwise 782 F Barendra Prasad Ray and Ors vs Income Tax Officer section G Mercantile Corporation Pvt Ltd vs Commissioner of Income Tax Commissioner of Income Tax vs Calcutta National Bank and Commissioner of Income Tax Mysore vs Canara Bank Ltd 1967 LXIII ITR 328 referred to 782 G H 783 B 3 An income which was casual in nature could be brought In the revenue net only if it arose from business In other words the receipt or profit of the nature covered by Section 103 could be brought to tax if it was the result of any business activity carried on by the assessee 783 D In the instant case the assessee carried on business of manufacturing radiators and not ingots The ingots were imported to be converted into strips and sheets at Bombay The link which could create direct relationship between the finished goods and the raw material was snapped even before it reached Bombay Payment made for loss of such goods did not bear any nexus with the assessee s business May be that if it would have reached it could have been after conversion into strips and sheets used as raw material But so long as it did not reach Bombay and was not converted into raw material the connection it bore with the assessee s business was remote And any payment made in respect of it could not be said to accrue from business 783 E Strong and Company of Romsey Limited vs Woodifieid Survevor of Taves 5 Tax Cases p215 referred to 783 F 4 An income directly or ancillary to the business may be an income from business but any income to an assessee carrying on business does not become an income from business unless the necessary relationship 778 between the two is established 784 B In the Instant case what was lost was not raw material but something which was capable of being converted into raw material The necessary nexus between ingots and radiators which could have resulted in income from ingots never came into being Thus any devaluation surplus arising out of payment paid for loss of ingots could not be treated as income from business of the assessee 784 C section Income from goods purchased for business is not an income from business In the instant case buying ingots by the assessee was not a part of its trading activity 784 F State Bank of India vs Commissioner of Imcome Tax Ernakulam distinguished 784 F 6 Taxability on profit or deduction for loss depends on whether profit or loss arises in the course of business The courts have maintained a distinction between insurance against loss of goods and insurance against loss of profits The latter is undoubtedly taxable Taxability of the amount paid on settlement of claim by the insurance company depends both on the nature of payment and purpose of insurance 785 D E 7 Any payment being accretion from business the excess or surplus accruing for any reason may be nothing but profit But where payment is made to compensate for loss of use of any goods in which the assessee does not carry on any business or the payment is a just equivalent of the cost incurred by the assessee but excess accrues due to fortuitous circumstances or is a windfall then the accrual may be a receipt but it would not be income arising from business and therefore not taxable under the Act 785 F G Commissioner of Inland Revenue vs William s Executors 26 Tax Cases p23 referred to 785 H In the instant case the assessee did not carry on business of buying and selling of ingots The compensation paid to the assessee was not for any trading or business activity but just equivalent in money of the goods lost by the assessee which it was prevented from using The excess arose on such payment in respect of goods in which the assessee did not carry on any business Due to fortuitous circumstances of devaluation of currency but not due to any business or trading activity the amount could not 779 be brought to tax 786 C D Commissioner of Income Tax vs Union Engineering Works approved 786 G

Appeal No 1094 of 1992 WITH Civil Appeal No1095 of 1992 AND Civil Appeal No 1096 of 1992 From the Judgment and Order dated 4292 24292 of the Bombay High Court in WP Nos11 8 70 of 1992 RK Garg Ram Jethmalani VA BobdeHarish N Salve KJ John Ms Deepa Dixit Rakesh Gosain Ms Rani Jethmalani PK Dev and Ms Shanta Ramchand for the Appellants Ashok Desai FS Nariman RF Nariman PH Parekh Sunil Dogra JD Dwarka Das and SC Sharma for the Respondents The Judgement of the Court was delivered by 827 VERMA J These appeals by special leave arise from writ petition Nos11 of 19928 of 1992 and 70 of 1992 all dismissed by the Bombay High Court at the Goa Bench merely on the ground of laches and they involve for decision the common question relating to the power of review if any of the Speaker to review his decision on the question of disqualification of a Member of the House rendered under the Tenth Schedule to the Constitution In those writ petitions the orders passed by the Speaker in purported exercise of the power of review setting aside the earlier orders of disqualification of certain Members made on merits by the Speaker were challenged on the ground that the Speaker has no such power of review The High Court took the view that the writ petitions were filed after considerable delay and therefore upholding the preliminary objection had to be dismissed merely on the ground of laches and therefore merits of the contention that the Speaker had no such power of review was not considered The main questions which arise for decision in these appeals are therefore two namely 1LACHES Are the impugned orders of the High Court dismissing the writ petitions merely on the ground of laches susceptible to interference under Article 136 of the Constitution in the present case and 2POWER OF REVIEW If so does the Speaker acting as the authority under the Tenth Schedule of the Constitution have no power of review so that any order made by him in purported exercise of the power of review is a nullity The further question of the consequence and nature of relief to be granted would arise only if these questions are answered in favour of the appellants Ravi section Naik Ratnakar M Chopdekar and Sanjay Bandekar were duly elected Members of the Goa Legislative Assembly in the elections held in November 1989 On 2511991 Ravi section Naik assumed the office of the Chief Minister of the State of Goa and he formed his Council of Ministers which included Chopdekar and Bandekar as Ministers On the same day ie on 2511991 Dr Kashinath Jalmi also a Member of the Legislative Assembly presented a petition to the Speaker Surendra V Sirsat seeking disqualification of Ravi section Naik as a Member of the Legis 828 lative Assembly on the ground that he had voluntarily given up the Membership of his political party On 1621991 the Speaker Surendra V Sirsat passed an order under para 6 of the Tenth Schedule to the Constitution disqualifying Ravi Naik on the ground of defection On 1621991 Ravi Naik filed writ petition No48 of 1991 at the Goa Bench of the Bombay High Court challenging the order of his disqualification made by the Speaker under the Tenth Schedule to the Constitution On 182 1991 the High Court passed an interim order in that writ petition staying operation of the order of disqualification made by the Speaker During the pendency of this writ petition on 2721991 Simon Peter D Souza was elected Deputy Speaker of the Goa Legislative Assembly on 431991 Surendra V Sirsat was removed from the office of Speaker and the Deputy Speaker Simon Peter D Souza began functioning as the Speaker in place of Surendra V Sirsat The same day ie on 431991 Ravi section Naik made an application to Simon Peter D Souza the Deputy Speaker functioning as the Speaker of the Goa Legislative Assembly for review of the order dated 1521991 of his disqualification made by the Speaker Surendra V Sirsat under the Tenth Schedule On 831991 the Acting Speaker Simon Peter D Souza made an order in purported exercise of the power of the review under the Tenth Schedule setting aside the order dated 1521991 made by the Speaker Surendra V Sirsat disqualifying Ravi section Naik as a Member of the Goa Legislative Assembly Thereafter Writ Petition No48 1991 filed by Ravi Naik challenging the order of the his disqualification made by the Speaker on 1521991 was dismissed as not pressed by him on 2241991 On 811992 Writ Petition No11 of 1992 was filed by Dr Kashinath Jalmi and Ramakant Khalap challenging the order of review dated 831991 passed by the Acting Speaker inter alia on the ground that the Speaker did not have any power to review the earlier order of disqualification made under the Tenth Schedule to the Constitution of India The High Court by the order dated 421992 upheld the preliminary objection of Ravi section Naik that the writ it petition filed ten months after the date of the impugned order was liable to be dismissed at the admission stage on the ground of laches This order dismissing the writ petition for this reason alone is challenged in Civil Appeal No 1094 of 1992 After the dismissal of writ petition No11 of 1992 another Member of the Goa Assembly Churchill Alemao filed writ petition No70 of 1992 also challenging the order of review dated 831991 made by the Acting 829 Speaker setting aside the earlier order dated 1521991 made by the Speaker disqualifying Ravi Naik on similar grounds The High Court dismissed writ petition No70 of 1992 also at the admission stage for the same reason on the ground of laches Civil Appeal No1096 of 1992 by Churchill Alemao is against the order dated 2421992 dismissing writ petition No70 of 1992 On 10121990 Ramakant D Khalap applied to the Speaker Surendra V Sirsat seeking disqualification of Sanjay Bandekar and Ratnakar Chopdekar as Members of the Goa Legislative Assembly for the defection under the Tenth Schedule On 11121990 the Speaker served notices on these Member On 13121990 Bandekar and Choopdekar filed writ petition No321 of 1990 at the Goa Bench of the Bombay High Court challenging the show cause notices issued to them by the Speaker On the same day ie on 13121990 the Speaker Surendra V Sirsat made the orders disqualifying Bandekar and Chopdekar as Members of the Assembly under the Tenth Schedule On 14121990 Writ Petition No321 of 1990 was amended to challenge the orders of disqualification dated 13121990 made by the Speaker against Bandekar and Chopdekar The Writ Petition was admitted by the High Court and an interim order made staying the orders of disqualification dated 13121990 made by the Speaker Unlike the writ petition No48 of 1991 by Ravi Naik which was dismissed as not pressed on 2241991 after the order of review made by the Deputy Speaker writ petition No321 of 1990 by Bandekar and Chopdekar is still pending in the High Court with the interim order made therein subsisting In the meantime in a manner similar to that in the case of Ravi Naik the Deputy Speaker functioning as the Speaker on applications made to him for the purpose passed orders on 731991 purporting to exercise the power of review whereby the orders dated 13121990 made by the Speaker disqualifying Bandekar and Chopdekar under the Tenth Schedule have been set aside This led to the filing of writ petition No 8 of 1992 by Ramakant D Khalap on 711992 at the Goa Bench of the Bombay High Court challenging the orders of the review dated 731991 passed by the Acting Speaker This writ petition also has been similarly dismissed merely on the ground of laches on 421992 Civil Appeal No1095 of 1992 has therefore been filed against dismissal of writ petition No8 of 1992 830 This is how the same questions relating to laches justifying dismissal of these writ petitions and the power of review if any of the Speaker under the Tenth Schedule arise for decision in these appeals The rival contentions may now be mentioned Shri Ram Jethmalani for the appellant in CA No1094 of 1992 Shri Harish Salve for the appellant in CA No1095 of 1992 and Shri RK Garg for the appellant in CA No1096 of 1992 advanced substantially similar arguments to contend that dismissal of the writ petitions by the High Court on the ground of laches is insupportable in the present context where challenge to the order of review made by the Speaker under the Tenth Schedule is on the ground of nullity since the Speaker has no power of review under Tenth Schedule and that the order of review being a nullity must be so declared In reply Shri FS Nariman for respondent Ravi section Naik in Civil Appeal Nos 1094 and 1096 of 1992 and Shri Ashok Desai for respondents Bandekar and Chopdekar in Civil Appeal No1095 of 1992 strenuously urged that the exercise of power under Article 226 of the Constitution being discre tionary the refusal to exercise that power at the instance of the writ petitioners was a proper exercise of the discretion which does not call for any interference by this court in exercise of its power under Article 136 of the Constitution Both the learned counsel in their reply further submitted that by the very nature of the high office of the Speaker and the finality attaching to the order made by the Speaker under para 6 of the Tenth Schedule the power of the review inheres in the Speaker for preventing miscarriage of justice in situations when the Speaker himself is of the view that continuance of his earlier order of disqualification would perpetuate injustice It was further submitted by them in the alternative that in view of the limited scope of judicial review of the Speaker s order of disqualification made under para 6 of the Tenth Schedule as held in the majority opinion in Kihoto Hollohan vs Zachillhu and Ors 1992 Supp 2 SCC 651 it is implicit that at least a limited power of review inheres in the Speaker to correct palpable errors outside the scope of the limited judicial review available against the order of disqualification made by the speaker under the Tenth Schedule It was urged by them that the alleged infirmities in the orders of disqualification made in the present case by the Speaker fell within at least this limited power of review which inheres in the Speaker Shri Nariman as well as Shri Desai strongly relied on the majority opinion in Kihoto Hollohan to support these submissions 831 The last alternative submission of Shri Nariman was that in case there is no power of review in the Speaker under the Tenth Schedule as a result of which the orders made by the Acting Speaker in purported exercise of that power have to be declared nullity and ignored then writ petition No48 of 1991 by Ravi section Naik being dismissed as not pressed on 2241991 because the order of his disqualification had been set aside by the order of review must be revived along with the interim stay granted therein to enable Ravi section Naik to pursue the remedy which he had invoked to challenge the order of his disqualification which is open to judicial review This submission of last resort made by Shri Nariman was strongly opposed by Shri RK Garg appearing for the appellant Church Alemao On the other hand Shri Ram Jethmalani appearing for the appellants in CA No1094 not only did not oppose such a direction being given but in his opening address itself suggested this as the equitable course to adopt But for the stand taken on this aspect there was no difference in the submissions of Shri Garg and Shri Jethmalani Both sides attempted to refer to the facts leading to the making of the orders of disqualification of the Members and the merits thereof However we do not propose to advert to them as we had indicated to the learned counsel at the hearing since those aspects will have to be gone into in the first instance by the High Court on the view we are taking in these appeals and therefore we would like to avoid the likelihood of any possible prejudice to either side resulting from any reference made by us to the same Accordingly we are confining ourselves only to the facts and the arguments relating to the aforesaid two questions which alone arise before us We may add that for the purpose of these appeals it has been assumed by both sides that the Deputy Speaker functioning as the Speaker would have the powers of the Speaker under the Tenth Schedule including that of review if any The further question whether the Deputy Speaker who discharging the functions of the Speaker has all the powers of the Speaker under the Tenth Schedule is therefore undisputed for the present purpose We shall now consider the aforesaid two main questions which arise for decision in the present case Any further question arising for decision in case both these questions are answered in favour of the appellants will be considered thereafter 832 LACHES The High Court has taken the view that the impugned orders of review having been made by the Acting Speaker on 7th and 8th March 1991 the writ petitions challenging them filed on 711992 811992 and 1021992 were highly belated and therefore liable to be dismissed merely on the ground of laches It is for this reason that they were dismissed at the admission stage itself sustaining the preliminary objection taken on this ground by Ravi section Naik Chopdekar and Bandekar in whose favour the orders of review had been made The High Court has referred to certain decisions of this Court for applying the doctrine of laches and declined to consider the merits of the main point raised in the writ petitions that the Speaker does not have any power of review acting under the Tenth Schedule The High Court has also held as untenable the explanation given by the writ petitioners that uncertainty of the law settled only by the decision of this Court in Kihoto Hollohan supra rendered on 12th November 1991 was the reason for not filing those writ petitions earlier Learned counsel for the appellants have assailed application of the doctrine of laches in the present situation and also contended that if any explanation was needed for the intervening period pendency of the question of constitutional validity of Tenth Schedule itself in this Court was sufficient to explain the period up to the date of the decision and the writ petitions were filed soon thereafter It was also submitted by learned counsel for the appellants that the continuance in office of disqualified persons even now provides recurring cause of action since the continuance in office without lawful authority of these persons one of whom is the Chief Minister of the State of Goa is against public policy and good administration It was submitted the Court cannot decline to examine the validity of the authority under which they continue to hold office On this basis it was urged that the mere delay if any in challenging the legality of the authority under which these three persons continue to hold office after being disqualified as Members of the Assembly could not be a valid justification for the High Court to refuse to examine the main question of existence of power of review in the Speaker acting under the Tenth Schedule since the discretion of the High Court under Article 226 of the Constitution must be exercised judicially so as not to permit perpetuation of an illegality Shri Jethmalani also submitted that the doctrine of laches does not apply where declaration sought is of nullity in order to prevent its continuing operation and laches is not relevant in the domain of public 833 law relating to public office where the purpose is to prevent an usurper from continuing to hold a public office Shri Harish Salve adopted these arguments and further submitted that Dr Kashinath Jalmi and Ramakant Khalap had consistently taken the stand that the Speaker s order of disqualification is final and not open to review by anyone He submitted that for this reason no prevarication in their stand can be attributed to either of them as has been done against Churchill Alemao by the learned counsel for the respondents for his support to Ravi Naik during the intervening period It was further urged by the learned counsel for the appellants that the motive and conduct of the writ petitioners in such matters is not decisive or fatal to the enquiry claimed in the writ petition in as much as the relief claimed in the writ petition was not for personal benefit of the writ petitioner but for larger public interest and good governance of the State of Goa by persons holding public offices including that of the Chief Minister only by lawful authority Both Shri FS Nariman and Shri Ashok Desai supported the Judgment of the High Court and strenuously urged that the High Court in exercise of its discretionary power under Article 226 of the Constitution was justified in refusing to exercise that power at the behest of the writ petitioners who were disentitled to grant of the relief on account of their conduct and motive for filing the writ petition It was submitted by them that the writ petitioners namely Churchill Alemao Dr Kashinath Jalmi and Ramakant Khalap are all persons who at different times were associated with Ravi SNaik as Chief Minister and were also obtaining benefit from him which conduct coupled with their motive of getting more political power to themselves disentitled them from claiming the relief Shri Nariman submitted that the doctrine of laches applies equally to a writ of quo warranto as it does to a writ of certiorari It was also submitted by learned counsel for the respondents that the explanation given for the delay in filing the writ petitions challenging the orders of review made by the Acting Speaker is facile and untenable It was submitted that notwithstanding the pendency of the question of the validity of the Tenth Schedule in this Court writ petitions were being filed challenging the orders made by the Speakers under the Tenth Schedule It was submitted that all the writ petitioners in view of their status in life were fully aware that the Speaker s order of review could be challenged by a writ petition even before the decision rendered by this Court on 12th November 1991 834 in Kihota Hollohan The main thrust of the argument of the counsel for the respondents was that in these circumstances the High Court was justified in dismissing the writ petitions at the threshold in exercise of its discretionary power under Article 226 of the Constitution and therefore the power under Article 136 of the Constitution also being discretionary this Court would be justified in refusing to interfere with the discretion so exercised by the High Court Having given our anxious consideration to the forceful submissions of learned counsel for the both sides we find ourselves unable to sustain the judgment of the High Court that the writ petitions were liable to be dismissed merely on the ground of laches One of the submissions of Shri Nariman was that even though there is no period of limitation prescribed by statute for filing a writ petition yet in a case like the present the apt analogy is of an election petition calling in question an election which is required to be filed within 45 days from the date of election of the returned candidate as provided in Section 811 of the Representation of the People Act 1951 to indicate that unless such a challenge is made promptly the courts would refuse to examine such a question after the lapse of a reasonable period On this basis he argued that a writ petition filed after ten months of the date of the order of review made by the Speaker acting under the Tenth Schedule must be treated as unduly delayed and is liable to rejection on the ground of laches as has been done by the High Court in the present case We are unable to accept this part of the submission since it is not an apt analogy The remedy of an election petition is statutory governed by the limitation prescribed therein unlike the remedy under Article 226 of the Constitution That apart the analogy which is more apposite is the decision on questions as to the disqualification of Members in accordance with Article 103 in the case of a Member of Parliament or Article 192 in the case of a Member of a House of a Legislature of a State For raising a dispute giving rise to any question whether a Member of a House has become subject to any of the disqualification mentioned in clause 1 of Article 102 or 191 as the case may be there is no prescribed limitation and so also for challenging the decision rendered under Article 103 or 192 by a writ petition The question of the disqualification of a Member on the ground of defection and the Speaker s order thereon rendered under the 835 Tenth Schedule is of a similar nature and not based on the result of an election which can be challenged only by an election petition in accordance with the provisions of Representation of the People Act 1951 The decision by a constitution bench in Brundaban Nayak vs Election Commission of India and another indicates the significance of deciding the question of disqualification of a Member as soon as it arises even at the instance of a citizen since the whole object of democratic elections is to constitute legislative chambers composed of members who are entitled to that status and if any member forfeits that status by reason of a subsequent disqualification it is in public interest that the matter was decided There is no indication in Brundaban Nayak that the delay in raising the question of disqualification provides justification for refusing to decide the same and the emphasis really is on a prompt decision by the competent authority on the question being raised since it is not the interest of the constituency which such a Member represents to delay the decision This decision is an indication that the authority competent to decide the question of disqualification must act promptly in deciding the same once it is raised even by a citizen in order to prevent a disqualified Member from representing the constituency after incurring a disqualification subsequent to his election so long as the question remains a live issue during the tenure of the Member This aspect is significant for dealing with the question of laches in the present case In order to justify dismissal of the writ petitions for laches Shri Nariman placed reliance on certain decisions some of which have been referred by the High Court Shri Nariman argued that the doctrine of laches applies as much to the writ of quo warranto as it does to a writ of certiorari and that the oblique motives of the petitioner together with his conduct may disentitled him to grant of the relief claimed by such a petition We now refer to some of these decisions The basic decision for submission on the doctrine of laches relied on is The Lindsay Petroleum Company vs Prosper Armstrong Hurd Abram Farewell and John Kemp which has been followed in the decisions of this Court in The Moon Mills Ltd vs MR Meher President Industrial Court Bombay and Ors AIR 1967 SC 1450 and Maharashtra State Road Transport Corporation vs Shri Balwant Regular Motor Service 836 Amravati Ors In The Moon Mills Ltd a writ of certiorari was sought to challenge a decision affecting the rights of the Petitioner wherein the question arose whether the petitioner could be denied the relief on the ground of acquiescence or laches In that context it was observed that the issue of a writ of certiorari is a matter of sound discretion and that the writ will not be granted if there is such negligence or omission on the part of the applicant to assert his right as taken in conjunction with the lapse of time and other circumstances causes prejudice to the adverse party It was observed that the exercise of discretion under Article 226 to issue a writ of certiorari is based on the principle to a great extent though not identical with similar to the exercise of discretion in the Court of Chancery For this principle involving the doctrine of laches in courts of equity reference was made to the observation of Sir Barnes Peacock in Lindsay Petroleum Co The decision was followed in and the principle reitered in Maharashtra State Road Transport Corporation again in the context of the discretion under article 226 of the Constitution to issue a Wit of certiorari Like all equitable principles the doctrine of laches applies where it would be unjust to give a remedy to the petitioner who is disentitled to grant of the same by his conduct or any other relevant circumstances including the creation of third party rights during the intervening period which are attributable to the laches of the petitioner Strong reliance was placed on the decision in Ms Tilokchand Motichand Ors vs HB Munshi Anr wherein relief under Article 32 of the Constitution was refused on the ground of delay to contend that if delay can be fatal under Article 32 itself a fundamental right it is more so in a petition under Article 226 of the Constitution wherein grant of the relief is discretionary The decision of this Court in Shri Vallabh Glass Works Ltd and Anr vs Union of India and Ors and Ms Delhi Rohtas Light Railway Company Lid vs District Board Bhojpur and Ors were also cited on the point In Shri Vallabh Glass Words Ltd a writ petition by way of alternative remedy was filed after expiry of statutory period of limitation prescribed for filling suit for the same claim and yet that alone was not held to be fatal taking the view that reasonableness of delay in filing the writ petition is to be assessed having regard to the facts and circumstances of the case since grant of the relief under Article 226 of the Constitution is a matter of sound judicial discretion and governed by the doctrine of laches 837 In Ms Dehri Rohtas Light Railway Company Limited Tilokchand Motichand s case was distinguished and it was indicated that the test is not to physical running of time and the real test to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created It is significant that all these decisions relate to enforcement of personal rights wherein a writ of certiorari was claimed for quashing some decision adverse to the petitioner and neither of them related to assertion of a public right in the nature of a class action In the present case the claim is for the issue of a writ of quo warranto on the ground that Ravi section Naik Chopdekar and Bandekar are holding public office having suffered disqualification as Member of the Assembly subsequent to their election and of them Ravi section Naik continues to hold the high public office of Chief Minister of Goa The relief claimed in the present case is not the conferment of a personal benefit to the petitioners but for cessation of the usurpation of public offices held by these persons if the contention of the petitioners be right that orders of review setting aside the earlier orders of disqualification made by the Speaker under the Tenth Schedule are nullity The decision of the Privy Council in the Lindsay Petroleum Company was followed by the House of Lords in Emile Erlanger and Ors vs The New Sombrero Phosphate Company and Ors 1878 3 Appeal Cases 1218 wherein reliance on the doctrine of laches by Courts of Equity for refusing relief where it would be practically unjust to grant the same was reiterated It was also reiterated that two circumstances always important in such cases are the length of the delay and the nature of the acts done during the interval which might affect the justice of the cause Once again this principle was reiterated by the Privy Council in Anachuna Nwakobi The Osha of Obosi and Ors vs Engene Nzekwu and Anr quoting the same passage from The Lindsay Petroleum Company None of these cases relate to the writ of quo warranto and in them the relief claimed was only for the personal benefit of the claimant We are not persuaded to hold that on the basis of these decisions some of which are referred by the High Court the writ petitions in the present case could have been dismissed merely on the ground of laches of the petitioners 838 We would now refer to the contention of Shri Nariman that this principle attracting the doctrine of laches equally applies to a writ of Quo Warranto sought in the present case For this purpose Shri Nariman placed reliance on the decision in Everett vs Griffiths 1924 1 KB 941 at 959 in addition to Halsbury s Law of England Fourth Edition Reissue Volume 16 Para 926 In Halsbury s Law of England the statement of law is based primarily on the decision of the Privy Council in The Lindsay Petroleum Company and those following it We have already indicated the inapplicability of those decisions in the present case At the same place one of the decisions referred to in foot note 3 of para 926 is AG vs Proprietors of the Bradford Canal 1866 LR 2 Equity Cases 71 for the proposition that Laches is not imputable to the Crown or to the Attorney General suing on behalf of the public In this decision distinction was drawn between the claim on behalf of the public and that by an individual plaintiff indicating that even though delay or laches may be attributable to an individual plaintiff it may not be so to an action brought on behalf of the public This is more so when the grievance made is that a person continues to hold a public office without the authority of law Shri Nariman laid great stress on Everett vs Griffuths 1924 1 KB 941 at page 959 where it is stated It is plain however that in quo warranto proceedings the Court can and will inquire into the conduct and motives of the relator Reference is made to a passage from Halsbury s Laws of England and some earlier decisions which have been referred for treating the point as well settled These observations were made after examining the claim on merits and in view of the fact that the plaintiff was known for his frequent persistent and fruitless litigation proceedings having commenced primarily with the motive of resentment In spite of these strong observations in the judgment about the conduct and motive of the plaintiff the court did not refuse to go into the points raised for that reason alone In our opinion this decision can not persuade us to hold that the dismissal at the admission stage of the present petitions by the High Court on the ground merely of laches can be sustained when the alleged usurpation of the public offices including that of the Chief Minister of the State of Goa continues 839 Reference was made by Shri Nariman as well as Shri Ashok Desai to Rules 1 and 4 of Order 53 of the Rules of Supreme Court and Section 30 of the Supreme Court Act 1981 England wherein limitation is prescribed for application for judicial review and delay in applying for relief LS a ground for denying the relief unless the Court considers that there is good reason for extending the period of making the application It was urged that these provisions are substantially the same as the earlier English Practice according to which as held in Everett vs Griffuths supra the order is not issued as of course and the conduct and motives of the applicant may be enquired into Reference was also made to R vs Stratford on Avon District Council and Anr ex parts Jackson which was followed by the House of Lords in Caswell and Another vs Dairy Produce Quota Tribunal for England and Wales In our opinion the position remains the same Emphasis in these decisions is on public interest and good administration and the jurisdiction of the Court to extend time in suitable cases for making such an application In Caswell the House of Lords took into account the larger public interest for the view that the interest of good administration required non interference with the decision which was challenged after a lapse of a considerable time since any interference at that stage when third party interests had also arisen would be detrimental to good administration In our opinion the exercise of discretion by the court even where the application is delayed is to be governed by the objective of promoting public interest and good administration and on that basis it cannot be said that discretion would not be exercised in favour of interference where it is necessary to prevent continuance of usurpation of office or perpetuation of an illegality We may also advert to a related aspect Learned counsel for the respondents were unable to dispute that any other member of the public to whom the oblique motives and conduct alleged against the appellants in the present case could not be attributed could file such a writ petition even now for the same relief since the alleged usurpation of the office is continuing and this disability on the ground of oblique motives and conduct would not attach to him This being so the relief claimed by the appellants in their writ petitions filed in the High Court being in the nature of a class action without seeking any relief personal to them should not 840 have been dismissed merely on the ground of laches The motive or conduct of the appellants as alleged by the respondents in such a situation can be relevant only for denying them the costs even if their claim succeeds but it cannot be a justification to refuse to examine the merits of the question raised therein since that is a matter of public concern and relates to the good governance of the State itself Shri RK Garg submitted that laches of the appellants can not legitimise usurpation of office by Ravi section Naik Chopdekar and Bandekar and Shri Jethmalani submitted that manifest illegatlity will not be sustained solely on the ground of laches when it results in continuance in a public office of a person without lawful authority The fact that the situation continues unaltered since these persons continue to hold the public offices to which they are alleged to be disentitled is in our opinion sufficient to hold that the writ petitions ought not to have been dismissed merely on the ground of laches at the admission stage without examining the contention on merits that these offices including that of the Chief Minister of the State are being held by persons without any lawful authority The dismissal of the writ petitions by the High Court merely on this ground can not therefore be sustained The further question now is of the availability of power of review in the Speaker under the Tenth Schedule POWER OF REVIEW The challenge to the orders dated 7th and 8th March 1991 made by the Acting Speaker under the purported exercise of power of review setting aside the earlier orders of the Speaker disqualifying Ravi section Naik Chopdekar and Bandekar under the Tenth Schedule is made by the appellants on the ground that the Speaker does not have any power of review under the Tenth Schedule It was stated in Patel Narshi Thakershi and Ors vs Pradyumansinghji Arjunsinghji AIR 1970 SC 1273 thus It is well settled that the power to review is not an inherent power It must be conferred by law either specifically or by necessary implication This position is not disputed before us Admittedly there is no express provision conferring the power of review on the Speaker in the 841 Tenth Schedule The only question therefore is whether the Speaker acting as the authority under the Tenth Schedule has the power of review by necessary implication empowering him to set aside the earlier order of disqualification made by him on merits On behalf of the appellants it was contended that such a power of review in the Speaker can not be implied from the provisions in the Tenth Schedule and the only remedy available to the aggrieved Member is by judicial review of the order of disqualification In reply it was contended on behalf of the respondents that the power of review inheres in the Speaker under the Tenth Schedule in view of the finality attaching to the order made underpara 6 of the Tenth Schedule It was submitted that this inherent power of review in the Speaker must be read in the Tenth Schedule at least up to 12th November 1991 when the Judgment in Kihoto Hollohan was rendered declaring the availability of judicial review against the Speaker s order of disqualification made under para 6 of the Tenth Schedule It was further submitted by learned counsel for the respondents that only a limited judicial review being available against the Speaker s order of disqualification as held by the majority in Kihoto Hollohan some power of review inheres in the Speaker even thereafter to correct palpable errors falling outside the limited scope of judicial review It was then submitted that the defects in the orders of disqualification made by the Speaker in the present case which were corrected by review were such defect which come within the ambit of the limited power of review available to the Speaker in addition to availability of judicial review as declared in Kihoto Hollohan Both sides referred to the merits of the orders of dis qualification made by the Speaker but we refrain from adverting to this aspect as indicated earlier in view of the conclusion reached by us that the Speaker has no power of review under the Tenth Schedule and an order of disqualification made by him under para 6 is subject to correction only by judicial review as held in Kihoto Hollohan Accordingly the alleged defects would require examination by judicial review in the writ petitions filed in the High Court challenging the orders of disqualification Shri Nariman contended that the power of review inheres in the Speaker under the Tenth Schedule as a necessary incident of his otherwise plenary jurisdiction to decide the question of disqualification He submitted that according to the majority in Kihoto Hallohan only limited scope of judicial review is available and therefore the power of review 842 inheres in the Speaker to review his own orders on grounds analogous to those in Order 47 Rule 1 Code of Civil Procedure In support of this submission Shri Nariman placed reliance on the decisions in Shivdeo Singhs and Ors vs State of Punjab and Ors AIR 1963 SC 1909 and Grindlays Bank Ltd vs Central Government Industrial Tribunal and Ors Another limb of Shri Nariman s submission is that the majority opinion in Kihoto Hollohan does not declare para 7 of the Tenth Schedule to be unconstitutional from the inception and Article 13 having no application to a constitutional amendment the existence of para 7 in the Tenth Schedule till the judgment was rendered in Kihoto Hollohan on 12th November 1991 must be accepted and the provisions in the Tenth Schedule including para 7 therein must be examined for determining the implied power of review in the Speaker till 12th November 1991 On this basis it was submitted that the finality declared in para 6 of the Tenth Schedule coupled with the ouster of judicial review in para 7 re enforces existence of the implied power of review in the Speaker at least till 12th November 1991 prior to which the impugned orders of review were made in the present case A further submission made by Shri Nariman was that by virtue of para 62 read with para 8 of the Tenth Schedule the general rules of procedure as well as Rule 77 of the Members of the Goa Legislative Assembly Disqualification on ground of Defection Rules 1986 applied under which the Speaker ordinarily has the power of review In this connection reference was made particularly to Rule 77 of the Rule of Procedure and Conduct of Business of the Goa Legislative Assembly regarding breach of privilege which enables the Speaker to reconsider his earlier decision and Rule 77 of the Members of the Goa Legislative Assembly Disqualification on grounds of defection Rules 1986 relating to the procedure It was submitted that these general rules relating to Speaker s power while dealing with a breach of privilege can be read to confer an express power of review The last limb of Shri Nariman s contention may be disposed of at the outset There is no scope for reading into the Tenth Schedule any of the powers of the Speaker which he otherwise has while functioning as the Speaking in the House to clothe him with any such power in his capacity as the statutory authority functioning under the Tenth Schedule of the Constitution This is well settled by the decisions of the Court relating to Speaker s orders under the Tenth Schedule Accordingly any power of the Speaker available to him while functioning in the House is not to be 843 treated as his power or privilege as the authority under the Tenth Schedule The majority opinion in kihoto Hollohan was pressed into service by Shri Nariman as well as Shri Ashok Desai to support several aspects of their submissions We may now refer to that opinion In Kihoto Hollohan there was no difference between the majority and minority opinions on the nature of finality attaching to the Speaker s order of disqualification made under para 6 of the Tenth Schedule and also that para 7 therein was unconstitutional in view of the non compliance of the proviso to clause 2 of Article 368 of the Constitution by which judicial review was sought to be excluded The main difference in the two opinions was that according to the majority opinion this defect resulted in the constitution standing amended from the inception with insertion of the Tenth Schedule minus para 7 therein while according to the minority the entire exercise of constitutional amendment was futile and an abortive attempt to amend the constitution since Para 7 was not severable According to the minority view all decisions rendered by the several Speakers under the Tenth Schedule were therefore nullity and liable to be ignored According to the majority view para 7 of the Tenth Schedule being unconstitutional and severable the Tenth Schedule minus para 7 was validly enacted and therefore the orders made by the Speaker under the Tenth Schedule were not nullity but subject to judicial review On the basis of the majority opinion this Court has exercised the power of judicial review over the orders of disqualification made by the speakers from the very inception of the Tenth Schedule and the exercise of judicial review has not been confined merely to the orders of disqualification made after 12th November 1991 when the judgment in Kihoto Hollohan was rendered Venkatachaliah J as he then was wrote the majority opinion and thereafter on this premise exercised the power of judicial review over orders of disqualification made prior to 12111991 The basic fallacy in the submission made on behalf of the respondents that para 7 must be treated as existing till 12th November 1991 is that on that view there would be no power of judicial review against an order of disqualification made by the Speaker prior to 12th November 1991 since para 7 in express terms totally excludes judicial review Accepting the submission of learned counsel for the respondents that para 7 must be read in the Tenth Schedule till 12th November 1991 when 844 the judgment in Kihoto Hollohan was rendered for which submission they place reliance on the majority opinion in Kihoto Hollohan would amount to taking a view contrary to the decision in Kihoto Hollohan itself as indicated At one stage Shri Nariman also attempted to read the majority opinion in Kihoto Hollohan as not expressly declaring para 7 in the Tenth Schedule as unconstitutional adding that such a declaration was made only in the minority opinion which declared the entire Tenth Schedule to be unconstitutional We are unable to read the majority opinion in this manner Any attempt to find support for the submissions of the respondents in the majority opinion in Kihoto Hollohan is futile The Constitution Bench decision in Shivdeo Singh and Ors vs State of Punjab and Ors supra is distinguishable and of no assistance to the respondents in the present case That was a case wherein the High Court had exercised its power in a second writ petition filed under Article 226 of the Constitution by a person who was not made a party in the earlier writ petition the order made in which was adverse to him This court held that the second writ petition by such a person was maintainable and the High Court had not acted without jurisdiction in reviewing its previous order at the instance of a person who was not a party to the previous writ proceedings That decision has no application in this situation Strong reliance was placed by Shri Nariman as well as Shri Ashok Desai on the decision of a two Judge bench in Grindlays Batik Ltd It was submitted by learned counsel that in the present case the defects in the orders of disqualification fell in the first of the two categories mentioned at page 347 SCR to which extent there is inherent power of review in the Speaker It may be mentioned that the decision in Patel Narshi Thakershi Ors vs Pradyumansinghji Arjunsinghji AIR 1970 SC 1273 is referred and distinguished at page 347 SCR on the facts of that case In that decision the question was whether the Industrial Tribunal constituted under Section 7A of the had the power to set aside an exparte award made by it It was held with the aid of Rule 24b Industrial Disputes Central Rules 1957 that the Tribunal had the power of a civil court under Order XVII of the Code of Civil Procedure relating to grant of adjournments and therefore as a necessary corollary the power under Order IX Rule 13 was attracted to enable the Tribunal to set aside an ex 845 parte award In our opinion the decision in Grindlays Bank Ltd wherein certain statutory rules attracted the power under Order XVII read with Order IX Rule 13 of the Code of Civil Procedure in the Tribunal to set aside an ex parte award is clearly distinguishable and is of no assistance in the present case The power of review which it is suggested by counsel for the respondents inheres in the Speaker by necessary implication has to be found in the provisions made in the Tenth Schedule alone and not elsewhere Para 7 has to be treated as non existent in the Tenth Schedule from the very inception as earlier indicated As held by the majority in kihoto Hollohan judicial review is available against an order of disqualification made by the Speaker under para 6 of the Tenth Schedule notwithstanding the finality mentioned therein It is on account of the nature of finality attaching by virtue of para 6 that the judicial review available against the Speaker s order has been labeled as limited in para 110 at page 711 of SCC of the decision in Kihoto Hollohan 1992 Supp 2 SCC 651 and the expression has to be understood in that sense distinguished from the wide power in an appeal and no more As held in Kihoto Hollohan the Speaker s order is final being subject only to judicial review according to the settled parameters of the exercise of power of judicial review in such cases which it is not necessary to elaborate in the present context The existence of judicial review against the Speaker s order of disqualification made under para 6 is itself a strong indication to the contrary that there can be no inherent power of review in the Speaker read in the Tenth Schedule by necessary implication The need for correction of errors in the Speaker s order made under the Tenth Schedule is met by the availability of judicial review against the same as held in Kihoto Hollohan In our opinion there is no merit in the submission that the power of review inheres in the Speaker under the Tenth Schedule as a necessary incident of his jurisdiction to decide the question of disqualification or that such a power existed till 12th November 1991 when the decision in Kihoto Hollohan was rendered or at least a limited power of review inheres in the Speaker to correct any palpable error outside the scope of judicial review CONSEQUENCE On the above view taken by us the orders dated 7th and 8th March 1991 made by the Acting Speaker in purported exercise of the power of 846 review are liable to be declared nullity and to be ignored with the result that the order dated 13th December 1990 disqualifying Chopedekar and Bandekar and dated 15th February 1991 disqualifying Ravi SNaik as Members of Goa Legislative Assembly would continue to operate Writ petition No321 of 1990 filed by Chopdekar and Bandekar challenging the orders of their disqualification is pending in the High Court wherein an interim order staying the operation of their orders of disqualification is subsisting Chopdekar and Bandekar can pursue that remedy to challenge their disqualification and no further order is required to be made by this Court for that purpose However writ petition No48 of 1991 which was filed in the High Court by Ravi section Naik challenging his disqualification wherein also an interim order was made staying the operation of the order of his disqualification was not pressed by Ravi SNaik after the order in purported exercise of power of review was made in his favour on 8th March 1 991 and therefore that writ petition was dismissed as not pressed on 2241991 The question is of the order if any required to be made by this Court in this situation Shri Ram Jethmalani appearing for the appellants in CA No109492 suggested that in all fairness writ petition No48 of 1991 should be revived in the High Court to enable Ravi SNaik to pursue his remedy of seeking judicial review against his disqualification On the other hand Shri RK Garg learned counsel for the appellant in Civil Appeal No109692 opposed the making of such an order Both the learned counsel however submitted that the interim order of stay made therein would not revive even if that writ petition is revived and the High Court will have to consider Afresh the question of making an interim order at the behest of Ravi section Naik On the other hand Shri FS Nariman appearing for Ravi section Naik in both these appeals submitted that it would be just in the circumstances of the case to revive writ petition No48 of 1991 for decision on merits by the High Court and the interim order of stay should also enure to the benefit of Ravi section Naik during the pendency of the writ petition more so when he is the Chief Minister of the State and refusal of stay would result in uncertainty in the State Having given our anxious consideration to the matter we have no doubt that the fact to Ravi section Naik being the Chief Minister of the State 847 of Goa is a wholly irrelevant circumstance for this purpose All the same an order which would be just and proper to make in the circumstances of this case has to be made taking into account also the fact that the law was declared and came to be settled only by the decision of this Court in Kihoto Hollohan after making of the orders of review by the Acting Speaker in the present case where after writ petition No48 of 1991 was dismissed as not pressed We have no doubt that Article 142 of the Constitution enables us if necessary to enlarge the powers of this Court for making an order which would be just in the facts and circumstances of this case In our opinion it would be appropriate to revive writ petition No48 of 1991 for hearing on merit by the High Court as suggested even by Shri Ram Jethmalani and to also order interim stay of the operation of the order of disqualification dated 1521991 made by the Speaker which was the situation prevailing till that writ petition was dismissed as not pressed It is however necessary that writ petition No48 of 1991 and also writ petition No321 of 1990 should be heard and disposed of at the earliest on account of their expediency RELIEF Accordingly we allow these appeals in the following manner 1 The impugned orders of the High Court dated 421992 dismissing writ petition No11 of 1992 dated 2421992 dismissing writ petition No70 of 1992 and dated 421992 dismissing writ petition No8 of 1992 are set aside 2 Writ petition Nos11 of 1992 70 of 1992 and 8 of 1992 are allowed declaring that orders dated 731992 and 831992 made by the Acting Speaker in purported exercise of power of review are nullity and liable to be ignored 3 Consequently orders dated 13121990 made by the Speaker disqualifying Ratnakar Chopdekar and Sanjay Bandekar continue to operate and writ petition No321 of 1990 pending in the High Court has to be heard and decided on merits in accordance with law 4 Similarly order dated 1521991 made by the Speaker disqualifying Ravi section Naik continues to operate and writ petition No48 of 1991 filed in the High Court by him is revived by setting aside the High Court s order 848 dated 2421991 dismissing that writ petition as not pressed The High Court will proceed to decide that writ petition also on merits in accordance with law 5 The interim order staying the order of disqualification in writ petition No48 of 1991 is revived However the parties would be at liberty to apply to the High Court for modification or cancellation of the said interim order or for any other interim relief or direction if so advised 6 The High Court should hear and dispose of the writ petition No48 of 1991 itself on merits as expeditiously as possible preferably by 30th April 1993 7 Writ Petition No321 of 1990 filed by Ratnakar M Chopdekar and Sanjay Bandekar pending in the High Court be also heard and disposed of as expeditiously as possible preferably by 30th April 1993 8 Parties are directed to appear at the Goa Bench of the Bombay High Court on 6th April 1993 without any further notice for obtaining further directions in this behalf 9 In the circumstances of the case the parties will bear their own costs TNA Appeals allowed

In a Notification dated 2891972 with a view to induce the sugar factories respondents to produce more and also to commence their operations early in the sugar year the year commencing on and with 1st October and ending with the 30th of September of the following year a rebate was provided The scheme of the Notification was 1If during the months of October and November 1972 in the Sugar Year 1972 73 a factory produced sugar in excess of the quantity of sugar produced by it during the months of October November 1971 suchfactory was granted rebate in the Excise Duty at the rate of rupees forty per quintal in so far as the excess production is concerned 2Rebate for the period 1st December 1972 to 30th April 1973 was available at the rate of rupees twenty per quintal provided the production of sugar during the said period was in excess of 115 of the quantity of sugar produced by the said factory during the corresponding period in the previous Sugar Year in so far as the excess production is concerned 3For the months of May and June 1973 rebate at the rate of rupees twenty per quintal was available provided the factory produced more sugar than it produced during the corresponding months in the previous Sugar Year The said rebate was available again only with respect to the excess production 759 4For the period commencing from 1st July 1973 and ending with 30th of September 1973 rebate was available at the rate of rupees twently per quintal provided the factory produced sugar in excess of the quantity produced during the corresponding period in the previous Sugar Year This rebate too was confined to the excess production However the benefit of the rebate mentioned in any of the clauses aforesaid was not available to a factory which inter alia did not work during the base pariod The other three Notifications dated 41073 121074 and 30976 were similar All the four Notifications were applicable to the Sugar years 1972 73 1973 74 1974 75 and 1976 77 respectively The respondents sugar factories did not produce any sugar in one or the other of the four blocks mentioned in the Table contained in the Notification in the base year previous sugar year During the current sugar year they produced certain quantity of sugar during that block period The respondents contended that they were entitled to the benefit of rebate provided in clause 1 of the Table contained in the Notification whereas the Revenue submitted that they were not entitled to the benefit of rebate The claim for rebate made by the respondnets was allowed in the first instance but later proceedings were initiated to recover back or re adjust the benefit already allowed These disputes were carried to the High Courts Almost all the High Courts except Karnataka held in favour of the respondents In Patna High Court there was a conflict of opinion Hence this batch of appeals by the Revenue contending that the benefit of rebate was available only where the sugar produced in a factory during the period commencing from the 1st day of October 1972 and ending with the 30th day of November 1972 which is in excess of the quantity of sugarproduced during the corresponding period in 1971 that nil production could not be equated to the quantity of sugarproduced in clause 1 that clause 1 of the first proviso in the 1972 Notification has 760 to be harmonised with the several clauses in the table and that no interpretation should be adopted which rendered any part of the Notification superfluous Dismissing all the civil appeals except Civil Appeal Nos 3831 32 of 1988 this Court HELD 101 The several clauses in the Notification must be read together harmonised and reasonably understood without ignoring the underlying object and purpose of the notification An interpretation which leads to absurd consequences should be avoided 770 E 102The object behind the notification was evidently not only to induce the factories to produce more sugar but also to induce them to start their production early in the sugar year The object appears to be also to induce the factories to keep on producing the sugar all the year round which they may perhaps not have done otherwise Running the factories during the off season off season means October November period and then again the period from May June to September may have its own problems which may increase the cost of production main issue is whether the words the quantity of sugar produced during the corresponding period do not take in the case of a factory which has not produced any sugar whatsoever during the relevant corresponding period It does take in Holding otherwise would have this absurd consequence a factory which has produced say just one quintal of sugar during the relevant corresponding period and has produced 1000 quintals during October November 1972 would qualify for the rebate on 999 quintals while another factory which has not produced any sugar nil production but has produced 1000 quintals during October November 1972 would not qualify 770 G H 104The Idea behind the notification is to induce the manufacturers to produce more in the current sugar year than what they have produced in the previous sugar year or during the previous corresponding period in the previous sugar year as the case may be Where a factor has not produced any sugar or has produced a particular quantity of sugar during the said period in the previous sugar year but produces a larger quantity during the said period in the current sugar year it must be rewarded 771 B D 761 105The case of October November appears to be rather an exception Normally it appears no factory owner commenced the production of sugar in these months because of several unfavorable factors Indeed these unfavorable factors appear to be present to a large extent even during the months June to September The notifications were evidently meant to compensate the factory owners for producing during these months as well 1772 C D 106One must proceed on the assumption that every industrialist and businessman would ordinarily like to produce as much more as possible since normally speaking more production means more profits 772 E 107No manufacturer produces sugar merely for the sake of rebate Rebate is an inducement an additional attraction It is not as if without rebate provided by these notifications no one would have produced sugar 771 D 108There is no arithmetical difficulty in working out 115 of zero it is zero What applies to clause1 applies equally to clauses 2 3 and 4 It is only that the factory need not necessarily have worked during each of the corresponding periods in the base year it is enough if it has worked in the base year 771 E F 109The interpretation placed upon the said notifications by the majority of the High Courts is the correct one The view taken by the Karnataka High Court in its Judgment under appeal in Civil Appeal Nos 3831 32 of 1988 and the view taken by the Patna High Court in ill Civil Writ Jurisdiction Case No 865 of 1966 are not correct basis for the percentages prescribed in the Notification dated 12th October 1974 the average production of the previous five years and not the excess production By way of illustrates take a factory which produces 2500 tons during the period Dec1 1974 to Sept 30 1975 as against the average production of 1000 tons during the corresponding periods in the five previous sugar years Out of 2500 quintals produced during the said period in the current sugar year December 1 1974 to September 30 1975 the average of the corresponding periods of the five previous sugar years ie 1000 quintals should be deducted first which means the excess production during the said period during the current year is 1500 quintals 75 of 1000 quintals is 75 quintals On this quantity 762 of 75 quintals the rate of rebate as per sub clause a will be Rs per quintal in the case of free sale sugar and Rs 5 per quintal in the case of levy Sugar Next 10 of excess production means 100 quintals which would be eligible for rebate under sub clause b at the rate of Rs 40 per quintal In the case of free sale sugar and Rs 10 per quintal in the case of levy sugar The next 100 quintals would be eligible for rebate under sub clause c at the rate of Rs 50 per quintal in the case of free sale sugar and Rs 14 per quintal in the case of levy sugar Then again the next 100 quintals would be eligible for rebate under sub clause d at the rate of Rs 60 per quintall in the case of free sale sugar and Rs 18 per quintal in the case of levy sugr The balance of 1125 quintals would qualify for rebate under sub clause e at the rate of Rs 82 per quintal in the case of free sale sugar and Rs 22 per quintal in the case of levy sugar 774 B E Etikoppaka Co operative Agricultural Society vs Union of India 1982 59 ELT 409 Allahabad Haryana and 1987 30 ELT 260 Orissa approved 768 H 769 A

minal Appeal No 724 of 1985 From the Judgment and Order dated 2181985 of the Rajasthan High Court in DB Criminal Appeal No 494 of 1974 Mahabir Singh for the Appellant Aruneshwar Gupta for the Respondent ANAND J This appeal under Section 2a of the Supreme Court Enlargement of Appellate Jurisdiction Act 1970 is directed against the judgment and order of the High Court of Rajasthan dated 2181985 in Criminal Appeal No4941974 convicting the appellant for an offence under Section 302 of the Indian Penal Code and sentencing him to suffer im prisonment for life by reversing an order of his acquittal recorded by the Additional Sessions Judge Ganganagar vide judgment and order dated 1321974 853 According to the prosecution case Mani Ram appellant and his brother Hari Ram had removed the fencing over the field of Hazur Singh deceased about 20 22 days prior to the occurrence which took place on 2261972 at about 1230 noon and that action of the appellant and his brother had resulted in a quarrel between the brothers and Hazur Singh and had created ill feelings between the parties On the fateful day of 2261972 Hazur Singh deceased had gone to his field His wife Surjeet Kaur PW1 and his Son Jaskaran PW2 later on went to the field carrying meals for Hazur Singh After Hazur Singh had taken his meal all the three were returning to their village from the field at about 1230 pm Hazur Singh was ahead of Surjeet Kaur and Jaskaran PWs by about one Kila When Hazur Singh reached near the water course of the village the appellant Mani Ram was seen coming from the village side He gave a lalkara to Hazur Singh and immediately fired a shot from his pistol at him His brother Hari Ram who was also armed with a gun exhorted Mani Ram appellant to kill Hazur Singh so that the enemy may not escape Mani Ram thereupon fired three more shots from his pistol at Hazur Singh who fell down and died at the spot At some distance away Sukh Ram PW4 was present and he also witnessed the occurrence Surjeet Kaur PW1 accompanied by Ganpatram went to police station Tibi and lodged the first information report exhibit P1 at about 300 pm A case was accordingly registered and the investigating officer Nisar Ahmed PW13 visited the spot He prepared the site plan the site inspector note and effected recovery of the empty cartridges vide memo exhibit P6 from the spot The body of the deceased was sent for port mortem examination which was conducted by Dr KC Mittal PW9 The autopsy report was prepared The following injuries found of the dead body of Hazur Singh deceased iGun shot wound oval in shape with inverted margins bleeding size 34 x 12 in the mid right hypochendrium wound is traced upward and backward by the probe Shirt is torn over the wound iiGun shot would size 134 at the lower and of the left side of chest in midaxillary size The edges are inverted Wound is continued downwards and posteriorly as he is identified by probe Shirt is torn iii Gun shot wound with inverted margin Size 34 x 854 12 with ulterior medical size of lower and of left arm Little bleeding Wound is printing upward and posterior through bone Shirt over wound is torn iv Gun shot wound 1 14 x 24 with margins averted ragged with severe bleeding on the posterior lateral size of the upper fifth of left arm Shirt over wound is torn v Gun shot wound in intra scapular region right side 1 x 14 x 34 circular averted and tagged margins with severe bleeding vi Gun shot wound mid back left side 112 x 1 ragged and averted margins with severe bleeding According to the Doctor the death was caused due to rupture of vital organs like liver lung and big blood vessels causing severe hemorrhage and shock as a result of the gun shot injuries and the same were sufficient in the ordinary course of nature to cause death After completion of the investigation the appellant alongwith his brother Hari Ram were sent up for trial While the appellant was charged for an offence under Section 302 IPC Hari Ram was charged for the offence under Section 302114 IPC Both the appellant and Hari Ram were also charged for an offence under Section 27 of the Arms Act After the trial the learned Sessions Judge found that there was no case made out against Hari Ram at all and that the prosecution had also not been able to prove the case against the appellant beyond a reasonable doubt As a consequence both Hari Ram and the appellant were acquitted of all the charges by the trial court On the State filing an appeal against the judgment and order of acquittal passed by the Trial Court the High Court allowed the appeal of the State in part and while it set aside the acquittal of the appellant and convicted him for an offence under Section 302 IPC and sentenced him to suffer imprisonment for life the acquittal of Hari Ram was maintained While the State has not questioned the acquittal of Hari Ram the appellant as already noticed has filed this appeal Mr Mahabir Singh learned counsel for the appellant submitted that the judgment of the Trial Court could neither be styled as perverse nor even as unreasonable and there were no other substantial and compelling reasons which could justify the setting aside of the order of acquittal and 855 therefore the High Court should not I have interfered with the order of acquittal Learned counsel urged that the presence of undigested food in the stomach of the deceased belied the prosecution case and that the Trial Court was right in holding that Hazur Sigh Could not have taken the meals at the time stated by his wife Surjeet Kaur PW1 and his son Jaskaran PW2 or murdered at 1230 pm as alleged The learned counsel also submitted that the inordinate delay in sending the empty cartridges to the ballistic expert went to show that the possibility that the same had been substituted by the investigating agency could not be ruled out and therefore the conviction of the appellant by the High Court was not justified In reply Mr Aruneshwar Gupta learned counsel appearing for the State of Rajasthan submitted that since it was an appeal under Section 2 of the Supreme Court Enlargement of Appellate Jurisdiction Act 1970 this Court could itself appreciate the evidence to determine the guilt or otherwise of the appellant Learned counsel stated that the findings recorded by the Trial Court were based on surmises and conjectures and the High Court was perfectly justified in reversing the order of acquittal Learned counsel emphasised that the evidence of PW1 Surjeet Kaur and PW4 Jaskaran conclusively established that the crime had been committed by the appellant by his pistol and their testimony has received ample corroboration not only from the statement of Dr KC Mittal PW9 but also from the evidence of Shri GR Prasad PW11 the ballistic expert who had opined that the four empty cartridges had been fired from the licensed pistol of the appellant and could not have been fired from any other weapon Replying to the submission regarding the presence of undigested food learned counsel submitted that being rustic villagers much importance could not be attached to the time given by PW1 and PW2 during their depositions about the exact time when the deceased may have had his meals and therefore it could not be said that the medical evidence had in any way belied the prosecution case We have given our thoughtful consideration to the submissions made at the Bar and have with the assistance of learned counsel for the parties examined the judgments of the courts below as also the material evidence in the case We are in agreement with the High Court that the evidence of PW1 Surjeet Kaur and PW2 Jaskaran has not been viewed and considered in 856 the correct and proper prospective by the trial court and undue and unwarranted emphasis had been attached to certain minor discrepancies Our independent appraisal of the evidence of both the witnesses PW1 and PW2 the widow and son of the deceased shows that they are consistent in their versions not only about the assailants but also about the manner of assault as has been noticed by us in the earlier part of this judgment Both the witnesses have given a vivid description of the occurrence The statement of PWl Surjeet Kaur that Hazur Singh took his meals at about 1030 am and that the occurrence had taken at about 12 1230 in the noon cannot be taken to have been contradicted by the medical evidence Indeed in the postmortem examination Dr KC Mittal PW9 found semi solid undigested food in the stomach of the deceased The doctor opined that digestion begins in 1 or 1 12 hours From this testimony what was sought to be made out by the defence was that had the occurrence taken place at 1230 noon the deceased would have had his meals before 1100 am as semi digested food was found in the stomach of the deceased The emphasis on this aspect of the case by the Trial Court in our opinion is misplaced not only because the medical evidence is only an evidence of opinion and is hardly decisive but also because when Dr KC Mittal PW9 stated that digestion begins in 1 or 112 hours he did not clarify as to what was the extent of the undigested food in the stomach of the deceased The process of digestion depends upon the digestive power of the an individual and varies from an individual to an individual It also depends upon the type and amount of food taken The period of digestion is different for different types of food Some food articles like mutton chicken etc would take more time for being digested as compared to vegetarian food No questions at all were asked from the wife of the deceased about the type of food served to her husband or the amount of food taken by the deceased That apart the time stated by the witnesses as to when the deceased took his food was only an approximate time as it was not even suggested to PWl that she had a wrist watch and had actually seen the time when her husband took his food Too much play on such slippery factors goes against realism and is not enough to discredit the otherwise reliable testimony of PW1 In our opinion the evidence of PWs 1 and 2 does not stand contradicted by the medical evidence at all and as a matter of fact the presence of semi solid undigested food in the stomach lends support of the testimony of the two witnesses that they had gone to the field latter on with the food for the deceased and had actually served meal to him It lends assurance to their 857 presence in the field with the deceased Despite the lengthy cross examination nothing was brought out in the cross examination of either of these two witnesses which could effect the veracity of their testimony The first information report was lodged by Surjeet Kaur PWl at 300 pm at a distance of about 15 miles from the place of occurrence and was therefore lodged with great promptitude and the entire version of the occurrence finds mention in that report The testimony of both the witnesses has impressed us and they appear to us to be truthful witnesses and being the close relations of the deceased would in the ordinary course of things be the last persons to screen the actual offender and implicate the appellants falsely Their testimony also receives ample corroboration from the medical evidence and the testimony of ballistic expert Shri GR Prasad PWII Dr Mittal PW9 as already noticed found six injuries on the deceased and opined that the same were sufficient in the ordinary course of nature to cause the death In the FIR exhibit PI lodged soon after the occurrence PWI Surjeet Kaur had stated that Mani Ram appellant had fired 3 4 shots after he had fired the first shot on her husband At the trial she however could not state exactly as to how many shots had been fired by the appellant from his pistol That is no surprising because she could not be expected to keep an exact account of the shots fired by the appellant when she found her husband being shot at and having fallen down dead She categorically attributed the gun shot injuries to the appellant and did not attribute any injury to the acquitted accused Hari Ram Since it has been found that the recovered empties had been fired from the pistol of the appellant it lends sufficient corroboration to her tes timony We may ignore the testimony of Sukh Ram PW4 as a matter of abundant caution but that would not in any way detract from the reliability of the testimony of PWI and PW2 The pistol weapon of offence was taken into possession from the appellant by PW6 SHO Bhim Singh It is a licensed pistol of the appellant According to the evidence of ballistic expert PW11 the empty cartridges sent to him for examination had been fired from that pistol and that pistol alone and from no other similar weapon Of course the sealed packets containing the pistol and the cartridges were sent to the ballistic expert after a long delay and that could have created some doubts about the possibility of substitution of the cartridges while the packets remained with the police but the evidence on the record rules out any possibility of such 858 a substitution The three sealed packets one containing pistol the second containing the empty cartridge recovered from the spot and the third containing the three empty cartridges recovered from the appellant alongwith the pistol were deposited in the malkhana of the police station They had been received by Head Constable Mani Ram PW10 on 2361972 the very next day after the occurrence He had sent the same to the Police lines at Ganganagar The prosecution examined PW12 Amar Singh who had carried the three packets from the police station to the police lines at Ganganagar He categorically stated that while the packets remained with him they were not tampered with at all PW10 Mani Ram also deposed that during the period the sealed packets remained in the malkhana they were not tampered with by anyone and that they were handed over to Amar Singh PW12 in the same condition According to PW7 Ram Chandra he received the three packets from Amar Singh and after taking them into custody he made an entry in the register and that while the packets remained in his custody nobody tampered with them The packets were sent to the ballistic expert and received there by Jaswant Singh PW8 and Mamraj Singh Jaswant Singh appearing as PW8 deposed that he delivered the packets to the ballistic expert on the very next day after receiving them and while the packets remained in his custody nobody tampered with them According to the Ballistic expert PW11 the packets when received by him were properly sealed and the seals were intact and tallied with the specimen of the seal sent to him None of these witnesses were at all cross examined No suggestion even was made to anyone of them that the sealed packets had allegedly been tampered with while in their custody No such suggestion was even made to SHO Bhim Singh PW6 that he had either substituted the cartridges sent to the ballistic expert or other wise tampered with the sealed packets It is therefore futile to contend that the possibility of the substitution of the cartridges could not be ruled out There is no basis for such an argument The evidence of the ballistic expert Shri GR Prasad PW11 read with the medical evidence of PW9 and the testimony of the eye witnesses PWs1 and 2 clearly establishes that the appellant had fired from his licensed pistol at the deceased and that the deceased dies as a result of the pistol shot injuries received by him We agree with learned Judge of the High Court that there are no suspicious features at all appearing in the evidence which may cast any doubt on the prosecution version that the deceased was shot at with the pistol by the appellant and that he died as a result of the injuries so received 859 Thus in view of what we have discussed above we find that the prosecution has successfully established the case against the appellant beyond any reasonable doubt and since the Trial Court had passed an order of acquittal on wholly erroneous grounds the High Court after a proper appraisal of the evidence was right in setting aside the order of acquittal and convicting the appellant for an offence under Section 302 IPC as well for an offence under Section 27 Arms Act Our independent analysis of the evidence on record shows that the order of conviction and the sentence of life imprisonment and two years rigorous imprisonment recorded by the High Court against the appellant for the offence under Sections 302 IPC and 27 Arms Act respectively is well merited and does not call for any interference Both the sentences shall however run concurrently Consequently the appeal fails and is dismissed The appellant is on bail His bail bonds shall stand cancelled and he shall be taken into custody to suffer the remaining period of the sentence VPR Appeal dismissed

The respondent industry entered into an agreement with the appellant Board for supply of electricity on 5th March 1965 Under the agreement which was valid for five years ie upto 5th March 1970 consumer was obliged to pay certain minimum charges in any event However on 30th April 1968 supply of electricity to respondent was disconnected for non payment of electricity charges Since the respondent also failed to pay the minimum charges for the period subsequent to the date of disconnection the Electricity Board riled a suit for the amount due on account of the electricity consumed upto April 30 1968 and for the minimum charges from May 1 1968 to March 5 1970 The Trial Court decreed the suit The respondent preferred an appeal before the High Court which sustained the Trial Court s decree only for the period upto the date of disconnection but disallowed the claim for the period subsequent to the date of disconnection on the ground that since the respondent did not avail of any energy whatsoever during the period subsequent to the disconnection it was not liable to pay the minimum charges for that person In appeal to this Court it was contended on behalf of the Electricity Board that in view of the judgment of this Court in the case of Bihar State Electricity Board Patna and Ors vs Ms Creen Rubber Industries and Ors 1990 1 SCC 731 the respondent was liable to pay the minimum charges for the period subsequent to disconnection 861 Allowing the appeal and setting aside the order of the High Court this Court HELD Clause 13 of the agreement between the parties does oblige the consumer to pay a certain minimum charges in any event The judgment and decree of the Trial Court is restored 862 E 863 D Bihar State Electricity Board Patna Ors vs Ms Green Rubber Industries and Ors 1990 1 SCC 731 relied on

Appeal No 3607 11 of 1988 From the Judgment and Order dated 1271988 of the Calcutta High Court in FMAT Nos 2301 2326 and 2327 of 1986 Tapas Ray Dr Shankar Ghosh B Dutta HK Puri SK Nandy Sushil Kr Jain and RK Joshi for the Appellants GL Sanghi NR Chowdhary Som Nath Chatterjee for the Respondents The Judgment of the Court was delivered by VERMA J These appeals involve for decision a common question relating to fixation of seniority of certain Sub Assistant Engineers appointed ad hoc temporary Assistant Engineers for a specified period in the PWD and the Irrigation and Waterways Department of the Government of West Bengal vis a vis the direct recruits in the cadre of Assistant Engineers appointed regularly according to rules in these departments prior to the regularisation of the ad hoc appointees The question was raised by the ad hoc appointees who were regularised subsequently by filing writ petitions in the Calcutta High Court claiming revision of their seniority reckoned from the date of their initial ad hoc appointment These writ petitions were dismissed by a Single Bench of the High Court but the writ appeals were allowed by a division bench resulting in grant of the relief claimed by the ad hoc appointees It is these judgments involving the common question of the merit of the claim of the ad hoc appointees for seniority reckoned from the date of their initial ad hoc appointment in he facts and circumstances of the case which are challenged in these appeals 925 Civil Appeal No 3607 of 1988 is by the State of West Bengal while Civil Appeal No 3610 of 1988 is by the adversely affected direct recruits who were respondents in the writ petition filed by the ad hoc appointees in the PWD Civil Appeal No 3608 of 1988 is by the State of West Bengal while Civil Appeal No 3611 of 1988 is by the adversely affected direct recruits who were respondents in the writ petition filed by the ad hoc appointees in the Irrigation and Waterways Department Civil Appeal No 3609 of 1988 is a similar matter also relating to the Irrigation and Water ways Department The material facts are only a few and may be stated with reference to the PWD pointing out the minor difference on facts between the ad hoc appointments made in the PWD and Irrigation and Waterways Department which are not significant on the conclusion reached In exercise of the powers conferred by the proviso to Article 309 of the Constitution of India the Governor of West Bengal made Rules by Notification No 94 dated 20th August 1959 for the regulation of recruitment to the Engineering Services under the Department of Works and Buildings of the Government of West Bengal In the present case we are concerned with the cadre of Assistant Engineers for which the relevant rules are Rule 4 There will be an examination held by the Public Service Commission West Bengal for recruitment to posts of Assistant Engineer A certain proportion of such posts as may be determined by the Works and Buildings Depart ment from time to time will be filled up by candidates in order of merit who will be given a higher initial pay of Rs 325 per month in the time scale of pay for Assistant Engineers In order to be eligible for such higher initial pay a candidate must secure 66 per cent or above of the total marks in the said examination Rule 9 Recruitment to the permanent posts of Assistant Engineer shall be made as follows 926 aForty per cent of vacancies by direct recruitment on the results of a competitive examination to be conducted by the Public Service Commission West Bengal as mentioned in rule 4 supra Qualifications iA degree in Civil Engineering of a recognised University or any other qualification in Civil Engineering exempting a candidate from appearing in Sections A and B of Associate Membership Examination of the Institute of Engineers India iiOne year s post graduate practical training or study or research or practica l engineering experience iiiAge not more than 27 years on the 1st August of the year in which the recruitment examination is held The age limit shall in the case of candidates who have been in the employ of the Central or the State Government or of the Damodar Valley Corporation or any other statutory body recognised for the purpose by the Government and are not out of such employment for more than a year on the said date be releasable to the extent of the actual period spent continuously in such employment This relaxation of age limit will not be permitted to a candidate who had already appeared in the examination thrice No candidate will be allowed to take more than three chances Departmental candidates are eligible to apply provided they fulfill the requisite qualifications bForty per cent by selection from amongst directly recruited temporary Assistant Engineers who have rendered two years satisfactory service selection wing made by the Public Service Commission West Bengal 927 cTwenty per cent by promotion of confirmed Overseer Estimators Rule 10 Recruitment to temporary posts of Assistant Engineer shall be made as follows a Eighty per cent of the vacancies are to be filled by direct recruitment on the results of a competitive examination referred to in rule 9a above b Twenty percent by promotion of confirmed Overseer Estimators Rule 11 Notwithstanding anything contained in these rules the Governor may in case of emergency fill up vacancies in the posts of Assistant Engineer both permanent and temporary by advertisement and interview through the Public Service Commission West Bengal Rule 12 An Overseer Estimator shall not be promoted as a temporary Assistant Engineer unless he has rendered 10 years services To be eligible fo r promotion he must pass a written and oral examination which will be conducted by the Public Service Commission West Bengal and will be of the same standard as Professional Examination referred to in Chapter VI of the Service Training and Examination Rules West Bengal Overseer Estimators who have been confirmed in their posts and have tendered 8 years service including temporary service in that post shall be eligible to sit for such examination a panel of Overseer Estimator fit for promotion as temporary Assistant Engineers shall be maintained in consultation with the Public Service Commission West Bengal Under these Rules recruitment to the permanent posts of Assistant Engineers was required to be made under Rule 9 while Rule 10 governed 928 recruitment to the temporary posts of Assistant Engineers Rule 11 provided for emergency appointment by advertisement and interview through the Public Service Commission It is clear from these Rules that appointments to all the posts permanent and temporary were to be made according to the prescribed procedure on the basis of a competitive examination conducted by the Public Service Commission and even the appointments made in an emergency governed by Rule 11 were to be made by advertisement and interview through the Public Service Commission Any appointment to a permanent or temporary post of Assistant Engineer which was not made in accordance with Rule 9 or 10 or 11 was therefore not in accordance with these Rules The writ petitioners in all these matters were duly appointed Sub Assistant Engineers who were earlier called Overseer Estimators as described in the Rules and though initially diploma holders having obtained the prescribed degree were eligible for appointment as Assistant Engineers The writ petitioners respondents in these appeals were appointed temporary Assistant Engineers on ad hoc basis initially for a period of six months in the PWD between 1974 to 1976 and in the Irrigation and Waterways Department between 1972 to 1978 According to writ petitioners themselves their claim for seniority is based on direct recruitment to the post of Assistant Engineer and not as promotee from the next below cadre of Sub Assistant Engineers in the promotion quota specified for them in the Rules It is therefore the claim of the writ petitioners for seniority from the date of their initial ad hoc appointment as direct recruits and not as promotees in the promotion quota which has to be considered The ad hoc appointment of all the writ petitioners was in identical terms and therefore it is sufficient to refer merely to the relevant part of one such notification dated 10th May 1974 as illustrative of the nature of their ad hoc appointment The relevant part of the notification is as under The Governor is pleased to appoint the following Sub Assistant Engineers of the PWD now posted in the Directoratesoffices mentioned against each as tempy Assistan t Engineers in the West Bengal Service of Engineers under the PW Department on ad hoc basis for a period of 6 six months with effect from the dates of joining or until further orders whichever is earlier 929 4 The appointment is purely on ad hoc basis and he will have to revert to the post of SAE if he is not selected for regular appointment as Assistant Engineer through the PSC The initial ad hoc appointment was extended periodically on the same terms during the entire period upto 2621980 During this period several opportunities were given to these persons to appear before the Public Service Commission to satisfy the condition attached to their ad hoc appointment but none of the writ petitioners complied with the requirement declining throughout to appear before the Public Service Commission Strangely the State Government requested the Public Service Commission to permit regularisation of the services of these ad hoc appointees as Assistant Engineers without being selected for regular appointment by the Public Service Commission but the Public Service Commission firmly turned down that request The PSC s letters dated 451978 10101979 and 22111979 contain such refusal The Government even then took the decision on 26th February 1980 to regularise these persons as Assistant Engineers and consequently took three simultaneous steps on 2621980 the requirement in the rules of consultation with the PSC was dispensed with for them they were absorbed as temporary Assistant Engineers and rule under Article 309 was made providing for their seniority as temporary Assistant Engineers with effect from the same date ie 2621980 This rule clearly provided that all persons appointed regularly in accordance with rules prior to 2621980 as Assistant Engineers would rank above the ad hoc appointees so absorbed with effect from 2621980 This decision of the Government has also been implemented Surprisingly the grievance even then of the writ petitioners is that their seniority should be reckoned not only from 2621980 as has been done but from the date of their initial ad hoc appointment made temporarily in the above manner notwithstanding the conditions attached to that appointment under the rules and their failure to fulfill the same It is sufficient to refer to certain portions of the PSC s reply dated 4th May 1978 to the State Government s proposal for regularisation of ad 930 hoc appointments reiterating the strong objection of PSC that the appointments had been ab initio irregular illegal and unconstitutional Relevant extract from the reply is as under 2 It appears that the cases of 27 of 36 ad hoc appointments of Assistant Engineer 29 in the Civil Branch and 7 in the Electrical Branch under the Public Works Department as made between May 1974 and June 1975 were earlier reported to the Commission in January 1975 The Commission informed Government that the appointments had been ab initio irregular illegal and unconstitutional and requested Government to make regular recruitment to the posts after advertisement vide Secretary s DO No 370 PSC dated the 8th March 1975 The Commission also brought the irregularity to the notice of the Chief Secretary whose reply in this regard was as follows vide Chief Secretary s letter No 93875 CS dated the 22nd August 1975 issued by Public Works Estt Department The ad hoc appointments in question were made by the Public Works Department in the exigencies of public service pending recruitment of Assistant Engineers through the Public Service Commission West Bengal and on the express condition that the concerned of ficers would have lo revert if they failed to be selected by the Public Service Commission for appointment as Assistant Engineers 3It appears that of the 29 ad hoc Assistant Engineers Civil only 3 applied in response to the Commission s subsequent advertisement None of them however appeared at the preliminary written test held by the Com mission in that connection As regards the 7 posts of Assistant Engineers Electrical it appears that all the 7 ad hoc appointees applied in response to the Commission s advertisements issued in 1975 but that none of them was able to obtain even the pass mark at the interviews In the above context it is not clear how Government can 931 now sponsor a proposal for regularisation of the appointment of these ad hoc appointees In this reply it was finally said that the illegality of these ad hoc appointments could not be cured It was after the strong stand taken by the PSC that the State Government took the aforesaid action on 2621980 to dispense with the requirement of consultation with the PSC and regularise appointments of ad hoc appointees with effect from 2621980 The Rules for seniority made by the notification dated 2621980 issued in exercise of the power conferred by the proviso to Article 309 of the Constitution are as under 1 These rules may be called the Seniority Rules for the Assistant Engineers recruited in the Public Works Department otherwise than through the Public Service Commission West Bengal during the period from May 1974 t o June1976 2 The Assistant Engineers under Public Works Department who were recruited otherwise than through the Public Service Commission West Bengal during the period from May 1974 to June 1976 and who were excluded from the purview of the Public Service Commission West Bengal under this department notification No 1299 F dated 2621982 shall be deemed to be junior to any Assistant Engineer who was selected by the Public Service Commission West Bengal and was appointed on a date prior to 26th February 1980 The inter seniority in respect of the Assistant Engineers who are covered by the said notification shall be determined on the basis of select list if any In the absence of any such select list the inter se seniority should be determined on the basis of their length of service as Assistant Engineer in the Public Works Department emphasis supplied These ad hoc appointees having obtained the benefit of regularisation with effect from 2621980 without being selected by the PSC and being given the benefit of seniority from the date of their regularisation on 932 2621980 have challenged the Government s action and claimed seniority with effect from the date of their initial ad hoc appointment of this nature It may here be mentioned that in case of the ad hoc appointees in the Irrigation and Waterways Department even a rule for seniority being given to them from 2621980 was not made as was done for the ad hoc appointees in the PWD and yet they have also been given the same benefit They make the same grievance inspite of this On behalf of the appellants State of West Bengal and the direct recruits aggrieved by the judgment of the Division Bench of the High Court it has been urged that the claim of the writ petitioners respondents in these appeals for seniority being given to the retrospectively from the date of their initial ad hoc appointment made contrary to the rules in spite of their regularisation being made expressly from 2621980 is wholly untenable and against the decisions of this Court particularly the constitution bench decision in Direct Recruit Class II Engineering Officer s Association and Ors vs State of Maharashtra and Ors On this basis it was submitted that the Division Bench of the High Court committed an error in reversing the judgment of the Single Bench by which the writ petitions had been dismissed In reply Shri GL Sanghi appearing for the writ petitioners respondents in all these appeals submitted that the initial ad hoc appointment of the writ petitioners was made by a mode permissible under the rules that appointment was made in relaxation of the rules by the Government which is implicit in the action taken the initial ad hoc appointment must therefore be equated with a regular appointment made under the rules and on this equation there is no justification for discrimination between the initial ad hoc appointees and regular appointees coming in by direct recruitment thereafter in accordance with rules It was submitted that the initial ad hoc appointment being therefore in the nature of regular appointment made during an emergency after selection by a Committee consisting of five Chief Engineers these persons are entitled to count their entire service including the ad hoc period prior to 2621980 for the purpose of their seniority Shri Sanghi relied on the decisions of this Court in A Janardhana vs Union of India and Ors1983 2 SCR 936 and Narender Chadha Ors vs Union of India and Ors to support his submission Shri Sanghi further submitted that the case of the writ petitioners fell squarely within the ambit of conclusion B of the summary 933 in Maharashtra Engineers case in para 44 of the SCR para 47 of SCC The question therefore is whether Shri Sanghi is right in his submission that this case falls within the ambit of the said conclusion B in Maharashtra Engineers case The submission of the other side is that this case falls not within conclusion B but the corollary mentioned in con clusion A of that decision Conclusions A and B which alone are material are as under A Once an incumbent is appointed to a post according to rule his seniority has to be counted from the date of his appointment and not according to the date of his confirmation The corollary of the above rule is that where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement the officiation in such post cannot be taken into account for considering the seniority BIf the initial appointment is not made by following the procedure laid down by the rules but the appointee continues in the post uninterruptedly till the regularisation of his service in accordance with the rules the period of officiating service will be counted It is not necessary to deal at length with the decisions of this court in A Janardhana and Narender Chadha in view of the later constitution bench judgment in Maharashtra Engineers case wherein all the relevant earlier decisions have been considered before summarising the conclusions in para 44 of SCR para 47 of SCC We may however briefly refer to the decisions in A Janardhana and Narender Chadha since Shri Sanghi has strongly relied on them It may be mentioned that both these decisions related to inter se seniority of direct recruits and promotees the two channels for appointment to the posts where there was a quota prescribed for the two channels leading to rota for confirmation and the seniority was based on the date of confirmation according to rules The dispute arose as a result of promotions being made in excess of the promotees quota in the case of the surplus promotees It 934 was in that context that the question of taking into account longer period of continuous officiation for the purpose of fixing inter se seniority of direct recruits and promotees came up for consideration Those cases are clearly distinguishable In the present case there is no dispute between promotees and direct recruits the claim of the writ petitioners being based only as direct recruits in the cadre of Assistant Engineers and not as promotees from the lower cadre of Sub Assistant Engineers to which they had earlier belonged The present is therefore not a case of a dispute relating to the surplus promotees who were given promotion regularly in accordance with rules but in excess of the quota fixed for them under the rules In the present case all the writ petitioners are persons who were given ad hoc temporary appointments for a fixed period which was extended from time to time till their regularisation on 2621980 and that too by relaxation of the condition of selection by the Public Service Commission which was an express condition of their ad hoc appointment and a requirement for regular appointment under the Rules Assuming the relaxation made in their case by the State Government on 2621980 to be valid as the same is not disputed before us they could be treated as regularly appointed only with effect from 2621980 when the relaxation was given to them and an order was made simultaneously absorbing them in the cadre of Assistant Engineers also framing a rule at the same time under Article 309 providing for fixation of their seniority only from that date Accordingly there is no foundation for the claim that they could be treated at par with the direct recruits regularly appointed prior to 2621980 The admitted facts which are the foundation of the claim of the writ petitioners are sufficient to negative their claim It is obvious that prior to the steps taken by the State Government on 2621980 for their regularisation in this manner there was no basis on which the writ petitioners could claim to be regularly appointed as Assistant Engineers and therefore the manner in which they were regularised including the mode of fixation of their seniority with effect from 2621980 is decisive of the nature of their regular appointment This alone is sufficient to negative their further claim They can make no grievance to any part of that exercise made only for their benefit The constitution bench in Maharashtra Engineers case while dealing with Narender Chadha emphasised the unusual fact that the promotees in question had worked continuously for long periods of nearly fifteen to 935 twenty years on the posts without being reverted and then proceeded to state the principle thus We therefore confirm the principle of counting towards seniority the period of continuous officiation following an appointment made in accordance with the rules prescribed for regular substantive appointments in the service The constitution bench having dealt with Narendra Chadha in this manner to indicate the above principle that decision can not be construed to apply to cases where the initial appointment was not according to rules We shall now deal with conclusions A and B of the constitution bench in the Maharashtra Engineers case quoted above There can be no doubt that these two conclusions have to be read harmoniously and conclusion B can not cover cases which are expressly excluded by conclusion A We may therefore first refer to conclusion A It is clear from conclusion A that to enable seniority to be counted from the date of initial appointment and not according to the date of confirmation the incumbent of the post has to be initially appointed according to rules The corollary set out in conclusion A then is that where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement the officiation in such posts cannot be taken into account for considering the seniority Thus the corollary in conclusion A expressly excludes the category of cases where the initial appointment is only ad hoc and not according to rules being made only as a stop gap arrangement The case of the writ petitioners squarely falls within this corollary in conclusion A which says that the officiation in such posts cannot be taken into account for counting the seniority This being the obvious inference from conclusion A the question is whether the present case can also fall within conclusion B which deals with cases in which period of officiating service will be counted for seniority We have no doubt that conclusion B cannot include within its ambit those cases which are expressly covered by the corollary in conclusion A since the two conclusions cannot be read in conflict with each other 936 The question therefore is of the category which would be covered by conclusion B excluding therefrom the cases covered by the corollary in conclusion A In our opinion the conclusion B was added to cover a different kind of situation wherein the appointments are otherwise regular except for the deficiency of certain procedural requirements laid down by the rules This is clear from the opening words of the conclusion B namely if the initial appointment is not made by following the procedure laid down by the rules and the later expression till the regularisation of his service in accordance with the rules We read conclusion B and it must be so read to re councile with conclusion A to cover the cases where the initial appointment is made against an existing vacancy not limited to a fixed period of time or purpose by the appointment order itself and is made subject to the deficiency in the procedural requirements prescribed by the rules for adjudging suitability of the appointee for the post being cured at the time of regularisation the appointee being eligible and qualified in every manner for a regular appointment on the date of initial appointment in such cases Decision about the nature of the appointment for determining whether it falls in this category has to be made on the basis of the terms of the initial appointment itself and the provisions in the rules In such cases the deficiency in the procedural requirements laid down by the rules has to be cured at the first available opportunity without any default of the employee and the appointee must continue in the post uninterruptedly till the regularisation of his service in accordance with the rules In such cases the appointee is not to blame for the deficiency in the procedural requirements under the rules at the time of his initial appointment and the appointment not being limited to a fixed period of time is intended to be a regular appointment subject to the remaining procedural requirements of the rules being fulfilled at the earliest In such cases also if there be any delay in curing the defects on account of any fault of the appointee the appointee would not get the full benefit of the earlier period on account of his default the benefit being confined only to the period for which he is not to blame This category of cases is different from those covered by the corollary in conclusion A which relates to appointment only on ad hoc basis as a stop gap arrangement and not according to rules It is therefore not correct to say that the present cases can fall within the ambit of conclusion B even though they are squarely covered by the corollary in conclusion A 937 In view of the above it is clear that the claim of the writ petitioners respondents in all these appeals for treating their entire period of service prior to 2621980 as regular service for the purpose of seniority and fixation of their seniority accordingly is untenable The submission of Shri Sanghi that their initial ad hoc appointment must be treated as having been made in accordance with the rules since the selection by an alternative mode namely by a committee of five Chief Engineers was resorted to on account of the emergency cannot be accepted Rule 11 of the 1959 Rules provides for appointments to be made during emergency and lays down that such appointments during emergency can be made only by advertisement and interview through the Public Service Commission West Bengal Admittedly this express requirement in Rule 11 was not followed or fulfilled subsequently and therefore the initial ad hoc appointments cannot be treated to have been made according to the applicable rules These ad hoc appointments were clearly not in accordance with the rules and were made only as a stop gap arrangement for fixed period as expressly stated in the appointment order itself Thus there is no escape from the conclusion that the present cases fall squarely within the ambit of the corollary in conclusion A of Maharashtra Engineers case and therefore the period of ad hoc service of writ petitioners respondents on the post of Assistant Engineer prior to 2621980 cannot be counted for reckoning their seniority Consequently these appeals are allowed The impugned judgments of the Division Bench of the High Court are set aside and those of the Single Bench dismissing the writ petitions are restored No costs NVK Appeals allowed

RS RM and SB were elected as Members of the Goa Legislative Assembly in the Elections held in November 1989 Subsequently RS assumed office of Chief Minister and formed his Council of Ministers including RM and SB as Ministers Thereafter the appellant In CA 109492 a Member of the Assembly presented a petition to the Speaker of the Assembly seeking disqualification of RS on the ground that he had voluntarily given up the membership of his political party By its order 821 dated 15291 the Speaker passed an order under Para 6 of the Tenth Schedule of the Constitution disqualifying RS on the ground of defection RS filed a writ petition before the Goa Bench of the Bombay High Court challenging the order of disqualification and by an interim order the High Court stayed the operation of the disqualification order During the pendency of the writ petition the Speaker was removed from office and a deputy speaker was elected in his place who began functioning as Speaker RS filed an application before the Acting Speaker seeking review of his Disqualification order and on 8391 the Acting Speaker passed an order in purported exercise of his power of review under the Tenth Schedule setting aside the Disqualification order dated 15291 Consequently tie writ petition filed by RS challenging his disqualification order was dismissed as not pressed by the High Court on 8192 the appellant flied a petition challenging the review order dated 8391 passed by the Acting Speaker on the ground that the Speaker did not have any power to review the earlier order of disqualification Without going into the merits of the case the High Court dismissed the petition at the admission stage on the ground of laches The decision of the High Court was impugned before this Courts Subsequently another member of the Assembly appellant in C 109692 also filed a writ petition challenging the review order dated 8391 passed by the Acting Speaker setting aside the earlier order disqualifying RS on similar grounds The High Court also dismissed the same at the admission stage for the same reason ie laches Against the order dismissing the writ petition an appeal was preferred in this Court In the connected appeal CA 109592 the appellant applied to the Speaker seeking disqualification of RM and SB on the ground of defection and by his order dated 131290 Speaker passed the order disqualifying RM and SB under the Tenth Schedule Both of them filed petitions challenging the disqualification order and by an interim order the High Court stayed the disqualification orders In the meantime in a manner similar to that in the case of RS the Acting Speaker by his order dated 7391 in purported exercise of the review set aside the orders dated 131290 disqualifying RM and SB The appellant filed a petition challenging the orders of review passed by the Acting Speaker It was also dismissed by the High Court on the ground of laches Against dismissal of the writ petition an appeal was filed before this Court 822 In appeals to this Court it was contended on behalf of the appellants that 1 the mere delay in challenging the legality of the authority under which respondents continue to hold public office after being disqualified as Members of the Assembly was not a valid justification for the High Court to refuse to examine the main question of existence of power of review in the Speaker acting under the Tenth Schedule since the discretion of the High Court under Article 226 of the Constitution must be exercised judicially so as not to permit perpetuation of an illegality 2 the doctrine of laches does not apply where declaration sought is of nullity in order to prevent its continuing operation and laches is not relevant in the domain of public law relating to public office where the purpose is to prevent an usurper from continuing to hold a public office 3 the power of review in the Speaker cannot be implied from the provisions in the Tenth Schedule and the only remedy available to the aggrieved person is by judicial review of the order of the disqualification and 4 that the motive and conduct of the petitioners appellants in such matters is not decisive or fatal to the enquiry claimed in the writ petition inasmuch as the relief claimed by them was not for their personal benefit but for larger public interest and good governance of the State by persons holding public offices On behalf of the respondents it was contended that 1 even though there is no statutory limitation for filing a writ petition yet in a case like the present the apt analogy is of an election petition challenging an election which is to be filed within 45 days from the date of election of the returned candidate under Section 811 of the Representation of the People Act 1951 to indicate that unless such a challenge is made promptly the courts would refuse to examine such a question after the lapse of a reasonable period hence petitions filed after ten months of the date of the order of review made by the Speaker were rightly rejected on the ground of laches 2 the doctrine of laches applies as much to the writ of quo warranto as it does to a writ of certiorari 3 in view of the finality attaching to the order made by the Speaker under para 6 of the Tenth Schedule the power of review inheres in the Speaker for preventing miscarriage of justice in situations when the speaker himself is of the view that continuance of his earlier order of disqualification would perpetuate injustice 4 the inherent power of review in the Speaker must be read in the Tenth Schedule at least upto 12th November 1991 when the Judgment in Kihoto Hollohan was rendered declaring the availability of judicial 823 review against the Speaker s order of disqualification made under para 6 of the Tenth Schedule 5 only a limited judicial review being available against the Speaker s order of disqualification as held by the majority in Kihoto Hollohan some power of review Inheres in the Speaker even thereafter to correct palpable errors failing outside the limited scope of judicial review and 6 the appellants were not only associated with RS at different times but also they obtained benefits from him thus in view of the oblique motive coupled with their conduct the High Court was justified in refusing to exercise its discretionary powers under Article 226 of the Constitution at the behest of the appellants the power under Article 136 also being discretionary this Court would also be justified in refusing to interfere with the discretion so exercised by the High Court Allowing the appeals this Court HELD 1 The judgment of the High Court that the writ petitions were liable to be dismissed merely on the ground of laches cannot be sustained 834 C 2 The exercise of discretion by the Court even where the application is delayed is to be governed by the objective of promoting public interest and good administration and on that basis it cannot be said that discretion would not be exercised in favour of interference where it is necessary to prevent continuance of usurpation of office or perpetuation of an illegality 839 F 3 In the present case the claim is for the issue of a writ of quo warranto on the ground that respondents are holding public offices having suffered disqualification as Member of the Assembly subsequent to their election and one of them continues to hold the high public office of Chief Minister The relief claimed in the present case in not the conferment of a personal benefit to the petitioners but for cessation of the usurpation of public offices held by respondents Thus the relief claimed by the appellants in their writ petitions filed in the High Court being in the nature of a class action without seeking any relief personal to them should not have been dismissed merely on the ground of laches 837 C D 839 H 840 A 31 The motive or conduct of the appellants as alleged by the respondents can be relevant only for denying them the costs even If their claim succeeds but It cannot be a justification to refuse to examine the 824 merits of the question raised therein since that is a matter of public concern and relates to the good governance of the State itself 840 A B 4 The remedy of an election petition Is statutory governed by the limitation prescribed therein unlike the remedy under Article 226 of the Constitution That apart the analogy which is more apposite is the decision on questions as to the disqualification of Members in accordance with Article 103 in the case of a Member of Parliament or Article 192 in the case of a Member of a House of a Legislature of a State For raising a dispute giving rise to any question whether a Member of a House has become subject to any of the disqualification mentioned in clause 1 of Article 102 or 191 as the case may be there is no prescribed limitation and so also for challenging the decision rendered under Article 103 or 192 by a writ petition The question of the disqualification of a Member on the ground of defection and the Speaker s order thereon rendered under the Tenth Schedule is of a similar nature and not based on the result of an election which can be challenged only by an election petition in accordance with the provisions of Representation of the People Act 1951 834 F H 835 A AG vs Proprietor of the Bradford Canal 1866 LR 2 Equity Cases 71 relied on Brundaban Nayak V Election Commission of India and Anr 19651 3 SCR 53 explained and held inapplicable The Lindsay Petroleum Company vs Prosper Armstrong Hurd Abram Farewell and John Kemp The Moon Mills Ltd vs MR Meher President Industrial Court Bombay and Ors AIR Maharashtra State Road Transport Corporation vs Shri Balwant Regular Motor Service Amravati Ors Ms Tilok chand Motichand Ors vs HB Munshi Anr Shri Vallabh Glass Works Ltd Anr vs Union of India Ors Ms Dehri Rohtas Light Railway Company Ltd vs District Board Bhojpur Ors Emile Erlanger and Ors vs The New Sombrero Phosphate Company and Ors 1878 3 Appeal Cases 1218 Anachuna Nwakobi The Osha of Obosi and Ors vs Eugene Nzekwu Anr Everett vs Griffiths 1924 1 KB 941 R vs Stratfort on Avon District Council and Anr ex parte Jackson and Caswell and Anr vs Dairy Produce Quota Tribunal for England and Wales held inapplicable 825 5 The Speaker has no power of review under the Tenth Schedule and an order of disqualification made by him under para 6 thereof Is subject to correction only by judicial review 841 F Khoto Hollohan vs Zachillu and Ors 1992 Supp 2 SCC 651 referred to Observations in Patel Narshi Thakershi Ors vs Pradyumansinghji Arjunsinghji AIR 1970 SC 1273 to the effect that the power to review is not inherent power and must be conferred by law either specifically or by necessary implications relied on 51There is no scope for reading in to the Tenth Schedule any of the powers of the Speaker which he otherwise has while functioning as the Speaker in the House to clothe him with any such power in his capacity as the statutory authority functioning under the Tenth Schedule of the Constitution Accordingly any power of the Speaker available to him while functioning in the House is not to be treated as his power of privilege as the authority under the Tenth Schedule 842 G H 843 A Rule 77 of the Members of the Goa Legislative Assembly Disqualification on grounds of Defection Rules 1986 and Rule 77 of the Rules of Procedure and Conduct of Business of the Goa Legislative Assembly held inapplicable Para 7 has to be treated as non existent in the Tenth Schedule from the very inception As held by the majority in Kihoto Hollohan judicial review is available against an order of disqualification made by the Speaker under para 6 of the Tenth Schedule notwithstanding the finality mentioned therein It is on account of the nature of finality attaching by virtue of para 6 that the judicial review available against the Speaker s order has been labeled as limited in Kihoto Hollohan and the expression has to be understood in that sense distinguished from the wide power in an appeal and no more Thus the Speaker s order is final being subject only to judicial review according to the settled parameters of the exercise of power of judicial review in such cases The existence of judicial review against the Speaker s order of disqualification made under para 6 Is Itself a strong indication to the contrary that there can be no Inherent power of review in the Speaker read in the Tenth Schedule by necessary Implication 845 B E 826 7 There is no merit in the submission that the power of review inheres in the Speaker under the Tenth Schedule as a necessary incident of his jurisdiction to decide the question of disqualification or that such a power existed till 12th November 1991 when the decision in Kihoto Hollohan was rendered or at least a limited power of review inheres in the Speaker to correct any palpable error outside the scope of judicial review 845 F G Kihoto Hollohan vs Zachillhu and Ors 1992 Suppl 2 SCC 651 explained Shivdeo Singh Ors vs State of Punjab Ors AIR 1963 SC 1909 and Grindlays Bank Ltd vs Central Government Industrial Tribunal Ors distinguished The impugned orders of the High Court dismissing writ Petitions are setaside The orders made by the Acting Speaker in purported exerciseof power of review are nullity and liable to be ignored 847 E F

Appeal Nos 1301 07 of 1991 From the Judgment and Order dated 31 3 89 of the Income Tax Settlement Commission Bombay in Settlement Application No 1054178IT Ashok Desai Debi Pal BK Mehta NK Sahu UK Sagar and PH Parekh for the Appellant Dr V Gaurishankar and section Rajappa for the Respondents The Judgment of the Court was delivered by BP JEEVAN REDDY J These appeals are preferred against the orders of the Settlement Commission dated March 31 1989 in pursuance of the offers of settlement made by the appellant Civil Appeals 1301 07 of 1991 relate to the assessment years 1964 65 to 1970 71 while Civil Appeals 1288 1300 of 1991 relate to the assessment years 1970 71 to 1982 83 Under its orders the Settlement Commission computed the taxable income of the appellant s father who died on August 22 1969 and of the appellant for the aforesaid assessment years and gave certain directions applying which the ITO was directed to compute the total income for each of the said assessment years and raise demand for the tax due The main issue in all these matters is the assessability of income from five foreign trusts created by the appellant s father Sri Vikramsinhji Sri Vikramsinhji Ex ruler of Gondal executed three deeds of settlements trusts deeds in the United States of America on December 19 1963 and two deeds in the United Kingdom on January 1 1964 The three settlements executed in US are in identical terms Similarly the two settlements executed in UK are similar The two sets of settlements however differ from each other in certain particulars though both the sets are meant for the benefit of the settlor and the members of his family We may refer to the relevant clauses in the settlements executed in US in the first instance 946 Under the US settlements The National City Bank New York is constituted the sole trustee The trust is created for the benefit of the grantorsettlor his wife and children and their spouses referred to as family members and their descendants The trustee is empowered to collect the income from the trust properties and to apply the same among the family members andor their descendants in such manner as he thinks appropriate He is also authorised to terminate the trusts for any reason including tax reasons and to transfer convey and pay off the property held thereunder to any person or persons then eligible to receive the income of the trusts On such termination the entire assets in the hands of the trustee are to be paid over to the then Maharaja Ruler or to his living male descendants in equal shares per stripes The clause which is relevant herein which according to the Revenue makes the trusts revocable ones we may refer to it as para 12 for the sake of convenience reads thus Anything hereinabove to the contrary notwithstanding at any time and from time to time the Trustee shall transfer convey and pay over any portion of the income of the trust fund and any portion or all of the principal held in trust to or to the use of such one or more members of a class composed of the Grantor the wife or widow of the Gran tor the children of the Grantor living from time to time the spouse of any child of the Grantor then living or deceased hereinafter referred to as the Family Members and the descendants of the Family Members living from time to time in such amounts shares and proportions either absolutely or in trust and upon such terms and conditions including the grant of a further power to appoint as the Trustee and a Maharaja who shall have attained the age of eighteen 18 years shall at any time and from time to time appoint and direct in a written instrument which refers to and specifically exercises this power and which is duly executed by the Maharaja and by the Trustee then acting here under The foregoing power to appoint may be released in whole or in part by the Maharaja or by the Trustee or by both at any time by one or more written instruments duly executed by the Maharaja or by the Trustee or by both and delivered to 947 the Trustee then acting here under provided however that if either the Maharaja or the Trustee but not both of them shall release such power then the party not so releasing shall continue to have the power to appointment hereinbefore provided acting alone Clauses 2 and 3 of the deeds confer an absolute discretion upon the trustee to pay over or apply in his discretion any part or whole of income or any part of or whole of the principal to any person then eligible to receive the income of this trust at such time and in such manner as he may decide in his absolute discretion Clause 3 says further that the Trustee may omit eligible members of the class from any and all such payments and applications and no such payment or application or commission of a person from participation therein shall cause a charge against or otherwise effect the future interest or share of any person here under Any determination made by the trustee in good faith in exercising the said discretion is held to be binding and conclusive It is not necessary to notice other clauses of these settlements except to say that the object of these trusts is to provide for the education maintenance and up keep of the members of the settlor s family and their descendants The settlor died on August 22 1969 During his lifetime the settlor Vikramsinhji was filing returns of his income in India including therein whole of the income arising from the US trusts The returns were filed by him for the assessment years 1964 65 to 1969 70 both years inclusive Since he died in the middle of the accounting year relevant to the assessment year 1970 71 two returns were filed for the said assessment year one upto the date of the death of the settlor and the other from the date of the death of settlor to the end of the accounting year These returns were filed by his elder son Jyotendrasinhji appellant in these appeals In these returns too the appellant included whole of the income from the US trusts in the respective returns At this stage the appellant says he was advised that the income from US trusts was not taxable in India either in the hands of settlor or in his hands and that inclusion of the said income in the returns by the settlor and by the appellant was a mistake Urging the said contention the appellant filed appeals against the assessment orders pertaining to the AYs 1965 66 and 1966 67 Inasmuch as the appeals were barred with respect to other assessment orders he preferred revisions 948 before the Commissioner of Income Tax It may be mentioned at this stage itself that the income from UK trusts was included in the aforesaid returns just as the income from US trusts was included Similarly the plea of non taxability was urged with respect to the income from UK trusts on the same basis as was urged with respect to the income from the US trusts The Appellate Assistant Commissioner Rajkot admitted additional grounds and allowed the aforesaid appeals by his orders dated April 4 1975 and August 20 1975 The Revenue went up in appeal to Tribunal The Tribunal allowed the appeals holding that the AAC acted contrary to Rule 462 of the Income Tax Rules in admitting the additional grounds and in looking into new material Accordingly it set aside his orders and remitted the appeals back to AAC It is at this stage that the appellant approached the settlement commission under chapter XIXA of the Income Tax Act 1961 We may now notice the relevant clauses in the deeds of settlements executed in UK Under these settlement deeds one Mr Robert Hampton Robertson McGill was designated as the trustee referred to in the deeds as the original trustees These trusts too were created for the benefit of the settlor the members of his family and their descendants referred to as beneficiaries The deeds define the expression the trustees to mean and include the original trustee or the other trustees for the time being appointed in terms of the deeds of settlement The expression the beneficiaries was defined to mean and include a the settlor b the children and remoter issue for the time being in existence of the settlor and c any person for the time being in existence who is the wife or widow of the settlor or the wife or widow or husband or widower of any of them the children and remoter issue of the settlor The clauses which are relevant for our purposes read thus We have for the sake of convenient reference numbered them as clauses 3 and 4 THE Settlor hereby directs that the Trustee shall and accordingly the Trustees shall stand possessed of the Trust Fund and the income thereof upon the trusts following that it 1 to say 949 1 UPON TRUST to raise and pay out of the capital thereof any further estate duty which may still be payable thereon in respect of the death of the Settlor s father His Late Highness Shri Bhojrajji Maharaja Saheb of Gondal who died on the Thirty first day of July One Thousand nine hundred and fifty two and any interest payable on such duty and any costs incurred in connection with the ascertainment or payment of such duty and interest 2 Subject as aforesaid UPON TRUST for all or such one more and more exclusively of the others or other of the Beneficiaries at such age or time or respective ages or times if more than one in such shares and with such trusts for their respective benefit and such provisions for their respective advancement and maintenance and education at the discretion of the Trustees or of any other person or persons as the person who for the time being is the Maharaja or of the title is abolished would have been the Maharaja had the title not been abolished shall at any time during the specified period by any deed or deeds revocable or irrevocable appoint AND in default of and subject to any such appointment upon he trusts and with and subject to the powers and provisions hereinafter declared and contained concerning the same PROVIDED ALWAYS that the foregoing power of appointment shall not be capable of being exercised a by anyone other than the Settlor or the Elder son or the Younger Son or b in favour of the person making the appointment save with the consent of the Trustees being at least two in number or a trust Corporation such consent to be testified by their being parties to the deed of appointment and executing the same 4 SUBJECT aforesaid the Trustees shall stand possessed of the Trust Fund and the income thereof upon the trusts 950 following that is to say 1 The income of the Trust Fund accruing during the life of the Settlor shall belong and be paid to the Settlor 2 Subject as aforesaid the income of the Trust Fund accruing during the life of the Elder Son shall belong and be paid to the Elder Son 3 Subject as aforesaid the Trust Fund shall be held in Trust for the person who being a descendant of the Elder Son first during the specified period a becomes the Maharaja or would become the Maharaja if his title had not been abolished and b attains the age of eighteen years It is not necessary to notice the other provisionsclauses of these deeds During his lifetime the settlor Vikramsinhji was including the whole of the income from these trusts in his returns of income just as he was doing in the case of US trusts The said income was also included in the two returns filed by his son for the AY1970 71 Thereafter however the appellant took the stand as mentioned hereinbefore that the income from these trusts is not includable in his income He also took the stand that the inclusion of the said income in the returns submitted by his father for the AYs1964 65 to 1969 70 and by him in the returns relating to AY1970 71 was under a mistake This submission too was the subject matter of the appeals and the revisions filed before the AAC and the Commissioner of Income Tax referred to hereinbefore When the appellant approached the settlement commission with an application for settlement it related to the income from UK trusts as well The Settlement Commission heard the arguments in extenso spread over several days and disposed of the matter under two elaborate orders One order relates to AYs 1964 65 to 1970 71 Vikramsinhji and the other to AYs1970 71 to 1982 83 Appellant The findings of the Commission which constitute the bases for its orders may briefly be stated as the following 951 iThough the US settlements are in the nature of discretionary trusts they fall within the mischief of sub clause ii of Clause a of Section 63 of the Act For this reason the whole of the income arising from the trust properties was liable to be included and was rightly included in the income of the settlortransferor Sri Vikramsinhji ii On the death of the settlor the US settlement deeds ceased to be revocable but inasmuch as the entire income thereunder was received by the appellant Sri Jyotendrasinhji it constitutes his income and could be and was lawfully taxed in his hands iii So far as the UK trusts are concerned clause 3 did never come into operation inasmuch as no additional trustees were appointed as contemplated by it If so clause 4 sprang into operation where under the entire income under the settlements flowed to the settlor during his lifetime and on his death to his elder son the appellant herein In other words these settlements are in the nature of specific trusts In any event the entire income from these trusts was received by the settlor during his lifetime and after the settlor s death by the appellant Therefore the said income was rightly included in the total income of the settlor and the assessee during the respective assessment years On the above bases the Commission computed the taxable income of the settlor under both the sets of trusts for AYs1964 65 to 1970 71 upto the date of the death of the settlor as also the income of the appellant for the AYs1970 71 to 1982 83 The appellant then preferred these two sets of appeals against the two orders At the stage of granting leave this court ordered vide the order dated March 22 1991 that the appellant shall not be entitled to question the jurisdiction of the settlement commission to decide the issues before it and that he will confine himself in appeal only to the questions relating to correctness or otherwise of the Commissioner s order Sri Ashok Desai learned counsel for the appellant urged the following contentions 1The settlement commission erred in law in holding that the US trusts are revocable trusts within the meaning of Section 63 of the Act For attracting Section 63 the deed of transfer should give the transferor a right 952 to retransfer directly or indirectly whole or any part of the income or assets to the transferor or it must give him a right to re assum power directly or indirectly over the whole or any part of income or assets In this case the relevant clause does not give thetransferor such a power The power is given to the trustee to be exercised with the concurrence of the transferorsettlor Even if for any reason the clause is construed as giving such a power to the settlortransferor Section 63 is not attracted inasmuch as the power is given not to him a such but jointly to him and the trustee Such a power does not attract the mischief of Section 63 2 The US trusts are discretionary trusts In such a case the assessment can be made only upon the trustees and not upon the beneficiaries recipients The Revenue has no option in such a situation It must necessarily tax the trustees and trustees alone The Revenue cannot take advantage of the mistake of law on the part of the settlor or the appellant 3 At any rate with the death of the settlor the US trusts ceased to be revocable trusts assuming that they were so during his lifetime So far as the appellant is concerned he cannot be taxed on the income received by him from the said trust Only the trustee can be taxed 4 So far as UK trusts are concerned the settlement commission has committee an error of law in holding that clause 3 could come into operation only if and when the settlor appointed the additional trustees as contemplated by it In fact the trust had come into existence with the sole trustee McGill and it did not depend upon the appointment of additional trustees Clause 3 prevails over clause 4 If so the UK trustssettlements are also discretionary trusts and not specific trusts as held by the Settlement Commission In such a case again the assessment can be made only upon the trustees and not upon the beneficiaries recipients 5 So far as UK trusts are concerned no income was receivedby the settlor or the appellant either in UK or in India So long as the trustees decided not to exercise the discretion to distribute the income no income arose to any of the beneficiaries The deeds do not prescribe a time limit within which the trustees should exercise their discretion to distribute income Until the trustees take a decision to distribute and distribute the incomethe beneficiaries have no right to income nor can it be said that the income accrues to them The Settlement Commission committed a legal error in the income from the UK trusts in the total income of 953 the settlor and the appellant even though it was not paid out by the trustee nor received by the assessees At any rate no income was received in India 6In both the US and UK tax has been levied upon the respective trust incomes under the laws of those countries Levying tax over again in this country on the very same income amounts to double taxation On this ground too the tax levied in India must be waived On the other hand Dr Gauri Shankar the learned counsel for the Revenue made the following submissions iThe Settlement Commission is not a regular Tribunal Its function is different from other quasi judicial authorities created by the Income Tax Act Where an offer of settlement has been made the commission either accepts it or rejects it subject to such conditions and terms as it thinks fit to impose in that behalf As the name itself suggests it is a settlement a sort of composition It need not even give reasons for its order Even if any principles are decided by the Commission they do not bind the Income Tax authorities in proceedings relating to subsequent years The order of the commission is relevant to and is confined only to the assessment years to which it relates The jurisdiction of this court under Article 136 in an appeal against the orders of settlement commission must be conditioned by above considerations This court would not be able to go into the merits of the order The commission s order cannot be dissected inasmuch as it is a package deal Either it stands or falls as a whole ii The interpretation placed by the commission on both US and UK trusts is perfectly in order and does not call for any interference by this court Indeed under the impugned orders several benefits have been conferred upon the settlor and the appellant like waiving of penalties interest and other liabilities attaching to the assessees under the Act While accepting the same the appellant cannot be allowed to disown those features of the order which go against him iii The argumentof not receiving the income from UK trusts is a mere after thought and should not be given any credence During his lifetime the settlor had declared that he had received income from both the UK and US trusts and had included the same in his returns of income for each of the assessment years relevant heroin The appellant too acted similarly 954 iv A trustee or the trustees as the case may be are expected to act reasonably and in furtherance of the object of the trusts They must apply the income for the purposes specified They cannot just accumulate it Applying the test of reasonableness it must be held that ordinarily the trustee ought to distribute the income each year As a matter of fact it was so distributed If so it must be held that the income from these UK trusts has rightly been taken into account by the commission while passing its orders The first question we have to answer is the scope of these appeals preferred under Article 136 of the Constitution against the orders of the Settlement Commission The question is whether all the questions of fact and law as may have been decided by the commission are open to review in this appeal For answering this question one has to have regard to the scheme of Chapter XIX A The said chapter was inserted by the Taxation Laws Amendment Act 1975 with effect from April 1 1976 A somewhat similar provision was contained sub sections 1A to 1D of Section 34 of the Income Tax Act 1922 introduced in the year 1954 The provisions of Chapter XIX A are however qualitatively different and more elaborate than the said provisions in the 1922 Act The proceedings under this chapter commence by an application made by the assessee as contemplated by Section 245 C Section 245 D prescribes the procedure to be followed by the commission on receipt of an application under Section 245 C Sub section 4 says after examination of the records and the report of the commissioner received under sub section 1 and the report if any of the commissioner received under sub section 3 and after giving an opportunity to the applicant and to the commissioner to be heard either in person or through a representative duly authorisedin this behalf and after examining such further evidence as may be placed before it or obtained by it the settlement commission may in accordance with the provisions of this Act pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application but referred to in the report of the commissioner under sub section 1 or sub section 3 Section 245 E empowers the Commission to reopen the completed proceedings in appropriate cases while Section 245 F confers all the powers of an Income Tax authority upon the Commission Section 245 H empowers the Commission to grant immunity from penalty and prosecution with or without conditions in cases where it is satisfied that the assessee has made a full disclosure of his income and 955 its sources Under Section 245 HA the Commission can send back the matter to assessing officer where it finds that the applicant is not cooperating with it Section 245 1 declares that every order of settlement passed under sub section 4 of Section 245D shall be conclusive as to the matters stated therein and no matter covered by such order shall save as otherwise provided in Chapter XIX A be re opened in any proceeding under the Act or under any other law for the time being in force Section 245 L declares that any proceedings under chapter XIX A before the settlement commission shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purposes of Section 196 of the Indian Penal Code It is true that the finality clause contained in Section 245 I does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 136 as the case may be But that does not mean that the jurisdiction of this Court in the appeal preferred directly in this court is any different than what it would be if the assessee had first approached the High Court under Article 226 and then come up in appeal to this court under Article 136 A party does not and cannot gain any advantage by approaching this Court directly under Article 136 instead of approaching the High Court under Article 226 This is not a limitation inherent in Article 136 it is a limitation which this court imposes on itself having regard to the nature of the function performed by the Commission and keeping in view the principles of judicial review May be there is also some force in what Dr Gauri Shankar says viz that the order of commission is in the nature of a package deal and that it may not be possible ordinarily speaking to dissect its order and that the assessee should not be permitted to accept what is favourable to him and reject what is not According to learned counsel the Commission is not even required or obligated to pass a reasoned order Be that as it may the fact remains that it is open to the Commission to accept an amount of tax by way of settlement and to prescribe the manner in which the said amount shall be paid It may condone the defaults and lapses on the part of the assessee and may waive interest penalties or prosecution where it thinks appropriate Indeed it would be difficult to predicate the reasons and considerations which induce the commission to make a particular order unless of course the commission itself chooses to give reasons for its order Even if it gives reasons in a given case the scope of enquiry in the appeal remains the same as indicated above viz whether it iscontrary 956 to any of the provisions of the Act In this context it is relevant to note that the principle of natural justice and alteram partem has been incorporated in Section 245 D itself The sole overall limitation upon tire Commission thus appears to be that it should act in accordance with the provisions of the Act The scope of enquiry whether by High Court under Article 226 or by this Court under Article 136 is also the same whether the order of the Commission is contrary to any of the provisions of the Act and if so has it prejudiced the petitionerappellant apart from ground of bias fraud malice which of course constitute a separate and independent category Reference in this behalf may be had to the decision of this Court in Sri Ram Durga Prasad vs Settlement Commission which too was an appeal against the orders of the Settlement Commission Sabyasachi Mukharji J speaking for the Bench comprising himself and SR Pandian J observed that in such a case this Court is concerned with the legality of procedure followed and not with the validity of the order The learned Judge added judicial review is concerned not with the decision but with the decision making process Reliance was placed upon the decision of the House of Lords in Chief Constable of the NW Police vs Evans 1982 1 WLR1155 Thus the appellate power under Article 136 was equated to power of judicial review where the appeal is directed against the orders of the Settlement Commission For all the above reasons we are of the opinion that the only ground upon which this Court can interfere in these appeals is that order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant The main controversy in these appeals relates to the interpretation of the settlement deeds though it is true some contentions of law are also raised The commission has interpreted the trust deeds in a particular manner Even if the interpretation placed by the commission the said deeds is not correct it would not be a ground for interference in these appeals since a wrong interpretation of a deed of trust cannot be said to be a violation of the provisions of the Income Tax Act it is equally clear that the interpretation placed upon the said deeds by the Commission does not bind the authorities under the Act in proceedings relating to other assessment years In view of the above though it is not necessary strictly speaking to go into the correctness of the interpretation placed upon the said deeds by the commission and it is enough if we confine ourselves to the question whether the order of the Commission is contrary to the provisions of the 957 Act we propose to for the sake of completeness examine also whether the order of Commission is vitiated by any such wrong interpretation U section TRUSTS The sole trustee under this settlement deed is the First National City Bank New York The deed empowers the trustee to hold manage invest and reinvest the principal of the trust fund to collect and receive the income thereof and to pay or apply so much of the net income as the trustee shall in his absolute and uncontrolled discretion deem advisable to or to the use of one or more members of the settlor s family It is thus a discretionary trust A discretionary trust is described as a trust where the trustees have been vested with a discretion in the matter of distribution of trust income among the specified class of beneficiaries In the case of such trusts the trustees have a discretion to pay whole or part of the income to such member or members of the designated class as they think fit and it such proportion as they deem appropriate Section 1641 sets out the same idea in the following words Where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown In Snell s Principles of Equity 25th Edn 1965 P129 a discretionary trust is defined in the following words A discretionary trust is one which gives the beneficiary no right to any part of the income of the trust property but vests in the trustees a discretionary power to pay him or apply for his benefit such part of the income as they think fit The beneficiary thus has no more than a hope that the discretion will be exercised in his favour That these trusts are discretionary trusts is not in controversy The main question is whether Para 12 quoted hereinbefore makes it a revocable trust within the meaning of Section 63 The said clause begins with a non obstante clause anything hereinabove to the contrary not withstanding thereby giving it an overriding effect over what has been said in the earlier recitals It then says that at any time and from time to time the trustee shall transfer convey and pay over any portion or of the income 958 of the trust fund and any portion or of all the principal held in trust to such member of the settlor s family as the trustee and a maharaja who shall have attained the age of 18 years shall at any time and from time to time appoint and direct in a written instrument which refers to and specifically exercise this power and which is duly executed by the Maharaja and the trustee then acting here under In other words the said clause empowers the settlortransferor and the trustee acting together to direct the trustee at any time to pay over the entire income andor entire corpus or a pan thereof to such member of the settlor s family or their descendants as they may direct The said power cannot be exercised by the settlor acting alone The question is whether the said clause attracts Section 63 Section 63 defines the expressions transfer and revocable transfer It says that for the purposes of Sections 60 61 and 62 a transfer shall be deemed to be revocable if i it contains any provisions for the retransfer directly or indirectly of the whole or any part of the income or assets to the transferor or ii it in any way gives the transferor a right to reassume power directly or indirectly over the whole or any part of the income or assets The expression transfer is defined to include any settlement trust covenant agreement or arrangement The expression family members occurring in the aforesaid clause in the trust deeds is defined in the deeds to mean the children of the grantor living from time to time the wife or widow of the grantor the spouse of any child of the grantor then living or deceased The descendants of the family members which expression also occurs in the aforesaid clause is defined in the deeds to mean the descendants of the family members living from time to time during the trust term The contention of Sri Ashok Desai the learned counsel for the appellant is that Section 63 will be attracted only where the transferor is vested with the exclusive andor absolute power to give direction of the nature contemplated therein and not where such a power has to be exercised by the transferor jointly with another person or with the concurrence or consent of another person Indeed he argues that the said power is really given to the trustee to be exercised in concert with the Settlor We find it difficult to agree with the learned counsel Firstly the power properly construed is given to the settlor to be exercised together with the trustee and not to the trustee to be exercised together with the settlor The trustee is anyhow vested with an absolute discretion to distribute the income of or the principal of the trust to such member of the family as he 959 thinks appropriate under the clause preceding and paras following para 12 If so there was no point in saving that he can together with the settlor be empowered to pay over part or whole of incomeprincipal to such one or more members of a class composed of the family members living It cannot also be forgotten that the trustee in this case is a Bank one of the largest in the USA and not an individual acquainted with the affairs of the settlor s family Now coming to Section 63 it is equally not possible to agree with the learned counsel Section 63 does not say that the power of revocation vesting in the transferor should be absolute or unconditional As pointed out by Chagla CJ in Behramji Sorubji vs Commissioner of Income Tar Bombay the only question that has got to be asked is whether the transfer is capable of being revoked by the assessee or not it may be that before the power is exercised the consent of two beneficiaries might have to be taken but even so although the revocation may be contingent or conditional still the deed remains a revocable deed of trust The same idea was reiterated by Tendulkar J in the said judgment in the following words It is urged by Sir Jamshedji on behalf of the assessee that the words revocable transfer in this section require that the transfer should be revocable absolutely and uncondi tional and that by reason of the fact that the transfer in this case could not be revoked under clause 10 of the trust deed without the consent of the wife and the children or any two of them it is not a revocable transfer within the meaning of Section 161c Apart from any authority and reading the section by itself I am unable to agree with this contention It would involve my reading into the section words which are not there and the Court is not entitled to do so unless it appears that giving effect to the section as it stands would lead to an obvious absurdity or inconvenience which could not have been contemplated by the legislature No such position arises in this case We find ourselves in agreement with the said opinions Section 63 of the present Act corresponds to the proviso appended to Section 161c of the 1922 Act The first proviso read thus provided that for the purposes of this clause the settlement disposition or a transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or 960 indirectly of the income or assets to the settlor disponer or transferor or in any way gives settlor disponer or transferor a right to reassume power directly or indirectly over the income or assets Section 631 also does not say that the deed of transfer must confer or vest an conditional or an exclusive power in the transferor to give the powerdirection of the nature contemplated by it Accordingly we hold that merely because the concurrence of the trustee had to be obtained by the transferorsettlor for giving the said direction it cannot be said that the deed does not contain a provision giving the transferor a right to reassume power directly or indirectly over the whole or any part of income or assets within the meaning of Section 63aiiof the Act In this view of the matter it is not necessary for us to refer to other decisions cited before us in any detail The decision of this Court in commissionerof Income Tax Bombay City vs Ratilal Nathalal emphasisesthat the power of revocation must be given to the settlor as settlor and not in any other capacity In the deeds before us the power is indisputably conferred upon the Settlor in the very same capacity and not in any different capacity The other decision of this court in Sevantilal Maneklal vs CIT is distinguishable for the reason that the power of the settlor therein was merely to choose among the several objects of the trust and therefore it was held that it does not attract Section 63 On the other hand Tarunendra Nath Tagore vs Commr of Income Tax Calcutta was a case where the trust deed empowered the settlor to cause a re transfer of the trust assets in certain specified contingencies The question was whether such a provision makes the transfer a revocable one within the meaning of the first proviso to Section 161c of the 1922 Act It was held that it does notwithstanding the fact that the power had to be exercised only in certain specified contingencies The decision of the Madras High Court in K Subramania Pillai vs Agricultural Income For Officer Thukalay was also a case where the power of revocation was to be exercised in certain specified contingencies alone Even so it was held that it was a revocable settlement Commissioner of Income Tax Punjab vs Raghabir Singh was case where the trust deed provided for the application of the trust income for satisfying the debts which the settlor was under an obligation to discharge The question was whether the provision makes the deed a 961 revocable one It was held that it did not inasmuch as there was no provision for re transfer of the income or the assets to the settlor It was observed that the mere fact that the settlor s debts had to be discharged from the trust income did not bring it within the four corners of the first proviso to Section 161c In the light of the above discussion it must be held that during the lifetime of the settlor the entire income arising from the three US trust deeds was bound to be and was rightly included in the income of the settlor by virtue of Section 63 read with Section 61 The commission was right in holding so With the death of the settlor Section 63 ceased to apply even though the aforesaid clause empowers not only the settlor but also the Maharaja for the time being to exercise the said power Section 63 is attracted only where such power is given to the transferor and the appellant the son of the settlor is not and cannot be called the transferor It is not denied that so far as the income from the US trusts is concerned it was indeed received by the appellant The only argument is that inasmuch these trusts are discretionary trusts the income therefrom must necessarily be taxed and can only be taxed in the hands of the trustees and not in the hands of the beneficiary It is argued that the Revenue has no choice to tax either the trustees or the beneficiaries in such a case We are unable to agree The trustees in the case of a trust declared by a duly executed instrument in writing are treated as representative assessees Section 1601iv It is equally true that in the case of a discretionary trust trustees are liable to be taxed in respect of the income received by them at the rate specified in Section 1641 Section 1641 has undergone several changes since 1962 The sub section as introduced by the Finance Act 1970 with effect from April 1 1970 provided that in such case tax shall be charged i as if the relevant income or part of relevant income were the total income of the association of persons or ii 65 Whichever course would be more beneficial to the Revenue For the purpose of this case it is not necessary to notice the provisos appended to sub section 1 or the subsequent amendments to the sub section At the same time Section 166 expressly declares that nothing in the foregoing sections in this chapter shall prevent either the direct assessment 962 of the person on whose behalf or for whose benefit income therein referred is receivable or the recovery from such person of the tax payable in respect of such income Language of this section is clear The opening words nothing in the foregoing sections in this chapter which means chapter XV wherein Sections 159 to 165 among other sections occur give it an over riding affect over the preceding provisions in the chapter The Section states in unmistakable terms that nothing contained in the preceding provisions in the chapter shall preclude the Revenue from making a direct assessment upon the beneficiary andor from recovering the tax payable from such person The Revenue has thus been given an option to tax the income from a discretionary trust either in the hands of the trustees or in the hands of the beneficiaries This Court in Nagappa vs CI T and the majority of High Courts have understood this Section in this manner In Nagappa the appellant had executed seven separate trusts setting specific properties for the benefit of his minor children He appointed himself his wife and his married daughter as the trustees Under each deed a portion of the income was to be utilised immediately for the benefit of the beneficiary and the balance accumulated for his or her benefit and handed over to the beneficiary on the specified date The entire income of the trusts including the income accumulated was included in the income of the appellant Nagappa which was questioned by him His contention was that the ITO was bound to assess the income under each deed of trust separately in the hands of the trustees as representative trustees and was incompetent in view of the express enactment of sub section 2 of Section 161 to assess the income in the hands of Nagappa or of the beneficiaries The contention was rejected with reference to Section 1611 and Section 166 by Shah J speaking foe the Bench comprising Shah Ramaswami and Grover JJ in the following words It is implicit in the terms of sub section 1 that the Income tax Officer may assess a representative assessee but he is not bound to do so He may assess either the representative assessee or the person represented by him That is expressly so enacted in section 166 which states Nothing in the foregoing sections in this Chapter shall prevent either the direct assessment of the person on whose behalf or for whose benefit income therein referred 963 to is receivable or the recovery from such person of the tax payable in respect of such income The Income tax Officer may therefore assess the person represented in respect of the income of the trust property and the appropriate provisions of the income tax Act relating to the computation of the total income and the manner in which the income is to be computed will apply to that assessment The Income tax Officer may in appropriate cases assess the representative assessee in respect of that income and limited to that extent and tax may be levied and recovered from him to the same extent as may be leviable and recoverable from the person rep resented by him The contention raised by counsel for Nagappa that since the trustees were assessable in respect of the income of the beneficiaries under Section 1611 that income could not by virtue of sub section 2 of Section 161 be assessed in the hands of the beneficiary is contrary to the plain terms of Section 166 Sub section 2 of Section 161 does not purport to deny the Income tax Officer the option to assess the income in the hands of the person represented by the representative assessee it merely enacts that when a representative assessee is assessed to tax in exercise of the option of the revenue he shall be assessed tinder Chapter XV and shall not in respect of that income be assessed under any other provision of the Act We will presently state the reasons why the rule was so enacted by Parliament But on the plain words used by Parliament the plea raised by counsel that the representative assessee alone may be assessed as regards income in respect of which he is a representative assessee cannot be accepted The learned Judge then went to explain the reasons for which section 166 among other provisions was enacted In another case arising under the Bihar Agricultural Income Tax Act 1948 a Bench of this Court comprising JL Kapur M Hidayatullah and 964 JC Shah JJ took a similar view in Ram Swaroop Das vs The State of Bihar even though that Act and did not contain a provision similar to Section 166 Section 13 of the Bihar Act provided Where any person holds land from which agricultural income is derived as a common manager appointed under any law from the time being in force or under any agreement or as receiver administrator or the like on behalf of persons jointly interested in such land or in the agricultural income derived therefrom the aggregate of the sums payable as agricultural income tax by each person on the agricultural income derived from such land and received by him shall be assessed on such common manager receiver administrator or the like and he shall be deemed to be the assessee in respect of the agricultural incometax so payable by each such person and shall be liable to pay the same It was urged that because of Section 13 the Receiver alone can be assessed in respect of the income of the estate under his charge and that no assessment can be made upon the person who actually received such income from the receiver The said contention was rejected by Shah J speaking for the Bench in the following words In our view there is no substance in the contention raised by the appellant The liability to pay tax is charged on the agricultural income of every person The income though collected by the Receiver was the income of the appellant By S13 in addition to the owner the Receiver is to be deemed to be an assessee But the fact that the Receiver may because he held the property from which income was derived in the year of account be deemed to be an assessee and liable to pay tax does not absolve the appel lant on whose behalf the income was received from the obligation to pay agricultural income tax Section 13 merely provides a machinery for recovery of tax and is not a charging section When property is in the possession of the Receiver common manager or administrator the taxing authorities may but are not bound to treat such 965 persons as assessee and recover tax The taxing authorities may always proceed against the owner of the income and assess the tax against him The definition in the connota tion of person undoubtedly include a Receiver trustee common manager administrator or executor and by such inclusion it is open to the taxing authorities to assess tax against any such persons but on that account the income in the hands of the owner is not exempt from liability to assessment of tax The principle of this decision does support our view notwithstanding certain variance between the provision concerned in the said decision and those concerned herein Sri Ashok Desai however placed strong reliance upon a Full Bench decision of the Gujarat High Court in CL T vs Kamalini Khatau where the majority Divan CJ and BK Mehta J with PD Desai J dissenting appears to take a contrary view Before we deal with the decision it would be interesting to note that the counsel for the appellant Sri NA Palkhivala who appeared for the appellant before the Settlement Commission had himself repudiated this argument though another counsel who appeared for the appellant at a later stage did not agree with the view expressed by Sri Palkhivala The Commission has recorded the submission of Sri Palkhivala in the following words We may mention here that when Shri NA Palkhivala appeared before us on behalf of the applicant he had stated that although according to the Gujarat High Court s decision in the case of Smt Kamalini Aatau the income of a discretionary trust is assessable only in the hands of a representative assessed and not in the hands of the beneficiaries he would not object to assessment of the amounts received by the beneficiaries in their hands in the present case for two reasons Firstly according t o Shri NA Palkhivala the Gujarat High Court s decision in question was erroneous and it was dissently judgment in that case to the contrary which was correct Secondly in the case before us the representative assessees namely the trusts being situated outside India could 966 not be taxed in India and in such cases it would not be proper not to assess the beneficiaries for that will lead to the entire income escaping the Indian income tax in the case of both the representative assessees and the beneficiaries Be that as it may we have been taken though both the opinions in the Full Bench decision in extensor We are told that an appeal is pending against the said decision in this Court In the circumstances we are not inclined to deal with the said opinions in any detail except to say that we are inclined to agree with the dissenting opinion of PD Desai J and are not concerned with the reasoning of the majority For the above reasons we cannot agree with Mr Ashok Desai We hold that by virtue of Section 166 the Revenue has an option in the case of a discretionary trust either to make an assessment upon the trustees or to make an assessment upon the beneficiaries Of course both the trustee and the beneficiary cannot be simultaneously taxed in respect of the same income The assessments made by the Commission on the deceased settlor and the appellant are thus unexceptionable UK TRUSTS The first contention urged with respect to UK trusts is that the commission has wrongly construed clause 3 which we have extracted hereinbefore Sri Desai argues that the trust had already come into existence with the appointment of the sole trustee Mr McGill and that the coming into existence of the trust did not depend upon the appointment of additional trustees The commission was wrong in holding that until and unless the additional trustees are appointed the trust in clause 3 does not come into existence Properly construed says Sri Desai clause 3 creates a discretionary trust Inasmuch as the sub clause does not prescribe any time limit within which the trustees must decide to distribute the income among the beneficiaries says the counsel clause 4 has not and had never come into operation In this case the trustees never did decide not to exercise their discretion under clause 3 If so no income ever arose or accrued to the Settlor or the appellant under clause 4 If the trustees fail to exercise their discretion under clause 3 the only remedy for the beneficiaries is to approach the court to compel the trustees to exercise their discretion one way or the other but they cannot say that the trust 967 income has accrued to them Clause 4 comes into operation says the counsel only where the trustees decide not to distribute the income among the specified beneficiaries only then does the trust income belongs to and has to be paid over to the settlor and after the death of the settlor to his elder son the appellant Accordingly the counsel says the Commission was wrong in law in treating these trusts as specific trusts in our opinion however the question urged is academic in the facts and circumstances of the case As a matter of fact both the settlor and the appellant have been receiving the income from these trusts during the several assessment years concerned herein Sri Vikramsinhji had voluntarily included the entire income from the UK trusts in his income in the returns filed by him for the assessment years 1964 65 to 1969 70 It is unlikely that he would have so included unless he really received it The Commission treated those declarations as proof of the settlor s real intention The Commission also relied upon certain other circumstances including the manner in which the accounts of these trusts were maintained in support of their opinion that all concerned with the trusts acted on the basis that the trust income was flowing to the settlor and after his death to the appellant The Commission also referred specifically to similar declarations made by the appellant in his returns It referred to his statements made in the two returns filed for the assessment year 1970 71 one relating to the income received by his father till his death and the other with respect to the income received by him during the accounting year after the death of his father Even subsequent to the death of Sri Vikramsinhji the Commission pointed out the appellant has been making similar declarations from time to time For instance in the letter dated March 3 1975 written by the appellant to the ITO A Ward Rajkot relating to the AY 1972 73 he had stated as per statement of UK sent herewith the trustees have arrived at income of 13027 pounds for the benefit of Sri Jyotendrasinhji According to our opinion this income is not taxable as UK trust is discretionary However as it has been taken last the income may be included in the hands of Sri Jyotendrasinhji subject to our appeal It is significant to notice the ground of non taxability put forward in the said letter The appellant did not say that he did not receive the income All he said was since it is a discretionary trust its income is not taxable in his hands If he had not received the income he would have put forward that fact in the forefront But he did not Similarly in the return relating to the AY 1973 74 a note was appended by the appellant to the following effect 968 Late HH Maharaja Vikramsinhji of Gondal has created trusts in UK The assessee has been informed that income falling in the hands of the assessee is 12627 pounds This is therefore shows as income in his return emphasis added It is true that the appellant had argued before the commission that the settlor as well as himself had included the said income in their returns out of ignorance and on the basis of wrong legal advice but the said explanation has not been accepted by the commission and we must go by the findings of the commission It is not brought to out notice that during any of the years concerned herein did the appellant ever say that he did not receive the income from these trusts If so the question of law urged is of mere academic interest and need not be dealt with by us Section 5 of the Act is wide enough to bring all such income to tax So far as the plea of double taxation is concerned the observation made by the Commission in that behalf is quite adequate It has stated that in case appellant proves that any income has been taxed in US or UK the same income shall not be taxable over again in India For the above reasons the appeals fail and are dismissed No costs VPR Appeals dismissed

The prosecution case was that about 20 22 days prior to the occurrence the appellant and his brother removed the fencing over the field of the deceased This resulted in a quarrel and created ill feelings between the deceased and the appellant and his brother On the date of occurrence the deceased went to his field Later on his wife PW1 and his son PW2 went to the field carrying meals for the deceased The deceased took his meal and at about 1230 pm all the three were returning to their village from the field near at the water course of the village the appellant who was coming from the village side gave a lalkara to the deceased and he fired a shot from his pistol at the deceased The appellant s brother exhorted him to kill the deceased Thereupon the appellant fired three more shots from his pistol The deceased fell down and died at the spot PW1 accompanied by one Ganpatram went to police station and lodged the first information report at about 3 pm and the police investigation was commenced The appellant and his brother were sent up for trial charging the former under section 302 IPC and the latter under section 302114 IPC Both were also charged under section 27 of the Arms Act The Trial Court acquitted the appellant and his brother of all the 850 charges as it found that the prosecution was unable to prove the case against them The State s appeal was partly allowed by the High Court The High Court set aside the acquittal of the appellant and convicted him for an offence under section 302 IPC and sentenced him to undergo life imprisonment The High Court maintained the acquittal of the appellant s brother Under section 2a of the Supreme Court Enlargement of Appellate Jurisdiction Act 1970 the present appeal was riled contending that the judgment of the Trial Court could neither be styled as perverse nor even as unreasonable and that there was no other substantial and compelling reasons which could justify the setting aside of the order of acquittal and therefore the High Court should not have interfered with the order of acquittal that the presence of undigested food in the stomach of the deceased belied the prosecutions case and that the Trial Court was right in holding that the deceased could not have taken the meals at the time stated by his wife PW1 and his son PW2 or murdered at 1230 pm as alleged that the inordinate delay in sending the empty cartridges to the ballistic expert went to show that the possibility that the same had been substituted by the investigating agency could not be ruled out and therefore the conviction of the appellant by the High Court was not justified The State submitted that since it was an appeal under Section 2 of the Supreme Court Enlargement of Appellate Jurisdiction Act 1970 this court could itself appreciate the evidence to determine the guilt or otherwise of the appellant that the findings recorded by the Trial Court were based on surmises and conjectures and the High Court was perfectly justified in reversing the order of acquittal that the evidence of PW1 and PW2 conclusively established that the crime had been committed by the appellant by his pistol and their testimony had received ample corroboration not only from the statement of the doctor PW9 but also from the evidence of PW11l the ballistic expert who had opined that the four empty cartridges had been fired from the licenced pistol of the appellant and could not have been fired from any other weapon that being rustic villagers much importance could not be attached to the time given by PW1 and PW2 during their depositions about the exact time when the deceased may have had his meals and therefore it could not be said that the medical 851 evidence had in any way belied the prosecution case Dismissing the appeal this Court HELD 101 The process of digestion depends upon the digestive power of an individual and varies from in individual to an individual It also depends upon the type and amount of food taken The period of digestion is different for different types of food Some food articles like mutton chicken etc would take more time for being digested as compared to vegetarian food No question at all were asked from the wife of the deceased about the type of food served by her to her husband or the amount of food taken by the deceased That apart the time stated by the witnesses as to when the deceased took his food was only an approximate time as it was not even suggested to PW1 that she had a wrist watch and had actually seen the time when her husband took his food Too much play on such slippery factors goes against realism and is not enough to discredit the otherwise reliable testimony of PW1 856E F 102 The doctor opined that digestion begins in 1 or 1 12 hours From this testimony what was sought to be made out by the defence was that had the occurrence taken place at 1230 noon the deceased would have had his meals before 1100 am as semi digested food was found in the stomach of the deceased The emphasis on this aspect of the case by the Trial Court is misplaced because the medical evidence is only an evidence of opinion and is hardly decisive 856 D 103 The evidence of both the witnesses PW1 and PW2 the widow and son of the deceased shows that they are consistent in their versions not only about the assailants but also about the manner of assault Both the witnesses have given a vivid description of the occurrence The statement of PW1 that the deceased took his meals at about 1030 am and that the occurrence had taken at about 12 1230 in the noon cannot be taken to have been contradicted by the medical evidence 856 B 104 The first information report was lodged by PW1 at 300 pm at a distance of about 13 miles from the place of occurrence and was therefore lodged with great promptitude and the entire version of the occurrence rinds mention in that report 857 B 105 The testimony of the PWs 1 and 2 has impressed the Court and 852 they appear to be truthful witnesses and being the close relations or the deceased would in the ordinary course of things be the last person to screen the actual offenders and implicate the appellants falsely Their testimony also receives ample corroboration from the medical evidence and the testimony of ballistic expert PW11 857 B C 106 No suggestion even was made to anyone of the PWs 6 7 8 10 12 that the sealed packets had allegedly been tampered with while in their custody No such suggestion was even made to PW6 that he had either substituted the carriages sent to the ballistic expert or otherwise tampered with the sealed packets There is no possibility of the substitution of the cartridges 859 F 107 Thus there are no suspicious features at all appearing in the evidence which may cast any doubt on the prosecution version that the deceased was shot at with the pistol by the appellant and that he died as a result of the injuries so received The prosecution had successfully established the case against the appellant beyond any reasonable doubt 858 H 859 A

ivil Appeal No 215 of 1955 Appeal from the judgment and decree dated April 1 1953 of the Calcutta High Court in Appeal from Original Decree No 89 of 1946 arising out of the judgment and decree dated December 4 1945 of the Subordinate Judge Darjeeling in Money Suit No 5 of 1940 409 L K Jha and D N Mukherjee for the appellant C B Aggarwala K B Bagchi and Sukumar Ghosh for Respondents Nos 1 to 5 1959 March 26 The Judgment of the Court was delivered by SUBBA RAO J This appeal filed against the judgment of the High Court of Judicature at Calcutta raises the question of the legality of a partnership to carry on business in wagering contracts The facts lie in a small compass They omitting those not germane to the controversy before us are as follows The appellant Gherulal Parakh and the first respondent Mahadeodas Maiya managers of two joint families entered into a partnership to carry on wagering contracts with two firms of Hapur namely Messrs Mulchand Gulzarimull and Baldeosahay Surajmull It was agreed between the partners that the said contracts would be made in the name of the respondents on behalf of the firm and that the profit and loss resulting from the transactions would be borne by them in equal shares In implementation of the said agreement the first respondent entered into 32 contracts with Mulchand and 49 contracts with Baldeosahay and the nett result of all these transactions was a loss with the result that the first respondent had to pay to the Hapur merchants the entire amount due to them As the appellant denied his liability to bear his share of the loss the first respondent along With his sons filed O section No 18 of 1937 in the Court of the Subordinate Judge Darjeeling for the recovery of half of the loss incurred in the transactions with Mulchand In the plaint he reserved his right to claim any further amount in respect of transactions with Mulchand that might be found due to him after the accounts were finally settled with him That suit was referred to arbitration and on the basis of the award the Subordinate Judge made a decree in favour of the first respondent and his sons for a sum of Rs 3375 After the final accounts were settled between the first respondent and the two merchants of Hapur and after 52 410 the amounts due to them were paid the first respondent instituted a suit out of which the present appeal arises in the Court of the Subordinate Judge Darjeeling for the recovery of a sum of Rs 5300 with interest thereon Subsequently the plaint was amended and by the amended plaint the respondents asked for the same relief on the basis that the firm had been dissolved The appellant and his sons inter alia pleaded in defence that the agreement between the parties to enter into wagering contracts was unlawful under section 23 of the Contract Act that as the partnership was not registered the suit was barred under section 691 of the Partnership Act and that in any event the suit was barred under section 2 Rule 2 of the Code of Civil Procedure The learned Subordinate Judge found that the agreement between the parties was to enter into wagering contracts depending upon the rise and fall of the market and that the said agreement was void as the said object was forbidden by law and opposed to public policy He also found that the claim in respect of the transactions with Mulchand so far as it was not included in the earlier suit was not barred under section 2 Rule 2 Code of Civil Procedure as the cause of action in respect of that part of the claim did not arise at the time the said suit was filed He further found that the partnership was between the two joint families of the appellant and the first respondent respectively that there could not be in law such a partnership and that therefore section 69 of the Partnership Act was not applicable In the result he dismissed the suit with costs On appeal the learned Judges of the High Court held that the partnership was not between the two joint families but was only between the two managers of the said families and therefore it was valid They found that the partnership to do business was only for a single venture with each one of the two merchants of Hapur and for a single season and that the said partnership was dissolved after the season was over and therefore the suit for accounts of the dissolved firm was not hit by the provisions of subsections 1 and 2 of section 69 of the Partnership Act 411 They further found that the object of the partnere was to deal in differences and that though the said transactions being in the nature of wager were void under section 30 of the the object was not unlawful within the meaning of section 23 of the said Act In regard to the claim the learned Judges found that there was no satisfactory evidence as regards the payment by the first respondent on account of loss incurred in the contracts with Mulchand but it was established that he paid a sum of Rs 7615 on account of loss in the contracts entered into with Baldeosahay In the result the High Court gave a decree to the first respondent for a sum of Rs 3807 8 0 and disallowed interest thereon for the reason that as the suit in substance was one for accounts of a dissolved firm there was no liability in the circumstances of the case to pay interest In the result the High Court gave a decree in favour of the first respondent for the said amount together with another small item and dismissed the suit as regards the plaintiffs other than the first respondent and the defendants other than the appellant Before we consider the questions of law raised in the case it would be convenient at the outset to dispose of questions of fact raised by either party The learned Counsel for the appellant contends that the finding of the learned Judges of the High Court that the partnership stood dissolved after the season was over was not supported by the pleadings or the evidence adduced in the case In the plaint as originally drafted and presented to the Court there was no express reference to the fact that the business was dissolved and no relief was asked for accounts of the dissolved firm But the plaint discloses that the parties jointly entered into contracts with two merchants between March 23 1937 and June 17 1937 that the plaintiffs obtained complete accounts of profit and loss on the aforesaid transactions from the said merchants after June 17 1937 that they issued a notice to the defendants to pay them a sum of Rs 4146 4 3 being half of the total payments made by them on account of 412 the said contracts and that the defendants denied their liability The suit was filed for recovery of the said amount The defendant filed a written statement on June 12 1940 but did not raise the plea based on section 69 of the Partnership Act He filed an additional written statement on November 9 1941 expressly setting up the plea Thereafter the plaintiffs prayed for the amendment of the plaint by adding the following to the plaint as paragraph 10 That even Section 69 of the Indian Partnership Act is not a bar to the present suit as the joint business referred to above was dissolved and in this suit the Court is required only to go into the accounts of the said joint business On August 14 1942 the defendant filed a further additional written statement alleging that the allegations in paragraph 2 were not true and that as no date of the alleged dissolution had been mentioned in the plaint the plaintiffs case based on the said alleged dissolution was not maintainable It would be seen from the aforesaid pleadings that though an express allegation of the fact of dissolution of the partnership was only made by an amendment on November 17 1941 the plaint as originally presented contained all the facts sustaining the said plea The defendants in their written statement inter alia denied that there was any partnership to enter into forward contracts with the said two merchants and that therefore consistent with their case they did not specifically deny the said facts The said facts except in regard to the question whether the partnership was between the two families or only between the two managers of the families on which there was difference of view between the Court of the Subordinate Judge and the High Court were concurrently found by both the Courts It follows from the said findings that the partnership was only in respect of forward contracts with two specified individuals and for a particular season But it is said that the said findings were not based on any evidence in the case It is true that the documents did not clearly indicate any period limiting the operation of the partnership but from the attitude adopted by the 413 defendants in the earlier suit ending in an award and that adopted in the present pleadings the nature of the transactions and the conduct of the parties no other conclusion was possible than that arrived at by the High Court If so section 42 of the Partnership Act directly applies to this case Under that section in the absence of a contract to the contrary a firm is dissolved if it is constituted to carry out one or more adventures or undertakings by completion thereof In this case the partnership was constituted to carry out contracts with specified persons during a particular season and as the said contracts were closed the partnership was dissolved At this stage a point raised by the learned Counsel for the respondents may conveniently be disposed of The learned Counsel contends that neither the learned Subordinate Judge nor the learned Judges of the High Court found that the first respondent entered into any wagering transactions with either of the two merchants of Hapur and therefore no question of illegality arises in this case The law on the subject is wellsettled and does not call for any citation of cases To constitute a wagering contract there must be proof that the contract was entered into upon terms that the performance of the contract should not be demanded but only the difference in prices should be paid There should be common intention between the parties to the wager that they should not demand delivery of the goods but should take only the difference in prices on the happening of an event Relying upon the said legal position it is contended that there is no evidence in the case to establish that there was a common intention between the first respondent and the Hapur merchants not to take delivery of possession but only to gamble in difference in prices This argument if we may say so is not really germane to the question raised in this case The suit was filed on the basis of a dissolved partnership for accounts The defendants contended that the object of the partnership was to carry on wagering transactions i e only to gamble in differences without any intention to give or take delivery of goods The Courts on the evidence both 414 direct and circumstantial came to the conclusion that the partnership agreement was entered into with the object of carrying on wagering transactions wherein there was no intention to ask for or to take delivery of goods but only to deal with differences That is a concurrent finding of fact and following the usual practice of this Court we must accept it We therefore proceed on the basis that the appellant and the first respondent entered into a partnership for carrying on wagering transactions and the claim related only to the loss incurred in respect of those transactions Now we come to the main and substantial point in the case The problem presented with its different facets is whether the said agreement of partnership is unlawful within the meaning of section 23 of the Section 23 of the said Act omitting portions unnecessary for the present purpose reads as follows The consideration or object of an agreement is lawful unless it is forbidden by law or the Court regards it as immoral or opposed to public policy In each of these cases the consideration or object of an agreement is said to be unlawful Every agreement of which the object or consideration is unlawful is void Under this section the object of an agreement whether it is of partnership or otherwise is unlawful if it is forbidden by law or the Court regards it as immoral or opposed to public policy and in such cases the agreement itself is void The learned Counsel for the appellant advances his argument under three sub heads i the object is forbidden by law ii it is opposed to public policy and iii it is immoral We shall consider each one of them separately i forbidden by law Under section 30 of the agreements by way of wager are void and no suit shall be brought for recovering anything 415 alleged to be won on any wager or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made Sir William Anson s definition of wager as a promise to give money or money s worth upon the determination or ascertainment of an uncertain event accurately brings out the concept of wager declared void by section 30 of the Contract Act As a contract which provides for payment of differences only without any intention on the part of either of the parties to give or take delivery of the goods is admittedly a wager within the meaning of section 30 of the Contract Act the argument proceeds such a transaction being void under the said section is also forbidden by law within the meaning of section 23 of the Contract Act The question shortly stated is whether what is void can be equated with what is forbidden by law This argument is not a new one but has been raised in England as well as in India and has uniformly been rejected In England the law relating to gaming and wagering contracts is contained in the Gaming Acts of 1845 and 1892 As the decisions turned upon the relevant provisions of the said Acts it would help to appreciate them better if the relevant sections of the two Acts were read at this stage Section 18 of the Gaming Act 1845 Contracts by way of gaming to be void and wagers or sums deposited with stakeholders not to be recoverable at law Saving for subscriptions for prizes All contracts or agreements whether by parole or in writing by way of gaming or wagering shall be null and void and no suit shall be brought or maintained in any court of law and equity for recovering any sum of money or valuable thing alleged to be won upon any wager or which shall have been deposited in the hands of any person to abide the event on which any wager shall have been made Provided always that this enactment shall not be deemed to apply to any subscription or contribution or agreement to subscribe or contribute for or towards any plate prize or sum of money to be awarded to the winner or winners of any lawful game sport pastime or exercise 416 Section 1 of the Gaming Act 1892 Promises to repay sums paid under contracts void by 8 9 Viet c 109 to be null and void Any promise express or implied to pay any person any sum of money paid by him under or in respect of any contract or agreement rendered null and void by the Gaming Act 1845 or to pay any sum of money by way of commission fee reward or otherwise in respect of any such contract or of any services in relation thereto or in connexion therewith shall be null and void and no action shall be brought or maintained to recover any such sum of money While the Act of 1845 declared all kinds of wagers or games null and void it only prohibited the recovery of money or valuable thing won upon any wager or desposited with stakeholders On the other hand the Act of 1892 further declared that moneys paid under or in respect of wagering contracts dealt with by the Act of 1845 are not recoverable and no commission or reward in respect of any wager can be claimed in a court of law by agents employed to bet on behalf of their principals The law of England till the passing of the Act of 1892 was analogous to that in India and the English law on the subject governing a similar situation would be of considerable help in deciding the present case Sir William Anson in his book On Law of Contracts succinctly states the legal position thus at page 205 the law may either actually forbid an agreement to be made or it may merely say that if it is made the Courts will not enforce it In the former case it is illegal in the latter only void but inasmuch as illegal contracts are also void though void contracts are not necessarily illegal the distinction is for most purposes not important and even judges seem sometimes to treat the two terms as inter changeable The learned author proceeds to apply the said general principles to wagers and observes at page 212 thus Wagers beidg only void no taint of illegality attached to a transaction whereby one man employed another to make bets for him the ordinary rules which 417 govern the relation of employer and employed applied in such a case Pollock and Mulla in their book on Indian Contract define the phrase forbidden by law in section 23 thus at page 158 An act or undertaking is equally forbidden by law whether it violates a prohibitory enactment of the Legislature or a principle of unwritten law But in India where the criminal law is codified acts forbidden by law seem practically to consist of acts punishable under the Penal Code and of acts prohibited by special legislation or by regulations or orders made under authority derived from the Legislature Some of the decisions both English and Indian cited at the Bar which bring out the distinction between a contract which is forbidden by law and that which is void may now be noticed In Thacker vs Hardy 1 the plaintiff a broker who was employed by the defendant to speculate for him upon the stock Exchange entered into contracts on behalf of the defendant with a third party upon which he the plaintiff became personally liable He sued the defendant for indemnity against the liability incurred by him and for commission as broker The Court held that the plaintiff was entitled to recover notwithstanding the provisions of 8 9 Viet c 109 section 18 English Gaming Act 1845 Lindley J observed at page 687 Now if gaming and wagering were illegal I should be of opinion that the illegality of the transactions in which the plaintiff and the defendant were engaged would have tainted as between themselves whatever the plaintiff had done in futherance of their illegal designs and would have precluded him from claiming in a court of law any indemnity from the defendant in respect of the liabilities he had incurred Cannan vs Bryce McKinnell vs Robinson Lyne vs Siesfeld 1 H N 278 But it has been held that although gaming and wagering contracts cannot be enforced they are 1 53 418 not illegal Fitch vs Jones is plain to that effect Money paid in discharge of a bet is a good consideration for a bill of exchange Oulds vs Harrison and if money be so paid by a plaintiff at the request of a defendant it can be recovered by action against him Knight vs Camber Jessopp vs Lutwyoho Rosewarne vs Billing 15 C B N section 316 and it has been held that a request to pay may be inferred from an authority to bet Oldham vs Ramsden Having regard to these decisions I cannot hold that the statute above referred to precludes the plaintiff from maintaining this action In Read vs Anderson1 where an agent was employed to make a bet in his own name on behalf of his principal a similar question arose for consideration Hawkins J states the legal position at page 104 At common law wagers were not illegal and before the passing of 8 9 Vict c 109 actions were constantly brought and maintained to recover money won upon them The object of 8 9 Viet c 109 passed in 1845 was not to render illegal wagers which up to that time had been lawful but simply to make the law no longer available for their enforcement leaving the parties to them to pay them or not as their sense of honour might dictate After citing the provisions of section 18 of that Act the learned Judge proceeds to observe thus at page 105 There is nothing in this language to affect the legality of wagering contracts they are simply rendered null and void and not enforceable by any process of law A host of authorities have settled this to be the true effect of the Statute This judgment of Hawkins J was confirmed on appeal reported in 13 Q B 779 on the ground that the agency became irrevocable on the making of the bet The judgment of the Court of Appeal cannot be considered to be a direct decision on the point The said principle was affirmed by the Court of Appeal again in Bridger vs Savage 2 There the plaintiff sued his 1 2 419 agent for the amount received by him in respect of the winnings from the persons with whom the agent had betted Brett M R observed at page 366 the defendant has received money which he contracted with the plaintiff to hand over to him when he had received it That is a perfectly legal contract but for the defendant it has been contended that the statute 8 9 Vict c 109 section 18 makes that contract illegal The answer is that it has been held by the Courts on several occasions that the statute applies only to the original contract made between the persons betting and not to such a contract as was made here between the plaintiff and defendant Bowen L J says much to the same effect at page 367 Now with respect to the principle involved in this case it is to be observed that the original contract of betting is not an illegal one but only one which is void If the person who has betted pays his bet he does nothing wrong he only waives a benefit which the statute has given to him and Confers a good title to the money on the person to whom he pays it Therefore when the bet is paid the transaction is completed and when it is paid to an agent it cannot be contended that it is not a good payment for his prin cipal So much therefore for the principle governing this case As to the authorities the cases of Sharp vs Taylor Johnson vs Lansley 12 C B 468 and Beeston vs Beeston I exhibit D 13 all go to shew that this action is maintainable and the only authority the other way is that of Beyer vs Adams and that case cannot be supported and is not law This case lays down the correct principle and is supported by earlier authorities The decision in Partridge vs Mallandaine 1 is to the effect that persons receiving profits from betting systematically carried on by them are chargeable with income tax on such profits in respect of a vocation under 5 6 Vict c 35 the Income Tax Act Schedule D Hawkins J rejecting the argument that the 1 420 profession of bookmakers is not a calling within the meaning of the Income Tax Act makes the following observations at page 278 Mere betting is not illegal It is perfectly lawful for a man to bet if he likes He may however have a difficulty in getting the amount of the bets from dishonest persons who make bets and will not pay The decision in Hyams vs Stuart King 1 deals with the problem of the legality of a fresh agreement between parties to a wager for consideration There two bookmakers had betting transactions together which resulted in the defendant giving the plaintiff a cheque for the amount of bets lost to him At the request of the defendant the cheque was held over by the plaintiff for a time and part of the amount of the cheque was paid by the defendant Subsequently a fresh verbal agreement was come to between the parties by which in consideration of the plaintiff holding over the cheque for a further time and refraining from declaring the defendant a defaulter and thereby injuring him with his customers the defendant promised to pay the balance owing in a few days The balance was never paid and the plaintiff filed a suit to recover the money on the basis of the fresh verbal agreement The Court of Appeal by a majority Fletcher Moulton L J dissenting held that the fresh verbal agreement was supported by good consideration and therefore the plaintiff was entitled to recover the amount due to him At page 705 Sir Gorell Barnes posed the following three questions to be decided in the case 1 Whether the new contract was itself one which falls within the provisions of 8 9 Vict c 109 section 18 2 whether there was any illegality affecting that contract and 3 whether that contract was a lawful contract founded on good consideration Adverting to the second question which is relevant to the present case the President made the following observations at page 707 it is to be observed that there was nothing illegal in the strict sense in making the bets 1 421 They were merely void under 8 9 Vict c 109 and there would have been no illegality in paying them There is no doubt whatever about this There was also nothing illegal in giving the cheque nor would there have been any illegality in paying it though the defendants could not have been compelled by the plaintiff to pay it because by statute it was to be deemed and taken to have been made and given for an illegal consideration and therefore void in the hands of the plaintiff The statutes do not make the giving or paying of the cheque illegal and impose no penalty for so doing Their effect and intention appear only so far as material to be that gaming or wagering contracts cannot be enforced in a Court of Law or Equity The view expressed by the President is therefore consistent with the view all along accepted by the Courts in England This case raised a now problem namely whether a substituted agreement for consideration between the same parties to the wager could be enforced and the majority held that it could be enforced while Fletcher Moulton L J recorded his dissent We shall have occasion to notice the dissenting view of Fletcher Moulton L J at a later stage The aforesaid decisions establish the proposition that in England a clear distinction is maintained between a contract which is void and that which is illegal and it has been held that though a wagering contract is void and unenforceable between parties it is not illegal and therefore it does not affect the validity of a collateral contract The same principle has been applied to collateral contracts of partnership also In Thwaites vs Coulthwaite 1 the question of legality of a partnership of bookmaking and betting was raised There the plaintiff and defendant were partners in a bookmakers and betting business which was carried on by the defendant the plaintiff claimed an account of the profits of the partnership and the defendant contended that having regard to the nature of the business no such relief could be obtained Chitty J rejected the 1 422 plea holding that the partnership was valid for the following reasons among others and stated at page 498 The Gaming Act 1845 8 9 Vict c 109 did not make betting illegal this statute as is well known merely avoided the wagering contract A man may make a single bet or many bets he may habitually bet he may carry on a betting or bookmakers business within the statute provided the business as carried on by him does not fall within the prohibition of the Betting Act 1853 In Thomas vs Day 1 a similar question arose There the plaintiff claimed an account and money due under a partnership which he alleged had existed between himself and the defendant to take an office and carry on a betting business as bookmakers Darling J held that a partnership to carry on the business of a bookmaker was not recognized by law that even if there was such a legal partnership an action for account would not lie as between the two bookmakers founded on betting and gambling transactions This judgment certainly supports the appellant but the learned Judge did not take notice of the previous decision on the subject and the subsequent decisions have not followed it When a similar objection was raised in Brookman vs Mather 2 Avery J rejected the plea and gave a decree to the plaintiff There the plaintiff and the defendant entered into a partnership to carry on a betting business Two years thereafter in 1910 the partnership was dissolved and a certain amount was found due to the plaintiff from the defend ant and the latter gave the former a promissory note for that amount A suit was filed for the recovery of the amount payable under the promissory note Avery J reiterated the principle that betting was not illegal per se When the decision in Thomas vs Day1 was cited in support of the broad principle that the betting business could not be recognized as legal in a Court of Justice the learned Judge pointed out that that case was decided without reference to Thwaites 1 2 423 vs Coulthwaite 1 This judgment therefore corrected the deviation made by Darling J in Thomas vs Day2 and put the case law in line with earlier precedents The earlier view was again accepted and followed in Keen vs Price 3 where an action by one of the partners in a bookmakers and betting business against the other for an account of the partnership dealings was entertained But the Court gave liberty to the defendant to object to repaying anything which represented profits in such business The reason for this apparent conflict between the two parts of the decision is found in the express terms of the provisions of the Gaming Act of 1892 Commenting upon Thwaites vs Coulthwaite 1 in which Chitty J held that such an action would lie for an account of the profits of the partnership Sargant J pointed out that in that case the Gaming Act 1892 was not referred to At page 101 the learned Judge says Curiously enough in that case the Gaming Act 1892 was not referred to and although the decision is a good one on the general law it cannot be regarded as a decision on the Act of 1892 This judgment confirms the principle that a wager is not illegal but states that after the Gaming Act 1892 a claim in respect of that amount even under a collateral agreement is not maintainable In O Connor and Ould vs Ralston 4 the plaintiff a firm of bookmakers filed a suit claiming from the defendant the amount of five cheques drawn by him upon his bank in payment of bets which he had lost to them and which had been dishonoured on presentation Darling J held that as the plaintiffs formed an association for the purpose of carrying on a betting business the action would not lie In coming to that conclusion the learned Judge relied upon the dissenting view of Fletcher Moulton L J in Hyams vs Stuart King We shall consider that decision at a later stage 1 2 3 4 5 424 The opinion of Darling J was not accepted in Jeffrey Co vs Bamford 1 wherein McCardie J held that a partnership for the purpose of carrying on a betting and bookmakers business is not per se illegal or impossible in law The learned Judge says at page 356 betting or wagering is not illegal at common law It has been repeatedly pointed out that mere betting on horse races is not illegal The learned Judge after noticing the earlier decisions already considered by us and also some of the observations of Fletcher Moulton L J came to the conclusion that the partnership was not illegal We shall now scrutinize the decision in Hill vs William Hill I to see whether there is any substance in the argument of the learned Counsel for the appellant that this decision accepted the dissenting view of Fletcher Moulton L J in Hyams vs Stuart King 3 or the view of Darling J in Thomas vs Day 4 and O Connor and Ould vs Ralston 5 The facts in that case were The appellant had betting transactions with the respondents a firm of bookmakers As a result of those transactions the appellant lost pound 3635 12 6 As the appellant was unable to pay the amount the matter was referred to the committee of Tattersalls who decided that the appellant should pay the respondents a sum of pound 635 12 6 within fourteen days and the balance by monthly instalments of pound 100 It was laid down that if the appellant failed to make those payments he was liable to be reported to the said committee which would result in his being warned off Newmarket Heath and posted as defaulters The appellant informed the respondents that he was unable to pay the pound 635 12 6 within the prescribed time and offered to send them a cheque for that sum post dated October 10 1946 and to pay the monthly instalments of pound 100 thereafter On the respondents agreeing to that course the appellant sent a post dated cheque to 1 2 3 4 5 425 them and also enclosed a letter agreeing to pay the monthly instalments As the post dated cheque was dishonoured and the appellant failed to pay the entire amount the respondents filed a suit claiming the amount due to them under the subsequent agreement The respondents contended that the sum the appellant had promised to pay was not money won upon a wager within the meaning of the second branch of section 18 but was money due under a new lawful and enforceable agreement and that even if the sum was to be regarded as won on a wager the agreement was outside the scope of the second branch of section 18 of the Gaming Act 1845 The House of Lords by a majority of 4 to 3 held that the agreement contained a new promise to pay money won upon a wager and that the second branch of section 18 applied to all suits brought to recover money alleged to have been won on a wager and therefore the contract was unenforceable In coming to that conclusion Viscount Simon one of the Judges who expressed the majority view agreed with Fletcher Moulton L J in holding that the bond constituted an agreement to pay money won upon a wager notwithstanding the new consideration and was thus unenforceable under the second limb of section 18 In Hyams vs Stuart King1 the facts of which we have already given the suit was filed on the basis of a subsequent agreement between the same parties to the wager The majority of the Judges held that the subsequent agreement was supported by good consideration while Fletcher Moulton L J dissented from that view The basis for the dissenting view is found at page 712 After reading section 18 of the Gaming Act 1845 the learned Judge proceeded to state In my opinion too little attention has been paid to the distinction between the two parts of this enactment and the second part has been treated as being in effect merely a repetition of the first part I cannot accept such an interpretation So far as the actual wagering contract is concerned the earlier provision is ample It makes that contract absolutely void 1 54 426 and it would be idle to enact in addition that no suit should be brought upon a contract that had thus been rendered void by statute The language of the later provision is in my opinion much wider It provides with complete generality that no action shall be brought to recover anything alleged to be won upon any wager without in any way limiting the application of the provision to the wagering contract itself In other words it provides that wherever the obligation under a contract is or includes the payment of money won upon a wager the Courts shall not be used to enforce the performance of that part of the obligation These observations must be understood in the context of the peculiar facts of that case The suit was between the parties to the wager The question was whether the second part of the concerned section was comprehensive enough to take in an agreement to recover the money won upon a wager within the meaning of that part Fletcher Moulton L J held that the second part was wide and comprehensive enough to take in such a claim for the suit was though on the basis of a substituted agreement for the recovery of the money won upon a wager within the meaning of the words of that part of the section The second question considered by the learned Judge was whether the defendants firm which was an association formed for the purpose of a betting business was a legal partnership under the English Law The learned Judge relied upon the Gaming Act 1892 in holding that it was not possible under the English law to have any such partnership At page 718 the learned Judge observed In my opinion no such partnership is possible under English law Without considering any other grounds of objection to its existence the language of the Gaming Act 1892 appears to me to be sufficient to establish this proposition It is essential to the idea of a partnership that each partner is an agent of the partnership and subject to the provisions of the partnership deed has authority to make payments on its behalf for partnership purposes for which he is entitled 427 to claim credit in the partnership accounts and thus receive directly or indirectly repayment But by the Gaming Act 1892 all promises to pay any person any sum of money paid by him in respect of a wagering contract are null and void These words are wide enough to nullify the fundamental contract which must be the basis of a partnership and therefore in my opinion no such partnership is possible and the action for this reason alone was wrongly framed and should have been dismissed with costs It would be seen from the said observations that Fletcher Moulton L J laid down two propositions i The second part of section 18 of the Gaming Act 1845 was comprehensive enough to take in a claim for the recovery of money alleged to be won upon a wager though the said claim was based upon a substituted contract between the same parties and ii by reason of the wide terms of the Gaming Act 1892 even the fundamental contract which was the basis of a partnership was itself a nullity The learned Lord Justice did not purport to express any opinion on the effect of a void contract of wager on a collateral contract In Hill s case 1 the only question that arose was whether the second part of section 18 was a bar to the maintainability of a suit under a substituted agreement for the recovery of money won upon a wager The majority accepted the view of Fletcher Moulton L J on the first question The second question did not arise for consideration in that case The House of Lords neither expressly nor by necessary implication purported to hold that collateral contract of either partnership or agency was illegal and that the long catena of decisions already referred to by us were wrongly decided This judgment does not therefore support the contention of the learned Counsel for the appellant The legal position in India is not different Before the Act for Avoiding Wagers 1848 the law relating to wagers that was in force in British India was the common law of England The Judicial Committee in Ramloll Thackoorseydass vs Soojumnull Dhondmull 2 1 2 1848 4 MIA 339 428 expressly ruled that the common law of England was in force in India and under that law an action might be maintained on a wager The wager dealt with in that case was upon the average price which opium would fetch at the next Government sale at Calcutta Lord Campbell in rejecting the plea that the wager was illegal observed at page 349 The Statute 8 9 Viet c 109 does not extend to India and although both parties on the record are Hindoos no peculiar Hindoo law is alleged to exist upon the subject therefore this case must be decided by the common law of England It is a direct decision on the point now mooted before us and it is in favour of the respondents Again the Privy Council considered a similar question in Doolubdass Pettamberdass vs Ramloll Thackoorseydass and others There again the wager was upon the price that the Patna opium would fetch at the next Government sale at Calcutta There the plaintiff instituted a suit in the Supreme Court of Bombay in January 1847 to recover the money won on a wager After the suit was filed Act 21 of 1848 was passed by the Indian Legislature where under all agreements whether made in speaking writing or otherwise by way of gaming or wagering would be null and void and no suit would be allowed in any Court of Law or Equity for recovering any sum of money or valuable thing alleged to be won on any wager This section was similar in terms to that of section 18 of the Gaming Act 1845 Their Lordships held that the contract was not void and the Act 21 of 1848 would not invalidate the contracts entered into before the Act came into force Adverting to the next argument that under Hindu Law such contracts were void they restated their view expressed in Ramloll Thackoorserdas vs Soojumnull Dhondmull 2 thus at page 127 Their Lordships have already said that they are not satisfied from the authorities referred to that such is the law among the Hindoos The Judicial Committee again restated the law in similar terms in Raghoonauth Sahoi Chotayloll vs 1 1850 5 MIA 109 2 1848 4 MIA 339 429 Manickchund and Kaisreechund 1 There the Judicial Committee held that a wagering contract in India upon the average price opium would fetch at a future Government sale was legal and enforceable before the passing of the Legislative Act No 21 of 1848 The aforesaid three decisions of the Privy Council clearly establish the legal position in India before the enactment of the Act 21 of 1848 namely that wagering contracts were governed by the common law of England and were not void and therefore enforceable in Courts They also held that the Hindu Law did not prohibit any such wagers The same view was expressed by the Indian Courts in cases decided after the enactment of the Contract Act An agent who paid the amount of betting lost by him was allowed to recover the same from his principal in Pringle vs Jafar Khan 2 The reason for that decision is given at page 445 There was nothing illegal in the contract betting at horse races could not be said to be illegal in the sense of tainting any transaction connected with it This distinction between an agreement which is only void and one in which the consideration is also unlawful is made in the Contract Act Section 23 points out in what cases the consideration of an agreement is unlawful and in such cases the agreement is also void that is not enforceable at law Section 30 refers to cases in which the agreement is only void though the consideration is not necessarily unlawful There is no reason why the plaintiff should not recover the sum paid by him In Shibho Mal vs Lachman Das 3 an agent who paid the losses on the wagering transactions was allowed to recover the amounts he paid from his principal In Beni Madho Das vs Kaunsal Kishor Dhusar 4 the plaintiff who lent money to the defendant to enable him to pay off a gambling debt was given a decree to recover the same from the defendant Where two partners entered into a contract of wager with a third 1 1856 6 MIA 251 3 All 2 All 4 All 430 party and one partner had satisfied his own and his co partner s liability under the contract the Nagpur High Court in Md Gulam Mustafakhan vs Padamsi 1 held that the partner who paid the amount could legally claim the other partner s share of the loss The learned Judge reiterated the same principle accepted in the decisions cited supra when he said at page 49 Section 30 of the does not affect agreements or transactions collateral to wagers The said decisions were based upon the well settled principle that a wagering contract was only void but not illegal and therefore a collateral contract could be enforced Before closing this branch of the discussion it may be convenient to consider a subsidiary point raised by the learned Counsel for the appellant that though a contract of partnership was not illegal in the matter of accounting the loss paid by one of the partners on wagering transactions could not be taken into consideration Reliance is placed in support of this contention on Chitty s Contract p 495 para 908 which reads Inasmuch as betting is not in itself illegal the law does not refuse to recognise a partnership formed for the purpose of betting Upon the dissolution of such a partnership an account may be ordered Each partner has a right to recover his share of the capital subscribed so far as it has not been spent but he cannot claim an account of profits or repayments of amounts advanced by him which have actually been applied in paying the bets of the partnership In support of this view two decisions are cited They are Thwaites vs Coulthwaite 2 and Saffery vs Mayer3 The first case has already been considered by us There Chitty J in giving a decree for account left open the question of the legality of certain transactions till it arose on the taking of the 1 AIR 1923 Nag 48 2 3 431 account Far from helping the appellant the observations and the actual decision in that case support the respondents contention The reservation of the question of particular transactions presumably related only to the transactions prohibited by the Betting Act 1853 Such of the transactions which were so prohibited by the Betting Act would be illegal and therefore the contract of partnership could not operate on such transactions The case of Saffery vs Mayer1 related to a suit for recovery of money advanced by one person to another for the purpose of betting on horses on their joint account The appellate Court held that by reason of the provisions of the Gaming Act 1892 the action was not maintainable This decision clearly turned upon the provisions of the Gaming Act 1892 Smith M R observed that the plaintiff paid the money to the defendant in respect of a contract rendered null and void and therefore it was not recoverable under the second limb of that section The other Lord Justices also based their judgments on the express words of the Gaining Act 1892 It will be also interesting to note that the Court of Appeal further pointed out that Chitty J in Thwaites Case2 in deciding in the way he did omitted to consider the effect of the provisions of the Gaming Act 1892 on the question of maintainability of the action before him The aforesaid passage in Chitty s Contract must be understood only in the context of the provisions of the Gaming Act 1892 The aforesaid discussion yields the following results 1 Under the common law of England a contract of wager is valid and therefore both the primary contract as well as the collateral agreement in respect thereof are enforceable 2 after the enactment of the Gaming Act 1845 a wager is made void but not illegal in the sense of being forbidden by law and thereafter a primary agreement of wager is void but a collateral agreement is enforceable 3 there was a conflict on the question whether the second part of section 18 of the Gaming Act 1845 would cover a case for the recovery of money or valuable thing alleged to be won upon 1 2 432 any wager under a substituted contract between the same parties the House of Lords in Hill s Case1 had finally resolved the conflict by holding that such a claim was not sustainable whether it was made under the original contract of wager between the parties or under a substituted agreement between them 4 under the Gaming Act 1892 in view of its wide and comprehensive phraseology even collateral contracts including partnership agreements are not enforceable 5 section 30 of the is based upon the provisions of section 18 of the Gaming Act 1845 and though a wager is void and unenforceable it is not forbidden by law and therefore the object of a collateral agreement is not unlawful under section 23 of the Contract Act and 6 partnership being an agreement within the meaning of section 23 of the it is not unlawful though its object is to carry on wagering transactions We therefore hold that in the present case the partnership is not unlawful within the meaning of section 23A of the Contract Act ii Public Policy The learned Counsel for the appellant contends that the concept of public policy is very comprehensive and that in India particularly after independence its content should be measured having regard to political social and economic policies of a welfare State and the traditions of this ancient country reflected in Srutis Smritis and Nibandas Before adverting to the argument of the learned Counsel it would be convenient at the outset to ascertain the meaning of this concept and to note how the Courts in England and India have applied it to different situations Cheshire and Fifoot in their book on Law of Contract 3rd Edn observe at page 280 thus The public interests which is designed to protect are so comprehensive and heterogeneous and opinions as to what is injurious must of necessity vary so greatly with the social and moral convictions and at times even with the political views of different judges that it forms a treacherous and unstable 1 433 ground for legal decision These questions have agitated the Courts in the past but the present state of the law would appear to be reasonably clear Two observations may be made with some degree of assurance First although the rules already established by precedent must be moulded to fit the new conditions of a changing world it is no longer legitimate for the Courts to invent a new head of public policy A judge is not free to speculate upon what in his opinion is for the good of the community He must be content to apply either directly or by way of analogy the principles laid down in previous decisions He must expound not expand this particular branch of the law Secondly even though the contract is one which prima facie falls under one of the recognized heads of public policy it will not be held illegal unless its harmful qualities are indisputable The doctrine as Lord Atkin remarked in a leading case should only be invoked in clear cases in which the harm to the public is substantially incontestable and does not depend upon the idiosyncratic inferences of a few judicial minds In popular language the contract should be given the benefit of the doubt Anson in his Law of Contract states the same rule thus at p 216 Jessel M R in 1875 stated a principle which is still valid for the Courts when he said You have this paramount public policy to consider that you are not lightly to interfere with the freedom of contract and it is in reconciling freedom of contract with other public interests which are regarded as of not less importance that the difficulty in these cases arises We may say however that the policy of the law has on certain subjects been worked into a set of tolerably definite rules The application of these to particular instances necessarily varies with the conditions of the times and the progressive development of public opinion and morality but as Lord Wright has said public policy like any other branch of the Common Law ought to be and I think is governed by 55 434 the judicial use of precedents If it is said that rules of public policy have to be moulded to suit new conditions of a changing world that is true but the same is true of the principles of the Common Law generally In Halsbury s Laws of England 3rd Edn Vol 8 the doctrine is stated at p 130 thus Any agreement which tends to be injurious to the public or against the public good is void as being contrary to public policy It seems however that this branch of the law will not be extended The determination of what is contrary to the so called policy of the law necessarily varies from time to time Many transactions are upheld now which in a former generation would have been avoided as contrary to the supposed policy of the law The rule remains but its application varies with the principles which for the time being guide public opinion A few of the leading cases on the subject reflected in the authoritative statements of law by the various authors may also be useful to demarcate the limits of this illusive concept Parke B in Egerton vs Brownlow1 which is a leading judgment on the subject describes the doctrine of public policy thus at p 123 I Public policy is a vague and unsatisfactory term and calculated to lead to uncertainty and error when applied to the decision of legal rights it is capable of being understood in different senses it may and does in its ordinary sense mean I political expedience or that which is best for the common good of the community and in that sense there may be every variety of opinion according to education habits talents and dispositions of each person who is to decide whether an act is against public policy or not To allow this to be a ground of judicial decision would lead to the greatest uncertainty and confusion It is the province of the statesman and not the lawyer to discuss and of the Legislature to determine what is best for the public good and to provide for it by proper enactments It 1s the province of the judge 1 123 408 435 to expound the law only the written from the statutes the unwritten or common law from the decisions of our predecessors and of our existing Courts from text writers of acknowledged authority and upon the principles to be clearly deduced from them by sound reason and just inference not to speculate upon what is the best in his opinion for the advantage of the community Some of these decisions may have no doubt been founded upon the prevailing and just opinions of the public good for instance the illegality of covenants in restraint of marriage or trade They have become a part of the recognised law and we are therefore bound by them but we are not thereby authorised to establish as law everything which we may think for the public good and prohibit everything which we think otherwise In Janson vs Driefontein Consolidated Mines Ltd1 an action raised against British underwriters in respect of insurance of treasures against capture during its transit from a foreign state to Great Britain was resisted by the underwriters on the ground that the insurance was against public policy The House of Lords rejected the plea Earl of Halsbury LC in his speech made weighty observations which may usefully be extracted The learned Lord says at page 491 In treating of various branches of the law learned persons have analysed the sources of the law and have sometimes expressed their opinion that such and such a provision is bad because it is contrary to public policy but I deny that any Court can invent a new head of public policy so a contract for marriage brokerage the creation of a perpetuity a contract in restraint of trade a gaming or wagering contract or what is relevant here the assisting of the King s enemies are all undoubtedly unlawful things and you may say that it is because they are contrary to public policy they are unlawful but it is because these things have been either enacted or assumed to be by the common law unlawful and not because a judge or Court have a right to declare that such and such 1 436 things are in his or their view contrary to public policy Of course in the application of the principles here insisted on it is inevitable that the particular case must be decided by a judge he must find the facts and he must decide whether the facts so found do or do not come within the principles which I have endeavoured to describe that is a principle of public policy recognised by the law which the suggested contract is infringing or is supposed to infringe These observations indicate that the doctrine of public policy is only a branch of common law and unless the principle of public policy is recognised by that law Court cannot apply it to invalidate a contract Lord Lindley in his speech at p 507 pointed out that public policy is a very unstable and dangerous foundation on which to build until made safe by decision A promise made by one spouse after a decree nisi for the dissolution of the marriage has been pronounced to marry a third person after the decree has been made absolute is not void as being against public policy see Fender vs St John Mildmay 1 In that case Lord Atkin states the scope of the doctrine thus at p 12 In popular language following the wise aphorism of Sir George Jessel cited above the contract should be given the benefit of the doubt But there is no doubt that the rule exists In cases where the promise to do something contrary to public policy which for short I will call a harmful thing or where the consideration for the promise is the doing or the promise to do a harmful thing a judge though he is on slippery ground at any rate has a chance of finding a footing But the doctrine does not extend only to harmful acts it has to be applied to harmful tendencies Here the ground is still less safe and more treacherous Adverting to the observation of Lord Halsbury in Janson vs Driefontein Consolidated Mines Ltd Lord Atkin commented thus at page 11 Lord Halsbury indeed appeared to decide that the categories of public policy are closed 1 2 437 and that the principle could not be invoked anew unless the case could be brought within some principle of public policy already recognised by the law I do not find however that this view received the express assent of the other members of the House and it seems to me with respect too rigid On the other hand it fortifies the serious warning illustrated by the passages cited above that the doctrine should only be invoked in clear cases in which the harm to the public is substantially incontestable and does not depend upon the idiosyncratic inferences of a few judicial minds Lord Thankerton summarised his view in the following terms at p 23 In the first place there can be little question as to the proper function of the Courts in questions of public policy Their duty is to expound and not to expand such policy Thai does not mean that they are precluded from applying ail existing principle of public policy to a new set of circumstances where such circumstances are clearly within the scope of the policy Such a case might well arise in the case of safety of the State for instance But no such case is suggested here Further the Courts must be watchful not to be influenced by their view of what the principle of public policy or its limits should be Lord Wright at p 38 explains the two senses in which the words public policy are used In one sense every rule of law either common law or equity which has been laid down by the Courts in that course of judicial legislation which has evolved the law of this country has been based on considerations of public interest or policy In that sense Sir George Jessel M R referred to the paramount public policy that people should fulfil their contracts But public policy in the narrower sense means that there are considerations of public interest which require the Courts to depart from their primary function of enforcing contracts and exceptionally to refuse to enforce them Public policy in this sense is disabling 438 Then the noble Lord proceeds to lay down the following principles on which a judge should exercise this peculiar and exceptional jurisdiction 1 It is clear that public policy is not a branch of law to be extended 2 it is the province of the judge to expound the law only 3 public policy like any other branch of the common law is governed by the judicial use of precedents and 4 Courts apply some recognised principles to the new conditions proceeding by way of analogy and according to logic and convenience just as Courts deal with any other rule of the common law The learned Lord on the basis of the discussion of case law on the subject observes at p 40 It is true that it has been observed that certain rules of public policy have to be moulded to suit now conditions of a changing world but that is true of the principles of common law generally I find it difficult to conceive that in these days any new head of public policy could be discovered The observations of the aforesaid Law Lords define the concept of public policy and lay down the limits of its application in the modern times In short they state that the rules of public policy are well settled and the function of the Courts is only to expound them and apply them to varying situations While Lord Atkin does not accept Lord Halsbury s dictum that the categories of public policy are closed he gives a warning that the doctrine should be invoked only in clear cases in which the harm to the public is substantially incontestable Lord Thankerton and Lord Wright seem to suggest that the categories of public policy are well settled and what the Courts at best can do is only to apply the same to new set of circumstances Neither of them excludes the possibility of evolving a new bead of public policy in a changing world but they could not conceive that under the existing circumstances any such head could be discovered Asquith L J in Monkland vs Jack Barclay Ltd 1 restated the law crisply at p 723 The Courts have again and again said that where a contract does not fit into one or other of these 1 439 pigeon holes but lies outside this charmed circle the courts should use extreme reserve in holding a contract to be void as against public policy and should only do so when the contract is incontestably and on any view inimical to the public interest The Indian cases also adopt the same view A division bench of the Bombay High Court in Shrinivas Das Lakshminarayan vs Ram Chandra Ramrattandas observed at p 20 It is no doubt open to the Court to hold that the consideration or object of an agreement is unlawful on the ground that it is opposed to what the Court regards as public policy This is laid down in section 23 of the and in India therefore it cannot be affirmed as a matter of law as was affirmed by Lord Halsbury in Janson vs Driefontein Consolidated Mines Limited at p 491 that no Court can invent a new head of public policy but the dictum of Lord Davey in the same case that public policy is always an unsafe and treacherous ground for legal decision may be accepted as a sound cautionary maxim in considering the reasons assigned by the learned Judge for his decision The same view is confirmed in Bhagwant Genuji Girme vs Gangabisan Ramgopal 2 and Gopi Tihadi vs Gokhei Panda 3 The doctrine of public policy may be summarized thus Public policy or the policy of the law is an illusive concept it has been described as untrustworthy guide variable quality uncertain one unruly horse etc the primary duty of a Court of Law is to enforce a promise which the parties have made and to uphold the sanctity of contracts which form the basis of society but in certain cases the Court may relieve them of their duty on a rule founded on what is called the public policy for want of better words Lord Atkin describes that something done contrary to public policy is a harmful thing but the doctrine is extended not only to harmful cases but also to harmful tendencies this doctrine of public policy is only a branch of common law and 1 ILR 2 ILR 1941 Bom 71 3 ILR 1953 Cuttack 558 440 just like any other branch of common law it is governed by precedents the principles have been crystallized under different heads and though it is permissible for Courts to expound and apply them to different situations it should only be invoked in clear and incontestable cases of harm to the public though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world it is advisable in the interest of stability of society not to make any attempt to discover new heads in these days This leads us to the question whether in England or in India a definite principle of public policy has been evolved or recognized invalidating wagers So far as England is concerned the passages from text books extracted and the decisions discussed in connection with the first point clearly establish that there has never been such a rule of public policy in that country Courts under the common law of England till the year 1845 enforced such contracts even between parties to the transaction They held that wagers were not illegal After the passing of the English Gaming Act 1845 8 9 Vict c 109 such contracts were declared void Even so the Courts held that though a wagering contract was void it was not illegal and therefore an agreement collateral to the wagering contract could be enforced Only after the enactment of the Gaming Act 1892 55 Vict c 9 the collateral contracts also became unenforceable by reason of the express words of that Act Indeed in some of the decisions cited supra the question of public policy was specifically raised and negatived by Courts See Thacker vs Hardy 1 Hyams vs Stuart King 2 and Michael Jeffrey Company vs Bamford 3 It is therefore abundantly clear that the common law of England did not recognize any principle of public policy declaring wagering contracts illegal The legal position is the same in India The Indian Courts both before and after the passing of the Act 1 2 3 441 21 of 1848 and also after the enactment of the Contract Act have held that the wagering contracts are not illegal and the collateral contracts in respect of GI them are enforceable We have already referred to these in dealing with the first point and we need not A cover the ground once again except to cite a passage from the decision of the Judicial Committee in Ramloll Thackoorseydass vs Soojumnull Dhondmull 1 which is directly in point Their Lordships in considering the applicability of the doctrine of public policy to a wagering contract observed at p 350 We are of opinion that although to a certain degree it might create a temptation to do what was wrong we are not to presume that the parties would commit a crime and as it did not interfere with the performance of any duty and as if the parties were not induced by it to commit a crime neither the interests of individuals or of the Government could be affected by it we cannot say that it is contrary to public policy There is not a single decision after the above cited case which was decided in 1848 up to the present day wherein the Courts either declared wagering contracts as illegal or refused to enforce any collateral contract in respect of such wagers on the ground of public policy It may therefore be stated without any contradiction that the common law of England in respect of wagers was followed in India and it has always been held that such contracts though void after the Act of 1848 were not illegal Nor the legislatures of the States excepting Bombay made any attempt to bring the law in India in line with that obtaining in England after the Gaming Act 1892 The Contract Act was passed in the year 1872 At the time of the passing of the Contract Act there was a Central Act Act 21 of 1848 principally based on the English Gaming Act 1845 There was also the Bombay Wagers Amendment Act 1865 amending the former Act in terms analogous to those later enacted by the Gaming Act 1892 Though the Contract 1 1848 4 MIA 339 56 442 Act repealed the Act 21 of 1848 it did not incorporate in it the provisions similar to those of the Bombay Act nor was any amendment made subsequent to the passing of the English Gaming Act 1892 The legislature must be deemed to have had the knowledge of the state of law in England and therefore we may assume that it did not think fit to make wagers illegal or to hit at collateral contracts The policy of law in India has therefore been to sustain the legality of wagers The history of the law of gambling in India would also show that though gaming in certain respects was controlled it has never been absolutely prohibited The following are some of the gambling Acts in India The Public Gambling Act 111 of 1867 The Bengal Public Gambling Act 11 of 1867 The Bombay Prevention of Gambling Act IV of 1887 Madhya Bharat Gambling ActLI of 1949 Madhya Pradesh Public Gambling Act Madras Gaming Act 111 of 1930 The Orissa Prevention of Gambling Act XVII of 1955 the Punjab Public Gambling Act 111 of 1867 the Rajasthan Public Gambling Ordinance Ordinance XLVIII of 1949 and the UP Public Gambling Act These Acts do not prohibit gaming in its entirety but aim at suppressing gaming in private houses when carried on for profit or gain of the owner or occupier thereof and also gaming in public Gaming without contravening the provisions of the said Acts is legal Wherever the State intended to declare a particular form of gaming illegal it made an express statute to that effect See section 29 A of the Indian Penal Code In other respects gaming and wagering are allowed in India It is also common knowledge that horse races are allowed throughout India and the State also derives revenue therefrom The next question posed by the learned Counsel for the appellant is whether under the Hindu Law it can be said that gambling contracts are held to be illegal The learned Counsel relies upon the observations of this Court in The State of Bombay vs R M D Chamarbaugwala 1 The question raised in that case was 1 443 whether the Bombay Lotteries and Prize Competition Control and Tax Amendment Act of 1952 extending the definition of prize competition contained in section 21d of the Bombay Lotteries and Prize Competition Control and Tax Act of 1948 so as to include prize competition carried on through newspapers printed and published outside the State was constitutionally valid It was contended inter alia that the Act offended the fundamental right of the respondents who were conducting prize competitions under article 191 g of the Constitution and also violated the freedom of inter State trade under article 301 thereof This Court held that the gambling activities in their very nature and essence were extra commercium and could not either be trade or commerce within the meaning of the aforesaid provisions and therefore neither the fundamental right of the respondents under article 191g or their right to freedom of interState trade under article 301 is violated In that context Das C J has collected all the Hindu Law texts from Rig Veda Mahabharata Manu Brihaspati Yagnavalkya etc at pp 922 923 It is unnecessary to restate them here but it is clear from those texts that Hindu sacred books condemned gambling in unambiguous terms But the question is whether those ancient text books remain only as pious wishes of our ancestors or whether they were enforced in the recent centu ries All the branches of the Hindu Law have not been administered by Courts in India only questions regarding succession inheritance marriage and religious usages and institutions are decided according to the Hindu Law except in so far as such law has been altered by legislative enactment Besides the matters above referred to there are certain additional matters to which the Hindu Law is applied to the Hindus in some cases by virtue of express legislation and in others on the principle of justice equity and good conscience These matters are adoption guardianship family relations wills gifts and partition As to these matters also the Hindu Law is to be applied subject to such alterations as have been made by legislative enactments See Mulla s Hindu Law para 444 3 p 2 In other respects the ancient Hindu Law was not enforced in Indian Courts and it may be said that they became obsolete Admittedly there has not been a single instance in recorded cases holding gambling or wagering contracts illegal on the ground that they are contrary to public policy as they offended the principles of ancient Hindu Law In the circumstances we find it difficult to import the tenets of Hindu Law to give a novel content to the doctrine of public policy in respect of contracts of gaming and wagering To summarize The common law of England and that of India have never struck down contracts of wager on the ground of public policy indeed they have always been held to be not illegal notwithstanding the fact that the statute declared them void Even after the contracts of wager were declared to be void in England collateral contracts were enforced till the passing of the Gamina Act of 1892 and in India except in the State of Bombay they have been enforced even after the passing of the Act 21 of 1848 which was substituted by section 30 of the Contract Act The moral prohibitions in Hindu Law texts against gambling were not only not legally enforced but were allowed to fall into desuetude In practice though gambling is controlled in specific matters it has not been declared illegal and there is no law declaring wagering illegal Indeed some of the gambling practices are a perennial source of income to the State In the circumstances it is not possible to hold that there is any definite head or principle of public policy evolved by Courts or laid down by precedents which would directly apply to wagering contracts Even if it is permissible for Courts to evolve a new head of public policy under extraordinary circumstances giving rise to incontestable harm to the society we cannot say that wager is one of such instances of exceptional gravity for it has been recognized for centuries and has been tolerated by the public and the State alike If it has any such tendency it is for the legislature to make a law prohibiting such contracts and declaring them illegal and not for this Court to resort to judicial legislation 445 Re Point 3 Immorality The argument under this head is rather broadly stated by the learned Counsel for the appellant The learned counsel attempts to draw an analogy from the Hindu Law relating to the doctrine of pious obligation of sons to discharge their father s debts and contends that what the Hindu Law considers to be immoral in that context may appropriately be applied to a case under section 23 of the Contract Act Neither any authority is cited nor any legal basis is suggested for importing the doctrine of Hindu Law into the domain of contracts Section 23 of the Contract Act is inspired by the common law of England and it would be more useful to refer to the English Law than to the Hindu Law texts dealing with a different matter Anson in his Law Of Contracts states at p 222 thus The only aspect of immorality with which Court of Law have dealt is sexual immorality Halsbury in his Laws of England 3rd Edn Vol makes a similar statement at p 138 A contract which is made upon an immoral consideration or for an immoral purpose is unenforceable and there is no distinction in this respect between immoral and illegal contracts The immorality here alluded to is sexual immorality In the Law of Contract by Cheshire and Fifoot 3rd Edn it is stated at p 279 Although Lord Mansfield laid it down that a contract contra bonos mores is illegal the law in this connection gives no extended meaning to morality but concerns itself only with what is sexually reprehensible In the book on the by Pollock and Mulla it is stated at p 157 The epithet immoral points in legal usage to conduct or purposes which the State though disapproving them is unable or not advised to visit with direct punishment The learned authors confined its operation to acts which are considered to be immoral according to the standards of immorality approved by Courts The case law both in England and India confines the operation of the doctrine to sexual immorality To cite 446 Only some instances settlements in consideration of encubinage contracts of sale or hire of things to be used in a brothel or by a prostitute for purposes incidental to her profession agreements to pay money for future illicit cohabitation promises in regard to marriage for consideration or contracts facilitating divorce are all held to be void on the ground that the object is immoral The word immoral is a very comprehensive word ordinarily it takes in every aspect of personal conduct deviating from the standard norms of life It may also be said that what is repugnant to good conscience is immoral Its varying content depends upon time place and the stage of civilization of a particular society In short no universal standard can be laid down and any law based on such fluid concept defeats its own purpose The provisions of section 23 of the Contract Act indicate the legislative intention to give it a restricted meaning Its juxtaposition with an equally illusive concept public policy indicates that it is used in a restricted sense otherwise there would be overlapping of the two concepts In its wide sense what is immoral may be against public policy for public policy covers political social and economic ground of objection Decided cases and authoritative text book writers therefore confined it with every justification only to sexual immorality The other limitation imposed on the word by the statute namely the court regards it as immoral brings out the idea that it is also a branch of the common law like the doctrine of public policy and therefore should be confined to the Principles recognized and settled by Courts Precedents confine the said concept only to sexual immora lity and no case has been brought to our notice where it has been applied to any head other than sexual immorality In the circumstances we cannot evolve a new head so as to bring in wagers within its fold Lastly it is contended by the learned Counsel for the appellant that wager is extra commercium and therefore there cannot be in law partnership for wager within the meaning of section 4 of the Partnership Act for partnership under that section is relationship between 447 persons who have agreed to share the profits of a business Reliance is placed in respect of this contention on the decision of this Court in The State of Bombay vs R M D Chamarbaugwala 1 This question was not raised in the pleadings No issue was framed in respect of it No such case was argued before the learned Subordinate Judge or in the High Court nor was this point raised in the application for certificate for leave to appeal to the Supreme Court filed in the High Court Indeed the learned Advocate appearing for the appellant in the High Court stated that his client intended to raise one question only namely whether the partnership formed for the purpose of carrying on a business in differences was illegal within the meaning of section 23 of the Contract Act Further this plea was not specifically disclosed in the statement of case filed by the appellant in this Court If this contention had been raised at the earliest point of time it would have been open to the respondents to ask for a suitable amendment of the plaint to sustain their claim In the circumstances we do not think that we could with justification allow the appellant to raise this new plea for the first time before us as it would cause irreparable prejudice to the respondents We express no opinion on this point For the foregoing reasons we must hold that the suit partnership was not unlawful within the meaning of section 23 of the In the result the appeal fails and is dismissed with costs Appeal dismissed

By Notification No 94 dated 20th August 1959 the Governor of West Bengal made Rules under the proviso to Article 309 of the Constitution of India for the regulation of recruitment to the Engineering Services under the Department of Works and Buildings of the State Government Under these Rules recruitment to the permanent posts of Assistant Engineers was to be made under Rule 9 while Rule 10 governed recruitment to the temporary posts of Assistant Engineers Rule 11 provided for emergency appointment by advertisement and interview through the State Public Service Commission on the basis of a competitive examination conducted by the Service Commission Accordingly any appointment to a permanent or temporary post of Assistant Engineer which was not made in accordance with Rule 9 or 10 or 11 was therefore not in accordance with these Service Rules The respondents in the appeals were petitioners in the writ petitions in the High Court They were duly appointed Sub Assistant Engineers who were earlier called Overseer Estimators and though Initially diploma holders having obtained the prescribed degree were eligible for appointment as Assistant Engineers They were appointed temporary Assistant Engineers on ad hoc basis initially for a period of six months in the PWD 1974 to 1976 and in the Irrigation and Waterways Department 920 between 1972 to 1978 They claimed seniority on the basis of their direct recruitment to the post of Assistant Engineer and not as promotee from the next below cadre of Sub Assistant Engineers In the promotion quota specified for them in the Rules Their initial ad hoc appointment was extended periodically upto 2621980 and during this period several opportunities were given to these persons to appear before the Public Service Commission to satisfy the condition attached to the ad hoc appointment but none of them complied with the requirement declining throughout to appear before the Public Service Commission The State Government requested the Public Service Commission to permit regularisation of the services of these ad hoc appointees as Assistant Engineers without being selected for regular appointment by the Public Service Commission but the Public Service Commission by several letters turned down that re quest The Government finally took the decision on 26th February 1980 to regularise these persons as Assistant Engineers and consequently took three simultaneous steps on 26 2 1980 viz 1 the requirement in the rules of consultation with the Public Service Commission being dispensed with 2 absorbtion as temporary Assistant Engineers and 3 a service rule under Article 309 providing for seniority as temporary Assistant Engineers with effect from the same date ie 26 2 1980 This statutory rule clearly provided that all persons appointed regularly in accordance with rules prior to 26 2 1980 as Assistant Engineers would rank above the ad hoc appointees so absorbed with effect from 26 2 1980 and the Government implemented this decision The question before the High Court related to the fixation of seniority of these Sub Assistant Engineers appointed ad hoc temporary Assistant Engineers for a specified period in the PWD and the Irrigation and Waterways Department vis a vis the direct recruits in the cadre of Assistant Engineers appointed regularly according to rules in the department prior to the regularisation of the ad hoc appointees The writ petitions were dismissed by a Single Judge of the High Court but the writ appeals were allowed by the Division Bench resulting in grant of the relief claimed by the ad hoc appointees In the appeals to this Court by the State of West Bengal and the adversely affected direct recruits who were respondents in the writ petitions filed by the ad hoc appointees it has been urged that the claim of 921 the respondents for seniority being given to them retrospectively from the date of their initial ad hoc appointment made contrary to the rules in spite of their regularisation being made expressly from 26 2 80 is wholly untenable and against the decisions of this Court particularly the Constitution Bench decision on Direct Recruit Class II Engineering Officers Association and Ors vs State of Maharashtra and Ors 1990 2 SCR 900 and that the Division Bench of the High Court com mitted an error in reversing the judgment of the Single judge Bench which had dismissed the writ petitions The appeals were contested by the respondents by submitting that the initial ad hoc appointment of the writ petitioners was made by a mode permissible under the Service Rules that appointment was made in relaxation of the rules by the Government which is implicit in the action taken the initial ad hoc appointment must therefore be equated to the regular appointment made under the Rules and on this equation there is no justification for discrimination between the initial ad hoc appointees and regular appointees coming in by direct recruitment thereafter in accordance with the rules It was further submitted that the case fell squarely within the ambit of conclusion B of the summary In Maharashtra Engineers case Allowing the appeals this Court HELD 1 There is no dispute between promotes and direct recruits the claim of the writ petitioners being based only as direct recruits in the Cadre of Assistant Engineers and not as promotees from the lower cadre of Sub Assistant Engineers to which they had earlier belonged The present is therefore not a case of a dispute relating to the surplus promotees who were given promotion regularly in accordance with rules but in excess of the quota fixed for them under the rules In the present case all the writ petitioners are persons who were given ad hoc temporary appointments for a fixed period which was extended from time to time till their regularisation on 26 2 1980 and that too by relaxation of the condition of selection by the Public Service Commission which was an express condition of their ad hoc appointment and a requirement for regular appointment under the Rules Assuming the relaxation made in their case by the State Government on 26 2 1980 to be valid they could be treated as regularly appointed only with effect from 26 2 1980 when the 922 relaxation was given to them and an order was made simultaneously absorbing them in the cadre of Assistant Engineers also framing a rule at the same time under Article 309 providing for fixation of their seniority only from that date Accordingly there is no foundation for the claim that they could be treated at par with the direct recruits regularly appointed prior to 26 2 1980 934 C E 2 Prior to the steps taken by the State Government on 26 2 1980 for regularisation there was no basis on which the writ petitioners could claim to be regularly appointed as Assistant Engineers and therefore the manner in which they were regularised including the mode of fixation of their seniority with effect from 26 2 1980 is decisive of the nature of their regular appointment This alone is sufficient to negative their further claim They can make no grievance to any part of that exercise made only for their benefit 934 F G 3 The claim of the writ petitioners respondents in all these appeals for treating their entire period of service prior to 26 2 1980 as regular service for the purpose of seniority and fixation of their seniority accordingly is untenable 1937 A 4 Rule It of the 1959 Rules provides for appointments to be made during emergency and lays down that such appointments can be made only by advertisement and interview through the Public Service Commission Admittedly this express requirement in Rule 11 was not followed or fulfilled subsequently and therefore the initial ad hoc appointments cannot be treated to have been made according to the applicable rules These ad hoc appointments were clearly not in accordance with the rules and were made only as a stop gap arrangement for fixed period as expressly stated in the appointment order itself 937 C 5 Conclusions A and B of the Constitution Bench in the Maharashtra Engineer s case have to be read harmoniously and conclusion B cannot cover cases which are expressly excluded by conclusion A It is clear from conclusion A that to enable seniority to be counted from the date of initial appointment and not according to the date of confirmation the incumbent of the post has to be initially appointed according to the rules The corollary set out in conclusion A then is that Where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement the officiation in such posts cannot be taken into 923 account for considering the seniority The case of the writ petitioners squarely falls within this corollary in conclusion A which says that the officiation in such posts cannot be taken into account for counting the seniority 935 D F 6 Conclusion B was added to cover a different kind of situation wherein the appointments are otherwise regular except for the deficiency of certain procedural requirements laid down by the rules This is clear from the opening words of the conclusion B namely if the initial appointment is not made by following the procedure laid down by the rules and the later expression till the regularisation of his service in accordance with the rules Conclusion B must be so read as to reconcile with conclusion A 936 B 7 Decision about the nature of the appointment for determining whether it falls in this category has to be made on the basis of the terms of the initial appointment itself and the provisions in the rules In such cases the deficiency in the procedural requirements laid down by the rules had to be cured at the first available opportunity without any default of the employee and the appointee must continue in the post uninterruptedly till the regularisation of his service in accordance with the rules In such cases the appointee is not to blame for the deficiency in the procedural requirements under the rules at the time of his initial appointment In such cases also if there be any delay in curing the defects on account of any fault of the appointee the appointee would not get the full benefit of the earlier period on account of his default the benefit being confined only to the period for which he is not to blame This category of cases is different from those covered by the corollary in conclusion A which relates to appointment only on ad hoc basis as a stop gap arrangement and not according to rules 936 E G 8 It is therefore not correct to say that the present cases can fall within the ambit of conclusion B even though they are squarely covered by the corollary in conclusion A 936 H 9 There is therefore no escape from the conclusion that the present cases fall squarely within the ambit of the corollary in conclusion A of Maharashtra Engineers case and therefore the period of ad hoc service of writ petitioners respondents on the post of Assistant Engineer prior to 26 2 1980 cannot be counted for reckoning their seniority 937 E 924 Direct Recruit Class II Engineering Officers Association and Ors vs State of Maharashtra and Ors explained and followed 932 D A Janardhana vs Union of India Ors and Narender Chadha Ors vs Union of India and Ors referred to 932 H

Appeal No 1287NT of 1982 From the Judgment and Order dated 222 1978 of the Madras in Tax Case No 24 of 1975 M Gaurishankar Murthy C Ramesh P Parmeswaran and Ms A Subhashini for the Appellant Ms Janki Ramachandran for the Respondent The following Order of the Court was delivered In this appeal preferred against the Judgment of the Madras High Court the words whose income chargeable under the head salaries occurring in the second proviso to sub clause iii of clause c of section 40 fall for interpretation The assessment year concerned is 1965 66 During the accounting year relevant to the said assessment year the assessee paid to its foreign technical director a total remuneration of Rs 66000 including a sum of Rs 28576 paid by way of perquisites The Income tax Officer held that by virtue of section 40ciii perquisites exceeding one fifth amount of the salary cannot be allowed as a deduction He held further the second Proviso to the said sub clause is not applicable inasmuch as the income chargeable under the head salaries was not Rs 7500 or less Accordingly he allowed only a sum of Rs 13200 by way of perquisites He disallowed the balance of Rs 15376 The Appellate Assistant Commissioner however allowed the assessee s appeal holding that inasmuch as the salary of the foreign technical director was exempt from tax under section 106vii the provision contained in section 40ciii was not applicable The appeal filed by the 995 Revenue was allowed by the Tribunal The Tribunal opined that merely because the salary is exempt under section 106vii the provision in section 40ciii does not cease to apply Under the proviso to the said sub clause only an employee whose income chargeable under the head salaries was Rs 7500 or less is exempted Inasmuch as the income chargeable under the head salaries in this case is more than Rs 7500 the exemption does not operate Since the said foreign technical director was an employee of the assessee he was certainly governed by the provision section 40ciii said the Tribunal At the request of the assessee it stated the following question for the opinion of the High Court Whether on the facts and circumstances of the case the Tribunal was justified in holding that the provisions of Section 40ciii were rightly invoked for the assessment year 1965 66 in relation to the remuneration of the Technical Director of the assessee company Section 40ciii as applicable to the assessment year 1965 66 read as follows 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 c in the case of any company iiiany expenditure incurred after the 29th day of February 1964 which results directly or indirectly in the provision of any benefit or amenity or perquisite whether convertible into money or not to an employee including any sum paid by the company in respect of any obligation which but for such payment would have been payable by such employee to the extent such expenditure exceeds one fifth of the amount of salary payable to the employe e for any period of his employment after the aforesaid date Provided further that nothing in this sub clause shall 996 apply to any expenditure which results directly or indirectly in the provision of any benefit or amenity or perquisite to an employee whose income chargeable under the head Salaries is seven thousand five hundred rupees or less Under section 106vii of the Act the remuneration due to any technician who was not a resident in any of the four financial years immediately preceding the financial year in which he arrived in India chargeable under the head salaries for Services rendered as a technician was exempt In this case the salary paid to the foreign technical director was admittedly exempt under section 106vii The contention of the assessee which has been accepted by the High Court runs thus the salary payable to the said director was exempt by virtue of Section 106vii In other words it is nil for the purposes of the Act If so the second proviso to the sub clause is attracted inasmuch as nil income under the head salaries is less than Rupees seven thousand five hundred By virtue of the said second proviso the main provision in sub clause iii goes out of picture The High Court reasoned that if income of one rupee is less than Rs 7500 there is no reason for saying that nil income is not an income less than Rs 7500 Since the income exempted under Section 10 is not liable to be included in the total income such exempted salary income should be treated as nil income for the purposes of Section 40ciii opined the High Court After hearing the counsel for the parties we are of the opinion that the view taken by the High Court is a reasonable one and does not call for any interference The appeal accordingly fails and is dismissed No costs GN Appeal dismissed

The appellant s father executed on 111964 three deeds of settlements trust deeds in the United States of America The terms in them all were identical The object of these trusts was to provide for the education maintenance and up keep of the members of the settlor s family and their descendants He also executed two settlements in UK with the very same object The settlor appellant s father was riling returns of his income in India including therein whole of the income arising from the trusts For the assessment years 1964 65 to 1969 70 he filed the returns Since he died on 22 8 1969 ie in the middle of the accounting year relevant to the assessment year 1970 71 two returns were filed one up to the date of his 938 939 death and the other from the date of his death to the end of the accounting year by his eldest son the appellant including the whole of the income from the trusts The appellant filed appeals against the assessment orders pertaining to the assessment years 1965 66 and 1966 67 contending that the income from US trusts was not taxable in India either in the hands of settlor or in his hands and that the inclusion of the said income in the returns by the settlor and by the appellant was a mistake The appellant preferred revisions against other assessment orders where appeal was barred taking the plea of non taxability with respect to the income from UK trusts and from the US trusts The Appellate Assistant Commissioner allowed the appeals The Revenue s appeals to the Tribunal were allowed holding that the AAC acted contrary to Rule 462 of the Income Tax Rules in admitting the additional grounds and in looking into new material The Tribunal remitted the appeals back to AAC At that stage the appellant approached the settlement commission under Chapter XIXA of the Income Tax Act 1961 The Settlement Commission went into all the aspects of the matter and computed the taxable income of appellant s father and his income for the assessment years 1964 65 to 1970 71 and 1970 71 to 1982 83 It directed the ITO to compute the total income for each of the said assessment years accordingly and raise demand for the tax due The appellant preferred two sets or appeals before this Court against the two orders of the Settlement Commission CAs 4301 07 of 1991 related to the assessment years 1964 65 to 1970 71 and CAs12881300 of 1991 related to the assessment years 1970 71 to 1982 83 The appellant contended that the settlement Commission erred in law in holding that the US trusts were revocable trusts within the meaning of Section 63 of the Act that for attracting Section 63 the deed of transfer must give the transferor a right to retransfer directly or indirectly whole or any part of the income or assets to the transferor or it must give him a right to reassume power directly or indirectly over the whole or any part of income or assets that in the present case such power was not given to the transferor that US trusts were discretionary trusts and 940 therefore the assessment could be made only upon the trustees and not upon the beneficiaries recipients that the revenue could not take advantage of the mistake of law on the part of the settlor or the appellant that with the death of the settlor the US trusts ceased to be revocable trusts and the appellant could not be taxed on the income received by him from the said trust because only the trustee could be taxed that the UK trusts were also discretionary trusts and not specific trusts as held by the Settlement Commission and the assessment could be made only upon the trustees and not upon the beneficiaries recipients that the Settlement Commission committed a legal error in including the income from the UK trusts in the total income of the settlor and the appellant even though it was not paid out by the trustee nor received by the assessees in India that in the USA and UK tax was levied upon the respective trust incomes under the laws of those countries that levying tax over again in India on the very same income amounted to double taxation and therefore the tax levied in India was to be waived The Revenue submitted that even if any principles were decided by the Settlement Commission they did not bind the Income Tax authorities in proceedings relating to subsequent years that the order of the Commission was relevant to and was confined I only to the assessment years to which it related that this Court under Article 136 of the Constitution would not be able to go into the merits of the order that the Settlement Commission s interpretation on the US and UK trusts was perfectly in order and did not call for any interference by this court that during his life time the settlor had declared that he had received income from the UK and US trusts and had included the same in his returns of income for each of the assessment years relevant herein that the appellant too acted similarly and therefore the argument of not receiving the income from UK trusts was a mere after thought and should not he given any credence that a trustee or the trustees waswere expected to act reasonably and in furtherance of the object of the trusts that they were to apply the income for the purposes specified because they could not just accumulate it that applying the test of reasonableness it was to be held that ordinarily the trustee ought to distribute the income each year and that it was to be held that the income from the UK trusts had rightly been taken into account by the Commission while passing its orders Dismissing the appeals this Court 941 HELD 101 The finality clause contained in Section 245 1 does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 136 as the case may be But that does not mean that the jurisdiction of this court in the appeal preferred directly in this court is any different than what it would be if the assessee had first approached the High Court under Article 226 and then come up in appeal to this court under Article 136 A party does not and cannot pin any advantage by approaching this Court directly under Article 136 instead of approaching the High Court under Article 226 This is not a limitation inherent in Article 136 it is a limitation which this court imposes on itself having regard to the nature of the function performed by the Commission and keeping In view the principles of judicial review 955 D E 102 The scope of enquiry whether by High Court under Article 226 or by this Court under Article 136 is also the same whether the order of the Commission is contrary to any of the provisions of the Act and if so has it prejudiced the petitionerappellant apart from ground of bias fraud malice which of course constitute a separate and independent category 956 B 103 The appellant power under Article 136 is similar to power of judicial review where the appeal is directed against the orders of the Settlement Commission Sri Ram Durga Prasad vs Settlement Commission 176 ITR 169 and Chief Constable of the N W Police vs Evans1982 1 WLR 1155 referred to 956 D 104 The only ground upon which this Court can interfere in these appeals is that the order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant 956 E 105 The main controversy in these appeals relates to the interpretation of the settlement deeds though it is true some contentions of law are also raised The commission has interpreted the trust deeds in a particular manner Even if the interpretation placed by the commission on the said deeds is not correct it would not be a ground for interference in these appeals since a wrong interpretation of a deed of trust cannot be said to be a violation of the provisions of the Income Tax Act 956 F 942 106 The interpretation placed upon the said deeds by the Commission does not bind the authorities under the Act in proceedings relating to other assessment years 956 G 107 Though it is not necessary strictly speaking to go into the correctness of the interpretation placed upon the said deeds by the commission and it is enough if this court confines itself to the question whether the order of the Commission is contrary to the provisions of the Act yet for the sake of completeness the Court examine whether the order of Commission is vitiated by any such wrong interpretation 956 H 957 A 201 A discretionary trust is described as a trust where the trustees have been vested with a discretion in the matter of distribution of trust income among the specified class of beneficiaries In the case of such trusts the trustees have a discretion to pay whole or part of the income to such member or members of the designated class as they think fit and in such proportion as they deem appropriate 957 C D Snell s Principles of Equity 25th Edn 1965 page 129 referred to 957 E 202 The US settlement deed empowers the trustee to hold manage invest and reinvest the principal of the trust fund to collect and receive the income thereof and to pay or apply so much of the net income as the trustee shall in his absolute and uncontrolled discretion deem advisable to or to the use of one of more members of the settlor s family It is thus a discretionary trust Para 12 of the US Deed empowers the settlortransferor and the trustee acting together to direct the trustee at any time to pay over the entire income andor entire corpus or a part thereof to such member of the settlor s family or their descendants as they may direct The said power cannot be exercised by the settlor acting Alone 958 B 204 The power properly construed is given to the settlor to be exercised together with the trustee and not to the trustee to be exercised together with the settlor The trustee is anyhow vested with an absolute discretion to distribute the income of or the principal of the trust to such member of the family as he thinks appropriate under the clause preceding and paras following para 12 If so there was no point in saying that 943 he can together with the settlor be empowered to pay over part or whole of incomeprincipal to such one or more members of a class composed of the family members living It cannot also be forgotten that the trustee in this case is a Bank one of the largest in the USA and not an individual acquaited with the affairs of the settlor s family 958 H 959 A 205 Section 63 does not say that the power of revocation vesting in the transferor should be absolute or unconditional 959 B 206 Section 631 also does not say that the deed of transfer must confer or vest an unconditional or an exclusive power in the transferor to give the powerdirection of the nature contemplated by it Merely because the concurrence of the trustee had to be obtained by the transferorsettlor for giving the said direction it cannot be said that the deed does not contain a provision giving the transferor a right to reassume power directly or indirectly over the whole or any part of income or assets within the meaning of Section 63aii of the Act 960 B C 207 During the lifetime of the settlor the entire income arising from the three US trust deeds was bound to be and was rightly included in the income of the settlor by virtue of Section 63 read with Section 61 961B 208 With the death of the settlor Section 63 ceased to apply even though the aforesaid clause empowers not only the settlor but also the Maharaja for the time being to exercise the said power 961 C 209 Section 63 is attracted only where such power is given to the transferor and the appellant the son of the settlor is not and cannot be called the transferor It is not denied that so far as the income from the US trusts is concerned it was indeed received by the appellant 961 D 210 The trustees in the case of a trust declared by a duly executed instrument in writing are treated as representative assessees Section 1601iv It is equally true that in the case of a discretionary trust trustees are liable to be taxed in respect of the income received by them at the rate specified in Section 1641 961 F 211 Section 166 states in unmistakable terms that nothing contained in the preceding provisions in the chapter shall preclude the Revenue from making a direct assessment upon the beneficiary andor recovering the tax payable from such person 962 B 944 212 By virtue of Section 166 the Revenue has an option in the case of a discretionary trust either to make an assessment upon the trustees or to make an assessment upon the beneficiaries Of course both the trustee and the beneficiary cannot be simultaneously taxed in respect of the same income The assessments made by the Commission on the deceased settlor and the appellant are thus unexceptionable 966 D Behramji Sorabji vs Commissioner of Income Tax Bombay Commissioner of Income Tax Bombay City vs Ratilal Nathalal Tarunendra Nath Tagore vs Commr of Income Tax K Subramania Pillai vs Agricultural Income Tar Officer 7hukalay Commissioner of Income Tar Punjab vs Raghubir Singh Nagappa vs CIT and Ram Swaroop Das vs The State of Bihar referred to Sevantilal Maneklal vs CIT distinguished CIT vs Kamalini Khatau FB Agreed with the dissenting opinion 301Both the settlor and the appellant have been receiving the income from the UK trusts during the several assessment years concerned herein The settlor had voluntarily included the entire income from the UK trusts in his income in the returns filed by him for the assessment years 1964 65 to 1969 70 It is unlikely that he would have so included unless he really received it The Commission treated those declarations as proof of the settlor s real intention The Commission also relied upon certain other circumstances including the manner in which the accounts of these trusts were maintained in support of their opinion that all concerned with the trusts acted on the basis that the trust income was flowing to the settlor and after his death to the appellant The Commission also referred specifically to similar declarations made by the appellant in his returns Even subsequent to the death of the settlor the Commission pointed out the appellant has been making similar declarations from time to time 967 C E 302 The appellant did not say that he did not receive the income from the UK trusts All he said was since it is a discretionary trust its income is not taxable in his hands If he had not received the income he would have put forward that fact in the forefront But he did not Section 945 5 of the Act is wide enough to bring all such income to tax In case appellant proves that any income has been taxed in US or UK the same income shall not be taxable over again in India 7 H 968 D

Appeal No 3522NT of 1979 From the Order dated 2411979 of the Punjab and Haryana High Court in Income Tax Case No50 of 1978 WITH CA NOS 2456NT78 5987 88NT901368NT821549 57NT93 1558NT93 GVishwanatha Iyer C Ramesh TV Ratnam and Ayyam Perumal for P Parmeswaran for the Appellants CS Aggarwal for BV Desai for the Respondents The Judgment of the Court was delivered by BP JEEVAN REDDY J Civil Appeal No2456NT of 1978 This appeal is preferred against the judgment and order of the Punjab and Haryana High Court dismissing an application filed by the Revenue under Section 2562 of the Income Tax Act The question which the Revenue wanted to raise reads thus Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the receipt of Rs138577 realised 1 per bilty per customer through the bills and credited to a separate account called DHARMADA was not assessable to tax as revenue receipt The case of the Revenue briefly stated is to the following effect the assessee is a private Ltd company engaged in the business of transport During the accounting period ending January 31 1970 relevant to the assessment year 1970 71 the respondent collected an amount of Rs138577 on account of DHARMADA The Income Tax Officer called upon the respondent assessee to explain why the said amount should not be treated as its trading receipt The respondent s case was that according to the custom prevailing in the transport business he two collected Re1 876 per bilty for spending on charitable purposes He stated that out of this amount collected a major portion was spent on charity and that the balance of Rs8871 was carried over in the separate account kept for DHARMADA His case was that this amount was never credited to his income account and it always constituted a distinct account This explana tion was not accepted by the Income Tax Officer who included the said amount of Rs138577 in the business income of the respondent On appeal the Appellate Assistant Commissioner accepted the respondent s contention and deleted the said addition The Tribunal confirmed the same However says the counsel the true state of affairs is disclosed from the assessees own letter extracted in the assessment order When called upon to explain the collection of the said amount and its purpose the assessee submitted a reply in writing stating as under It is customary in the Transport business to collectcharge DHARMADA at the rate of Re1 per Bilty Not only this but also all the Transport Companies chargecollect this customary Dharmada This amount is meant for distribution to the poor relatives of labourers working in the business premises and also to give at the time of marriages of girls in their families This is just to get full cooperation from them The company has nothing to do with this collection as it has to distribute the same It is thus evident says the counsel for the Revenue that the amount though collected in the name of Dharmada was neither meant for charity nor was it ever spent on charitable purposes Distribution of the said money among the poor relatives of the labourers working in the business premises of the assessee and also to give at the time of marriages of girls in their families cannot be called a charitable purpose Indeed according to the respondent himself these amounts were distributed among them with a view to get full cooperation from them According to learned counsel the assessee is really using the money collected in the name of Dharmada for his own business purposes In the above circumstances say the counsel the High Court ought to have directed the Tribunal to state the aforesaid question under Sec2562 of the Act 877 So far as inclusion of amounts collected as Dharmada which are kept in a separate account and are utilised for charitable purposes is concerned there can be no dispute that they are not liable to be included in the income of the assessee vide CL T vs Bijli Cotton Mills P Ltd but the Revenue s case herein is that though collected in the name of Dharmada these amounts were neither meant for any charitable purpose nor were they spent on charitable purposes In support of the same they rely upon the aforesaid written reply of the respondent assessee itself In our opinion this was a proper case where the High Court ought to have directed the Tribunal to state the said question under Section 2562 of the Act We do not think it necessary to say more than this on this occasion lest it may prejudice the case of the parties at the hearing of the reference The appeal is accordingly allowed the judgment and order of the High Court is set aside and the application filed by Revenue under Section 2562 is allowed The Tribunal shall state the aforesaid question for the opinion of the High Court under Section 2562 of the Act No order as to costs CIVIL APPEAL NO3522NT179 1368NT182 5987 88 NT190 AND SLP C No8353185 These appeals and Special Leave Petition pertain to the very same assessee who is the respondent in Civil Appeal No2456NT of 1978 For the reasons given hereinabove leave is granted in SLP C No8353 of 1985 and all these appeals are allowed in the same terms as the appeal No2456NT of 1976 SLP C NOS 3257 3265 OF 1979 The facts in these Special Leave Petitions are identical to the facts in Civil Appeal No2456NT of 1978 though the assessee is different The assessee too is engaged in transport business No separate argument is addressed in these matters Leave granted in all these Special Leave Petitions For the reasons stated in the judgment in Civil Appeal No2456NT of 1978 these appeals too are allowed and the Tribunal is directed to state the following question for the opinion of the High Court under Section 2562 of the Act 878 Whether on the facts and in the circumstances of the case the Appellate Tribunal is right in Law in holding the of Rs5506 Rs26039 Rs33385 Rs49634 and Rs57902 charged in bilties in the assessment years 1967 68 to 1971 72 are not assessable to tax as revenue receipts it No costs GN Appeals allowed

The question for determination in this appeal was whether an agreement of partnership with the object of entering into wagering transactions was illegal within the meaning of section 23 Of the Indian Contract Act The appellant and the respondent No 1 entered into a partnership with the object of entering into forward contracts for the purchase and sale of wheat with two other firms and the agreement between them was that the respondent would enter into the contracts on behalf of the partnership and the profit or loss would be shared by the parties equally The transactions resulted in loss and the respondent paid the entire amount due to the third parties On the appellant denying his liability for the half of the loss the respondent sued him for the recovery of the same and his defence inter alia was that the agreement to enter into the wagering contracts was unlawful under section 23 Of the Contract Act The trial Court dismissed the suit The High Court on appeal held that though the wagering contracts were void under section 30 Of the Indian Contract Act the object of the partnership was not unlawful within the meaning of the Act and decreed the suit It was contended on behalf of the appellant 1 that a wagering contract being void under section 30 Of the Contract Act was also forbidden by law within the 407 meaning of S23 Of the Act that 2 the concept of public policy was very comprehensive in India since the independence and such a contract would be against public Policy 3 that wagering contracts were illegal under the Hindu Law and 4 that they were immoral tested by the Hindu Law doctrine of pious obligation of sons to discharge the father s debts Held that the contentions raised were unsustainable in law and must be negatived Although a wagering contract was void and unenforceable under section 30 Of the Contract Act it was not forbidden by law and an agreement collateral to such a contract was not unlawful within the meaning of section 23 Of the Contract Act A partnership with the object of carrying on wagering transactions was not therefore hit by that section Pringle vs Jafer Khan All 443 Shibho Mal vs Lachman Das All 165 Beni Madho Das vs Kaunsal Kishor Dhusar All 452 Md Gulam Mustafakhan vs Padamsi AIR 1923 Nag 48 approved ThacKer vs Hardy Read vs Anderson Bridger vs Savage Hyams vs Stuart King Thwaites vs Coulthwaite Brookman vs Mather and Jaffrey Co vs Bamford 1921 2 KB 351 Ramloll Thackoorseydass vs Soojumnull Dhondmull 1848 4 MlA 339 Doolubdas Pettamberdass vs Ramloll Thackoorseydass and Ors 1850 5 MIA 109 Raghoonauth Shoi Chotayloll vs Manickchund and Kaisreechund 1856 6 MIA 251 referred to Hill vs William Hill considered The doctrine of public policy was only a branch of the com mon law and just like its any other branch it was governed by precedents its principles had been crystallised under different heads and though it was permissible to expound and apply them to different situations it could be applied only to clear and undeniable cases of harm to the public Although theoretically it was permissible to evolve a new head of public policy in exceptional cirumstances such a course would be inadvisable in the interest of stability of society Shrinivas Das Lakshminarayan vs Ram Chandra Ramrattandas ILR Bhagwanti Genuji Girme vs Gangabisan Ramgopal ILR and Gopi Tihadi vs Gokhei Panda ILR 1953 Cuttack 558 approved Egerton vs Brownlow Janson vs Driefontein Consolidated Mines Ltd Fender vs St John Mildmay 1938 AC 1 and Monkland vs Jack Barclay Ltd referred to Like the common law of England which did not recognise any principle of public policy declaring wagering contracts illegal the Indian Courts both before and after the passing of Of 1848 and also after the enactment of the held that wagering contracts were not illegal as being contrary to public policy and collateral contracts in respect of them were enforceable in law Ramloll Thackoorseydass vs Soojumnull Dhondmull 1848 4 MIA 339 referred to Gambling or wagering contracts were never declared to be illegal by courts in India as being contrary to public policy as offending the principles of ancient Hindu Law and it was not possible to give a novel content to that doctrine in respect of gaming and wagering contracts The State of Bombay vs R M D Chamaybaugwala considered The common law of England and that of India never struck down contracts of wager on the ground of public policy and such contracts had always been held not to be illegal although the statute declared them to be void The moral prohibitions in Hindu Law texts against gambling were not legally enforced but were allowed to fall into desuetude and it was not possible to hold that there was any definite head or principle of public policy evolved by courts or laid down by precedents directly applicable to wagering contracts There was neither any authority nor any legal basis for importing the doctrine of Hindu Law relating to the pious obligation of sons to pay the father s debt into the dominion of contracts Section 23 Of the Contract Act was inspired by the common law of England and should be construed in that light The word immoral was very comprehensive and varying in its contents and no universal standard could be laid down Any law therefore based on such fluid concept would defeat its purpose The provisions of section 23 of the indicated that the Legislature intended to give that word a restricted meaning The limitation imposed on it by the expression the Court regards it as immoral clearly indicated that it was also a branch of the common law and should therefore be confined to principles recognised and settled by courts judicial decisions confined it to sexual immorality and wager could not be brought in as new head within its fold

Appeal No 1374 of 1974 From the Judgment and Order dated 1314 2 1974 of the Gujarat High Court in Special Civil Application No 220 of 1970 WITH Civil Appeal No 1776 of 1980 From the Judgment and Order dated 2141980251980 of the Gujarat High Court in Special Civil Application No 942 of 1976 BK Mehta and HS Parihar for the Appellant 807 Dave Ms Meenakshi Arora Anip Sachthey for the Respondents The Judgment of the Court was delivered by SAWANT J Civil Appeal No 13741974 Some tax payers of the appellant Morvi Municipality the Municipality had filed a writ petition in the High Court challenging the validity of the rules made by it for the levy of consolidated property tax on lands and buildings and also the assessment lists prepared and authenticated by the Municipality for the years 1967 68 1968 69 and 1969 70 There is no dispute that the concerned rules have been made by the Municipality under Section 271 1 read with Section 99 1 of the Gujarat Municipalities Act 1963 the Act The relevant contentions of the writ petitioners who are the respondents before us before the High Court were as follows 1 Rules 2 7 4 and 5 of the Rules of the consolidated property tax on the lands and buildings were ultra vires Section 99 1 i and proviso e to it read with Section 2 1 of the Act The assessment lists for the years 1967 68 1968 69 and 1969 70 were invalid since they were prepared without following the procedure laid down in Sections 105 to 112 of the Act The High Court upheld the validity of Rules 2 7 and 4 No appeal is preferred against that part of the High Court s decision We are therefore concerned in this appeal only with the validity of Rule 5 which has been struck down by the High Court The High Court has also declared that the tax collected by the Municipality for the assessment years 1968 69 and 1969 70 in excess of the amounts which may be determined in accordance with the principles laid down by it in the judgment under appeal was without the authority of law So far as the assessment lists for the said two years are concerned we are concerned in this appeal only with the validity of the excess amount However as far as the assessment list for the year 1967 68 is concerned it has been struck down in its entirety by the High Court also on the ground that it was not prepared in compliance with the procedure laid down in Sections 105 to 112 of the Act Hence we have to 808 consider the validity of the entire assessment for the said year Rules 4 and 5 have obviously been made by the Municipality to give effect to Section 99 1 i which provides for imposition of taxes on buildings or lands situate within its limits That section reads as follows 99 Taxes which may be imposed 1 Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 101 and 102 a municipality may impose for the purposes of this Act any of the following taxes namely i a tax on building or lands situate within the municipal borough to be based on the annual letting value or the capital value or a percentage of capital value of the buildings or lands or both Further Clause e of the second proviso to sub section 1 of Section 99 reads as follows e the municipality in lieu of imposing separately any two or more of the taxes described in clauses i vii ix and x except a special water rate may impose a consolidated tax assessed as a tax on buildings or lands or both situated within the municipal borough Since the Municipality has chosen to impose the tax on the basis of the annual letting value of the buildings and lands and not on the basis of the capital value or percentage of capital value we have to ascertain in the present case the precise connotation of the expression annual letting value Section 2 1 of the Act defines the expression annual letting value as follows 1 annual letting value means the annual rent for which any building or land exclusive of furniture of machinery contained or situate therein or thereon might reasonably be expected to let from year to year and shall include all payments made or agreed to be made by a tenant to the owner of the building or land on account of occupation taxes under any law for the time being in force insurance or other charges incidental to his tenancy 809 The crucial expressions in the above definition are might reasonably be expected to let and all payments made or agreed to be made by a tenant to the owner on account of occupation Shri Mehta the learned counsel for the Municipality contended that the said expressions unmis takably indicate the actual rent received by the landlord from his tenant According to him the reasonable rent means the rent which a willing tenant will pay to the willing owner and the agreement between the parties would indicate the same and no more and no less He further argued that the standard rent under the rent restriction legislation was only one of the factors relevant for the estimation of the reasonable expectation of the rent from the property and was not the sole basis of such rent and hence the assessment can be made on the basis of the actual rent received It is not necessary for us to go into a detailed discussion of the pros and cons of the question since the question is no longer res Integra The decisions of this court rendered in The Corporation of Calcutta vs Smt Padma Debi and others Corporation of Calcutta vs Life Insurance Corporation of India Guntur Municipal Council vs Guntur Town Rate Payers Association and Dewan Daulat Rai Kapoor and Others vs New Delhi Municipal Committee and Others have consistently held that it is not the value of occupation of the property to the tenant but the rental income from it to the owner which is to be taken into consideration while estimating the reasonable return that a landlord can expect from his property It has also been held there that wherever the rent is restricted on account of the operation of the rent restriction legislation the outer limit of the reasonable rent that can be expected from the property stands defined by such restriction Hence while estimating or calculating the annual rent which might reasonably be expected from such property the provisions of such legislation have to be taken into consideration Different rent restriction legislations have described the maximum rent recoverable under them differently such as standard rent fair rent etc Hence the annual letting value of the building or land or both to which the rent restriction legislation is applicable cannot exceed the annual standard or fair rent It is the annual standardfair rent which alone therefore can form the basis of the assessment of the property tax by the local authority It is true that although a four judge Bench of this Court as early as in Padma Debi s case Supra had taken this view which has been reiterated in the other decisions cited above a three Judge Bench of this Court in a decision in Municipal 810 Corporation Indore vs Smt Ratnaprabha and Others has held that the actual annual rent received by the owner of the property notwithstanding the application of the rent restriction legislation can provide a basis for assessment of the property tax However this view taken in the above case has been explained in Dewan Daulat Rai Kapoor s case Supra which is the latest decision of this Court on the point It has been pointed out there that the said view in the case of the Municipal Corporation Indore supra turned on the presence of the non obstante clause notwithstanding anything contained in any other law in the provisions of the Act levying the property tax there Since in the present Act namely the Gujarat Municipalities Act 1963 there is no such non obstante clause the view taken there would not apply to the present case Shri Mehta learned counsel appearing for the Municipality did not press his further contentions that the presence or the absence of such non obstante clause would not make any difference to the proposition laid down there that the annual letting value should always be based upon the actual annual rent received and not on the standard or fair rent under the rent restriction legislation We therefore refrain from going into the said question in the present case and leave the point open for consideration if necessary in future cases For our purpose it is sufficient to proceed on the footing that the annual letting value has to be determined as held in the aforesaid three decisions of this Court keeping in mind the outer limit down in the rent restriction legislation Rule 4 of the Municipality is as under 4 The tax on open lands and buildings shall be levied in accordance with the following rate The buildings which are used for residential purpose shall be levied on the annual letting value by the percentage as follows x x x x x x 2 The buildings which arc used for non residential purpose shall be levied on the annual letting value by the percentage as follows x x x x x x 811 It merely prescribes that the tax that may be levied on buildings used both for residential and non residential purposes will be on the basis of the annual letting value by the percentages prescribed therein Hence if the expression annual letting value in the said rule is read as the annual letting value as determined by the out limit prescribed by the standard or fair rent under the rent restriction legislation applicable to the premises which in the present case is the Bombay Rents Hotel and Lodging House Rates Control Act 1947 the validity of the said rule cannot be assailed The High Court has therefore rightly upheld it However Rule 5 with the validity of which we are concerned here reads as follows 5 a The rental actually realised in each case of the buildings shops and lands which are let shall be considered to be the annual letting value but if the assessment officer has reasons to believe that the rent shown in the rent note or in account does not represent the correct letting value then the case of such properties he officer shall assess the reasonable annual letting value according to his own decision b In the case of buildings which are sublet the rent paid by the occupier shall be taken as annual letting value c In the case of the buildings used by the owner himself the annual letting value shall be fixed with the rent derived from the properties buildings which are let nearby The assessment officer will not assess the annual letting value more than 6 14 of the capital value in the case of the properties noted in sub rule C It will be apparent that the rule seeks to lay down the mode of working out the annual letting value of the property According to the rule it is to be worked out by taking the actual rental realised as the basis However where the assessment officer has reason to believe that the rent shown in the rent note or in the accounts does not represent the correct letting value the rule permits the officer to assess the reasonable annual 812 letting value according to his own decision In clause c the rule states that so far as the buildings used by the owner himself are concerned the annual letting value should be fixed with reference to the rent derived from the properties which are let nearby It is clear that to the extent the rule mandates the actual rent received to be taken into consideration for fixation of the annual letting value even if it is in excess of the standard rent fixed under the rent restriction legislation it is contrary to the interpretation placed by this Court on the expression annual letting value It is for this reason that the High Court has struck down the whole of the said rule Shri Mehta does not dispute the premise that where the rent restriction legislation is applicable Rule 5 will have to be read down to mean that the annual letting value is to be fixed only on the basis of the annual standard rent However he contends that it is not necessary to strike down the said rule for there may be properties which are not governed by the rent restriction legislation and their annual letting value can be determined unrestricted by the provisions of the rent restriction legislation His grievance is that since the High Court has struck down the rule instead of reading it down to bring it in conformity with the judicial decisions the Municipality is hampered in assessing the properties to which the rent restriction legislation does not apply Shri Mehta may be right there if there are such properties within the limits of the Municipality The correct mode of getting over the difficulty is to amend Rule 5 itself suitably to take care of such properties instead of keeping it on the rule book as it is There is nothing to prevent the Municipality from introducing a new rule in place of the said rule Even without Rule 5 and on the basis of Rule 4 as it is the annual letting value can be calculated on the basis of the standard rent where the rent restriction legislation is applicable Where it is not applicable nothing prevents the Municipality from assessing the properties on the basis of the actual rent received under the same Rule 4 itself However pending the framing of the new rule Rule 5 as it can be interpreted as being applicable only to such properties which are not governed by the rent restriction legislation Hence the decision of the High Court will have to be modified to the extent the High Court has struck down the said rule instead of allowing it to remain on the rule book confining its operations only to those properties which are not governed by 813 the Rent Control Act Coming now to the assessment list for 1967 68 which is struck down in its entirety by the High Court we are afraid that the High Court has misinterpreted the provisions of Sections 105 to 112 of the Act which relate to the assessment of taxes on properties Section 105 provides for preparation of an assessment list containing the particulars mentioned therein such as the address and description of the property the names of the owner the valuation based on the annual letting value of the amount of tax assessed thereon etc Section 106 indicates the persons primarily liable for tax and the procedure to be followed when the name of such person cannot be ascertained Section 107 provides for the publication of notice when the assessment has been completed and the right of the owner or occupier of the property included in the list or any agent of such person to inspect the list and to make extracts therefrom Section 108 then provides for a public notice of a date before which the objections to the valuation or assessment in the assessment list shall be made and of the hearing of objections Sub section 3 of Section 108 provides for the hearing of objections by the Executive Committee of the Municipality constituted under Section 53 of the Act Upon hearing of the objections and disposing them of the Executive Committee is required to cause the result thereof to be noted in the book kept for the purpose The Executive Committee is also empowered to amend the assessment list if necessary in accordance with the result of the hearing However before any amendment is made in the assessment list the reasons thereof are required to be recorded in the book concerned This sub section also provides that the powers and duties of the Executive Committee under it may be transferred to any other committee appointed by the Municipality or with the permission of the Development Commission to any officer or pensioner of the Government Sub section 4 of the said section provides that as and when in respect of any property the objections made under the section have been disposed of and the amendment required by sub section 3 have been made in the assessment list the said list so tar as such properties are concerned shall be authenticated by the signature of the Chairman and at least one other member of the Executive Committee If the Executive Committee s powers and functions under sub section 3 have been transferred to any other committee or to an officer or pensioner of the Government the authentication is to be made by the signatures of 814 not less than 2 members of such Committee or of the officer or pensioner as the case may be The person or the persons so authenticating the list have to certify that no valid objection has been made to the valuation and assessment of the property contained in the list except in the cases in which amendments have been made therein Sub section 5 of the said Section then provides that the lists so authenticated shall be deposited in the Municipal Office and shall be open for inspection to an owners and occupiers of the property entered in the list or to their agents Sub section 6 states that subject to such alterations made therein under the provisions of Section 109 and to the result of any appeal or revision under that Section the entries in the assessment list so authenticated and deposited shall be accepted as conclusive evidence i for the purposes of the Municipal taxes and of the valuation of the annual letting value and ii for the purposes of the tax for which such assessment list has been prepared and the amount of the tax leviable on such properties in any official year in which the fist is in force Section 109 gives power to the Executive Committee to amend the assessment list if any entry in respect of any property has been either omitted from or erroneously made therein through fraud accident or mistake It also gives power to the Executive Committee to amend the list if any building has been constructed altered or reconstructed either in whole or part after the preparation of the assessment list Section 110 provides that where any building or any portion of such building which is liable to payment of tax is demolished or removed otherwise than by an order of the Executive Committee the person primarily liable for the said tax has to give notice to the Chief Officer of the Municipality Section 111 states that it shall not be necessary to prepare a new assessment list every year subject to the condition that the assessment list shall be completely revised every four years The Chief Officer is given power to adopt the valuation and assessment contained in the list for any year such alteration as may be deemed necessary for the year immediately following However the provisions of Sections 107 108 and 109 are applicable to the said list as if a new assessment list has been completed at the commencement of the official year The official year has been defined in Section 2 17 of the Act to mean the year commencing on the first day of April 815 Section 112 then gives power to the State Government to appoint a person to authenticate the assessment list in case of default by the Municipality in authenticating it It states that where in any year a new assessment list is prepared or a list is revised or the valuation and assess ment contained in the list for the year immediately preceding is adopted with or without alterations such new revised or adopted assessment list shall be authenticated in the manner provided by Section 108 at any time not later than 31st of July of the official year to which the list relates If the list is not so authenticated then the State Government shall appoint such person or persons as it thinks fit to prepare revise or adopt and authenticate the assessment list Such person or persons have to authenti cate such list at any time before the last day of the official year ie 31st March of the year to which the list relates The section also states that Sections 105 to 108 and Section 111 shall so far as may be necessary apply to the preparation revision or adoption of the list as the case may be by the person or persons appointed by the State Government Section 99 among others of the Act to which we have already made a reference earlier empowers the Municipality to impose various taxes fees and cesses as a source of revenue for discharging its duties and functions The tax on buildings or lands or both is only one of such taxes This tax can be recovered separately or as the consolidated tax along with general water rate and lighting tax as provided in Clause e of the second proviso to sub section 1 of Section 99 The provisions contained in Sections 105 to 112 above only relate to the preparation of an assessment list of properties which are liable to such tax They are procedural in nature and the charging section for the tax is Section 99 of the Act Section 99 itself does not provide for any limitation of time on the imposition of tax The High Court has however read limitation of time in Section 112 on the authentication of the assessment list According to the High Court the period of limitation for the Municipality to authenticate the list is upto 31st July of the official year to which the list relates and in default by the Municipality the period of limitation for the person appointed by the State Government is upto the 31st March of the said official year What is further according to the High Court the Municipality cannot authenticate the assessment list beyond 31st July of the official year and it is the person s appointed by the State Government alone who can do so and that too upto 31st March of that official year It is difficult to accept this reasoning According to us the High Court has erred in reading in the provisions of H 816 Section 112 an intention by the legislature to lay down a period of limitation either for the Municipality or for the person or persons appointed by the State Government It is obvious that Section 112 in the context in which it appears is both directory and enabling in nature insofar as it requires the Municipality to authenticate the list before 31st July of the official year That the provisions are no more than directory is clear from the fact that they provide that if the Municipality fails to do its duty the State Government may complete the work by appointing a persons to do it This is as it should be since the various provisions of the Act show that the revenue and the expenditure of the Municipality among others is controlled and regulated by the State Government Further the Section requires that the Municipality should complete the authentication of the assessment list before a particular date which in the present case happens to particular date which in the present case happens to be 31st July of the year It was necessary to incorporate in the section the said provision to give enough time to the State Government to step in and authenticate the list before the end of the official year The official year is the same for the Municipality as well as the State Government and for the purposes of budgeting the provision that the assessment list should be authenticated by the particular dates was necessary to be incorporated However even Section 112 which is procedural in nature does not state that the list which is authenticated by the Municipality after 31st July of the official year and by the person appointed by the Government after 31st March of the same official year would be invalid On the contrary when the Municipality fails to authenticate the assessment list till 31st July of the official year the section empowers the State Government to appoint a person or persons to authenticate the same It was also necessary to prescribe some time limit for the authentication by the person so appointed and hence the section provides that persons so appointed shall authenticate it by 31st March of the official year In any case neither the Municipality is prevented from authenticating it beyond 31st July nor is the persons appointed by State Government prevented from doing so beyond 31st March of the official year In the present case there was an additional factor which was relevant to be taken into consideration The Municipality had levied the property tax for the first time in the official year 1967 68 and the State Government felt that it should be given time to authenticate the same before 31st March 1968 That is the reason why the State Government did not appoint a person to authenticate the list after 31st July 1967 even though the Mun 817 cipality had failed to do so Instead the State Government had extended the time for the Municipality to do so till 31st March 1968 The step taken by the government was in conformity with the interpretation of the provisions of Section 112 which as stated earlier are only directory and enabling in nature The High Court has therefore erred in holding that the Municipality could not authenticate the assessment list after July 1967 and it is only the State Government which could do it This the High Court did as stated earlier by reading 31st July 1967 as the period of limitation for the Municipality to authenticate the list for the official year 1967 68 There is no dispute that the Municipality authenticated the list by 28th March 1968 The finding of the High court that the assessment list for the year 1967 68 is void and illegal is therefore clearly wrong 6In the result we set aside the finding of the High Court that Rule 5 is ultra vires the Act and hold that the same is to be read as being applicable only to the properties which are not governed by the provisions of the Rent Control Act As far as the properties which are amenable to the provisions of the Rent Control Act are concerned their annual letting value will be calculated only on the basis of the standard rent determined or determinable under the said Act We further set aside the decision of the High Court striking down the assessment list for 1967 68 and hold that the said assessment list is validly authenticated and the taxes can be recovered on the basis of the same The appeal is allowed accordingly with no order as to costs CIVIL APPEAL NO 17761980 7 In the present case Rule 5 of the rules made by the appellant Junagadh Municipality the Municipality under Section 271 1 and Section 99 1 i of the Act has been struck down by the High Court to the extent it provides for calculating the annual letting value on the basis of actual rent as being ultra vires Section 99 1 i read with Section 21 of the Act The relevant portion of the said Rule 5 reads as follows In the case of buildings or lands which are let the rent which is the actual rent or in the case where the standard rent is determined by the Civil Court the same shall in such case be considered to be the annual letting value unless the executive committee or the special committee on the Chief Officer or his delegate entrusted with the 818 work of valuation has reasons to believe that the rent shown in the rent note or account does not represent the correct letting value or is collusive or is not determined by the Court on merits as the case may be in which case reasons for such belief shall be stated in the decision provided that in case rent actually charged is in excess of the rent as determined by the Court at any time the rent actually charged shall be considered to be the annual letting value 8 It is not necessary to repeat what we have discussed on the subject in the accompanying appeal viz CA No 1374 of 1974 Suffice it to say that in the present case the rule itself has provided that where the standard rent is determined by the Civil Court of course under the rent restriction legislation the annual letting value will be determined on the basis of such standard rent The rule however goes further and says that in other cases viz 1 where the standard rent is not determined and 121 even if it is determined where actual rent charged is in excess of the standard rent it is the actual rent which will be taken as the basis for calculating the annual letting value The latter two situations do not make distinction between the properties to which the rent restriction legislation is applicable and the properties to which it is not applicable In other words under the rule even where the rent restriction legislation is in force it is the actual rent which will be taken as the basis for calculating the annual letting value if the standard rent is not determined by the Court The High Court has therefore rightly struck down the rule to the extent that it applies to properties to which the rent restriction legislation is applicable In view of what we have stated in the accompanying appeal we see no reason to take a different view However Shri Mehta appearing for the Municipality is right in contending that it is not necessary to declare the rule ultra vires Section 991 read with Section 2 because it also provides for assessing the annual letting value of property on the basis of the actual rent That part of the rule which enables the authorities to take the actual rent as the basis for calculating the annual letting value can be read down to apply only to those properties to which the rent restriction legislation does not apply We agree with him there if there are such properties within the limits of the 819 Municipality We therefore allow the appeal set aside the decision of the High Court striking down the part of the rule which enables the authorities to adopt actual rent as the basis for calculating the annual letting value of the properties Instead we declare that Rule 5 to the extent it enables the authorities to take the actual rent as the basis for calculating the annual letting value will apply only to the properties to which the rent restriction legislation which in the present case is the Bombay Rents Hotel and Lodging House Rates Control Act 1947 does not apply The appeal is allowed accordingly with no order as to costs VM Appeal allowed

During the accounting order relevant to assessment year 1965 66 the Respondent assessee paid to its foreign technical director a total remuneration of Rs 66000 including a sum of Rs 28576 paid by way of perquisites The Income tax Officer allowed only a sum of Rs 13200 by way of perquisites and disallowed the balance of Rs 15376 in view of Section 40ciii of the Income tax Act 1961 On an appeal by the assessee the Appellate Assistant Commissioner held that since the salary of the foreign technical director was exempt under S106vii the provision contained in Sec40ciii was not applicable Revenue preferred an appeal and the Tribunal held that S40ciii was applicable At the instance of the Assessee Tribunal referred the question to the High Court Since the High Court answered the question in favour of the assessee Revenue preferred the present appeal Dismissing the appeal this Court HELD Under section 106vii of the Income tax Act 1961 the remuneration due to any technician who was not a resident in any of the four financial years immediately preceding the financial year in which he arrived in India chargeable under the head salaries for services rendered as a technician was exempt Thus in the instant case the salary paid to the foreign technical director was admittedly exempt under Section 106vii of the Income tax Act 1961 In other words it was nil for the purposes of the Act If so the second proviso to sub clause iii of S40c 994 is attracted inasmuch as nil income under the head salaries is less than Rupees seven thousand five hundred By virtue of the said proviso the main provision in sub clause iii goes out of picture The High Court reasoned that if income of one rupee is less than Rs 7500 there is no reason for saying that nil income is not an income less than Rs 7500 The High Court was right in taking the view that since the income exempted under Section 10 is not liable to be included in the total income such exempted salary income should be treated as nil income for the purposes of Section 40ciii of the Act 996 B E

Appeal No 2169NT of 1993 From the Judgment and Order dated 10121979 of the Madras High Court in Tax Case No 398 of 1976 Mrs Janaki Ramachandran for the Appellant KN Shukla Sudhir Walia and P Parmeswaran for the Respondent The Judgment of the Court was delivered by BP JEEVAN REDDY J Under Section 2561 of the Income Tax Act the Income Tax Appellate Tribunal Madras stated the following question of law for the opinion of the Madras High Court Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the sum of Rs 19 being the interest received on the deposits made with the 1000 Electricity company is a business receipt and accordingly deleting the additional surcharge of Rs 81920 charged for the assessment year 1963 64 The High Court returned the reference unanswered It directed the Tribunal to consider the case on all points that require consideration of the question whether additional surcharge was attracted In short it asked the Tribunal to examine whether the additional surcharge was attracted even if the income of Rs 19 is chargeable under the head Profits and gains of business The learned counsel for the assessee submits that the High Court exceeded its jurisdiction in making the above direction It is submitted that the matter be sent back to the High Court for answering the question of law as stated by the Tribunal The contention of the learned counsel is that by giving the impugned direction the High Court has sought to widen the scope of enquiry which it is not empowered to do in a reference under Section 256 The assessee is a cooperative society engaged in the business of banking The previous year relevant to the assessment year 1963 64 was the year ending June 30 1962 Its business income was exempt under the provisions of Section 811 as it then stood During the said accounting year the assessee received a sum of Rs 19 being the interest on the deposit made by it with the Salem Erode Electricity Distribution Company This deposit was made by the assessee as required by the conditions notified by the said company for supply of energy The deposit carried interest and it is on account of the said interest that the sum of Rs 19 was received by the assessee The Income Tax Officer treated the said amount of Rs 19 as income from other sources On that basis he levied additional surcharge in a sum of Rs 81920 under the provisions of the relevant Finance Act On appeal the Appellate Assistant Commissioner upheld the contention of the assessee that the said sum of Rs 19 also constituted its business income and therefore exempt Accordingly he held the levy of surcharge was unsustainable The Revenue appealed to the Appellate Tribunal Its case was that the said receipt cannot be treated as a business receipt and that it was rightly treated by the ITO as income from other sources The Tribunal recorded in its order Before us it is made clear by both sides that the levy of additional surcharge and interest would depend upon the classification of the head of income for this interest income of Rs 19 and that if it fell under income from business the appeal has to be dismissed 1001 and that if it fell under income from other sources the appeal has to be allowed and the levy of surcharge and interest restored So we proceed to discuss the vital issue in this case on which hangs the result of this appeal The Tribunal held it income from business and accordingly dismissed the appeal filed by the Revenue At the instance of the revenue the Tribunal stated the aforesaid question Before the High Court it was contended by the Revenue that both the AAC and the Tribunal laboured under an erroneous assumption that the said sum of Rs 19 represented business income and the liability of surcharge was not attracted It was submitted that whether the said sum was a business income or income from other sources it attracted the liability of additional surcharge The assessee however submitted that it was not open to the revenue to take the said stand inasmuch as it agreed before the Tribunal that in case the said sum constituted business income liability of additional surcharge was not attracted The assessee submitted further that the High Court should not allow the revenue to shift its stand and urge a new contention The High Court held after an examination of the relevant provisions of the Finance Act and of the decisions relating to the nature of jurisdiction of the High Court in such a reference that the assumption made by the AAC and the Tribunal that the liability of surcharge is not attracted in case the said sum of Rs 19 represented business income may not be warranted and that in such a situation the High Court does possess the power to correct the error so long as the point arose out of the Tribunal s order The High Court held This Court cannot look on helplessly with reference to an error which is manifested in the contention of both sides before the Tribunal This court has jurisdiction to correct an error in the order of the Tribunal so long as the point arose out of its order whoever be the author of the mistake or error in taking up an particular contention Having regard to the nature of the issue that was before the Tribunal and having regard to what we have stated above we think it proper to set aside the order of the Tribunal and direct the Tribunal to consider the case on all the points that require consideration of the question whether additional surcharge was attracted The reference is returned unanswered 1002 We find it difficult to agree with Smt Janaki Ramachandran learned counsel for the assessee that the High Court has exceeded its jurisdiction under Section 256 in making the above direction As rightly observed by the High Court if the Tribunal proceeds upon an assumption which is erroneous in law and refers a question to the High Court it cannot be said that the High Court is bound by the terms of the question referred and cannot correct the erroneous assumption of law underlying the question If such power is not conceded to the High Court the result would be that the answer given by the High Court may equally be erroneous in law Such a situation cannot certainly be countenanced It would not be in the interest of law or justice It is not as if the High Court has asked for any fresh investigation of facts in this case not that such power does not exist in the High Court in a appropriate case All that the High Court has asked the Tribunal to do is to consider whether the liability of surcharge is not attracted even if the said sum of Rs 19 is treated as income from business The fact that the revenue was also a party to the said erroneous assumption before the Tribunal cannot stand in the way of the Revenue resiling from an erroneous assumption of law In CIT Bombay vs Scindia Steam Navigation Ltd the facts were these a steam ship belonging to the respondent company was requisitioned by the government The ship was lost by enemy action on March 16 1944 The company received a sum of Rs 20 lacs by way of compensation on July 17 1944 a sum of Rs 23 lacs on December 22 1944 and a sum of Rs 33333 on August 10 1946 The total compensation so received exceeded the cost price of the steam ship The difference between the cost price and written down value was Rs 926532 In the assessment proceeding for the AY 1946 47 the revenue sought to charge the said amount under the fourth proviso to Section 102vii of the Income Tax Act 1922 inserted by the Income Tax Amendment Act 1946 which came into force on May 4 1946 The assessee contended that the amount should be deemed to have been received on April 161944 as was done for the purposes of Excess Profits Tax Act in which case it could not fall within the accounting period July 1 1944 to June 30 1945 relevant to the AY 1946 47 The Tribunal was of the opinion that the material date for the purpose of the fourth proviso to Section 102vii was the date when the compensation was in fact received and that therefore the amount was assessable in the AY 1946 47 At the instance of the assessee the Tribunal 1003 stated the following question of law for the opinion of the High Court whether the sum of Rs 926532 was properly included in the assessee company s total income computed for the AY 1946 47 Before the High Court the assessee raised a new contention for the first time that the fourth proviso to section 102vii did not apply to the assessment as it was not in force on April 1 1946 and the liability of the company had to be determined as on April 1 1946 when the Finance Act 1946 came into force A preliminary objection was raised by the revenue that the said aspect or question as it may be called did not arise out of the order of the Tribunal that it was not raised before or dealt with by the Tribunal and that it was also not referred for the opining of the High Court The High Court over ruled the objection opining that the form in which the question was framed was sufficiently wide to take in the new contention and that the company was entitled to raise it even if that aspect of the question had not been argued before the Tribunal It upheld the new contention raised by the assessee and answered the question in its favour On appeal this court affirmed It was held that the High Court had jurisdiction to entertain the new contention raised by the assessee for the first time inasmuch as it was within the scope of the question framed by the Tribunal and was implicit therein This court enunciated several principles relating to the nature of the jurisdiction of the High Court under Section 256 of which the following principle is relevant for our purpose Section 661 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 branching 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 661 requires is that the question of law which is referred to the court for decision and whic h 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 1004 itself a distinct question for the purpose of section 661 of the Act This decision of the Constitution Bench in our opinion justifies and warrants the approach adopted by the High Court in the judgment under appeal The question in the present case is whether additional surcharge was leviable for the AY 1963 64 under the relevant Finance Act The assessee s contention was that it has no income which was liable to be assessed to income tax inasmuch as its entire income was exempt under Section 811a In tune with this submission the assessee submitted that the said sum of Rs 19 was also a business income and therefore the liability of additional surcharge did not attach to the assessee The ITO took the view that the said sum of Rs 19 represented income from other sources and therefore liability of additional surcharge was attracted On Appeal the AAC and the Tribunal upheld the assessee s contention that it was business income and therefore the liability of surcharge was not attracted The High Court however thought that having regard to the language of the provisions of the relevant Finance Act the Tribunal ought to examine whether the liability to additional surcharge is attracted even if the said sum of Rs 19 was treated as income from business The High Court was of the opinion that the legal submission urged by the Revenue before the High Court no doubt for the first time did call for serious consideration This was done to arrive at a correct decision in law relating to the liability to additional surcharge If really additional surcharge was chargeable according to the Finance Act even in case the said sum of Rs 19 represented business income the High Court cannot be called upon to act on the assumption that it is not so chargeable and answer the question stated Such a course would neither be in the interest of law or justice That the Revenue was also a party to the erroneous assumption of law makes little difference to the principle Counsel for the parties have cited several decisions touching upon the nature of the jurisdiction of the High Court under Section 256 viz VR YKN Kallappa Chettiar vs Commissioner of Income Tax CIT vs Ogale Class Works Ltd and Keshav Mills Co Ltd vs Commissioner of Income Tax Bombay North Ahmedabad by the learned counsel for the appellant and Commissioner of Income Tax Bihar and Orissa vs kirkend Coal Co and Kusunben D 1005 Mahadevia vs Commissioner of Income Tax Bombay City by the learned counsel for the Revenue We do not however think it necessary to refer to them since the situation present herein was not present in those cases The principles of these decisions does not in any manner run contrary to the one affirmed by us herein which is consistent with the one enunciated in Scindia Steam Navigation The appeal accordingly fails and is dismissed No costs NVK Appeal dismissed

The question involved in these appeals was whether the amounts collected for spending on charity and kept in a separate account for Dharmadha could be included in the business income of the assessee The explanation that these amounts were distributed among the poor relatives of the labourers and to the girls in their families at the time of marriage was not accepted by the Income tax Officer as a charity He added the entire dharmadha amounts to the business income of the appellant assessees On appeal the Appellate Assistant Commissioner deleted the said additions and the Tribunal confirmed the deletions Revenue filed ap plications before the High Court for reference The High Court having dismissed the applications Revenue preferred the present appeals contending that the assessees were using the amounts collected in the name of dharmadha for business purposes Allowing the appeals this Court HELD1 So far as the inclusion of amounts collected as Dharmada which are kept in a separate account and are utilised for charitable purposes is concerned there can be no dispute that they are not liable to be included in the income of the assessee The Revenue s case is that though collected in the name of Dharmada these amounts were neither meant for any charitable purpose nor were they spent on charitable purposes In these circumstances the High Court ought to have directed the Tribunal to state the question under Sec2562 of the Income tax Act 875 1961 as to whether such amounts could be assessed to tax as revenue receipts The Tribunal is directed to do so 877 A C

Appeal No 1240 of 1993 From the Judgment and Order dated 2721992 of the Delhi High Court in CWP No 877 of 1991 Arun Jaitley Ms Ayesha Khatri and Ms Indu Malhotra NP for the Appellant PP Khurana and Arun K Sinha for the Respondent The Judgment of the Court was delivered by VERMA J The respondent HC Khurana was employed as Execu 1037 tive Engineer in the Delhi Development Authority DDA A preliminary memo was served on the respondent on 6111985 alleging some irregularities by him in the construction works and they were being investigated A chargesheet was framed on 1171990 against the respondent on the basis of irregularities in the constructions made in a housing colony On 1371990 the chargesheet was despatched for being served on the respondent However the respondent proceeded on two months medical leave and therefore on 1771990 another Executive Engineer RK Sood working in the same Wing as the respondent received it and gave the intimation that the respondent was on leave adding that the same would be handed over to the respondent on his return from leave On 28111990 the Departmental Promotion Committee DPC met and in view of the earlier decision to initiate disciplinary proceedings against the respondent it followed the sealed cover procedure in the case of respondent It appears that the effort to effect personal service of the chargesheet on the respondent on account of his non availability continued and the same could be served personally on the respondent only on 2511991 As a result of the selection made by the DPC certain persons were promoted to the post of Superintending Engineer while the respondent s matter was kept in obeyance to await the outcome of the disciplinary proceedings In these circumstances the respondent filed Writ Petition No 877 of 1991 in the Delhi High Court claiming a mandamus directing the DDA to promote him as Superintending Engineer with effect from the date on which his juniors had been promoted to the post of Superintending Engineer on the basis of selection made by the DPC The High Court has allowed that writ petition taking the view that the framing of charge would carry with it the duty to issue and serve the same on the employee there was no justification for the respondent to follow the sealed cover procedure in this case on 28111991 when the Departmental Promotion Committee met since actual service of the chargesheet on the respondent was made only after the date on which the DPC met According to the High Court issuance of the chargesheet to the employee means its actual service on him and this should be complete before following the sealed cover procedure The High Court has read Union of India and Others vs KV Jankiraman and Others to this effect for taking the view that on these facts the disciplinary proceedings cannot be said to have been initiated prior to 29111990 when the DPC followed the sealed cover procedure Accordingly the High Court has directed the DDA to 1038 open the sealed cover to promote the respondent as Superintending Engineer if he has been otherwise found suitable by the DPC and in that event lo give him seniority with all consequential benefits from the date on which his juniors were so promoted The judgment of the High Court is challenged by special leave in this appeal The short question for consideration is Whether in the present case the High Court has correctly applied the decision in Jankiraman Learned counsel for the appellant contended that Jankiraman cannot be read to hold in a case like the present where the disciplinary proceedings had been initiated by framing the chargesheet and despatching the same that the chargesheet had not been issued and therefore the sealed cover procedure could not be followed by the DPC on 28111990 On the other hand learned counsel for the respondent strenuously urged that Jankiraman holds that without effective service of the chargesheet on the employee the disciplinary proceedings cannot be said to have been initiated against him Learned counsel for the respondent referred to the Office Memorandum No 22O 11491 Estt A dated 1491992 of the Department of Personnel Training Ministry of Personnel Public Grievances and Pensions Government of India issued in supersession of the earlier Office Memorandum No 220 11286 Estt A dated 1211988 consequent upon the judgment in Jankiraman to support his submission that even though mere issuance or despatch of a chargesheet without the further requirement of its actual service on the employee would now be sufficient according to the OM dated 1491992 for following the sealed cover procedure yet the same was not sufficient earlier according to the OM dated 1211988 which required actual service and not mere issuance of the chargesheet for initiating the disciplinary proceedings Admittedly the guidelines in the OM dated 1211988 were in force in the present case The subject of the two memoranda containing the guidelines is the same as under Promotion of Government servants against whom disciplinarycourt proceedings are pending or whose Conduct is under investigation Procedure and guidelines to be followed emphasis supplied 1039 Para 2 is the relevant portion in these memoranda In 0M dated 1211988 para 2 is as under Cases of Government Servants to whom Sealed Cover Procedure will be applicable 2At the time of consideration of the cases of Government servants for promotion details of Government servants in the consideration zone for promotion falling under the following categories should be specifically brought to the notice of the Departmental Promotion Committee i Government servants under suspension iiGovernment servants in respect of whom disciplinary proceedings are pending or a decision has been taken to initiate disciplinary proceedings iiiGovernment servants in respect of whom prosecution for a criminal charge is pending or sanction for prosecution has been issued or a decision has been taken to accord sanction for prosecution ivGovernment servants against whom an investigation on serious allegations of corruption bribery or similar grave misconduct is in progress either by the CBI or any other agency departmental or otherwise emphasis supplied The substituted clause ii in para 2 in OM dated 1491992 is as under ii Government servants in respect of whom a Chargesheet has been issued and the disciplinary proceedings are pending and emphasis supplied It is the change made in clause ii of para 2 in the OM dated 1491992 from which learned counsel for the respondent tried to find 1040 support for his submission Before we refer to Jankiraman we may advert to clause ii of para 2 of OM dated 1211988 which was the guideline applicable at the material time in the present case and is as under a Government servants in respect of whom disciplinary proceedings are pending or a decision has been taken to initiate disciplinary proceedings emphasis supplied These words clearly indicate that the sealed cover procedure was applicable in cases where the disciplinary proceedings are pending in respect of the government servant or a decision has been taken to initiate disciplinary proceedings Thus on a decision being taken to initiate disciplinary proceedings the guidelines attract the sealed cover procedure The reason is obvious Where a decision has been taken to initiate the disciplinary proceedings against a government servant his promotion even if he is found otherwise suitable would be incongruous because a government servant under such a cloud should not be promoted till he is cleared of the allegations against him into which an inquiry has to be made according to the decision taken In such a situation the correctness of the allegation being dependent on the final outcome of the disciplinary proceedings it would not be fair to exclude him from consideration for promotion till conclusion of the disciplinary proceedings even though it would be improper to promote him if found otherwise suitable unless exonerated To reconcile these conflicting interests of the government servant and public administration the only fair and just course is to consider his case for promotion and to determine if he is otherwise suitable for promotion and keep the result in abeyance in sealed cover to be implemented on conclusion of the disciplinary proceedings and in case he is exonerated therein to promote him with all consequential benefits if found otherwise suitable by the Selection Committee On the other hand giving him promotion after taking the decision to initiate disciplinary proceedings would be incongruous and against public policy and principles of good administration This is the rationale behind the guideline to follow the sealed cover procedure in such cases to prevent the possibility of any injustice or arbitrariness 1041 The question now is What is the stage when it can be said that a decision has been taken to initiate disciplinary proceedings We have no doubt that the decision to initiate disciplinary proceedings cannot be subsequent to the issuance of the chargesheet since issue of the chargesheet is a consequence of the decision to initiate disciplinary proceedings Framing the chargesheet is the first step taken for holding the enquiry into the allegations on the decision taken to initiate disciplinary proceedings The chargesheet is framed on the basis of the allegations made against the government servant the chargesheet is then served on him to enable him to give his explanation if the explanation is satisfactory the proceedings are closed otherwise an enquiry is held into the charges if the charges are not proved the proceedings are closed and the government servant exonerated but if the charges are proved the penalty follows Thus the service of the chargesheet on the government servant follows the decision to initiate disciplinary proceedings and it does not precede or coincide with that decision The delay if any in service of the chargesheet to the government servant after it has been framed and despatched does not have the effect of delaying initiation of the disciplinary proceedings inasmuch as information to the government servant of the charges framed against him by service of the chargesheet is not a part of the decision making process of the authorities for initiating the disciplinary proceedings This plain meaning of the expression used in clause ii of para 2 of OM dated 1211988 also promotes the object of the provision The expression refers merely to the decision of the authority and knowledge of the government servant thereof does not form a part of that decision The change made in clause ii of para 2 in OM dated 1491992 merely clarifies this position by using the expression chargesheet has been issued to indicate that service of chargesheet is not necessary and issue of the chargesheet by its despatch indicates beyond doubt that the decision to initiate disciplinary proceedings was taken In our opinion Jankiraman takes the same view and it is not possible to read that decision otherwise in the manner suggested by learned counsel for the respondent The decision in Jankiraman is based inter alia on OM dated 1211988 The facts of the cases dealt with in the decision in Jankiraman do not indicate that the Court took the view that even though the chargesheet against the government servant was framed and direction given to despatch the same to the government servant as a result of the decision to 1042 initiate disciplinary proceedings taken prior to the meeting of the DPC that was not sufficient to attract the sealed cover procedure merely because service of the chargesheet was effected subsequent to the meeting of the DPC Moreover in Jankiraman itself it was stated thus 14 To bring the record up to date it may be pointed out that in view of the decision of this Court in Union of India vs Tejinder Singh decided on September 26 1986 the Government of India in the Deptt of Personnel and Training issued another Office Memorandum No22011286 A dated January 12 1988 in supersession of all the earlier instructions on the subject including the Office Memorandum dated January 301982 A further guideline contained in this Memorandum is that the same sealed cover procedure is to be applied where a government servant is recommended for promotion by the DPC but before he is actually promoted he is either placed under suspension or disciplinary proceedings are taken against him or a decision has been taken to initiate the proceedings or criminal prosecution is launched or sanction for such prosecution has been issued or decision to accord such sanction is taken 10These differences in the two Memoranda have no bearing on the questions to be answered emphasis supplied PP 117 118 Thereafter in Jankiraman the conclusions of the Full Bench of the Tribunal under consideration were quoted and then while restating that the conclusions of the Tribunal could be reconciled it was further stated thus 17 There is no doubt that there is a seeming contradiction between the two conclusions But read harmoniously and that is what the Full Bench has intended the two conclusions can be reconciled with each other The conclusion No1 should be read to mean that the promotion etc cannot be withheld merely because some disciplinarycriminal proceedings are pending against the employee To deny the said benefit they must be at the relevant time pending at the stage when charge memolcharge sheet has 1043 already been issued to the employee Thus read there is no inconsistency in the two conclusions emphasis supplied PP 119 It will be seen that in Jankiraman also emphasis is on the stage when a decision has been taken to initiate the disciplinary proceedings and it was further said that to deny the said benefit of promotion they must be at the relevant time pending at the stage when charge memocharge sheet has already been issued to the employee The word issued used in this context in Jankiraman it is urged by learned counsel for the respondent means service on the employee We are unable to read Jankiraman in this manner The context in which the word issued has been used merely means that the decision to initiate disciplinary proceedings is taken and translated into action by despatch of the chargesheet leaving no doubt that the decision had been taken The contrary view would defeat the object by enabling the government servant if so inclined to evade service and thereby frustrate the decision and get promotion in spite of that decision Obviously the contrary view cannot be taken Issue of the chargesheet in the context of a decision taken to initiate the disciplinary proceedings must mean as it does the framing of the chargesheet and taking of the necessary action to despatch the chargesheet to the employee to inform him of the charges framed against him requiring his explanation and not also the further fact of service of the chargesheet on the employee It is so because knowledge to the employee of the charges framed against him on the basis of the decision taken to initiate disciplinary proceedings does not form a part of the decision making process of the authorities to initiate the disciplinary proceedings even if framing the charges forms a part of that process in certain situations The conclusions of the Tribunal quoted at the end of para 16 of the decision in Jankiraman which have been accepted thereafter in para 17 in the manner indicated above do use the word served in conclusion No4 but the fact of issue of the chargesheet to the employee is emphasised in para 17 of the decision Conclusion No4 of the Tribunal has to be deemed to be accepted in Jankiraman only in this manner The meaning of the word issued on which considerable stress was laid by learned counsel for the respondent has to be gathered from the 1044 context in which it is used Meanings of the word issue given in the Shorter Oxford English Dictionary include to give exit to to send forth or allow to pass out to let out to give or send out authoritatively or officially to send forth or deal out formally or publicly to emit put into circulation The issue of a chargesheet therefore means its despatch to the government servant and this act is complete the moment steps are taken for the purpose by framing the chargesheet and despatching it to the government servant the further fact of its actual service on the government servant not being a necessary part of its requirement This is the sense in which the word issue was used in the expression chargesheet has already been issued to the employee in para 17 of the decision in Jankiraman In view of the above we are unable to accept the respondent s contention which found favour with the High Court that the decision in Jankiramnan on the facts in the present case supports the view that the decision to initate the disciplinary proceedings had not been taken or the chargesheet had not been issued to the respondent prior to 28111990 when the DPC adopted the sealed cover procedure merely because service of the chargesheet framed and issued earlier could be effected on the respondent after 28111990 on account of his absence Consequently the appeal is allowed and the judgment of the High Court is set aside with the result that the writ petition of the respondent stands dismissed No costs NVK Appeal allowed

Some tax payers of the appellant Municipality filed a writ petition in the High Court challenging the validity of the rules made by it for the levy of consolidated property tax on lands and buildings and also the assessment list prepared and authenticated by the Municipality for the year 1967 68 1968 69 and 1969 70 It was contented before the High Court that Rules 27 4 and 5 of the Rules of the consolidated property tax on the lands and buildings were ultra vires section 991 i and the proviso e to it read with section 21 of the Act and that the assessment lists for the years 1967 68 1968 69 and 1969 70 were invalid since they were prepared without following the procedure laid down in Sections 105 to 112 of the Act The High Court upheld the validity of Rules 27 and 4 and struck down the validity of Rule 5 It also declared that the tax collected by the 803 804 Municipality for the assessment years 1968 69 and 1969 70 in excess of the amounts which may be determined in accordance with the principles laid down was without the authority of law and struck down the assessment list for the year 1967 68 on the ground that it was not prepared in compliance with the procedure I aid down in Sections 105 to 112 of the Act Being aggrieved by the High Court s decision the appellants preferred the present appeals Allowing the appeals this Court HELD 1 It is not the value of occupation of the property to the tenant but the rental income from it to the owner which is to be taken into consideration while estimating the reasonable return that a landlord can expect from his property While estimating or calculating the annual rent which might reasonably be expected from such property the provisions of such legislation have to be taken into consideration Different rent restriction legislations have described the maximum rent recoverable under them differently such as standard rent fair rent etc Hence the annual letting value of the building or land or both to which the rent restriction legislation is applicable cannot exceed the annual standard or fair rent It is the annual standardfair rent which alone therefore can form the basis of the assessment of the property tax by the local authority 809 E G 12 Since there is no non obstante clause in the Gujarat Municipalities Act 1963 this Court refrains from going into the question of non obstante clause in the provisions of the Act levying property tax 810 C 13 If the expression annual letting value in rule 4 is read as the annual letting value as determined by the outer limit prescribed by the standard or fair rent under the rent restriction legislation applicable to the premises which in the present cast is the Bombay Rents Hotel and Lodging House Rates Control Act 1947 the validity of the said rule cannot be assailed 811 B 14 Rule 5 mandates the actual rent received to be taken into consideration for fixation of the annual letting value even if it is in excess of the standard rent fixed under the rent restriction legislation which is contrary to the interpretation placed by this Court on the expression annual letting value The correct mode of getting over the difficulty is to 805 amend Rule 5 itself suitably to take care of such properties Instead of keeping it on the rule book as it is There is nothing to prevent the Municipality from introducing a new rule in place of the said rule 812B E 15 Even without Rule 5 and on the basis of Rule 4 as it is the annual letting value can be calculated on the basis of the standard rent where the rent restriction legislation is applicable Where it is not applicable nothing prevents the Municipality from assessing the properties on the basis of the actual rent received under the same Rule 4 itself 811 F 16 Rule 5 is to be read as being applicable only to the properties which are not governed by the provisions of the Rent Control Act As far as the properties which are amenable to the provisions of the Rent Control Act are concerned their annual letting value will be calculated only on the basis of the standard rent determined or determinable under tile said Act Where the standard rent is determined by the Civil Court of course under the rent restriction legislation the annual letting value will be determined on the basis of such standard rent The rule however goes further and says that in other cases viz 1 where the standard rent is not determined and 2 even if it is determined where actual rent charged is in excess of the standard rent it is the actual rent which will be taken as the basis for calculating the annual letting value The latter two situations do not make distinction between the properties to which the rent restriction legislation is applicable and the properties to which it is not applicable In other words under the rule even where the rent restriction legislation is in force it is the actual rent which will be taken as the basis for calculating the annual letting value if the standard rent is not determined by the Court 817 D 818 E F 17 Rule 5 to the extent it enables the authorities to take the actual rent as the basis for calculating the annual letting value will apply to the properties to which the rent restriction legislation which in the present case is the Bombay Rent Hotel and Lodging Housing Rates Control Act 1947 does not apply 819 B The Corporation of Calcutta vs Smt Padma Debi and Others Corporation of Calcutta vs Life Insurance Corporation of India Guntur Municipal Council vs Guntur Town Rate Payers 806 Association and Dewan Daulat Rai Kapoor and Others vs New Delhi Municipal Committee Others relied on Municipal Corporation Indore vs Smt Ratnaprabha and Others referred to 809 D 2 Section 112 in the context in which it appears is both directory and enabling in nature insofar as it requires the Municipality to authenticate the list before 31st July of the official year That the provisions are no more than directory is clear from the fact that they provide that if the Municipality fails to do its duty the State Government way complete the work by appointing persons to do it This is as it should be since the various provisions of the Act show that the revenue and the expenditure of the Municipality among others is controlled and regulated by the State Government Further the Section requires that the Municipality should complete the authentication of the assessment list before a particular date which in the present case happens to be 31st July of the year It was necessary to incorporate in the section the said provision to give enough time to the State Government to step in and authenticate the list before the end of the official year The official year is the same for the Municipality as well as the State Government and for the purposes of budgeting the provision that the assessment list should be authenticated by the particular date was necessary to be incorporated In any case neither the Municipality is prevented from authenticating it beyond 31st July nor is the person or persons appointed by the State Government prevented from doing so beyond 31st March of the official year 816 E G

minal Appeal No 540 of 1985 From the Judgment and Order dated 27385 22585 of the Patna High Court in Govt Appeal No 28 of 1979 Udai Narain Sinha and MP Jha for the Appellants D Goburdhan for the Respondent ANAND J This appeal under Section 2a of the is directed against the judgment and order of the High Court of Patna dated 27th March 1985 in Government Appeal No 28 of 1979 convicting and sentencing the appellants Shatrugan Singh Al Kapildeo Singh A2 Rampriya Yadav A4 Brij Bihari Singh A5 Ram Ekbal Singh A6 and Suresh Singh A7 Awadesh Singh A3 died after the judgment of the High Court for offences under Sections 302 302149 148 324 and 326 IPC by reversing an order of acquittal recorded by the Additional Sessions Judge VI Patna dated 28th April 1979 While Al and A2 are brothers A3 is the son of A2 A4 is a ploughman of A 1 A5 is the son in law of A2 A6 is the brother in law of A3 and A7 is the son of A6 The prosecution case in brief is that the deceased Shyamdeo Singh was on enimical terms with A1 and A2 and litigation was going on between the two parties On the night intervening 1213 October 1977 at about mid night at village Malia Gaura the appellants along with Awadesh Singh A3 variously armed went to the house of the deceased and knocked at the door of the room in which he was sleeping Rajmani Devi PW 13 the daughter of the deceased alongwith her ailing child was also sleeping in the same room On hearing the knocking she opened the door and found Al A3 and A5 armed with pistols A2 armed with a gun A4 and A7 armed with a grasa each and A6 armed with a dagger present there As soon as she opened the door 5 Kapildeo Singh A2 fired from his gun at her causing an injury to her person Rampriya Yadav A4 hurled a grasa blow as a result of which two of her fingers of the left hand were chopped off Ram Ekbal Singh A6 thereupon told his companions to spare her and to kill her father Shyaindeo Singh for which purpose they had come there Rajmani Devi PW 1 3 was pushed aside by the accused who entered the room When her father moved towards her A1 Shatrugan Singh opened fire at him with his pistol aiming it at his chest Shyamdeo Singh on receipt of the pistol shot fell down in the room and died Ram Ekabal Singh A6 hurled a dagger below on the deceased After committing the crime the accused party opened the entrance door and fled away While they were retreating some villagers who were coming towards the house of the deceased on hearing the noise were also attacked and in the process a gun shot injury was caused to Basant Sao PW II The villagers thereafter made arrangements for a cot to carry Rajmani Devi PW 1 3 to the Police Station and while going to the Police Station they stopped at the house of the local Mukhiya Ram Nandan Singh PW 8 who also accompanied her to the Police Station Naubatpur Basant Sao PW 11 was also brought to Naubatpur Police Station on a cot by his relations and villagers On the basis of the statement of Rajmani Devi PW13 FIR exhibit 7 was drawn up at the Police Station Naubatpur and a case was registered in the early hours of the morning of 13101977 Investigation was immediately taken up by Pameshwar Parshad Singh PW 15 and both the injured Rajmani Devi PW 13 and Basant Sao PW 11 were sent for treatment to Naubatpur Hospital where their injuries were examined by Dr Ramesh Kumar Ran PW14 Considering the serious nature of the injuries of Basant Sao PW II he was referred to Patna Medical College Hospital The investigating officer Parmeshwar Prasad Singh PW 15 visited the place of occurrence and prepared the inquest report of the dead body of Shyamdeo Singh and sent the body forpost mortem examination During the investigation the investigating officer PW 15 seized blood stained earth from the place of occurrence An empty cartridge was produced before the investigating officer by one Ram Rekha Singh After Basant Sao PW11 reached PMCH for treatment information was sent by the doctor to the local police of Pirbahore Police Station ASI Ram Lakhan Jha of Pirbahore Police Station went to the hospital and recorded the statement of Basant Sao PW 11 exhibit 12 on 14101977 at about 8 PM after Basant Sao PWI 1 had regained consciousness He sent the same to the officer 6 in charge of Naubatpur Police Station Mr Udai Sinha learned senior advocate appearing for the appellants submitted that the version of the occurrence given by Basant Sao PW 11 in his statement recorded at PMCH by Ram Lakhan Jha DW1 exhibit 12 was materially different from the statement of Rajmani Devi PW 1 3 recorded as FIR exhibit 7 at Police Station Naubatpur and gave a lie to the prosecution case rendering the prosecution case doubtful Learned counsel submitted that the High Court erroneously ignored the statement of Basant Sao PW 11 holding it inadmissible in evidence on the ground that it had been recorded after the investigation in the instant case had started on the FIR being lodged by Rajmani Devi PW 13 According to the learned counsel statement of Basant Sao exhibit 12 could not be said to have been recorded during the investigation of the case and should not have been ruled out of consideration We cannot agree In our opinion the High Court was justified in ignoring the statement of Basant Sao exhibit 12 as it admittedly was recorded during the investigation of the case registered on the basis of FIR exhibit 7 and had been sent to the investigating officer PW 15 by Ram Lakhan Jha DW 1 The statement was therefore hit by Section 162Cr PC and could not be read in evidence Even if be assumed for the sake of argument though without accepting it that exhibit 12 was in the nature of an FIR lodged by Basant Sao PWI 1 the same could not have been brought on record as not only Basant Sao PW11 denied making any such statement he was not even confronted with the alleged statement exhibit 12 nor his signatures got proved on it exhibit 12 could not therefore be read at all in evidence The trial court not only committed an error in bringing on record exhibit 12 and reading it in evidence but also going further and comparing it with FIR exhibit 7 lodged by Rajamani Devi and finding discrepancies in the two documents Learned counsel then submitted that due to the admitted enmity between the parties and the hostility of the Mukhiya of the Gram Panchayat PW8 towards A1 and A2 it would not be safe to rely upon the testimony of the prosecution witnesses without looking for independent corroboration and since none was forth coming in the case the conviction of the appellants was not justified In view of the hostile relations between the parties and the fact that all the accused are closely related to each other and the prosecution 7 witnesses are also closely related or connected with each other we have scrutinised the evidence on the record with care Our independent and careful appraisal of the evidence on the record has convinced us that the version given by the first informant PW13 about the occurrence in the first FIR exhibit 7 lodged almost within three hours of the occurrence is a truthful version of the manner in which she had received the injuries as also how her father had been shot at and as to who the assailants were Rajmani Devi PW 13 is the injured person and as such she would be the last person to spare her real assailants or the assailants of her father and substitute the real assailants by innocent persons She was the first victim of the assault Her statement in court corroborates FIR exhibit 7 and the medical evidence and the testimony of other witnesses lends sufficient corroboration to her testimony From the evidence on the record it is established that Rajmani Devi PWI 3 was sleeping along with her child in the same room as her father deceased Shyamdeo Singh at the time of the occurrence She knew all the appellants and she had enough time to see them in the light of the burning lantern It is the consistent case of prosecution witnesses PW9 PW 1 0 and PW 1 2 that a lantern was burning in the room and the mere fact that the investigating officer failed to take the lantern into possession cannot render the testimony of these witnesses doubtful Rajmani Devi PW13 attributed specific acts to Kapildeo Singh A 1 and Rampriya Yadav A4 in so far as the injuries on her own person were concerned and to Shatrugan Singh A1 in so far as the fatal pistol shot on her father was concerned She of course deposed that the other accused persons variously armed were also present at the time of occurrence Kunti Devi PW10 the sister of Rajmani Devi PWI 3 stated that after hearing the sound of gun shot she woke up and went into the room where her sister was sleeping with the child She then went on to say I saw that the accused Kapildeo Singh Shatrugan Singh and Awadesh Singh were coming out from the room of my father Besides these other people were also there but I could not recognize them due to darkness A lantern was hitting up in the room of my father I had recognised the aforesaid three accused persons in the lantern light This witness 8 therefore recognized only Al A2 and A3 though she knew all the accused persons Varat Devi PW 1 2 the sister in law of the deceased Shyamdeo Singh who was also present in the house on the night of the occurrence and was sleeping in another room with Kunti PW 1 0 and the wife of the deceased deposed that at mid night she heard the shot of a gun and as she got up and opened the door to go out she saw some persons coming out from Shyamdeo Singh s room She went on to say that out of them I recognized Kapildeo Singh Shatrugan Singh and Awadesh Singh All the three accused persons are present in the court This witness also thus recognized only three accused Al A2 and A4 even though according to the prosecution case all the accused were known to her Ram Nandan Singh PW8 who according to the prosecution case being the Mukhiya of the village went to the police station stated in his examination that he had told the police that seven persons had their hand in the killing of the deceased but admitted in the cross examination that before the police he had named only two accused persons namely Kapildeo Singh A2 and Shatrugan Singh A1 as the assailants Rajeshwar Singh PW5 a neighbour of the deceased who woke up on hearing the firing of the gun and went to the house of the deceased stated that he had seen the deceased Shyamdeo Singh lying an Rajmani Devi PWI3 sitting near the dead body with injuries on her breast and fingers and that on his inquiry from Rajmani Devi PW 1 3 as to what had happened was told by her that Kapildeo Singh had caused her the injury by his gun and that Rampriya Yadav had cut her fingers with a grasa and that Shatrugan Singh had killed her father by the shot of pistol This witness has also therefore supported PW13 about the manner of assault and the nomination of the actual assailants From an analysis of the evidence referred to above it is clear that while Rajmani Devi PW 1 3 had named all the seven accused she had attributed specific acts onlyto Kapildeo Singh A2 Rampriya Yadav A4 and Shatrugan Singh A 1 Kunti Devi PW10 and Varat Devi PW 12 on I their own showing had recognized only Kapildeo Singh A2 Shatrugan Singh Al and Awadesh Singh Al They did not recognize and other accused persons even though they were known to them PW5 also did not state that Rajmani Devi PW13 had given to him the names 9 of any other accused when he had reached her house soon after the occurrence In view of the admitted enmity between the parties and the close relationship of the witnesses inter se and the close relationship of the accused persons with one another the possibility that alongwith the actual assailants some other have also been implicated cannot be ruled out Prudence therefore requires that this court should look for corroboration of the testimony of PWI3 in respect of each of the accused before finding them guilty Since the prosecution witnesses referred to above knew each of the accused the non identification by any one of them of A5 A6 and A7 renders the presence of these accused and their participation rather doubtful It is not possible to say with any amount of certainty that they were actually involved in the commission of crime with the other accused persons Of course PW 1 3 would not leave her own assailants or the assailants of her father but it is not unknown that in view of the pronounced hostility between the parties the close relations of A 1 A2 A3 and A4 namely accused A5 A6 and A7 may have also been roped in Though PW 1 0 and PW 12 did not recognize Rampriya Yadav A4 as one of the accused but the participation of Rampriya Yadav A4 who according to Rajmani Devi PWI3 had given her the blow with the grasa chopping off her two fingers of the left hand in our opinion has been conclusively established The presence of Awadesh Singh A3 since deceased is admitted by all the prosecution witnesses The testimony of Rajmani Devi PW 1 3 is consistent about the participation of Shatrugan Singh Al and Kapildeo Singh A2 alongwith Rampriya Yadav A4 in the crime Inspite of lengthy cross examination nothing has been brought out to discredit her testimony in so far as either the occurrence or the actual assault on her and the deceased is concerned The ocular testimony regarding the participation of the accused in the crime as well as the manner of assault and the nature of weapons used by A1 A2 and A4 for causing injuries has received ample corroboration from the medical evidence and the recovery of the blood stained clothes and earth from the place of occurrence The FIR lodged by the injured witnesses promptly also lends enough assurance as regards the participation of A 1 A2 A3 and A4 in the crime We have therefore no hesitation to hold that the prosecution has established the case against Shatrugan Singh A1 Kapildeo Singh A2 Awadesh Singh A3 since dead and Rampriya Yadav A4 beyond any reasonable doubt 10 This now takes us to the question of the nature of the offence committed by the aforesaid four appellants Since we have doubted the presence of A5 A6 and A7 and their participation in the crimethey are entitled to the benefit of doubt and giving them the benefit of doubt we allow their appeal and setting aside their conviction and sentence acquit them With the acquittal of A5 A6 and A7 it is only the four appellants Al A2 A3 and A4 against whom the prosecution can be said to have established its case beyond a reasonable doubt Section 148 IPC under the circumstances would have no application Similarly Section 149 IPC would also not be attracted and A2 A3 and A4 cannot be convicted under Section 302 with the aid of Section 149 IPC From the prosecution evidence however it stands amply established that the three appellants Al A2 and A4 alongwith A3 since dead had come together armed with deadly weapons to the house of the deceased Shyamdeo Singh and while Al Shatrugan Singh had fired pistol shot at Shyamdeo Singh resulting in his death Kapildeo Singh A2 had fired from his gun at Rajmani Devi PW 13 causing her a serious injury on her breast while Rampriya Yadav A4 had caused her grievous injuries with a grasa resulting in the chopping off two of her fingers of the left hand The crime was committed in the presence of Awadesh Singh A3 Therefore while A2 A3 and A4 cannot be convicted for the offence under Section 302149 IPC all of them can be said to have shared the common intention with Shatrugan Singh Al for committing the murder of Shyamdeo Singh deceased The very fact of Al A2 A3 and A4 came together armed with deadly weapons at the night to the house of the deceased and cause deadly injuries to the deceased and seriously wounded Rajmani Devi PW 13 and thereafter escaped together would undoubtedly go to show that all of them shared the common intention to murder Shyamdeo Singh They are therefore liable to be convicted with the aid of Section 34 IPC and learned counsel was unable to point out any impediment in the way of convicting them with the aid of Section 34 IPC instead of Section 149 IPC The evidence on the record has established beyond any doubt that Shatrugan Singh A 1 committed the murder of Shyamdeo Singh deceased by firing the pistol shot He has therefore rightly been 11 convicted by the High Court for the offence under Section 302 IPC and sentenced to suffer imprisonment for life His conviction for the offence under Section 27 of the Arms Act and the sentence of two years R 1 is also justified We maintain his conviction and sentence on both counts We however alter the conviction of Kapildeo Singh A2 Awadesh Singh A3 and Rampriya Yadav A4 for the offence under Section 302149 lPC to the one under Section 30234 IPC and sentence A2 and A4 each to suffer imprisonment for life A3 being already dead We maintain the conviction of Kapildeo Singh A2 for the offence under Section 27 of the Arms Act as also the sentence of two years RI imposed on him for the said offence His conviction and sentence for an offence under Section 324 IPC as recorded by the High Court is also maintained Rampriya Yadav A4 has also been convicted for the offence under Section 326 IPC and sentenced to three years RI We maintain his conviction and sentence for the said offence The conviction of A1 A2 and A4 for the offence under Section 148 is however set aside The sentence of imprisonment imposed on Al A2 and A4 on different counts shall however run concurrently As a result of the above discussion the appeal of Brij Bihari Singh A5 Ram Ekbal Singh A6 and Suresh Singh A7 is accepted and allowed Their conviction and sentence as recorded by the High Court are set aside They are given the benefit of the doubt and acquitted They are on bail Their bail bonds shall stand discharged The appeal of Al A2 and A4 except to the extent of the modification of the judgment under appeal as indicated above is dismissed All the three appellants Shatrugan Singh A1 Kapildeo Singh A2 and Rampriya Yadav A4 are on bail Their bail bonds shall stand cancelled They shall be taken into custody to under go the remaining period of their sentence GN Appeal partly allowed

The appellant assessee was a cooperative society engaged in the business of banking The previous year relevant to the assessment year 1963 64 was the year ending June 30 1962 The business income of the assessee was exempt under the provisions of Section 801 as it then stood During the aforesaid accounting yew the assessee received a sum of Rs 19 being the interest on the deposit made by it with an Electricity Distribution Company This deposit had to be made by the assessee as it was required by the conditions notified by the electricity company for supply of energy and it carried interest It was on account of the said deposit that the sum of Rs 19 was received by the assessee by way of interest The Income tax Officer treated the amount of Rs 19 as income from other sources and on that basis he levied additional surcharge in a sum of Rs 81920 The assessee appealed to the Appellate Assistant Commissioner who upheld the assessee s contention that the said sum of Rs 19 constituted its business income and was therefore exempt He held that the levy of surcharge was unsustainable The Revenue appealed to the Appellate Tribunal which held that it was income from business and accordingly dismissed the Revenue s 997 998 appeal At the instance of the Revenue the Tribunal referred the question to the High Court The High Court held that the assumption made by the Appellate Assistant Commissioner and the Tribunal that the liability of surcharge was not attracted in case the said sum of Rs 19 represented business income may not be warranted and that in such a situation the High Court does possess the power to correct the error so long as the point arose out of the Tribunal s order It returned the reference unanswered and directed the Tribunal to consider the case on all points that require consideration of the question whether additional surcharge was attracted In the assessee s appeal to this Court it was submitted that the High Court exceeded its jurisdiction in making the aforesaid direction that the High Court widened the scope of enquiry which it was not empowered to do in a reference under Section 256 and that the matter should be sent back to the High Court for answering the question of law as stated by the Tribunal Dismissing the appeal this Court HELD All that the High Court has asked the Tribunal to do is to consider whether the liability of surcharge is not attracted even if the said sum of Rs 19 is treated as income from business The fact that the revenue was also a party to the said erroneous assumption before the Tribunal cannot stand in the way of the Revenue resiling from an er roneous assumption of law 1004 D F In the instant case the question was whether additional surcharge was leviable for the assessment year 1963 64 under the relevant Finance Act The assessee s contention was that it had no income which was liable to be assessed to income tax inasmuch as its entire income was exempt under Section 81 1 a and it was submitted that the sum of Rs 19 was also a business income and therefore the liability of additional surcharge did not attach to the assessee The ITO took the view that the said sum of Rs 19 represented income from other sources and therefore liability of additional surcharge was attracted The Appellate Assistant Commissioner upheld this contention The High Court however thought that having regard to the language of the provisions of the relevant Finance Act the Tribunal ought to examine whether the liability to additional 999 surcharge was attracted even if the said sum of Rs 19 was treated as income from business The High Court was of the opinion that this legal submission though raised for the first time did call for serious consideration This was done to arrive at a correct decision in law relating to the liability to additional surcharge If really additional surcharge was chargeable according to the Finance Act even In case the said sum of Rs 19 represented business income the High Court cannot be called upon to act on the assumption that it is not so chargeable and answer the question stated Such a course would neither be in the interest of law or justice That the Revenue was also a party to the erroneous assumption of law makes little difference to the principle 1004 B F CIT Bombay vs Scindia Steam Navigation Ltd 42 ITR 589 relied on1004 H VRYKN Kallappa Chettiar vs Commissioner of Income Tax CL T vs Ogale Glass Works Ltd 25 ITR 529 Keshav Mills Co Ltd vs Commissioner of Income Tax Bombay North Ahmedabad Commissioner of Income Tax Bihar and Orissa vs Kirkend Coal Co 74 ITR 67 and Kusumben D Mahadevia vs Commissioner of Income Tax Bombay City not applicable 1004 H

Appeal No 6120 of 1983 From the Judgment and Order dated 2541983 of the Disciplinary Committee of the Bar Council of India in BCI Tr Case No 32 of 1982 Bharat Sangal for the Appellant VR Reddy Addl Solicitor General T Ratnam and DN Goburdhan for the Respondents by MOHAN J This is a statutory appeal under Section 38 of the Advocates Act of 1961 The brief facts are as under The respondent engaged the appellant as a counsel in suit No 510 of 1964 this was in April 1976 The suit was ultimately compromised on 14677 It was ordered that out of the total amount lying with the court receiver a sum of Rs 64000 shall be paid over to the plaintiff the balance was to be paid to the respondent and possession of suit property was to be handed over to the respondent by the court receiver During the pendency of the suit the court receiver inducted one Usman Ghani Haji Mohamed as a tenant He filed CS No 7 of 1978 praying for an interim injunction restraining the court receiver from handing over possession to the respondent That suit was continued After the compromise decree was passed on 14677 the appellant who was the counsel for the respondent was requested to withdraw the amount lying with the court receiver and hand over the same to the 1009 respondent For this purpose a letter of authorisation to enable the appellant to receive the amount was also issued Pursuant to the letter of authorisation and instructions a total amount of Rs 50379 was withdrawn by the appellant from the court receiver Out of this he paid only Rs 18000 and the rest was not paid Therefore the respondent preferred a complaint before the Bar Council of India on 9181 The appellant was issued a notice by the Bar Council to which he submitted his reply On consideration of his reply and hearing the arguments the Disciplinary Committee of the Bar Council of India was of the view that the burden of proving the fact that the respondent had paid a sum of Rs 50379 lay on the appellant Certain receipts produced to evidence payment to the respondent were not accepted The plea of the appellant that the account books had been lost was held to be untrue Ultimately the appellant was suspended for a period of two years and further directed to pay a sum of Rs 500 to the complainant the respondent herein It is against this order the present appeal has been preferred Learned counsel for the appellant took us through the impugned order and urged that the Committee had not properly appreciated the evidence especially the receipts which were produced by the appellant to evidence the payment It is incorrect to hold that the receipt dated 8877 was a suspicious document merely because the account books were not produced it would not follow that the payments made by the appellant could be disbelieved We pointed out to the learned counsel for the appellant that the order under appeal is unexceptional and there was no case for interference We felt that the order of suspension of two years was not commensurate with the charges of misappropriation Therefore we directed the issue notice to the appellant which came to be accepted by the learned counsel Mr Bharat Sangal Inspite of the fact that the appellant has not chosen to appear in order to make over the payment of the amount voluntarily Therefore we are left with no option then to decide the case ourselves on merits The Disciplinary Committee of the Bar Council on a proper appreciation of the evidence disbelieved the so called receipts evidencing the payment It has come to the correct conclusion that the receipt dated 8th of August 1979 was got up on a blank signed paper Hence the due 1010 execution of the receipt had not been proved by the appellant Besides the statement of the appellant that the account books had been lost in transit had been rightly disbelieved Under these circumstances this is a clear case wherein the misappropriation by the appellant has been fully established Once this conclusion is arrived at the question is what is the punishment to be imposed Advocacy is not a craft but a calling a profession wherein devotion to duty constitutes the hall mark Sincerity of performance and the earnestness of endeavor are the two wings that will bare aloft the advocate to the tower of success Given these virtues other qualifications will follow of their own account This is the reason why legal profession is regarded to be a noble one But it cannot be allowed to become a sorriest of trades It will be useful to quote what Sharaswood said of this profession A lower without the most sterling integrity may shine for a while with meteoric splendor but his light will soon go out in blackness of darkness It is not in every man s power to rise to eminence by distinguished abilities It is not in every man s power with fe w exceptions to attain respectability competence and usefulness The temptations which beset a young man in the outset of his professional life especially if he is in absolute dependence upon business for his subsistence are very great The strictest principles of integrity and honour are his only safety Let him begin by swerving from truth or fairness in small particulars he will find his character gone whispered away before he knows it Such a one may not indeed be irrecoverably lost but it will be years before he will be able to regain a firm foothold There is no profession in which moral character is so soon fixed as in that of the law there is none in which it is subjected to severer scrutiny by the public It is well that it is so The things we hold dearest on earth out fortunes reputations domestic peace the future of those dearest to us nay our liberty and life itself we confide to the integrity of our legal counselors and advocates Their character must be not only without a stain but without suspicion From the very commencement of a lawyer s career let him cultivate 1011 above all things truth simplicity and candor They are cardinal virtues of a lawyer Let him always seek to have a clear understanding of his object be sure it is honest and right and then march directly to it The covert indirect and insidious way of doing anything is always the wrong way It gradually hardens the moral faculties renders obtuse the perception of right and wrong in human actions weighs everything in the balance of worldly policy and ends most generally in the practical adoption of the vile maxim that the end sanctifies the means Therefore an exacting standard is what is expected of an advocate This court has taken the view in M Veerabhadra Rao vs Tek Chand 1984 Supp SCC 571 as to how in such a case professional misconduct has to be dealt with In that case the advocate committed forgery by attesting false affidavits which was held to be a serious misconduct This court pointed out the duties of the members of the bar in the following passage Legal profession is monopolistic in character and this monopoly itself inheres certain high traditions which its members are expected to upkeep and uphold Members of the profession claimed that they are the leaders of thought and society In the words of Justice Krishna Iyer in Bar Council of Maharashtra vs MV Dabholkar 19751 2 SCC 702 the role of the members of the Bar can be appreciated He said at page 718 The bar is not a private guild like that of barbers butchers and candlestick makers but by bold contrast a public institution committed to public justice and pro bono public service The grant of a monopoly licence to practice law is based on three assumptions 1 There is a socially useful function for the lawyer to perform 2 The lawyer is a professional person who will perform that function and 3 His performance a a professional person is regulated by himself and more formally by the profession as a whole The central function that the legal profession must perform is nothing less than the ad 1012 ministration of justice The Practice of Law is a Public Utility The Lawyer the Public and Professional Responsibility by F Raymond Marks et al Chicago American Bar Foundation 1972 pp 288 289 A glance at the functions of the Bar Council and it will be apparent that a rainbow of public utility duties including legal aid to the poor is cast on these bodies in the national hope that the members of this monopoly will serve society and keep to canons of ethics befitting an honorable order If pathological cases of member misbehavior occur the reputation and credibility of the Bar suffer a mayhem and who but the Bar Council is more concerned with and sensitive to this potential disrepute the few black sheep bring about The official heads of the Bar ie the Attorney General and the Advocates General too are distressed if a lawyer stoops to conquer by resort to soliciting touting and other corrupt practices If these are the high expectations of what is describes as a noble profession its members must set an example of conduct worthy of emulation If any of them falls from that high expectation the punishment has to be commensurate with the degree and gravity of the misconduct Accordingly the punishment was increased to one of suspension for a period of five years having regard to the gravity of the misconduct and keeping in view the motto that the punishment must be commensurate with the gravity of the misconduct In the case on hand admittedly the complainant respondent does not know English It is equally admitted that the appellant had withdrawn the money from the Court Receiver None of the correspondence addressed to the respondent mentioned about the receipt dated 8th of August 1977 The plea taken by the appellant based on the receipt is clearly false The appellant has been withdrawing the money over 14 years and he has illegally retained the amount Out of a sum of Rs 50379 which was admittedly withdrawn from the court receiver only Rs 18000 was paid on different occasions The said amount was also spread over and paid on 1013 different occasions On a direction of this court a sum of Rs 10000 had been deposited by the appellant which has been withdrawn by the respondent as per order dated 3rd September 1991 Still a sum of Rs 22379 is due In view of the established finding of misappropriation we think the proper punishment will be the name of the Advocate must be struck off the rolls We order accordingly In addition to this the question arises whether we can direct the refund of the sum of Rs 22379 which still is pending for the appellant Section 38 of the Advocates Act says as follows Appeal to the Supreme Court Any person aggrieved by an order made by the disciplinary committee of the Bar Council of India under Section 36 or Section 37 or the Attorney General of India or the Advocate General of the State concerned as the case may be may within sixty days of the date on which the order is communicated to him prefer an appeal to the Supreme Court and the Supreme Court may pass such order including an order varying the punishment awarded by the disciplinary committee of the Bar Council of India thereon as it deems fit Provided that no order of the disciplinary committee of the Bar Council of India shall be varied by the Supreme Court so as to Prejudicially affect the person aggrieved without giving him a reasonable opportunity of being heard when it says deems fit it must be construed as to meet the ends of justice We feel the respondent should not be driven to a civil court for recovery of this amount even when the appellant has been found guilty by his own peers which we have also confirmed Therefore we direct that there shall be a decree in favour of the respondent complainant for a sum of Rs 22379 together with interest at 9 per annum from the date of the complaint till the date of payment The appeal is dismissed in the above terms with costs of the respondent which is quantified at Rs 3000 Rs three thousand only Before we part with the case we may usefully quote Harry R Blythe 1014 cited in Great God the hour has come when we must clear The legal fields from poison and from fear We must remould our standards build them higher And clear the air as though by cleansing fire Weed out the damning traitors to the law Restore her to her ancient place of awe VPR Appeal dismissed

The respondent who was employed as an Executive Engineer in the DDA appellant was served on 61185 a preliminary memo alleging irregularities committed by him in the construction works and that they were being investigated On 11790 a chargesheet was framed on the basis of these irregularities and on 13790 the chargesheet was despatched for being served on him The respondent however proceeded on two months medical leave and therefore on 17790 another Executive Engineer workIng in the same Wing as the respondent received It and gave intimation that the respondent was on leave and adding the same would be handed over to the respondent on his return from leave A Departmental Promotion Committee met on 281190 and in view of the earlier decision to Initiate disciplinary proceedings against the respondent It followed the sealed cover procedure in the case of the respondent Efforts to effect personal service of the chargesheet on the respondent on account of his non availability continued and the same could be served personally on him only on 25191 As a result of the selection made by the DPC certain persons were promoted to the post of Superintending Engineer while the respondent s matter was kept In abeyance to await the result of the disciplinary proceedings The respondent riled a writ petition In the High Court for a writ of 1034 mandamus directing the DDA to promote him as Superintending Engineer with effect from the date on which his juniors had been promoted to the said post on the basis of the selection by the DPC The High Court allowed the writ petition relying on Union of India and Others vs K V Jankiraman and Others and taking the view that the framing of charge would carry with it the duty to issue and serve the same on the employee that there was no justification for the DDA to follow the sealed cover procedure in this case on 281191 when the Departmental Promotion Committee met since actual service of the chargesheet was made only after the date on which the DPC met Accordingly the High Court directed the DDA to open the sealed cover and to promote the respondent as Superintending Engineer if otherwise found suitable by the DPC and to give him seniority and all consequential benefits from the date on which his juniors were so promoted The DDA appellant challenged the aforesaid decision by special leave in this Court and contended that fankiraman cannot be read to hold in a case like the present one where the disciplinary proceedings have been initiated by framing the chargesheet and despatching the same that the chargesheet had not been issued and therefore the sealed cover procedure could not be followed by the DPC on 281190 On behalf of the respondent official it was urged that Jankiraman holds that without effective service of the chargesheet on the employee the disciplinary proceedings cannot be said to have been initiated and reliance was also placed on the Office Memorandum dated 12188 which required actual service and not mere issuance of the chargesheet for initiating the disciplinary proceedings Allowing the appeal and setting aside the judgment of the High Court this Court HELD 1 The sealed cover procedure is applicable in cases where the disciplinary proceedings are pending in respect of the government servant or a decision has been taken to initiate disciplinary proceedings Thug on a decision being taken to initiate disciplinary proceedings the guidelines contained in OMs dated 14992 and 12188 attract the sealed cover procedure 1040 D 2 The decision to initiate disciplinary proceedings cannot be sub 1035 sequent to the issuance of the chargesheet since issue of the chargesheet is a consequence of the decision to initiate disciplinary proceedings The service of the chargesheet on the government servant follows the decision to initiate disciplinary proceedings and it does not precede or coincide with that decision The delay if any if service of the chargesheet to the government servant after it has been framed and despatched does not have the effect of delaying initiation of the disciplinary proceedings inas much as information to the government servant of the charges framed against him by service of the chargesheet is not a part of the decision making process of the authorities for initiating the disciplinary proceedings 1041 B D 3The plain meaning of the expression a decision has been taken to initiate disciplinary proceedings used in clause ii of para 2 of OM dated 12188 also promotes the object of the provision The expression refers merely to the decision of the authority and knowledge of the government servant thereof does not form a part of that decision The change made in clause ii of para 2 in OM dated 14992 merely clarifies this position by using the expression chargesheet has been issued to indicate that service of chargesheet is not necessary and issue of the chargesheet by its despatch indicates beyond doubt that the decision to initiate disciplinary proceedings was taken Jankiraman takes the same view and it is not possible to read that decision otherwise 1041 E F 4 The decision in Janiraman is based interalia on OM dated 12188 The facts of the cases dealt with in the decision in Jankiraman do not indicate that the court took the view that even though the chargesheet against the government servant was framed and direction given to despatch the same to the government servant as a result of the decision to initiate disciplinary proceedings taken prior to the meeting of the DPC that was not sufficient to attract the sealed cover procedure merely because service of the chargesheet was effected subsequent to the meeting of the DPC 1041 H 1042 A 5 Issue of the chargesheet in the context of a decision taken to initiate the disciplinary proceedings must mean as it does the framing of the chargesheet and taking of the necessary action to despatch the chargesheet to the employee to inform him of the charges framed against him requiring his explanation and not also the further fact of service of the 1036 chargesheet on the employee It is so because knowledge to the employee of the charges framed against him on the basis of the decision taken to initiate disciplinary proceedings does not form a part of the decision making process of the authorities to initiate the disciplinary proceedings even if framing the charges forms a part of that process in certain situations 1043 E F 6 The meaning of the word issued has to be gathered from the context in which it is used The issue of a chargesheet therefore means its despatch to the government servant and this act is complete the moment steps are taken for the purpose by framing the chargesheet and despatching it to the government servant the further fact of its actual service on the government servant not being a necessary part of its requirement This is the sense in which the word issue was used in the expression chargesheet has already been issued to the employees in para 17 of the decision in Janakiraman 1044 B C 7 The decision to initiate the disciplinary proceedings against the respondent had been taken and chargesheet had also been issued to the respondent prior to 281190 when the DPC adopted the sealed cover procedure It cannot be held otherwise merely because service of the chargesheet framed and issued earlier could be effected on the respondent after 281190 on account of the absence of the respondent 1044 D Union of India and Others vs KV Jankiraman and Others referred to and relied on 1037 G

Appeal No 372 of 1979 From the Judgement and Order dated 2551978 of the Delhi High Court in Civil Writ Petition No 1494 of 1973 Dr NM Ghatate and DN Mishra for JBD Co for the Appellant VC Mahajan C Ramesh and CV Subba Rao for the Respon dents The Judgment of the Court was delivered by BP JEEVAN REDDY J The appeal is preferred against the judgment of the Delhi High Court allowing the writ petition filed by the second respondent Ms Ferro Alloys Corporation Ltd The writ petition was directed against the judgment and order of the Government of India Ministry of Finance dated September 19 1973 in an appeal preferred under paragraph 9 of the Tax Credit Certificate Exports Scheme 1965 The second respondent is the manufacturer cxportcr of ferro manganese and chrome concentrates During the year 1964 65 from February 28 1965 to June 5 1965 the second respondent entered into a number of agreements with the foreign buyers for the sale of the aforesaid two commodities The export was routed through the M MTC the appellant herein to bring it within the system of private barter introduced by the Government of India with a view to encourage exports It would be appropriate to notice the essential features of the barter system in vogue during the relevant period at this stage The main objective behind the system was to provide a mechanism which would result in increased export of particular commodities which were ordinarily difficult to sell abroad and to destinations in which the selling countries were not able to _Pet a foot hold This objective was sought to be achieved by linking them to imports of an equivalent or 15 lesser value of essential commodities which in any event the country had to import All barter proposals were scrutinized in the first instance by the MMTC and then by the Barter Committee The essential stipulations were i All imports made under barter deals were subject to such sale price and distribution control as were laid down by the Government and iiAll barter deals were to be routed through STC MMTC unless otherwise decided upon by barter committee As and when approval was given by the Government of India a letter of indent used to be issued by the MMTC to the bartering firm or the local supplier as the case may be In this case there was no bartering firm Ferro Alloys was directly sending the goods As far as purchase and sale contracts were concerned the MMTC insisted that there should be one contract of sale between the local supplier and the MMTC and another contract of sale by the MMTC to the foreign buyer on principal to principal basis The foreign exchange so generated under this arrangement was the basis for issue of import licences which were issued in the name of MMTC with the letter of authority in favour of the bartering firm or the local supplier as the case may be This enabled the bartering firmlocal supplier to import the approved commodity under its approval barter and thus he in a position to recoup the losses incurred by it in arranging the supply or in supplying as the case may be of export commodities to the MMTC It was agreed and understood that the ferro alloys should intimate the foreign buyer to enter into a direct contract with the MMTC treating it as the seller It was also agreed that G RI Form prescribed by the Reserve Bank of India under the Rules framed under the Foreign Exchange Regulation Act for accounting the receipt of foreign exchange was to be signed by the MMTC showing it as the exporter and seller vis a vis the foreign buyer Letters of credit was also to be opened in the name of MMTC which was to be assigned to the Feffo alloys This was done with a view to enable the Ferro alloys to receive the payment directly for the goods supplied to MMTC The Shipping Bill which is a document prescribed under the Customs Act was also to be made out 16 showing MMTC as the exporter The transactions were gone through Dispute arose between the parties when the question of issuance of a tax credit certificate under Section 280 Z C of the Income Tax Act arose Sub section 1 of section 280 Z C as in force at the relevant time read as follows Tax Credit Certificate in relation to exports 1 Subjects to the provisions of this section a person who exports any goods or merchandise out of India after the 28th day of February 1965 and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act 1947 7 of 1947 and the rules made thereunder shall be granted a tax credit certificate for an amount calculated at a rate not exceeding fifteen per cent on the amount of such sale proceeds A reading of the sub section shows that the tax Credit Certificate is issued to the person who exports any goods or merchandise out of India after the 28th day of February 1965 and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act 1947 and the Rules made thereunder Question therefore arose who is the person in the case of this transaction who can be said to have exported the goods and received the sale proceeds in the shape of foreign exchange The matter was taken in appeal before the Government of India under paragraph 9 of the Tax Credit Certificate Exports Scheme 1965 On an elaborate consideration of the bartering scheme and the several documents which came into existence in connection with the transactions between the parties the Government of India held that the MMTC must be held to be the exporter for the purpose of Section280ZC and not the Ferro alloys This order was challenged by Ferro alloys by way of a writ petition in the High Court The High Court allowed the writ petition on the following reasoning While the terms of the scheme of barter and the 17 arrangement between the exporter and the Corporation visualizes in theory that the contracts to be entered into between the exporter and the foreign buyers would be duly substituted by principal to principal contracts between the foreign buyer and the Corporation as well as the Corporation and the Indian supplier of the goods so that the Corporation virtually gets substituted for the exporter for all external appearance in actual practice however it appears that the substituted contracts are rarely executed and were in any event not executed in the present case at either of the two ends although the letter of credits were opened by the foreign buyers in favour of the Corpo ration and the shipments were made in some cases in the name of the Corporation on account of the exporter while in the others in the name of the exporter on account of the Corporation No consideration however passed between the Corporation and the exporter on account of any sale of the commodity to the Corporation The letters of credit being transferable are endorsed immediately on receipt in favour of the exporter by the corporation and the sale proceeds are directly realized by the exporters through their bankers and the commission of the Corporation agreed to is paid by the exporter to the Corporation The declaration under Section 12 of the Foreign Exchange Regulations Act in Form GR I contains the name of the Corporation as the exporter But the form lists the name of the exporters banker as the banker concerned In other words the High Court s approach was that while for external appearances the corporation was given out as the exporters Ferro alloys was the real exporter for all purposes and it was Ferro alloys which earned and received the foreign exchange MMTC got only its commission of 2 and nothing more Alternatively held the High Court even if it is held that the documents executed between the parties had the legal effect of transferring title in the goods to and in favour of the Corporation even so Ferro alloys must be deemed to be 18 the real exporter for the purposes of Section 280ZC having regard to the objective underlying the said section viz providing an additional incentive to the real exporter The correctness of the said view is questioned in this appeal Though the second respondent Ferro alloys Corporation Ltd has been served no one appears on its behalf We are therefore obliged to dispose of this appeal only with the assistance of the counsel for the MMTC May be that there are factors in this case supporting the contentions of both the parties In such a case we have to decide the question on a totality of relevant factors applying the test of predominance It is true that there was initially an agreement or contract between Ferro alloys and the foreign buyer for export of manganese and other goods but that was substituted and superseded by the two contracts entered into with respect to the very same goods One contract was between Ferro alloys and MMTC for sale of the said goods to and in favour of MMTC and the other was a sale by MMTC to the foreign buyer It is significant to notice that these contracts were on principal to principal basis Apart from this fact all the statutory documents viz G RI Form prescribed under the Foreign Exchange Regulation Act 1947 and the shipping bill prescribed by the Customs Act were made out in the name of MMTC showing it as the exporter We have perused the Form GRIColumn 1 pertains to exporter sname Against this column is shown Minerals and Metals Trading Corporation of India Limited The Form contains a declaration to be signed by the exporter declaring that he is the sellerconsignor of goods and a further undertaking that they will deliver to the Bank mentioned in the said Form the foreign exchange resulting from the export of the goods mentioned therein It was signed by the MMTC Letters of credit were opened in the name of MMTC All this was done as required by the system of barter Ferro alloys availed of this system presumably because it was to its advantage In fact it appears that it was not able to sell the said goods otherwise Be that as it may whether by choice or for lack of alternative it chose to route its goods through MMTC Is it open to the Ferro alloys now to say that all this must be ignored in the name of external appearances and it must be treated as the real exporter for the purposes of Section 280ZC It wants to be the gainer in both the events A case of heads I win tails you lose As against the above circumstances the factors appearing in favour of the 19 Ferro alloys are the following The contract between the parties spoke of commission of two per cent payable to the MMTC Use of the expression commission it is pointed out is indicative of the fact that M MTC was only an agent For the MMTC it is explained that it was one way of describing the difference between the export price and the sale price It is submitted that the said feature must be understood in the context of the totality of the scheme which was not a mere commercial scheme but a scheme conceived in the interest of foreign trade economy and balance of payments Ferro alloys also relied upon a certificate given by the foreign buyer stating that the goods in question were sold to it by Ferro alloys But as rightly pointed out by the Government of India this certificate was obtained long after the relevant transactions were over and evidently to buttress its case with respect to the tax credit certificate Not much significance can be attached to it also because it is in the teeth of the contracts signed by the foreign buyer with the MMTC with respect to the very same It is also pointed out that some of the documents required to be executed according to he system of barter were not actually executed between the parties May be so The fact yet remains that the entire export was done through MMTC in accordance with the system of barter There is no half way house either it is no barter system or it is This is an undisputed fact as are the several statutory documents made out in the name of MMTC referred to here in before On a consideration of all the relevant factors and circumstances we are of the opinion that the MMTC must be held to be the exporter for the purpose of Section 280ZC The entire system of barter and the several documents executed in that behalf including those required by statutory provisions cannot be explained away as mere external appearances The Ferro alloys cannot come to MMTC when it is profitable to it and disavow it when it is not profitable to it It cannot have it both ways The title to goods passed to MMTC by virtue of the several documents executed between the parties Indeed that was the fulcrum of the entire scheme of Barter We are also not convinced with the alternative reasoning of the High Court that even if it is held that the title to the goods passed to MMTC even so Ferro alloys must be held to be the real exporter in view of the objective underlying Section 280ZC If MMT C has acquired the title to the goods and is the exporter for all other purposes it equally the exporter 20 for the purposes Section 280ZC There can he no dichotomy of the nature propounded by the High Court We are therefore of the opinion that the High Court was not right in holding to the contrary The appeal is allowed The judgment and order of the High Court of Delhi is set aside and the order of the Government of India dated September 19 1973 is restored The writ petition filed by the second respondent in the Delhi High Court is dismissed No costs G N Appeal allowed

The appellants were charged with offences under Sections 302 149 148324 and 326 IPC for causing the murder of one IS and for causing grievous Injury to one R The Trial Court acquitted them On appeal by the State the High Court reversed the order of acquittal Aggrieved by the High Court s judgment the appellants preferred the present appeal It was contended on behalf of the appellants that the version of the occurrence given by PW II in his statement recorded viz exhibit P12 was materially different from the statement of PW 13 recorded as FIR Ex7 and gave a lie to the prosecution case rendering the prosecution case doubtful that the High Court erroneously ignored the statement of PW 11 holding it inadmissible in evidence on the ground that it had been recorded during the investigation and that due to the admitted enmity between the parties and the hostility of the Mukhiya of the Gram Panchayat towards Al and A2 it would not be safe to rely upon the testimony of the prosecution witnesses without looking for independent corroboration and in the absence of which the conviction of the appellants was not justified Partly allowing the appeal this Court HELD 1 In view of the admitted enmity between the parties and the close relationship of the witnesses inter se and the close relationship of the accused persons with one another the possibility that 2 alongwith the actual assailants some others have also been implicated cannot be ruled out Prudence therefore requires that this court should look for corroboration of the testimony of PW 13 in respect of each of the accused before finding them guilty Since the prosecution witnesses knew each of the accused the non identification by any one of them of A5 A6 and A7 renders the presence of these accused and their participation rather doubtful It is not possible to say with any amount of certainty that they were actually involved in the commission of the crime along with the other accused persons Of course PW 13 would not leave her own assailants or the assailants of her father but it is not unknown that in view of the pronounced hostility between the parties the close relations of Al A2 A3 and A4 namely accused A5 A6 and A7 may have also been roped in 8 H 9 A C Though PW 10 and PW 12 did not recognize A4 as one of the accused but the participation of A4 who according to PW 13 had given her the blow with the grass chopping off her two ringers of the left hand has been conclusively established The presence of A3 since deceased is admitted by all the prosecution witnesses The testimony of PW 13 is consistent a bout the participation of Al and A2 alongwith A4 in the crime Inspite of long thy cross examination nothing has been brought out to discredit her testimony in so far as either the occurrence or the actual assault on her and the deceased is concerned The ocular testimony regarding the participation of the accused in the crime as well as the manner of assault and the nature of weapons used by A 1 A2 and A4 for causing injuries has received ample corroboration from the medical evidence and the recovery of the blood stained clothes and earth from the place of occurrence The FIR lodged promptly by the injured witnesses also lends enough assurance as regards the participation of A 1 A2 A3 and A4 in the crime Thus the prosecution has established the case against Al A2 A3 since dead and A4 beyond any reasonable doubt 9 D G 3 Since the presence of A5 A6 and A7 and their participation in the crime is in doubt they are entitled to the benefit of doubt and giving them the benefit of doubt their conviction and sentence are set aside and they are acquitted With their acquittal it is only the four appellants Al A2 A3 and A4 against whom the prosecution can be said to have established its case beyond reasonable doubt Section 148 IPC under the circumstances would have no application Similarly 3 Section 149 IPC would also not be attracted and A2 A3 and A4 cannot be convicted under Section 302 with the aid of Section 149 IPC From the prosecution evidence however it stands amply established that the three appellants Al A2 and A4 alongwith A3 since dead had come together armed with deadly weapons to the house of the deceased and while A I had fired pistol shot at the deceased resulting in his death A2 had fired from his gun at PW 13 causing her a serious injury on her breast while A4 had caused her grievous injuries with a grass resulting in the chopping off two of her fingerson the left hand The crime was committed in the presence of A3 Therefore while A2 A3 and A4 cannot he convicted for the offence under Section 302149 IPC all of them can be said to have shared the common intention with A 1 for committing the murder of the deceased The very fact that A 1 A2 A3 and A4 came together armed with deadly weapons at the night to the house of the deceased and caused deadly injuries to the deceased and seriously wounded PW 13 and thereafter escaped together would undoubtedly go to show that all of them shared the common intention They are therefore liable to be convicted with the aid of section 34 IPC 9 H 10 A F 5 The evidence on record has established beyond any doubt that A 1 committed the murder of the deceased by firing the pistol shot He has therefore rightly been convicted by the High Court for the offence under Section 302 IPC and sentenced to suffer imprisonment for life His conviction for the offence under Section 27 of the Arms Act and the sentence of two years RI is also justified Hence his conviction and sentence on both counts is maintained However the conviction of A2 A3 and A4 for the offence under section 302149 IPC is altered to the one under Section 30234 IPC A2 and A4 are sentenced to suffer imprisonment for life A3 being already dead The convic tion of Al A2 and A4 for the offence under Section 148 is however set aside The conviction and sentence of the appellants under section 27 of the Arms Act and under Sections 324 and 326 IPC are maintained The sentence of imprisonment imposed on A 1 A2 and A4 on different counts shall however run concurrently 10 H 11 A C 4

c No 509 of 199 1 Under Article 32 of the Constitution of India Dr Rajiv Dhawan V Akshya Bali and Miss Kamini Jaiswal for the Petitioner MC Bhandare P Chidambaram Sushil Kumar Jain Ms Meenakshi Arora SS Jauhar Aruneshwar Gupta and EC Agrawala for the Respondents The Judgment of the Court was delivered by 29 BP JEEVAN REDDY J Tarun Bharat Sangh a voluntary Organisation interested inter alia in protection of environment approached this court complaining that widespread illegal mining activity was going on in the area declared as Tiger Reserve in Altar District of Rajasthan In the interest of ecology environment and rule of law it said the activity should stop The petitioner s case is that the area wherein the illegal mining is going on has been declared as a tiger reserve under Rajasthan Wild Animals and Birds Protection Act 195 1 as a Sanctuary and a National Park under Wild Life Protection Act 1972 and as protected forest under the Rajasthan Forest Act 1953 These various notifications said the petitioner prohibit all or any mining activity and yet the Government of Rajasthan had granted hundred of Licences for mining marble dolomite and other minerals in late 1980s contrary to law After issuing notices to the Government of Rajasthan and the mine owners which expression is used in this order to denote lessees and licences under the leases and licences granted by the State of Rajasthan this court gave certain directions on October 11 1991 An interlocutory direction was issued to the effect that no mining operation of whatever nature shall be carried on in the protected area A Committee under the chairmanship of Shri ML Jain J former Judge of the Rajasthan High Court was appointed to ensure due observance of the various Acts and Notifications issued there under with respect to the said protected area In particular the committee was asked to demarcate the area declared as protected forest under the notification dated January 1 1975 issued by the Rajasthan Government under section 29 of the Rajasthan Forest Act This demarcation was felt necessary in view of the ambiguity prevailing with respect to the precise boundaries of the protected forest declared as such under the notification aforesaid Petitioner s case was that no mining lease licence can be granted within the protected forest except with the prior permission of the Government of India Section 2 of the and Rule 46 of Rajasthan Minor Mineral Concession Rules and that no such permission was obtained in fact By its order dated November 26 1991 the court clarified that the order dated October 11 1991 was not intended to permit the mine 30 owners to carry on their mining activity where such activity was prohibited by any Act Rule or Notification having the force of Law In effect the order said it meant to prohibit and not to permit the mining activity In its order dated May 14 1992 the court clarified the meaning if the expression protected area used in the order dated October 11 1991 The expression it was clarified was intended to and does refer to all the areas which have had legal protection against non forest activities that devastated the environment including poaching mining felling of trees etc It was further clarified that once an area is declared as protected forest it becomes a protected forest notwithstanding the fact that a part of that area is waste The idea behind declaring an area as protected forest it was pointed out is not merely the protection of the existing forest but also afforestation The Committee submitted its report dated September 28 1992 The Report states that the Committee verified and cross checked the tracing maps furnished by the Forest Department with the maps furnished by the Revenue Department and found that both of them Watched After looking into the khasra numbers mentioned in the notification dated January 1 1975 and all other material placed before it by the parties including the mine owners the report states the committee identified the areas declared as protected forest The report indicates that the areas declared as protected forest under the said notification was not in one contiguous block but was comprised in several blocks or areas as it may be called As per the said Report 215 mines mentioned in appendix A to the Report fall completely within the areas declared as protected forest while 47 mines mentioned in Appendix B to tile Report fall partly inside and partly outside the areas declared as protected forest These 262 mines are referred to hereinafter as Listed mines To this extent there is no difference of opinion among the members of the committee Differing opinions have however been expressed when it came to making of recommendations for the consideration of this court The Chairman Shri Justice ML Jain recommended that the mining operations in all the 215 mines listed in appendix A should be stopped forthwith and that the mining operations in the 47 mines listed 31 in appendix B should be stopped forthwith to the extent they fell within the area declared as protected forest Three other members of the Committee Collector Always the Chief Conservator of Forest and Chief Wild Life Warden Rajasthan and the Additional Director of Mines differed from the Chairman They suggested that this Court be pleased to accept the representation of the State Government appended as appendix C to the Report wherein it was prayed that the area covered by the mines should be allowed to be excluded from the protected forest in lieu of which the Government of Rajasthan will provide an equal extent of area for being included in the protected forest An application has also been filed by the State of Rajasthan to the same effect It is stated therein that the protected forest area measures about 800 sq km whereas the 262 mines mentioned in appendix A and B cover only an area of 208 sq In the interest of economy of the State industry and the workers engaged therein it is submitted an extent of 502 sq including the area covered by the said mines be allowed to be deleted from the protected forest In lieu thereof the Government of Rajasthan offered to place an equal extent for the purpose of being declared as protected forest It is submitted further that when the mining leases with respect to the said 262 mines were granted the Government of Rajasthan was under the impression that the said mines did not fall within the protected forest area Indeed it was so certified by the Forest Department This happened because of want of clarity about the precise boundaries of the areas declared as protected forest The mine owners too have filed objections to the Report of the Committee to the recommendation made by the Chairman of the Committee and submitted alternately that the proposal of the Government of Rajasthan be accepted and they be allowed to continue their mining operations At this stage we directed the Government of India to file an affidavit making their stand clear in the matter Accordingly an affidavit sworn to by Shri section P Singh Deputy Director in the Ministry of Environment and Forest Project Tiger New Delhi has been filed It is stated in the affidavit that the area declared as project tigertiger reserve is covered by notifications issued under the Rajasthan Forest Act Environment Protection Act 1986 and Mines and Minerals 32 Regulation and Development Act 1957 It is submitted that the applies not only to reserve and protected forest but to all areas recorded as forest in Government records Mining is non forestry activity and therefore cannot be carried on in the areas to which applies without the prior approval of the Government of India It is stated further that on May 7 1992 the Government of India has issued the final notification under Section 3 of the Environment Protection Act 1986 prohibiting all mining activity except with the approval of the Government of India in the protected forest Sariska National Park and certain areas of Alwar District mentioned in the Notification Since no permission is obtained under any of the said enactments with respect to the said 262 mines it is submitted no mining operations can be carried on in the area until and unless they obtain the permission of the Central Government Indeed the prohibition extends not merely to protected forest areas but to the entire area declared as tiger reserve and as Sariska National Park A copy of the notification dated May 7 1992 issued under Section 3 of the Environment Protection Act is appended to the affidavit It is necessary to notice the relevation portions of the said notification They read Now therefore in exercise of the powers conferred by sub section 1 and clause v of sub section 2 of section 3 of the Environment Protection Act 1986 29 of 1986 read with rule 5 of the Environment Protection Rules 1986 the Central Government hereby prohibits the carrying on of the following processes and operations except with the prior permission in the areas specified in the Table appended to this Notification i Location of any new industry including expansionmodernisation ii a All new mining operations including renewals of mining lease b Existing mining leases in sanctuaries National Park and areas covered under Project Tiger and or 33 c Mining is being done without permission of the competent authority iiiCutting of trees iv Construction of any clusters of dwelling units farms houses sheds community centers information centres and any other activity connected with such construction including roads a part of any infrastructure relating thereto v Electrificationlaying of new transmission lines TABLE Areas where carrying on of processes and operations without permission is prohibited i all reserved forests protected forests or any other area shown as forest in the land records maintained by the State Government as on the date of this notification in relation to Gurgaon District of the State of Haryana and the Alwar District of the State of Rajasthan ii all areas shown as a Gair Mumkin Pahar or b Gain Mumkin Rada or c Gain Mumkin Behed or d Banjad Beed or e Rundh In the land records maintained by the State Government as on the date of this notification in relation to Gurgaon District of the State of Haryana and the Alwar district of the State of Rajasthan 34 iiiall areas covered by notifications issued under sections 4 and 5 of the Punjab Land Preservation Act 1900 as applicable to the State of Haryana in the district of Gurgaon upto the date of this Notification iv all areas of Sariska National Park and Sariska Sanctuary notified under the Wildlife Protection Act 1972 53 of 1972 emphasis added We have heard Dr Rajiv Dhawan counsel for the writ petitioner Shri Aruneshwar Gupta counsel for the State of Rajasthan and SShri MC Bhandare and P Chidambaram council appearing for the mine owners Certain other mine owners have intervened We permitted them to file their written Submissions Dr Rajiv Dhawan submitted that in view of the earlier orders of this court and the report of the committee all the mining activity in all the areas declared as protected forest and in the areas notified under the notification dated May 7 1992 should stop forthwith Indeed he says it should have stopped long ago Continuance of mining activity is in gross contempt of this court and constitutes a clear violation of its orders The Government of Rajasthan is equally guilty of contempt in as much as it has come forward with an application for directions instead of taking stringent action forthwith to stop the mining activity in all the listed mines As a matter of fact he says the Government of Rajasthan appears to be colluding with the mine owners which is evident from the dissent expressed by the officers of the Rajasthan Government who were members of the Committee appointed by this Court to the straight forward and logical recommendation of the Chairman of the Committee The Government of India s affidavit places the matter beyond doubt Not only the mining operations in the listed mines should be injunction forthwith but the mine owners and the Government of Rajasthan should be proceeded against for contempt says the counsel He pointed out further that the mining leases granted by the Government of Rajasthan are ex facie illegal inasmuch as prior permission of the Central Government was admittedly not obtained for the said leases as required by the and Rule 46 of the Rajasthan Minor Mineral Concession Rules Prohibition of 35 mining flows from the provisions of the as well as the notification issued under the Environment Protection Act in May 1992 Shri Aninseshwar Gupta learned counsel for the State of Rajasthan submitted that the Rajasthan Government and its officers were not aware when they granted leaseslicences in respect of listed mines that they fell within the area declared as protected forest Indeed a certificate was issued by the Forest Department to the effect that they did not fall within the protected forest area It was thus a bonafide grant The boundaries of the areas declared as protected areas were not clearly known nor were they demarcated on the spot Of course it now turns out that the said listed mines fall wholly or partly within the protected forest but for the reasons mentioned in the application filed by the Government of Rajasthan the area of five sq kilometers should be allowed to be deleted from out of the protected forest subject to the conditions offered in the said application Counsel says that the Government of Rajasthan is neither colluding with the mine owners nor has it any intention to flout the orders of the court It is prepared to abide fully by the orders of this court It has already shut down 54 mines It is also prepared to shut down all the other listed mines if this court so directs It is however making an earnest request that it may be allowed to exclude the areas covered by these mines from the protected forest in public interest Learned counsel has placed before us map said to have been prepared by the officers of the Rajasthan State showing the areas covered by tiger reserve sanctuary protected forest and the location of the listed mines Shri MC Bhandare learned counsel appearing for the mine owners in Mallana village submitted that demarcation of protected forest by the committee is defective erroneous and unacceptable for the various reasons set out in the objections filed by his clients It is technically imperfect The very description of the boundaries in the notification dated January 1 1975 is vague and misleading It mentions old khasra numbers which were not in vogue in the year 1975The map produced by the Government of Rajasthan for the perusal of this court delineating the tiger reserve is equally incorrect besides being unauthenticated It is not know who prepared the map and on what basis The mine owners do not admit that their mines fall within the 36 tiger reserve or within the protected forest areas Closing down hundreds of mines employing thousands of workers wherein a large amount of capital is invested would disturb the economy of the State besides affecting the supplies of marble and other minerals No public purpose would be served by such closure The mine owners are not guilty of contempt of this court inasmuch as their mines do not fall within the protected forest or protected area Even otherwise it appears that the areas declared as protected forest are in disparate patches away from each other Mines are located not only within the areas declared as protected forest but also in the adjacent areas which are not declared as protected forest In such a case no purpose is served by closing the mines within the protected forest inasmuch as the mining activity in the mines located outside the protected forest will continue uninterrupted The purpose of ecology and environment would not be served by such a situation Moreover the notification issued by the Government of Rajasthan on January 1 1975 declaring certain areas as protected areas is only a provisional or an interim notification It is not a final notification The final notification is yet to be issued Since there is no forest in the areas covered by the mines nor is any afforestation possible in such areas they should be allowed to be deleted from the protected forest in the final notification to be issued Shri P Chidambaram learned counsel appearing for some of the mine owners submitted that it is unsafe for this court to act upon and or to pass any orders based upon the map produced by State of Rajasthan showing the tiger reserve and identifying the areas declared as protected forest It is not known who prepared the said map and on what basis and for what purpose The declaration as tiger reserve by the Government of India is not under any statutory authority The area declared as tiger reserve and the area notified as sanctuary under Section 18 of the Wildlife Protection Act as also the area declared as National Park under Section 35 of the Wildlife Protection Act are not co extensive with each other More particularly the areas declared as protected forest are not co extensive with the area declared as tiger reserve sanctuary or National Park It is not known how many areas declared as protected forest fall within tiger reserve and how many in the sanctuary andor National Park The Government of India has not prepared or submitted any map showing these various areas None of 37 the mines fall within the sanctuary or the National Park not even within project tiger In such a situation any orders stopping the mining operations merely on the basis of the report of the commission or the unauthenticated map produced by the Government of Rajasthan would be wholly unsafe The proper course would be to appoint a committee or to call upon the Government of India to identify the areas declared as tiger reserve sanctuary National Park and the areas declared as protected forest indicating at the same time the location of mines if any in the said areas Only then will the correct position be known Counsel also submitted that the proposal of the Government of Rajasthan merits acceptance by this court Both the counsel appearing for the mine owners affirmed that the mine owners are not acting in a spirit of adversarial litigation but in a spirit of cooperation They are as much interested in protecting the environment and ecology as the petitioner but they say it should not be a one sided affair At the outset we may be permitted to clarify an aspect This is not a case where we are called upon to shut down an activity being carried on lawfully in the name of higher considerations of ecology and environment This is a simple case where we are called upon to ensure observance of enacted laws made by the State to protect the environment and ecology of the area In such a case we need not be oppressed by considerations of balancing the interests of economy and ecology Mat has already been done by the Legislature and Parliament The grievance of tile petitioner is against the executive Charged with the delegation of implementing the laws of the land the executive is yet failing to do its duty by law and by people when faced with the might of money respect for law is dissolving into respect for gammon says the petitioner Let us therefore first find out which laws are violated if any and then decide what are the proper directions to make A Section 2 of the ForestConservationAct read with Section 29 of the Rajasthan Forest Act and Rule 4 6 of the Rajasthan Minor Mineral Concessions Rule Section 29 of the Rajasthan Act empowers the Government to declare any forest land or waste land to be a protected forest Subsection 1 says that the State Government may by notification in the official gazette declare the provisions of this chapter applicable to any 38 forest land or waste land which is not included in a reserve forest hut which is the property of the State Government or over which the State Government has proprietary rights It is not disputed in this case that the land over which the listed mines mines listed in Appendix A and to the Report of the Justice ML Jain Committee are situated is the property of the State Government The State Government is empowered not only to declare any forest land as a protected forest but also any waste land as such The idea evidently is not only to protect the existing forest hut also to bring waste lands under schemes of afforestation Once declared as protected forest the distinction between forest land and waste land disappears The entire area becomes a protected forest Before however declaring any forest land or waste land as a protected forest the State Government is obliged to make an enquiry into the nature and extent of the rights of the State Government and of private persons in or over the forest land or waste land proposed to be declared as protected forest and record the same at a survey or settlement or in such other manner as the State Government thinks sufficient This is the requirement of sub section 3 However the proviso to sub section 3 empowers the State Government in case it thinks that such an enquiry and record will occupy such length of time as in the meantime to endanger the rights of the State Government it may pending such enquiry and record declare a particular area to be a protected forest without of course abridging or affecting any rights of individuals or communities Sub section 4 empowers the State Government to delete any area from out of the area declared as protected forest Reading Section 29 as a whole it appears the normal rule is to make an enquiry into the rights of the State Government and of the private parties over the land proposed to be declared as protected forest in the first instance prepare a record thereof and then declare it as a protected forest But in case of urgency it is open to the State Government to issue such notification forthwith subject of course to the existing rights of individuals and communities in the area concerned In this case the notification dated January 1 1975 issued by the Government of Rajasthan appears to be one issued under the proviso to sub section 3 Sri Bhandare submits that a notification issued under the proviso to sub section 3 is only an interim or provisional notification and that after conducting the enquiry contemplated by the main limb of sub section3 a regular and proper notification under sub section 1 has still to be issued Until then he submits the declaration as protected forest does not take effect We are not 39 prepared to agree Section 29 contemplates only one notification declaring an area as a protected forest Whether issued after a normal enquiry and record or without enquiry or record Section 29 contemplates only one notification and not two in any event Therefore the notification issued is the valid and effective one It is not a provisional or preliminary notification It is not also the case of the mine owners that leases or licences in their favour were granted prior to January 1 1975 All of them were granted in the middle of or in the late eighties The savings clause contained in the proviso to sub section 3 does not avail them In view of the ambiguity prevailing with respect to the precise boundaries of the area or areas declared as protected forest under the notification dated January 1 1975 the Justice ML Jain committee was appointed by this court to demarcate and identify the areas declared as protected forest under the said notification with the help of the Revenue and Forest Departments of the State of Rajasthan It has done so Besides being headed by a former Judge of the Rajasthan High Court it was composed of high officials of the Government of Rajasthan They have undertaken an elaborate and intensive exercise and have demarcated the areas declared as protected forest with the help of the official maps and records We see no reason not to accept the said report The several objections submitted by the mine owners cannot prevail over the official maps and records They were represented before the Commission at the time of the said exercise It is significant to notice that the dissent note appended by the officers of the Government of Rajasthan was not with respect to the demarcation or identification of areas declared as protected forest but only with respect to the closure of the mines operating within those areas The report of the committee is accordingly accepted herewith Once an area is declared as a protected forest it comes within the purview of the It becomes a forest land within the meaning of Section 2 The effect of this position is that no non forest activity can be carried on in the said area except with the prior approval of the Central Government Even the State Government cannot carry on any such non forest activity in the said area without such prior approval That the mining activity amounts to non forest purpose is beyond dispute Thus the grant of mining leaseslicences 40 and their renewal by the State Government without obtaining the prior approval of the Central Government in respect of the mines situated within the protected forest after January 1 1975 is contrary to law All the mines listed in Appendix A to the committee s report do fall within the areas declared as protected forest while the mines listed in Appendix B fall partly within and partly outside such areas According to Rule 46 of the Rajasthan Minor Mineral Concession Rules 1986 too no mining ease could have been granted or renewed within the forest without clearance from the Central Government in accordance with the and the Rules made thereunder Admittedly no such prior approval or clearance of Central Government was obtained The Chairman of the Committee Sri justice ML Jain has recommended that 215 mines mentioned in appendix A to his report which are situated wholly within the protected forest should he closed forthwith There can hardly be any valid objection in law to the said recommendation Similarly with respect to 47 mines mentioned in appendix B to the report the learned Chairman has recommended that they should be closed forthwith in so far as they fall within the protected forest To this recommendation also there can be no valid objection in law At this stage it would be appropriate to consider the application filed by State of Rajasthan for permission to delete an extent of 502 sq from out of the protected forest The application is confined only to 208 mines out of 262 listed mines 54 mines mentioned in para 9 of the application are proposed to be closed indeed according to the counsel for the State they have already been closed Reliance is placed upon the order dated May 14 1992 in this behalf It is pointed out that the said order does contemplate such modification of course with the permission of this Court and for valid reasons It is pointed out that for such deletion or modification the prior approval of the Central Government is not required No such requirement is prescribed either in the or Rajasthan Forest Act it is submitted In this context the submission of Sri MC Bhandare may also be considered He says that there are a number of mines around and outside the area declared as protected forests and that no purpose would be served by merely closings the mines within the protected forest and leaving those outside unhindered He says that all these mines within and outside are within the tiger reserve as per the Rajasthan Government map though outside the sanctuary May be so 41 But it cannot he forgotten that purpose of Forest Acts and purpose of Environmental Protection Acts may not always be the same Such closure may not serve the environmental purpose assuming that factual situation asserted by the learned counsel is true upon which aspect we need not and do not make any pronouncement but it may serve the forest purpose Be that as it may both the purposes appear to be intertwined in this case In this situation we think it appropriate that the merits of the said proposal be examined by the Ministry of Environment and Forests Government of India and a report submitted to this Court within three months from today Orders will be passed on the application for directions filed by the State of Rajasthan after considering tile said report B Notification issued by the Central Government under Section 3 of the Environment Protection Act 1986 on May 7 1992 This notification expressly prohibits the carrying on of the mining operations except with the Central Government s prior permission in the areas covered under project tiger The prohibition extends to existing mining leases in SanctuariesNational Park All mining operations are prohibited therein The table appended to the notification particularises the areas where carrying on the processes and operations aforesaid is prohibited without the permission of the Central Government They include all reserve forest protected forest or any other area shown as forest in the land records maintained by the State Government as on the date of the issuance of tile said notification in relation to inter alia Alwar district of the State of Rajasthan The table also includes all areas of Sariska National Park and Sariska Sanctuary notified under the Wildlife Protection Act 1972 53 of 72 we cannot agree with the learned counsel for mine owners that the area declared as project tiger in the Alwar district has not been properly identified or that it is not properly identifiable Both the State Government and Central Government have demarcated them in exactly identical manner The map produced before us by the State Government is a detailed plan prepared with great care There is no reason to presume that it is not prepared by competent persons on the basis of the relevant material The map delineates the area declared as sanctuary within the area declared as tiger reserve The location of listed mines is clearly marked They fall within the tiger reserve 42 though outside the sanctuary A publication by the Forest Survey of India Dehradun Ministry of Environment and Forest Government of Indiaentitled Status of Forest covering in Project Tiger Reserve has been placed before us At pages 92 94 we find the map of Sariska Tiger reserve Rajasthan The boundaries shape and dimensions of the said map tally fully and perfectly with the map prepared by the State of Rajasthan Thus there can be no legitimate dispute with respect to the correctness of the map produced by Government of Rajasthan or with respect to the area declared as tiger reserve Both the State Government and Central Government have delineated it May be that the declaration as tiger reserve was without any statutory authority and is relatable to the executive power of the Union of India but tile notification issued under Section 3 of the Environment Protection Act puts the stamp of statutory authority over it The Central Government has specifically stated in its affidavit that no prior permission was obtained with respect to the mines located within the tiger reserve On this ground the mining operations being carried on in the tiger reserve including the listed mines also appears to be contrary to law of course this notification has come only in May 1992 Now coming to the appropriate directions to be made in this behalf it should be borne in mind that there is a distinction between the listed mines and those mines which are situated outside he protected forest but within the tiger reserve So far as the listed mines are concerned the very grant and renewal of those mining leaselicences is itself illegal These areas were declared as protected forest is far back as January 1 1975 If so no mining lease or licence could have been granted in respect of the mines situated within the protected forest without clearance from the Central Government as required by Rule 46 of the Rajasthan Minor Mineral Concession Rules and without prior approval of the Central Government under section 2 of the It is an admitted fact that all these leases and licences were granted after 1980 There is also he order of this Court dated October 11 1991 directing that no mining operation of whatever nature shall be carried on in the protected area Protected area does without a doubt include the areas declared as protected forest The recommendation of the Chairman of the Committee Sri justice ML Jainisal so to the effect that the mining activity in the listed mines should be stopped forthwith Even with respect to the mines in appendix B which partly full within and partly outside the protected 43 forest areas the recommendation of the Chairman is that they should he closed to the extent they fall within the protected forest The Central Government has also taken the stand that the mining activity in these areas is illegal and cannot PO on As against this is the plea of the Rajasthan Government and of the mine owners that the area covered by these mines should be allowed to be deleted excluded from the protected forest in lieu of their offer to include an equal extent of area within the protected forest We do not propose to express any opinion on this plea of the Rajasthan Government and the mine owners for the reasons recorded hereinbefore We would like to have the opinion of the Central Government on the said plea or proposal as it may be called Only thereafter shall we consider the request of the State Government But is on today the situation is that the mining activity in the listed mines according to the Rajasthan Government it has already stopped all mining activities in 54 mines specified in its application is illegal and has to stop May be that this will have the effect of mining to halt the activity involving a good amount of capital and a large number of workers But in view of the inherent illegality attaching to them indicated hereinbefore we have no option but to close them We cannot permit them to operate If and when the central government recommends the plea of the State Government and any of the areas already declared as protected forest are deleted with leave of this court can the mining activity go on in these areas It is accordingly directed that all mining activity in the mines mentioned in appendix A to the report of Sri justice M I Jain Committee shall stop forthwith Similarly the mining activity in the mines mentioned in appendix B to the said report shall also stop forthwith in so far as they fall within the protected forest areas The plea of the Rajasthan Government and of the mine owners shall he considered by Department of Forest and Environment Government of India and report submitted to this Court within three months Now coming to the mines located outside the protected forest areas but within the tiger reserve it cannot be said that the very grant of mining leaselicence is itself illegal in their case unless of course such mining lease licence or its renewal has been granted on or after May 71992 particulars in this behalf are not made available to us The illegality has attached to these mines by virtue of the notification issued by the central government under Section 3 of the Environment 44 Protection Act on May 71992 In the circumstances it is directed that the mining activity in the mines situated outside the protected forest areas but within the tiger reserve may continue for a period of four months Within this period it shall be open to the concerned mine owners to approach the Department of Forest and Environment Government of India for permission to continue their mining operations They can continue the mining operations in these mines only if the central government permits them and subject to the orders of the central government in that behalf If no permission is obtained from the central government within the said period of four months the mining activity in the entire area declared as tiger reserve shall stop and cease on the expiry of four months List this matter for further orders on July 12 1993

The respondent was defendant in a suit He engaged the appellant as an Advocate The suit was compromised on 14677 ordering that out of the amount lying with the Court receiver plaintiff was to be paid a sum of Rs 64000 and the balance to be paid to the defendant respondent and possession of suit property to be handed over to the respondent During the tendency of the suit the Court Receiver inducted a tenant in a suit property The tenant filed a suit praying for an interim injunction restraining the court receiver from handing over possession to the respondent Tenant s suit was continued After the compromise decree was passed on 14677 the appellant withdrew a total amount of Rs 50379 from the Court receiver Out of the amount appellant paid only Rs 18000 to the respondent On 9181 the respondent filed a complaint against the appellant before the Bar Council of India On receiving a notice the appellant submitted reply The Disciplinary Committee of the Bar Council rejected certain receipts produced to evidence payment to the respondent and also the plea of the appellant that the account books were lost The Committee suspended the appellant for a period of two years and further directed to pay a sum of Rs 500 to the respondent Before this Court the order of the Disciplinary Committee of the Bar Council of India was challenged contending that the Committee did not properly appreciate the evidence and that it was incorrect to hold that the 1007 receipt dated 8877 was a suspicious document merely because the account books were not produced Dismissing the appeal this Court HELD 101 Advocacy is not a craft but a calling a profession wherein devotion to duty constitutes the hall mark Sincerity of performance and the earnestness of endeavor are the two wings that will bare aloft the advocate to the tower of success Given these virtues other qualifications will follow of their own account This is the reason why legal profession is regarded to be a noble one But it cannot be allowed to become a sorriest of trades Therefore an exacting standard is what is expected of an advocate 1010 C D 1011 C 102 The members of the noble profession must set an example of conduct worthy of emulation If any of them falls from the high expectations the punishment has to be commensurate with the degree and gravity of the misconduct 1012 E Sharasawood on legal profession Harry R Blythe cited if referred to M Veerabhadra Rao vs Tek Chand 1984 Supp SCC 571 referred to1011 C 201 The appellant had withdrawn the money from the Court Receiver None of the correspondence addressed to the respondent mentioned about the receipt dated 8th of August 1977 The plea taken by the appellant based on the receipt is clearly false The statement of the appellant that the account books had been lost in transit cannot be believed Under these circumstances this is a clear case wherein the misappropriation by the appellant has been fully established 1012 F 202 The appellant has been withdrawing the money over 14 years and lit has illegally retained the amount Out of a sum of Rs 50379 which was admittedly withdrawn from the court receiver only Rs 18000 was paid on different occasions Still a sum of Rs 22379 is due 1012 H 1013 A 203 In view of the established finding of misappropriation the proper punishment will be the name of the Advocate must be struck off the rolls 1013 B 1008 204 When Section 38 of the Advocates Act says deems fit it must be construed as to meet the ends of justice The respondent should not be driven to a civil court for recovery of this amount even when the appellant has been found guilty Therefore it is directed that there shall be a decree in favour of the respondent complainant for a sum of Rs 22379 together with interest at 9 per annum from the date of the complaint till the date of payment 11013 F G

on c No 85787 etc Under Article 32 of the Constitution of India Altaf Ahmed Addl SolicitorGeneral ML Verma GL Sanghi K Labiri Sarva Miner Narain section Bhattacharya Vivek Gambhir SK Gambhir Vijay Hansaria P Pameswaran PKJain Rajiv Dutta MN Shroff Ms ASubhashini Ms PratibhaJain LK Gupta MA Firoz Naresh K Sharma AK Goel Ashok K Mahajan Ms 54 Sushma Suri and Kailash Vasdev for the appearing parties The judgment of the Court was delivered by BP JEEVAN REDDY J The petitioners in this batch of writ petitions question in the validity of the levy and collection of cess under section 3 of the Vegetable Oils Cess Act 1983 for the period commencing 1st March 1986 and ending with 31st March 1987 Parliament enacted in the year 1983 the National Oilseeds and Vegetable Oils Development Board Act 1983 being Act 29 of 1983 hereinafter referred to as the Board Act The Act was intended to provide for the development under the control of the Union of the oilseeds Industry and the Vegetable Oils Industry and for matters connected therewith The Act contemplated establishment and constitution of a board called the National Oilseeds and Vegetable Oils Development Board The functions of the Board were specified in section 9 In short the duty of the Board was to promote the development by such measures as it thought fit subject to the control of the Central Government the Oilseeds Industry and the Vegetable Oils Industry Section 12 provided for constitution of Oilseeds and Vegetable Oils Development Fund The fund was to be applied for promoting the purposes of the Act Simultaneously with the Board Act was enacted the Vegetable Oils Cess Act 1983 being Act 30 of 1983 hereinafter referred to as the Cess Act The purpose of this Act is stated in sub section 1 of section 3 It is to levy and collect by way of cess for the purposes of the National Oilseeds and Vegetable Oils Development Board Act 1983 a duty of excise on vegetable Oils produced in any m ill in India at such rate not exceeding Rs5 per quintal on vegetable oil as the Central Government may from time to time specify by notification in the Official Gazette Sub section 2 of Section 3 clarified that the duty of excise levied under sub section 1 section 3 shall be in addition to the duty of excise leviable on vegetable oils under the or any other law for the time being in force Sub section 3 stated that the duty of excise levied on section 3 1 shall be payable by the occupier of the mill in which the vegetable oil is produced Sub section 4 provided that the provisions of the 55 Central Excise Act and the Rules made thereunder including those relating to refunds and exemptions from duty shall so far as may be apply in relation to the levy and collection of the said duty of excise as they apply in relation to the levy and collection of the duty of excise on vegetable oils under that Act Section 4 provided that the proceeds of the duty of excise levied under section 3 1 shall first be credited to the Consolidated Fund of India Subject to appropriation made by law by the Parliament the Central Government could pay to the Board from time to time such amounts from out of the said collections as it thought fit for being utilised for the purposes of the Board Section 7 amended certain provisions of the It is thus clear that the cess which is called a duty of excise levied under section 3 of the cess Act was intended to serve the purposes of the Board Act The said cess was accordingly levied and collected on and from 1983 The Cess Act was however repealed by section 12 of the Cotton Copra and Vegetable Oils Cess Abolition Act 1987 being Act 4 of 1987 hereinafter referred to as the Repeal Act Chapter IV of the Repeal Act provides for the repeal inter alia of the Vegetable Oil Cess Act 1983 Section 12 is the repealing section Chapter V containing only one section namely section 13 is relevant for purposes Chapter V carries the heading COLLECTION OF ARREARS OF DUTIES OF EXCISE Section 13 reads as follows 13 Collection and payment of arrears of duties of excise Notwithstanding anything contained in the amendments made to the 15 of 1966 or the repeal of the Copra Cess Act 1979 4 of 1979 or the Vegetable Oils Cess Act 1983 30 of 1983 by this Act any duty of excise levied under any of the said Acts immediately before the commencement of this Act but has not been collected before such commencement shall be liable to be collected after such commencement in accordance with the provisions of the said Acts for being paid into the Consolidated Fund of India as if this Act had not been enacted The Statement of Objects and Reasons appended to the Bill 56 which became the Repeal Act stated inter alia that the abolition of the said cess was with a view to reduce the number of cesses and multiplicity of taxes The petitioners do not dispute the validity of the levy of the said cessduty of excise till the 28th February 1986 Their submission is confined as stated hereinbefore to the period commencing on March 1 1986 and ending with March 31 1987 As noticed here in before the Cess Act was repealed on and with effect from March 31 1987 by section 12 of the Repeal Act Section 13 of the Repeal Act expressly provides notwithstanding the said repeal the duty of excise levied under the said Act immediately before the commencement of the Repeal Act but which has not been collected before such commencement shall be liable to be collected even after the repeal in accordance with the Cess Act as if the said Cess Act has not been repealed In the face of this provision it would appear that the petitioners dispute as to their liability to pay the said cess for the period March 1 1986 to March 31 1987 is of little avail The petitioners however rely upon certain circumstancesgrounds in support of their contention which we may now deal with The petitioners are manufacturers of vegetable oil which was subject to the cessduty of excise under section 3 of the Cess Act They rely upon the following circumstances and ground in supports of their plea 1 In his Budget Speech delivered on 2821986 presenting the Budget 1986 87 the Union Minister of Finance stated the long term Fiscal Policy recognises that cesses levied as excise duties contribute to the multiplicity of taxes As an endeavour to reduce the number of the cesses it has been decided to dispense with the cess on cotton copra and vegetable oils The Ministry of Agriculture will take appropriate action in the matter The loss to the exchequer on this account will be Rs590 crores The Budget proposals also specify the loss of revenue on account of the decision to dispense with the cess on vegetable oils among others This Speech made on the floor of the Lok Sabha speaks of a decision already taken by the Government and is enforceable and effective from the said date 57 2 In pursuance of the said decision of the Government of India the Directorate of Vanaspati Vegetable Oils and Fats addressed the letter dated August 11 1986 to the Commissioner Tax Research Department of Revenue New Delhi asking him to issue instructions to all concerned indicating that the cess on vegetable oils has been dispensed with and as such the cess shall not be collected It was further directed that the cess collected if any since April 1 1986 shall be refunded A copy of this letter was sent to the President Central Organisation for Oil Industries and Trade Bombay Counsel for the petitioners Shri ML Verma and GL Sanghi urged the following contentions a The Budget Speech of the Finance Minister delivered on the floor of the Lok Sabha constitutes a enforceable and effective decision upon which the petitioners were entitled to act The said decision was exemplified and implemented by way of a communication from the Directorate of Vanaspati Vegetable Oils and Fats referred to above In view of the said communication the petitioners did not pass on the burden of the said cess to their purchasers on and from March 1 1986 It is not open to the Government to go back upon the said decision and demand cess for the period subsequent to March 1 1986 b By virtue of sub section 4 of section 3 of the Cess Act Rule 8 of the Central Excise Rules is attracted among other provisions of the Central Excise Act and Rules Rule 8 empowers the Central Government to grant exemption on any excisable goods from the whole or any part of duty leviable on such goods Sub rule 1 of Rule 8 empowers the Central Government to grant exemption while Sub rule 2 em powers the Central Board of Excise and Customs to grant exemption Inasmuch as section 3 4 of the Cess Act applies the provisions of the Central Excise Act and the Rules subject to the rider so far as may be the provisions in Rule 8 should be read with the necessary modification In other words while sub rule 1 of rule 8 must be read as empowering the Central Government to grant exemption sub rule 2 must be read as conferring a similar power upon the Central Government andor the Directorate of Vanaspati Vegetable Oils and Fats Unlike sub rule 1 sub rule 2 does not require the order of exemption to be published in the Official Gazette nor does it require that such 58 exemption should be through a notification The budget proposals of the Finance Minister and the letter of the Directorate of the Vanaspati and Vegetable Oils aforesaid are relatable to sub rule 2 or Rule 8 of Central Excise Rule read with sub section 4 of section 3 of the Cess Act Reading them together it must be held that the Government and the Directorate have exempted the vegetable oils from the levy under section 1 of section 3 We find it difficult to agree It is not brought to our notice that the budget proposals contained in the Finance Minister s speech were accepted by the Parliament The cess having been imposed by a Parliamentary enactment could be rendered inoperative only by a Parliamentary enactment Such repealing enactment came only in the year 1987 with effect from April 1 1987 Not only that The repealing Act expressly provided in section 13 that the cess due before the date of said repeal but not collected shall be collected according to law as if the Cess Act is not repealed This provision amounts to a positive affirmation of the intention of the Parliament to keep the said imposi tion alive and effective till the date of the repeal of the Cess Act In the face of the said statutory provisions no rights can be founded nor can the levy of the cess be said to have been dispensed with by virtue of the alleged decision referred to in the Finance Minister s speech or on account of the letter dated August 11 1986 The Finance Minister s speech is not law The Parliament may or may not accept his proposal Indeed in this case it did not accept the said proposal immediately but only a year later It is only from the date of the repeal that the said levy becomes inoperative Now coming to the argument based upon Rule 8 of the Central Excise Rules read with section 34 of the Cess Act we find it totally unacceptable No notification has been issued under rule 8 1 by the Central Government much less was any such notification published in the Gazette No special order has also been made by the Central Board of Excise and Customs in this behalf under rule 8 2 The cess imposed under section 3 1 of the Cess Act it may be remembered is a duty or Excise as stated in section 3 itself Therefore the Central Board of Excise and Customs was perhaps competent to grant exemption even in the case of said cess though we do not wish to express any definite opinion on this question since it was not debated at the Bar Suffice it to say that the Central Government cannot again be brought 59 in under sub rule 2 of rule 8 in the place of Central Board nor can the Directorate of Vanaspati and Vegetable Oils be equated to Central Board of Excise and Customs The words so far as may be occurring in section 3 4 of the Cess Act can not be stretched to that extent Above all it is extremely doubtful whether the power of exemption conferred by rule 8 can be carried to the extent of nullifying the very Act itself It would be difficult to agree that by virtue of the power of exemption the very levy created by section 31 can be dispensed with Doing so would amount to nullifying the Cess Act itself Nothing remains thereafter to be done under the Cess Act Even the language of rule 8 does not warrant such extensive power Rule 8 contemplates merely exempting of certain excisable goods from the whole or any part of the duty leviable on such goods The principle of the decision of this Court in Kesavananda Bharti Sripadagalvaru and others vs State of Kerala and another AIR 1973 SC 1461 applies here perfectly It was held therein that the power of amendment conferred by Article 368 cannot extend to scrapping of the Constitution or to altering the basic structure of the constitution Applying the principle of the decision it must he held that the power of exemption cannot be utilised for nor can it extend to the scrapping of the very Act itself To repeat the power of exemption cannot be utilised to dispense with the very levy created under section 3 of the Cess Act or for that matter under section 3 of the Central Excise Act Mr Sanghi submitted that the Board contemplated under the Board Act never did actually start functioning and therefore the levy of cess is impermissible It is difficult to agree with this contention either As the Preamble to the Cess Act indicates the levy of the said cess was not for the purpose of the Board but for the purpose of the development of the Oilseeds Industry and Vegetable Oils Industry The Board was merely a medium in that effort It must be noticed that the cess was to be credited to the Consolidated Fund of India out of which requisite sums of money to be utilised for the purpose of the Board Act In any event there is nothing to show that the Board did not become operational except the bare assertion to that effect A vague allegation cannot merit any credence In Writ Petition 963 of 1987 Mr Sanghi raised an additional contention that the goods concerned therein cannot be called Veg 60 eatable Oil within the meaning of section 3 1 of the Cess Act and therefore the levy of the cess thereon is incompetent We cannot however allow this contention to be raised in a petition under Article 32 of the Constitution It is open to the petitioner to raise the said contention before the appropriate authority at the appropriate stage For the above reasons the writ petitions fail and are dismissed but in the circumstances without costs N V K Petitons dismissed

The Second Respondent Ferro Alloys Corporation manufac turer exporter of ferro maganese and chrome concentrates entered into a number of agreement with foreign buyers for sale of the said commodity The export was routed through the appellant to bring it within the system of private barter introduced by the Government of India with a view to encourage exports The main objective of barter system was to provide a mechanism which would result in increased export of particular commodities which were ordinarily difficult to sell abroad where the selling countries were not able to get a foot hold This objective was sought to he achieved by linking them to exports of an equivalent or lesser value of essential commodities which in any event had to he imported As for as purchase and sale contracts were concerned MMTC insisted that there should be one contract of sale between the local supplier and the MMTC and another contract of sale by the MMTC to the foreign buyer on principal to principal basis It was agreed that Ferro Alloys should intimate the foreign buyer to enter into a direct contract with MMTC treating it as the seller Also the GRI form prescribed by the Reserve Bank of India under the Rules framed under FERA was to be signed by MMTC showing it as the exporter and seller Letters of credit was opened in the name of MMTC which was to be assigned to Ferro Alloys so that Ferro Alloys could receive the payment directly for the goods supplied to 13 MMTC The shipping documents also showed MMTC as the exporter The transactions were gone through Dispute arose between the parties when the question of issuance of Tax Credit Certificate uS 280ZC of the Income tax arose as to who could be said to have exported the goods and received the sale proceeds in the shape of foreign exchange The matter was taken in appeal before the Government of India It held that MMTC was the exporter for the purpose of S280ZC Ferro Alloys challenged the said order before the High Court by way of a Writ Petition The High Court allowed the Writ Petition and held that the real exporter was Ferro Alloys which earned and received the foreign exchange and MMTC got only its commission of 2 and nothing more Aggrieved by the judgment of the High Court MMTC preferred the present appeal Allowing the appeal this Court HELD 1 The entire export was done through MMTC in accordance with the system of barter There is no half way house either it is not barter system or it is in accordance with the system of barter This is an undisputed fact as are the several statutory documents made out in the name of MMTC Thus MMTC is the exporter for the purpose of Section 280ZC of the Income tax Act 1961 The entire system of barter and the several documents executed in that behalf including those required by statutory provisions cannot be explained away as mere external appearances Ferro alloys cannot come to MMTC when it is profitable to it and disavow it when it is not profitable to it It cannot have it both ways The title to goods passed to MMTC by virtue of the several documents executed between the parties Indeedthat was the fulcrum of the entire scheme of Barter 19 E F This Court is not convinced with the alternative reasoning of the High Court that even if it is viewed that the title to the goods passed to MMTC even so Ferro alloys must be held to be the real exporter in view of the objective underlying Section 280ZC If MMTC has acquired the title to the goods and is the exporter for all other purposes it is equally the exporter for the purpose of Section 14 280ZC There can be no dichotomy of the nature propounded by the High Court 19 H 20 A

Appeals Nos 231 and 232 of 1958 Appeal by special leave from the judgment and order dated October 21 1957 of the Madras High Court in Writ Petitions Nos 675 and 676 of 1957 R Ganapathy Iyer section B Adityan and G Gopalakrishnan for the appellant A N Sinha and P K Mukherjee for respondent No 1 1958 November 24 J These appeals raise a question of considerable importance as to the scope of an enquiry in an election petition wherein election is called in question under section 1001c of the Representation of the People Act 1951 43 of 1951 on the ground that a nomination paper had been improperly rejected 625 The facts are that during the general elections which were held in 1957 six persons including the appellant Veluswami Thevar the second respondent Chellapandian and the fourth respondent Arunachalam were nominated for election to the Legislative Assembly of the State of Madras from Alangulam Constituency in the District of Tirunelveli At the time of the scrutiny which was on February 1 1957 Chellapandian raised an objection to the nomination of Arunachalam on the ground that he was the Head Master of the National Training School Tiruchendur which was a Government aided school and that he was therefore disqualified under section 7 cls d and e of the Representation of the People Act 1951 hereinafter referred to as the Act as holding an office of profit under the Government In upholding this objection the returning officer observed Sri section Arunachalam is not present at the time of scrutiny of nominations nor any authorised agent of his could take notice of the objection and file a reply In view of the objection which has not been cleared by Sri section Arunachalam by satisfying me that he is not holding an office of profit in a concern in which the State Government has financial interest the objection is upheld and Sri section Arunachalam is disqualified under Sections 7d and e of Act 43 of 1951 Accordingly his nomination is rejected The five nomination papers were accepted two of the candidates subsequently withdrew from the election the other three went to the polls and on March 10 1957 the appellant who secured the largest number of votes was declared elected On April 18 1957 Raja Nainar the first respondent who was not a candidate but a voter filed E P No 109 of 1957 praying that the election of the appellant be declared void on the ground that the rejection of the nomination paper of Arunachalam was improper because he had ceased to be a Head Master at the time of his nomination and that further the institution was a private one The appellant filed a written statement in which he pleaded that Arunachalam was 79 626 not qualified to be chosen not merely on the ground put forward by Chellapandian before the returning officer but also on the grounds that he was interested as a partner in contracts for the execution of works for the Government and that further he had entered into an agreement with the District Board Chittoor to serve as a teacher in that Board and that his nomination paper was therefore rightly rejected Raja Nainar then came out with the application 1 A No 5 of 1957 out of which the present proceedings arise to strike out the additional grounds of disquali fication raised in the statement of the appellant on the ground that the Tribunal had no jurisdiction to enquire into any ground of disqualification which was not taken before the returning officer and that accordingly the new grounds put forward by the appellant should be struck out By its order dated August 17 1957 the Tribunal held that the question to be decided by it was whether there was a valid nomination paper and that to decide that it could go into grounds other than those which were put forward before the returning officer and in that view dismissed the application The correctness of this order was challenged by Raja Nainar in two Writ Petitions Nos 675 and 676 of 1957 preferred under article 226 Therein he repeated his contention that it was not competent to the Tribunal to enquire into any but the grounds which had been put forward before the returning officer and prayed that a writ of certiorari be issued to quash the order in 1 A No 5 of 1957 and a writ of prohibition to restrain the Tribunal from enquiring into the new grounds raised by the appellant These applications were heard by a Bench of the Madras High Court consisting of Rajagopalan and Rajagopals Ayyangar JJ who upheld the contention of the petitioner and stated their conclusion in these terms We are clearly of opinion that the enquiry before the Tribunal must be restricted to the objections which the returning officer had to consider and decide but not necessarily to the material placed 627 before the returning officer at the stage of the summary enquiry The Tribunal has jurisdiction to adjudicate upon the truth and validity of those objections on relevant material even if that material be other than that placed before the returning officer The Tribunal has no jurisdiction to investigate the truth or validity of the objections which were not put forward before the returning officer and which he had therefore no occasion to consider Once again we have to point out that we are discussing only the position of a candidate whose nomination was rejected and not for instance that of a returned candidate A further objection was also taken before the learned judges that as the decision of the Election Tribunal was open to appeal under section 116A of the Act the court should in exercise of its discretion under article 226 decline to entertain writ petitions against interlocutory orders But the learned judge held that as the Tribunal had no jurisdiction to entertain grounds other than those which were put forward before the returning officer writs could issue under article 226 In the result they quashed the order of the Election Tribunal in 1 A No 5 of 1957 and issued a writ of Mandamus directing it to dispose of the application afresh in accordance with law as laid down in the judgment It is against this judgment that the present appeals have been preferred on leave granted by this Court under article 136 and the point that arises for decision is whether in an election petition questioning the propriety of the rejection of a nomination paper under section 1001c of the Act it is open to the parties to raise grounds of disqualification other than those put forward before the returning officer It will be convenient at this stage to refer to the provisions of the Act hearing on this question Section 32 of the Act provides that Any person maybe nominated as a candidate for election to fill a seat if he is qualified to be chosen to fill that seat under the provisions of the Constitution and this Act Under section 331 the candidate is to deliver to the returning officer a nomination paper completed in the 628 prescribed form and signed by the candidate and by an elector of the constituency as proposer Section 33 4 enacts that On the presentation of a 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 rolls Provided that the returning officer shall permit any clerical or technical error in the nomination paper in regard to the said names or numbers to be corrected in order to bring them into conformity with the corresponding entries in the electoral rolls and where necessary direct that any clerical or printing error in the said entries shall be overlooked Section 35 provides inter alia that the returning officer shall cause to be affixed in some conspicuous place in his office a notice of the nomination containing descriptions similar to those contained in the nomination paper both of the candidate and of the proposer Section 36 omitting what is not material is as follows 36 1 On the date fixed for the scrutiny of nominations under section 30 the candidates their election agents one proposer of each candidate and one other person duly authorized in writing by each candidate but no other person may attend at such time and place as the returning officer may appoint and the returning officer shall give them all reasonable facilities for examining the nomination papers of all candidates which have been delivered within the time and in the manner laid down in section 33 2 The returning officer shall then examine the nomination papers and 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 inquiry if any as he thinks necessary reject any nomination on any of the following grounds a that the candidate either is not qualified or is disqualified for being chosen to fill the seat under any of the following provisions that may be applicable namely 629 Articles 84 102 173 and 191 Part 11 of this Act or b that there has been a failure to comply With any of the provisions of section 33 or section 34 or c that the signature of the candidate or the pro poser on the nomination paper is not genuine 5 The returning officer shall hold the scrutiny on the date appointed in this behalf under clause b of section 30 and shall not allow any adjournment of the proceedings except when such proceedings are interrupted or obstructed by riot or open violence or by causes beyond his control Provided 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 6 The returning officer shall endorse on each nomination paper his decision accepting or rejecting the same ania if the nomination paper is rejected shall record in writing a brief statement of his reasons for such rejection Then we have section 1001c the construction of which is the main point for determination It is as follows 100 1 Subject to the provisions of subsection 2 if the Tribunal is of opinion c that any nomination has been improperly rejected the Tribunal shall declare the election of the returned candidate to be void Now the whole controversy between the parties is as to what the expression improperly rejected in section 1001c means According to the appellant when the nomination paper of a candidate who is under no such disqualification as is mentioned in section 362 has been rejected that is improper rejection within section 1001c Acoording to the respondent when the 630 nomination paper of a candidate is rejected by the returning officer on the ground that he is subject to a specified disqualification the rejection is improper if it is found that that disqualification does not exist If the former view is correct then the scope of an enquiry before the Tribunal must extend to all matters which are mentioned in section 362 and if the latter then it must be limited to determining whether the ground on which the returning officer has rejected the nomination is well founded Now to decide what the expression improperly rejected in section 1001c precisely imports it is necessary to examine the relevant provisions of the Act bearing on the question and the setting of the above section therein Under section 32 of the Act any person may be nominated as a candidate for election if he is duly qualified under the provisions of the Constitution and the Act Section 362 authorises the returning officer to reject any nomination paper on the ground that he is either not qualified that is under sections 3 to 7 of the Act or is disqualified under the provisions referred to therein If there are no grounds for rejecting a nomination paper under section 362 then it has to be accepted and the name of the candidate is to be included in a list Vide section 368 Then we come to section 1001c and section 1001d1 which provide a remedy to persons who are aggrieved by an order improperly rejecting or improperly accepting any nomination In the context it appears to us that the improper rejection or acceptance must have refer ence to section 362 and that the rejection of a nomination paper of a candidate who is qualified to be chosen for election and who does not suffer from any of the dis qualifications mentioned in section 362 would be improper within section 1001c and that likewise acceptance of a nomination paper of a candidate who is not qualified or who is disqualified will equally be improper under s1001d1Section 32 confers a substantive right on a candidate to be chosen to the legislature subject only to the limitations enacted in articles 84 102 173 and 191 of the Constitution and sections 3 to 7 of the Act and sections 36 and 100 provide the machinery for the exercise and enforcement of that right It is a sound 631 rule of construction that procedural enactments should be construed liberally and in such manner as to render the enforcement of substantive rights effective Readings section 1001c in the context of the whole enactment we think that an enquiry before the Tribunal must embrace all the matters as to qualification and disqualification mentioned in section 362 and that it cannot be limited to the particular ground of disqualification which was taken before the returning officer It was contended for the respondent that the proceedings before the Tribunal are really by way of appeal against the decision of the returning officer and that therefore the scope of the enquiry in the election petition must be co extensive with that before the returning officer and must be limited to the ground taken before him It was argued that a decision could be said to be improper only with reference to a ground which was put forward and decided in a particular manner by the returning officer and that therefore the expression improperly rejected would in its true connotation restrict the scope of the enquiry before the Tribunal to the ground taken before the returning officer We are unable to agree with this contention The jurisdiction which a Tribunal exercises in hearing an election petition even when it raises a question under section 1001c is not in the nature of an appeal against the decision of the returning officer An election petition is an original proceeding instituted by the presentation of a petition under section 81 of the Act The respondents have a right to file written statements by way of reply to it issues have to be framed and subject to the provisions of the Act the provisions of the Code of Civil Procedure regulate the trial of the petition All the parties have the right to adduce evidence and that is of the essence of an original proceeding as contrasted with a proceeding by way of appeal That being the character of the proceedings the rule applicable is that which governs the trial of all original proceedings that is it is open to a party to put forward all grounds in support of or negation of the claim subject only to such limitations as may be found in the Act 632 It should be noted in this connection that if a petition to set aside an election on the ground of improper rejection of a nomination paper is in the nature of an appeal against the decision of the returning officer then logically speaking the decision of the Tribunal must be based only on the materials placed before the returning officer given with respect to the ground which was urged before him and no fresh evidence could be admitted before the Tribunal except in accordance with 0 41 R 27 The learned judges in the court below however observe that though the enquiry before the Tribunal is restricted to the particular ground put forward before the returning officer it is not restricted to the material placed before him and that all evidence bearing on that ground could be adduced before the Tribunal This in our view is quite correct The enquiry which a returning officer has to make under section 36 is summary in character He may make such summary enquiry if any as he thinks necessary he can act suo motu Such being the nature of the enquiry the right which is given to a party under section 1001c and section 1001d1 to challenge the propriety of an order of rejection or acceptance of a nomination paper would become illusory if the Tribunal is to base its decision only on the materials placed before the returning officer It was contended for the respondent that even with reference to the ground taken before the returning officer no evidence other than what was placed before him could be brought before the Tribunal and he relied on the following observations of the learned judges in Charanjit Lal vs Lehri Singh 1 Whether a nomination has been improperly rejected or not has to be considered in relation to the state of evidence before the returning officer at the time of the scrutiny The testimony of the returning officer shows that he rejected the nomination because it did not appear to him that on the question of age the candidate Shri Pirthi was qualfied to stand for election 1 A I R 1958 punj 633 There a nomination paper had been rejected by the returning officer on the ground that the candidate did not appear to possess the age qualification required by article 173 The correctness of this order was challenged in an election petition Evidence was taken as to the age of the candidate in this petition and eventually it was held that the order of the returning officer was right In the order of rejection the returning officer also stated The nomination is rejected as the age is not mentioned in the nomination paper Neither the candidate nor the proposer or any person duly authorised on his behalf is present to testify to his age Now the argument before the High Court was that the failure to mention the age in the nomination paper was a formal defect which should have been condoned under section 364 of the Act The learned judges held that the defect was not merely one of failure to mention the age but of want of the requisite qualification in age and that that could not be cured under section 364 In this context the observations relied on could not be read as meaning that no evidence could be adduced even in respect of a ground which was urged before the returning officer as in fact evidence was taken before the Tribunal and a finding given and if they meant what the respondent suggests they do we do not agree with them It is to be noted that in many of the cases which came before this Court as for example Durga Shankar Mehta vs Thakur Raghuraj Singh and others 1 the finding of the Tribunal was based on fresh evidence admitted before it and the propriety of such admission was never questioned And if the true position is as we have held it is that it is open to the parties to adduce fresh evidence on the matter in issue it is difficult to imagine how the proceedings before the Tribunal can be regarded as in the nature of appeal against the decision of the returning officer In support of his contention that it is only the ground that is urged before the returning officer that 1 1955 1 SCR 267 80 634 can be raised before the Tribunal Mr Sinha learned counsel for the respondent relies on the provision in section 366 that when a nomination paper is rejected the returning officer should record his reasons therefor The object of this provision it is argued is to enable the Tribunal to decide whether the order of the returning officer is right or not and by implication it confines the scope of the enquiry before the Tribunal to the ground put forward before the returning officer This contention is in our opinion unsound Now when a nomination paper is accepted section 366 does not require that any reason should be recorded therefor If the contention of the respondent is right it would follow that acceptance of a nomination paper can never be questioned But that would be against section 1001d1 and it must therefore be held that an acceptance can be questioned on all the grounds available under section 362 Section 1001d1 deals with improper acceptance of a nomination paper and if the word improper in that provision has reference to the matters mentioned in section 362 it must have the same connotation in section 1001c as well The word improper which occurs in both section 1001c and section 1001d1 must bear the same meaning in both the provisions unless there is something in the context to the contrary and none such has been shown There is another difficulty in the way of accepting this argument of the respondent A candidate may be subject to more than one disqualification and his nomination paper may be questioned on all those grounds Supposing that the returning officer upholds one objection and rejects the nomination paper on the basis of that objection without going into other objections notwithstanding that under section 362 he has to decide all the objections is it open to the respondents in the election petition to adduce evidence on those objections According to the respondent it is not so that if the decision of the returning officer on the objection on which he rejected the nomination paper is held to be bad the Tribunal has no option but to set aside the election under section 1001c even though the candidate was in fact disqualified and his nomination paper was rightly rejected Mr Sinha for the respondent concedes that the result would be anomalous but he says that the Law of Election is full of anomalies and this is one of them and that is no reason for not interpreting the law on its own terms It is no doubt true that if on its true construction a statute leads to anomalous results the Courts have no option but to give effect to it and leave it to the legislature to amend and alter the law But when on a construction of a statute two views are possible one which results in an anomaly and the other not it is our duty to adopt the latter and not the former seeking consolation in the thought that the law bristles with anomalies Anomalies will disappear and the law will be found to be simple and logical if it is understood that when a question is raised in an election petition as to the propriety of the rejection of a nomination paper the point to be decided is about the propriety of the nomination and not the decision of the returning officer on the materials placed before him and that decision must depend on whether the candidate is duly qualified and is not subject to any disqualifications as provided in section 362 It remains to deal with one more contention advanced on behalf of the respondent and that is based on the following observations in Hari Vishnu Kamath vs Syed Ahmad Ishaque and others 1 Under this provision R 474 the Tribunal is constituted a court of appeal against the decision of the returning officer and as such its jurisdiction must be co extensive with that of the returning officer and cannot extend further The argument is that if the jurisdiction of the Tribunal is co extensive with that of the returning officer then the enquiry before it must be confined to the grounds which were urged before the returning officer Now the observations quoted above were made statedly with reference to R 47 and assuming that they apply to an enquiry under section 1001c the question still remains what is the jurisdiction of the returning officer in hearing objections to nomination papers 31 1132 636 His jurisdiction is defined in section 362 and the Tribunal must therefore have jurisdiction to decide all the questions which can be raised under that section The fact that a particular ground which could have been raised was not in fact raised before the returning officer does not put an end to his jurisdiction to decide it and what he could have decided if it had been raised could be decided by the Tribunal when raised Mr Ganapathy Iyer learned counsel for the appellant invited our attention to the decisions of the Election Tribunals on the question whether grounds other than those raised before the returning officer could be put forward in an enquiry in an election petition They held with one solitary exception that it is permissible and indeed it is stated in Mengh Raj vs Bhimandas 1 as settled law that the rejection of a nomination paper can be sustained on grounds not raised before the returning officer If the legislature which must be taken to have knowledge of the law as interpreted in those decisions wanted to make a departure from it it would have said so in clear terms and in the absence of such an expression it would be right to interpret section 1001c as not intended to alter the law as laid down in those decisions It is now necessary to refer to the decisions which have been cited before us In Durga Shankar Mehta s case 2 the election was to a double member constituency The appellant who obtained the largest number of votes was declared elected to the general seat and one Vasantarao to the reserved seat The validity of the election was challenged on the ground that Vasantarao was below the age of 25 years and was therefore disqualified to stand The Election Tribunal upheld that objection and set aside the entire election The decision was taken in appeal to this Court and the point for determination was whether the election of the appellant was liable to be set aside on account of the disqualification of Vasantarao It was held that the matter fell within section 1002c as it then stood and not under section 1001c and that the election of the appellant could not be declared void 1 31O 2 19551 1 SCR 267 637 This is not a direct pronouncement on the point now in controversy and that is conceded In Vashist Narain Sharma vs Dev Chandra and others 1 a question was raised as to what would be improper acceptance within the meaning of section 100 but in the view taken by this Court no opinion was expressed thereon The question now under consideration came up directly for decision before the High Court of Rajasthan in Tej Singh vs Election Tribunal Jaipur 2 and it was held that the respondent to an election petition was entitled to raise a plea that the nomination of the petitioner rejected on one ground by the returning officer was defective on one or more of the other grounds mentioned in section 362 of the Act and that such a plea if taken must be enquired into by the Election Tribunal In Dhanraj Deshlehara vs Vishwanath Y Tamaskar 3 it was observed by a Bench of the Madhya Pradesh High Court that in determining whether a nomination was improperly rejected the Election Tribunal was not bound to confine its enquiry to the ground on which the returning officer rejected it and that even if the ground on which the returning officer rejected the nomination could not be sustained the rejection could not be held to be improper if the Tribunal found other fatal defects in the nomination An unreported judgment of the Andhra Pradesh High Court in Badrivishal Pitti vs J V Narsing Rao 4 has been cited before us and that also takes the view that in an enquiry before the Election Tribunal it is open to the parties to support an order of rejection of a nomination paper on grounds other than those which were put forward before the returning officer We are in agreement with these decisions As the question has also been raised as to the propriety of interfering in writ petitions under article 226 with interlocutory orders passed in the course of an enquiry before the Election Tribunal we shall express our opinion thereon The jurisdiction of the High Court to issue writs against orders of the Tribunal is 1 2 1954 9 ELR193 3 4 Special Appeal No 1 Of 1957 638 undoubted but then it is well settled that where there is another remedy provided the court may properly exercise its discretion in declining to interfere under article 226 It should be remembered that under the election law as it stood prior to the amendment in1956 election petitions were dismissed on preliminary grounds and the correctness of the decision was challenged in applications under article 226 and in further appeals to this Court with the result that by the time the matter was finally decided the life of the legislatures for which the election was held would have itself very nearly come to an end thus rendering the proceedings infructuous A signal example of a case of this kind is to be found in the decision reported in Bhikaji Keshao Joshi and another vs Brijlal Nandlal Biyani and others 1 It is to remedy this defect that the legislature has now amended the law by providing a right of appeal against a decision of the Tribunal to the High Court under section 116 A and its intention is obviously that proceedings before the Tribunal should go on with expedition and without interruption and that any error in its decision should be set right in an appeal under that section In this view it would be a proper exercise of discretion under article 226 to decline to interfere with interlocutory orders In the result we allow the appeals set aside the orders of the court below and dismiss the writ petitions filed by the respondent with costs here and in the court below Appeal allowed 1 1055 2 SCR 428

The petitioner a voluntary Organization Interested In protecting environment approached this Court under Article 32 of the Constitution of India complaining of the widespread illegal mining activity going on in the area declared as a Tiger Reserve In Alwar District in the State of Rajasthan It prayed that in the interest of ecology environment and rule of law the activity should stop It was alleged that the area where the mining activity was carried on was declared as a tiger reserve under the Rajasthan Wild Animals and Birds Protection Act 1951 as a sanctuary and a National Park under the Wild Life Protection Act 1972 and as protected forest under the Rajasthan Forest Act 1953 and that these notifications prohibit all or any mining activity and yet the State Government had granted hundreds of licences for mining marble dolomite and other materials and that such section was contrary to law This Court Issued notices to the State Government and the mineowners respondents In the Writ Petition An interlocutory direction was also made that no mining operation be carried on in the protected 22 area The Court also appointed a Committee under the Chairmanship of a Former Judge of the State High Court to ensure due observance of the various Acts and Notifications that had been issued in respect of the protected area The Committee was requested in particular to demarcate the area declared as protected forest under the notification dated January 1 1975 issued by the Rajasthan Government under Section 29 of the Rajasthan Forest Act The Committee submitted its Report dated September 281992 stating that the committee had verified and cross checked the tracing maps furnished by the Forest Department with the maps furnished by the Revenue Department and found that both of them matched and that after looking into the Khasra numbers mentioned in the notification dated January 1 1975 and the other material placed before it by the parties the Committee identified the areas declared as protected forest It stated that they were not in one contiguous block but were comprised in several blocks or areas The 215 mines mentioned in Appendix A to the Report fall completely within the areas declared as protected forest while 47 mines mentioned in Appendix II to the Report fall partly inside and partly outside the areas declared as protected forest There was no difference of opinion among the members of the committee regarding the location of the mines but only with respect to the question whether they should be directed to he closed The Chairman recommended that the mining operations in all the 215 mines listed in Appendix A should be stopped forthwith and the mining operation in the 47 mines listed in Appendix B be stopped forthwith to the extent they fell within the area declared as protected forest The three other Members of the Committee viz Collector Chief Conservator of Forest and Chief Wildlife Warden and Additional Director of Mines differed from the Chairman They suggested that this Court should accede to the representation of the State Government Appendix IC that the area covered by the mines should be allowed to be excluded from the protected forest in lieu of which the state Government undertook to provide an equal extent of the area for being included in the protected forest The Sate Government s application to the Court was also to the same effect It was stated therein that the protected forest area measures about 800 23 Sq kilometers whereas the 262 mines mentioned in Appendixes A and B cover only an area of 208 Sq kilometers and that in the interest of the economy of the State industry and workers an extent of 502 Sq kilometers including the area covered by the said mines be allowed to be deleted from the protected forest the State Government offering to place an equal extent for the purpose of being declared as protected forest The mine owners also riled objections to the Report of the Committee and requested that they he allowed to continue their mining operations The Government of India which was directed to file an affidavit riled the same and stated that the area declared as project tigertiger reserve was covered by notification issued under the Rajasthan Forest Act Environment Protection Act 1986 and the Mines and Minerals Regulation and Development Act 1957 It submitted that the Forest Conservation Act applies not only to reserve and protected forest but to all areas recorded as forest in Government records and that Mining was non forestry activity and therefore cannot be carried on in areas to which the Forest Conservation Act applies without prior approval of the Government of India It was further stated that on May 71992 the Government of India had issued the final notification under Section 3 of the Environment Protection Act 1986 prohibiting all mining activity except with the approval of the Government of India and that since no permission was obtained under any of the said enactments with respect to the said 262 mines no mining operations can be carried on in the area unless and until the permission of the Central Government was obtained On petitioner s behalf it was submitted that all the mining activity in the areas notified under the notification dated May 71992 should have stopped long ago and continuance of mining activity amounts to gross contempt and constitutes a clear violation of orders that the State Government appears to be colluding with the mineowners which is evident from the dissent expressed by officers of the State Government who were Members of the Committee to the straight forward and logical recommendation of the Chairman and that prohibition of mining flows from the provisions of the Forest 24 Conservation Act as well as the notification issued under the Environment Protection Act in May 1992 On behalf of the State Government It was submitted that the State Government and Its officers were not aware when they granted leaseslicences in respect of the listed mine that they fell within the area declared as protected forest and that the certificate issued by the Forest Department indicates that they did not fall within the protected forest area It was thus a bonafide grant It was further submitted that the State was prepared to abide fully by the orders of this Court 54 mines had been shut down and it was prepared to shut down all the listed mines if this Court so directs A map prepared by the State officers showing the areas covered by tiger reserve sanctuary protected forest and the location of the listed mines was placed before the Court for consideration On behalf of the mine owners in Mallana village it was submitted that demarcation of protected forest by the Committee was defective erroneous and unacceptable for the various reasons set out in the objections riled to the report that the map produced by the State Government delineating the tiger reserve was incorrect besides being an authenticated that the mine owners do not admit that their mines fell within the tiger reserve or within the protected forest areas and that closing down of hundreds of mines employing thousands of workers wherein a large amount of capital was invested would disturb the economy of the State besides affecting the supplies of marble and other minerals serving no public purpose On behalf of the some of the other mine owners it was submitted that it was unsafe to act upon and to pass any orders based upon the map produced by the State Government that the declaration as tiger reserve by the Government of India was not under any statutory authority that the areas declared as protected forest was not coextensive with the area declared as tiger reserve and sanctuary and national park that none of the mines fell within the sanctuary or the National Park not even within project tiger and that the mine owners are as much interested In protecting the environment and ecology as the petitioner 25 Declaring that the relevant laws were violated and passing directions the Court HELD 1 This is not a case where the Court is called upon to shut down an activity being carried on lawfully in the name of higher considerations of ecology and environment It is a simple case to ensure observance of enacted laws made by the State to protect the environment and ecology of the area In such a case there is no need to be oppressed by considerations of balancing the interest of economy and ecology That has already been done by the Legislature and Parliament 37 D E In the instant case the petitioner s grievance is against the executive Charged with the delegation of implementing the laws of the land the executive is yet failing to do its duty by law and by people and that when faced with the might of money respect for law is dissolving into respect for gammon 37 E F The State Government is empowered not only to declare any forest land as a protected forest but also any waste land as such The idea evidently is not only to protect the existing forest but also to bring waste lands under schemes of afforestation Once declared as protected forest the distinction between forest land and waste land disappears The entire area becomes a protected forest 38 B 3 Reading Section 29 of the Rajasthan Forest Act as a whole it appears the normal rule is to make an enquiry into the rights of the state Government and of the private parties over the land proposed to be declared as protected forest in the first in stance prepare a record thereof and then declare it as a protected forest But in case of urgency It is open to the State Government to Issue such notification forthwith subject of course to the existing rights of individuals and communities in the area concerned 38 F In the instant case the notification dated January 1 1975 issued by the Government of Rajasthan appears to be one issued under the proviso to sub section 3 of Section 29 38 G 4 Section 29 contemplates only one notification declaring an 26 area as a protected forest Whether issued after a normal enquiry and record or without enquiry or record Section 29 contemplates only one notification and not two in any event Therefore the notification issued is the valid and effective one It is not a provisional or preliminary notification It is not also the case of the mine owners that leases or licences in their favour were granted prior to January 1 1975 All of them were granted in the middle of or in the late eighties The savings clause contained in the proviso to sub section3does not avail them 39 A B 5 The Committee appointed by this court to demarcate and identify the areas declared as protected forest was composed of high officials of the Government of Rajasthan They had undertaken an elaborate and intensive exercise and have demarcated the areas declared as protected forest with the help of the official maps and records There is no reason not to accept the said report The several objections submitted by the mine owners cannot prevail over the official maps and records They were represented before the commission at the time of the said exercise The dissent note appended by the officers of the Government of Rajasthan was not with respect to the demarcation or identification of areas declared as protected forest but only with respect to the closure of the mines operating within those areas The report of the committee is accepted 39 D F 6 Once an area is declared as a protected forest it comes within the purview of the Even the State Government cannot carry on any non forest activity in the said area without prior approval of the Central Government That the mining activity amounts to non forest purpose is beyond dispute Thus the grant of mining lease licenses their renewal by the State Govern ment without obtaining the prior approval of the Central Government in respect of the mines situated within the protected forest after January 1 1975 is contrary to law 39 G H 40 B 7 All the mines listed in Appendix A to the Committee s Report do fall within the areas declared as protected forest while the mines listed in Appendix B fall partly with in and partly out side such areas 41 B 27 8 According to rule 46 of the Rajasthan Minor Mineral A Concession Rules 1986 no mining lease could have been granted or renewed within the forest without clearance from the Central Government in accordance with the forest Conservation Act 1980 and the Rules made there under Admittedly no such prior approval or clearance of central Government was obtained The purpose of Forest Acts and Environmental Protection Act may not always be the same Closure of the mines may not serve the environmental purpose but it may serve the forest purpose 40 B 10 It is appropriate that the merits of the proposal of the State Government to delete an extent of 502 Sq kilometers from out of the protected forest be examined by the Ministry of Environment and Forest forests and a report submitted to this Court within three months Orders will be passed thereafter on the application riled by the State of Rajasthan 40 E 11The notification issued by the Central Government under Section 3 of the Environment Protection Act 1986 on May 7 1992 expressly prohibits the carrying on of mining operations except with the Central Government s prior permission in the areas covered under project tiger The prohibition extends to existing mining leases in SanctuariesNational Park All mining operations are pro hibited therein 41 C D 12 There can he no legitimate dispute with respect to the correctness of the map produced by Government of Rajasthan or with respect to the area declared as tiger reserve Both the State Government and Central Government have delineated it May be that the declaration as tiger reserve was without any statutory authority and is relatable to the executive power of the Union of India but the notification issued under Section 3 of the Environment Protection Act puts the stamp of statutory authority over it The Central Government has specifically stated in its affidavits that no prior permission was obtained with respect to the mines located within the tiger reserve On this ground the mining operations being carried on in the tiger reserve including the listed mines also appears to be 28 contrary to law 42 C D 13The situation is that the mining activity in the listed mines mining activities in 54 mines has already been stopped is illegal and has to stop May be that this will have the effect of bringing to halt the activity involving a good amount of capital and a large number of workers But in view of the inherent illegality attaching to them there is no option but to close them They cannot be permitted to operate If and when the Central Government recommends the plea of the State Government and any of the areas already declared as protected forest are deleted with the leave of this Court can the mining activity go on in these areas 43 D 14It is directed that the mining activity in the mines situated outside the protected forest areas but within the tiger reserve may continue for a period of four months Within this period it shall be open to the concerned mine owners to approach the Department of Forest and Environment Government of India for permission to continue their mining operations They can continue the mining operations in these mines only if the Central Government permits them and subject to the orders of the Central Government in that behalf If no permission is obtained from the Central Government within the said period of four months the mining activity in the entire area declared as tiger reserve shall stop and cease on the expiry of four months 44 B C

Appeal Nos 1730311993 From the Judgment and Order dated 3061992 and 291992 of the Jammu and Kashmir High Court in LPA No 16190 and CW P No 135288 DD Thakur MH Baig Rajendra Mal Tatia Indra Makwana and K K Gupta for Suresh A Shroff Co for the Appellants VR Reddy Addl Solicitor General and Ashok Mathur for the Respondents The Judgment of the Court was delivered by BP JEEVAN REDDY J Heard counsel for the parties Leave granted in SLPs 1260892 and 1641892 The appeals are directed against the judgment of the Division Bench of the Jammu and Kashmir High Court allowing a special appeal preferred by the State of Jammu and Kashmir against the judgement of the learned Single Judge The learned Single Judge had allowed the writ petition filed by the appellants herein The matter pertains to approval and publication of the select list of District Munsifs prepared by the Jammu and Kashmir Public Service Commission On May 28 1984 the High court intimated the Government of ten vacancies in the category of munsifs and requested the Government to initiate appropriate steps for selection of candidates The government wrote to the public service commission and the latter issued the notification and put the process in motion Written test was held in the year 1985 viva voce was also held At that stage the High Court requested the government with a copy forwarded to the public service commission to select twenty candidates in the place of ten This was done on December 10 1985 The government in turn requested the public service commission on December 27 1985 to select twenty 100 candidates On March 11 1986 the Public Service Commission sent three select lists one containing twenty candidates the other containing three scheduled castes candidates and a waiting list of ten candidates From the record placed before us by the learned counsel for the State of Jammu and Kashmir it appears that the government received several complaints against the selection process The government appears to have been satisfied prima facie with some of those complaints and was toying with the idea of scrapping the entire list and asking for a fresh selection The select list sent by the commission was kept pending without being approved as required by Rule 39 of the Jammu and Kashmir Civil Service Judicial Recruitment Rules 1967 Meanwhile the High Court had been pressing for approval of the names in view of a number of vacancies and the consequent accumulation of work Number of courts were without presiding officers In particular the High Court said there was urgent need for at least thirteen Munsifs In the circumstances the government approved on December 23 1986 tile names of thirteen persons out of the list recommended by the public service commission and Published the same They were appointed on December 30 1986 Meanwhile a writ petition had been tiled in the High Court for a direction to the Government to approve and publish the list recommended by the public Service commission On December 30 1986 the Advocate General for the State stated before the court that the Government has already approved thirteen entries and that the question of approval of the remaining persons in the list was under the active consideration of the Government Recording the said statement the writ petition was dismissed as settled The Government however did not approve any of the other names in the lists evidently in view of the very same reasons for which they were disinclined initially to approve the said lists Meanwhile the candidates in the select list below serial No 13 were pressing the Government to approve and publish the list The High Court was also addressing the government from time to time to approve the list in view of certain vacancies arising since the appointment of the thirteen Munsifs aforementioned Since no further names were being approved by the Government the writ petition from which these appeals arise was filed on September 14 1988 The writ petition was allowed on July 111990 by a learned Single Judge and a direction was issued to the State Government to approve and publish the list of 101 the remaining candidates submitted by the public service commission to it for appointment as munsifs immediately in accordance with the Rules of 1967 and to consider the appointment of such candidates including the writ petitioners as munsifs in the vacancies existing or likely to exist in accordance with the recommendations to be made by the High Court On appeal the Division Bench disagreed with the learned Single Judge The Bench held that approval and publication of the select list by the Government under Rule 39 is not a mere ministerial act but a meaningful one It is open to the government to examine the select list carefully and to reach its own conclusion regarding the suitability and merits of the candidates and publish the names of only those candidates who are found suitable While approving the list the Division Bench held the State Government cannot alter or temper with the order of merit determined by the commission but it is certainly open to the government to stop at a particular point where it feels that a particular candidate is not meritorious and not to approve the remaining list The government is not bound to fill up the existing vacancies within a particular time frame The mere inclusion in the select list also does not confer upon the candidates any indefeasible right to appointment The recommendations of the commission are not binding upon the State Government held the Division Bench In the facts and circumstances of the case it must be held that the remaining seven names in the select list have been disapproved by the government The writ petition also suffers from leaches The persons who had meanwhile become eligible and qualified to apply for the said post should also be given a chance A list prepared as far back as 1985 86 cannot be directed to be approved in the year 1992 In these appeals it is submitted by the learned counsel for the appellants that once the public service commission prepares and recommends a select list the government has no power to sit in judgment over it It is bound to approve the list as recommended The function of the government under Rule 39 of the 1967 Rules is merely ministerial and formal Even otherwise the government has not disclosed any reasons for not approving the seven names while approving the first thirteen The government s action is arbitrary and capricious It is indeed vitiated by inadmissible and extraneous considerations The government cannot be allowed an absolute power in the matter On the other hand it is contended by Sri Dipankar Gupta learned Solicitor General appearing for the State of Jammu and 102 Kashmir that the function of the government under Rule 39 is not merely formal or ministerial The government being the appointing authority is entitled to scrutinise the list prepared by the public service commission It is open to the government either to approve or disapprove the list either wholly or in part As a matter of fact a large number of complaints were received by the government against the said selection and many of them were also found to be not without substance However in view of the pressing need expressed by the High Court the first thirteen candidates in the list were approved in the interest of judicial administration The remaining seven names were not approved inasmuch as no vacancies were available at that time In all the circumstances of the case the Hon ble Chief Minister took a decision on March 28 1988 not to approve any further names and to go in for fresh selection Inasmuch as the vacancies at the end of the year 1986 were not more than thirteen the refusal to approve the remaining seven is a valid and bonafide exercise of power and discretion on the part of the government The appellants have no legal right to be appointed just because their names have been included in the select list prepared by the public service commission The first requisition by the High court was sent in May 1984 The written test was held in 1985 The select list was recommended in March 1986 After a lapse of more than seven years the said list cannot now be directed to be given effect to the learned Solicitor general submitted Such a direction would deprive a large number of persons who have become qualified and eligible to apply and complete for the said post meanwhile of the opportunity of applying for the said post Many of them may even become age barred meanwhile he submitted It is true that the government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the government has an absolute power Such an argument does violence to the constitutional scheme The Constitution has created a public service commission and assigned it the function of Conducting examinations for appointments to the services of the Union or to the services of the State as the case may be According to Article 320 clause 1 this is the primary function of the commission The Government is directed to consult the public service commission on all matters relating to methods of recruitment to civil services and to civil posts and on the principles to be followed in making appointment to civil services and posts and on the suitability of candidates for 103 such appointment among other matters An examination of Articles 317 to 320 makes it evident that the constitution Contemplates the commission to he an independent and effective body outside the governmental control This is an instance of application of the basic tenet of democratic form of government viz diffusion of governing power The idea is not to allow the concentration of governing power in the hands of one person authority or organ It is in the light of this constitutional scheme that one has to construe Rules 39 and 41 of the 1967 Rules They read as follows 39Final List The list of selected candidates after it is approved shall be published by the Government Gazette and a copy thereof shall be sent to the court along with the Waiting list if any furnished by the commission for record in their office Security to the list The list and the Waiting list of the selected candidates shall remain in operation for a period of one year from the date of its publication in the Govt Gazette or till it is exhausted by appointment of the candidates whichever is earlier provided that nothing in this Rule shall apply to the list and the waiting list prepared as a result of the examination held in 1981 which will in operation till the list or the waiting list is exhausted Construed in the above light Rule 39 in our opinion does not confer an absolute power upon the government to disapprove or cancel the select list sent by the public service commission Where however the government is satisfied after due enquiry that the selection has been vitiated either on account of violation of a fundamental procedural requirement or is vitiated by consideration of corruption favourtism or nepotism it can refuse to approve the select list In such a case the government is bound to record the reasons for its action and produce the same before a Court if and when summoned to do so apart from placing the same before the Legislature as required by clause 2 of Article 323 Indeed clause 2 of Article 323 obliges the Governor of a State to ray a copy of the annual report received from the 104 commission before the Legislature together with a memorandum explaining as respect the cases if any where the advice of the commission was not accepted and the reasons for such non acceptance Evidently this is meant as a check upon the power of the government This provision too militates against the theory of absolute power in the government to disapprove or reject the recommendations of the commission For the same reason it must be held that the government cannot pick and choose candidates out of the list Of course where in respect of any particular candidate any material is discovered disclosing his involvement in any criminal activity the government can always refuse to appoint such person but this would not be a case touching the select list prepared and recommended by the commission It is equally not open to the government to approve a part of the list and disapprove the balance In this case it may be remembered that the government itself had asked for a list of twenty and the commission had sent a list of twenty we are not concerned with the waiting list sent by the commission at this stage It could not have been approved in part and rejected in part The number of vacancies available on the date of approval and publication of the list is not material By merely approving the list of twenty there was no obligation upon the government to appoint them forthwith Their appointment depended upon the availability of vacancies A reading of Rule 41 makes this aspect clear The list remains valid for one year from the date of its approval and publication If within such one year any of the candidates therein is not appointed the list lapses and a fresh list has to be prepared In this case no doubt a number of complaints appears to have been received by the government about the selection process We have seen the note file placed before us It refers to certain facts and complaints But if the government wanted to disapprove or reject the list it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded Not having done that and having approved the list partly thirteen out of twenty names the cannot put forward any ground for not approving the remaining list I indeed when it approved the list to the extent of thirteen it ought to have approved the entire list of twenty or have disapproved the entire list of twenty The objection the government have pertains to the very process of selection ie to the entire list and not individually to any of the remaining seven candidates It is true that mere inclusion in the select list does not confer upon 105 the candidates included therein an indefeasible right to appointment State of Haryana vs Subhash Chandra Marwaha AIR 1 973 SC2216 MS Jain vs State of Haryana AIR and State of Kerala vs A Lakshmikutty AIR but that is only one aspect of the matter The other aspect is the obligation of the government to act fairly The whole exercise cannot be reduced to a farce Having sent a requisitionrequest to the commission to select a particular number of candidates for a particular category in pursuance of which the commission issues a notification holds a written test conducts a notification holds a written test conducts interviews prepares a select list and then communicates to the government the government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment We do not think that any government can adopt such a stand with any justification today This aspect has been dealt with by a Constitution Bench of this Court in Shankarsan Dash vs Union of India 1991 1 3 SCC47 where the earlier decisions of this court are also noted The following observations of the court are apposite It is not correct to say that if a number of vacancies are notified for appointment and adequate number of candidates are found fit the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post Unless the relevant recruitment rules so indicate the State is under no legal duty to fill up all or any of the vacancies However it does not mean that the State has the licence of acting in an arbitrary manner The decision not to fill up the vacancies has to he taken bona fide for appropriate reasons And if the vacancies or any of them are filled up the State is bound to respect the comparative merit of the candidates as reflected at the recruitment test and no discrimination can be permitted This correct position has been consistently followed by this Court and we do not find any discordant note in the decisions in State of Hary 106 ana vs Subhash Chander Marwahs Neelima Shangla vs State of Haryana or Jatendra Kumar vs State of Punjab We may reiterate that the principle of Article 323 referred to hereinabove is equally relevant on the nature of the power of the government in such a matter Looked at from the above stand point it appears that the government s action in not approving the rest of the seven names in the Select list is unsustainable but there are certain circumstances which induce us not to interfere in this matter They are i During the period of one year from the date of approval of thirteen names 2312198630121986 no vacancy bid arisen which means that even if the list of twenty had been approved and published on December 23 or December 30 1986 none of the seven persons would have been appointed At the end of one year the list lapis and becomes inoperative The first letter of the High Court stating that one or two more vacancies have arisen and requesting the Government to approve the remaining names was sent only on August 131988 ie long after the expiry of the one year period Any direction at this stage to approve the list would be a futile exercise The list cannot be operated with respect to the vacancies existing as on today and ii When the government failed to act within a reasonable period from the date of the order December 30 1986 of the High Court in writ petition 131684 which was disposed of recording the statement of the Advocate General the petitioners ought to have moved in the matter They did not do so They waited for more then twenty months and approached the High Court only on September 14 This delay in our opinion disentitles the petitioners from any relief in the facts and circumstances of the case For the above reasons the appeals fail and are dismissed No costs WRIT PETITION C NO 81 OF 1993 107 The petitioner in this writ petition was included in the waiting list prepared by the public service commission Since the appeals preferred by the candidates at serial No 14 onwards in the main list have themselves failed there is no question of giving any relief to this petitioner The writ petition accordingly fails and is dismissed No costs V P R Appeals dismissed

Parliament enacted In 1983 the National Oilseeds and Vegetable Oils Development Board Act 1983 to provide for the development under the control of the Union of the Oilseeds Industry and the Vegetable Oils Industry and for matters connected therewith The Act contemplated the establishment of a board called the National Oilseeds and Vegetable Oils Development Board and the Constitution of Oilseeds and Vegetable Oils Development Fund for promoting the purposes of the Act The Vegetable Oils Cess Act 1983 was simultaneously enacted to levy and collect by way of cess for the purpose of the National Oilseeds and Vegetable Oils Development Board Act1983 a duty of excise on vegetable oils produced in any mill in India at such rate not exceeding Rs 5 per quintal on vegetable oil This Cess Act was however repealed by Section 12 of the Cotton Copra and Vegetable Oils Cess Abolition Act 1987 Chapter 5 of the said Act carried the heading Collection and Payment of Arrears of Duties and Excise The petitioners who were manufacturers of vegetable oil which was subject to the cessduty of excise under Section 3 of the Cess Act in their writ petitions to this Court questioned the validity of the levy and collection of cess for the period commencing on 1st March 1986 and ending with 31st March It was contended that 1 In his Budget Speech delivered on 2821986 while presenting the Budget 52 1986 87 the Union Finance Minister had stated that as an endeavour to reduce the number of cesses it had been decided to dispense with the cession cotton copra and vegetable oils and that this statement was exemplified and implemented by way of a communication from the Directorate of Vanaspati It is not open to the Government to go back upon the said decision and demand cess for the period subsequent to March 1 1986 and 2 By virtue of Sub section 4 of Section 3 of the Cess Act Rule 8 of the Central Excise Rules is attracted among other provisions of the Central Excise Act and Rules Reading the budget proposals of the Finance Minister and the letter of the Directorate of Vanaspati together it must be held that vegetable oils have been exempted from the levy under Section 3 1 Dismissing the Writ Petitions this Court HELD 1 a The cess having been imposed by a Parliamentary enactment could he rendered inoperative only by a parliamentary enactment Such repealing enactment came only in the year 1987 with effect from April 1 1987 58 C b The repealing Act expressly provided in Section 13 that the cess due before the date of said repeal but not collected shall be collected according to law as if the Cess Act is not repealed This provision amounts to a positive affirmation of the intention of the parliament to keep the said imposition alive and effective till the date of the repeal of the Cess Act 58 1 c In the face of the aforesaid statutory provisions no rights can he founded nor can the levy of the cess be said to have been dispensed with by virtue of the alleged decision referred to in the Finance Minister s speech or on account of the letter dated August 11 1986 58 E d The Finance Minister s speech is not law The Parliament may or may not accept his proposal Indeed in this case it did not accept the said proposal immediately but only a ear later It is only from the date of the repeal that the said levy becomes inoperative 2 a The cess imposed under section 3 1 of the Cess Act is a duty of Excise as stated in Section 3 Itself Therefore the Central Board of Excise and Customs was perhaps competent to grant exemption even in the case of said cess though no definite opinion on this question need be expressed since it was not debated Suffice It to say that the Central Government cannot again be brought in under sub rule 2 of rule 8 in the place of the Central Board nor can the Directorate of Vanaspati and Vegetable Oils be equated to the Central Board of excise and customs 58 H 59 A b The words so far as may bell occurring In section 3 4 of the Cess Act cannot be stretched to that extent Above all It Is extremely doubtful whether the power of exemption conferred by rule 8 can be carried to the extent of nullifying the very Act itself It would be difficult to Wee that by virtue of the power of exemption the very levy created by Section 3 1 can be dispensed with Doing so would amount to nullifying the Cess Act Itself Nothing remains thereafter to be done under the cess Act Even the language of Rule 8 does not warrant such extensive power Rule 8 contemplates merely exempting of certain excisable goods from the whole or any part of the duty leviable on such goods 59 B 3 The power of exemption cannot be utilised to dispense with the very levy created under Section 3 of the Cess Act or for that matter under Section 3 of the Central Excise Act 59 E Kesavananda Bharti Sripadagalvaru and others vs State of kerala and another AIR 1973 SC 1461 62 G relied on

l Leave Petition Civil No 10784 of 1992 etc From the judgment and Order dated 1331992 of the Central Administrative Tribunal New Delhi in OA No 262 of 1991 M K Ramamoorthy HS Gururaja Rao R Venkataramani SM Garg TL Roy TV Ratnam EX Joseph DN Paul and MM Kashyap for the Petitioners DN Dwivedi Addl Solicitor General VK Verma and Ms Ameeka Singh for the Respondents The Judgment of the Court was delivered by VENKATACHALAJ In these Special Leave Petitions we are concerned with the Grievance of the employees belonging to the office of the Comptroller and Auditor General of India working in the Railway Audit Department These employees who were Section Officers prior to 1st March 1984 got promotion from that day as Assistant Audit Officers on a pay scale of Rs 650 30 740 35800 EB 40 1040 and were designated as Officers Group B Gazetted On the recommendations of the Fourth Pay Commission the said pay scale of Assistant Audit Officers was revised to Rs 2000 3200 from 1st January 1986 The grievance of the Assistant Audit Officers Group B Gazetted is that the Indian Railways should not have denied to them the benefits such as issue of Railway Travel PassesPT0s allotment of Railway Quarters giving of accommodation in Rest HousesRetiring Rooms taking of family members while on tour etc admissible to Group B Gazetted Officers of the Railways The Principal Bench of the Central Administrative Tribunal to be referred to herein after as the Tribunal which examined the said grievance rejected it by order dated 13th March 1992 The grievance so rejected by the Tribunal is again ventilated in these Special Leave Petitions seeking redressal therefor Since the facts which have given rise to the grievance furnish the background for examining its merit it would be advantageous to advert to them at the 299 out set The Railway Board in its letter No EG 58PS5 201 dated 14th April 1960 addressed to the General Managers of the Indian Railways spelled out its policy in the matter of issuance of Railway PassesPT0s to the staff of the Railway Audit Department including the Indian Audit Accounts Service Officers IAAS Officers of that Department thus i The scale of PassesPT0s and the rules governing their issue will be the same as applicable to Railway servants from time to time PassesPT0s to IA AS Officers if are to be issued when they are proceeding on leave exceeding four months they should have completed one year s service in the Railway Audit Department and the Comptroller and Auditor General of India ought to assure by declaring that the Officers concerned will return to Railway Audit Department on the expiry of such Officers leave IA AS Officers working in the Railway Audit Department will pot be entitled to grant of certificates which would entitle them to obtain travel concessions on Railways outside India PassesPT0s will be issued by the Chief Auditors irrespective of home or foreign line It was mentioned in the above letter that the same was issued with the sanction of the President of India The policy contained in the above letter was followed by the Indian Railways for several years In the meantime the Director of Audit Central Railway by his notice dated 19th December 1983 made it known that the Central Government had on the recommendations of the Comptroller and Auditor General of India sanctioned higher scale of pay of Rs 650 30 740 35 800 EB 40 1040 to 80 per cent of Section Officers on the staff of the Railway Audit Department and that scale of pay would become effective from 1st March 1984 It was indicated in that notice that the Section Officers on the staff of the Railway Audit Department getting such higher scale of pay will have their designation as Assistant Audit Officers Group B Gazetted Similar notice it is said was issued by the concerned Director of Audit of every other Zone of the lndian Railways The said scale of the pay of the Assistant Audit Officers Group B Gazetted came to be revised as Rs 2000 300 3200 from 1st January 1986 as per the recommendations of the Fourth Pay Commission Even then the Assistant Audit Officers who Were designated as Group B Gazetted continued to have the privileges and facilities of Group B Officers of the Indian Railways However by its letter No EW 87PS513 dated 27th July 1989 addressed to all General Managers Indian Railways the Railway Board referring to the creation of posts of Assistant Audit Officers in the Railway Audit Department and the incumbents in those posts having been given Group B Gazetted status stated thus As a result of restructuring of the cadre of Indian Audit and Accounts Department a number of posts of Assistant Audit Officers have been created in the scale of Rs 2000 3200 and classified as Group B posts carrying a gazetted status The eligibility of these officers to various facilities as admissible to the Gazetted Officers on Railways in scale of Rs 2000 3500 has been considered but the same has not been agreed to It has been decided that the Audit Officers in scale of Rs 2000 3200 may be given the privileges and facilities viz PassesPTOs allotment of Railway Quarters and Rest Housesretiring Rooms and taking family with them while on tour etc as admissible to the Railway Employees in identical scale of pay viz Rs 2000 3200 The said letter shows that it had been issued with the concurrence of the Finance Directorate of the Ministry of Railways But the contents of the said letter were modified by a telegram which read thus No EW87PS513 In partial notification of Ministry of Railway s letter of even number dated 27789 Ministry of Railway have decided that the Assistant Audit Officers given the Gazetted status between 1st March 1984 and 31121985 shall continue to enjoy the facility of passes PTOS Quarters etc enjoyed by them as a result of conferring of the gazetted status on them during the period mentioned above As personal to them The said telegram makes it obvious that those Assistant Audit Officers in the Railway Audit Department who got Gazetted status between 1st March 1984 and 31st December 1985 shall alone be entitled to the facilities of PassesPT0s Quarters etcand not those who got such Gazetted status after 31st December 301 Then there is the letter No PCIV86 Imp46 dated 30th October 1987 issued by the Railway Board to the General Managers of the Indian Railways which shows that the president of India had consequent upon the revision of pay scales of the Central Government employees recommended by the Fourth Pay Commission reclassified all the posts under the Indian Railways thus Classification Description of Posts of posts Group A All posts in scale Rs 2200 4000 and above Group B Posts in scale Rs 2375 3500 applicable to accounts Officers only and other posts of Officers in scale Rs 2000 3500all Deptts Group C All posts in scales Rs 825 1200 and above including posts of Post graduate Teachers Selection GradeHead masters Middle School Selection Gradein scale Rs 2000 3500 Supervisors in scale Rs 2375 3500 and excluding those mentioned for Groups A and B Group D All posts in scales Rs 750 940 Rs 7751025 and Rs 800 1150 The said classification of posts in the Indian Railways is done as becomes clear from the said letter consequent upon the introduction of Railway Services Revised Pay Rules 1986 In this context it would be necessary to advert to the Railway Servants Pass Rules 1986 made by the President of India under the proviso to Article 309 of the Constitution regulating the issuance of passes and Privileged Ticket Orders to Railway servants Meaning of railway servant for the purposes of the said Rules is given in clause h of Rule 2 thereof thus railway servant means a person who is a member of a service or who holds a post under the administrative control of Railway Board and includes a person who holds a post in the Railway Board Persons lent from a service or post which is not under the administrative control of the Railway Board to a service or post which is under such administrative control do not come within the scope of this definition This term excludes casual labour for whom special 302 orders have been framed Schedule II of the said Rules contains the classification categorisation of Railway servants into Group A Group B Group C and Group D and refers to certain privileges admissible to them That Schedule which provides for issue of passes on privilege account to Railway servants puts Group A Group B Railway servants in one category Group C Railway servants are put in altogether a different category for the purpose of issue of passes to them From the said facts it becomes clear that the Assistant Audit Officers in the Railway Audit Department who hold the posts on the pay scale of Rs 20003200 although designated as Group B Officers are not treated on par with Railway servants of the Indian Railways in the category of Group B Officers to wit the Railway servants holding the posts of Assistant Accounts Officers and other Officers on the higher pay Scale of Rs 2000 3500 Therefore the obvious reason for denial of the privileges conferred upon Group B Railway Officers under the Railway Servants Pass Rules 1986 to Assistant Audit Officers of the Railway Audit Department was the latter holding posts of lower pay scale of Rs 2000 3200 It was contended by the learned counsel for the petitioners that the Assistant Audit Officers working in the Railway Audit Department could not have been treated differently from Group B Officers of the Indian Railways in the matter of issue of privilege PassesPT0s to them when the latter No E G 58PS5 201 dated 14th April 1960 issued by the Railway Board with the sanction of the President clearly laid down the policy that scale of PassesPT0s and the Rules governing their issue will be the same as applicable to Railway servants from time to time It was also contended by them that the Railway Servants Pass Rules 1986 issued by the President of India since exclude the Assistant Audit Officers from B category Officers they would be violative of Article 14 of the Constitution Lastly it was contended by them that the decision of the Indian Railways that the Assistant Audit Officers of the Railway Audit Department who were given the Gazetted status between 1st March 1984 and 31 st December 1985 alone shall continue to enjoy the facilities of PassesPT0s Quarters etc has since resulted in denial of such facilities to the Assistant Audit Officers who were given the Gazetted status after 31st December 1985 the same decision is violative of Article 14 of the Constitution We are unable to find merit in any of the said contentions urged on behalf of the Assistant Audit Officers in support of their grievance for the reasons which we shall presently state 303 The Assistant Audit Officers although working in the Railway Audit Department are the Officers who are appointed by the Comptroller and Auditor General of India and work under his control and supervision No doubt the Railway Board as seen from its letter dated 14th April 1960 adverted to earlier had decided to give to the staff and Officers working in the Railway Audit Department the facilities admissible to Railway servants of comparable status It is not for us to go into the question whether it was obligatory for the Railways to confer such facilities on the staff and Officers of the Railway Audit Department who in reality belong to the Department of Comptroller and Auditor General of India inasmuch as that question is not required to be decided by us When the said letter dated 14th April 1960 containing the Railway Board s policy of issuance of PassesPT0s is seen it shows that the staff of the Railway Audit Department is treated more generously than the Officers of the same Audit Department in the matter of issuance of PassesPT0s to them Officers in that the issuance of passes to the latter category is made subject to certain restrictions No doubt when certain Section Officers were promoted as Assistant Audit Officers and conferred the status of Group B Gazetted by the Comptroller and Auditor General of India such Officers were treated notwithstanding their lower pay scale on par with B Group Officers in the Indian Railways as regards privilegesfacilities obtainable by them from the Railways But when the scale of pay of the Assistant Audit Officers of the Railway Audit Department was revised on the recommendations of the Fourth pay Commission the scale of pay of the Assistant Audit Officers who had been designated as Group B Officers by the Comptroller and Auditor General of India fell short of the scale of pay of the Railway servants of the Railway Department classified as Group B Officers by the President of India It cannot be overlooked that it is the President of India who made the Railway Services Revised Pay Rules 1986 on the basis of the pay revision of the Central Government Servants as recommended by the Fourth Pay Commission and it is again the order of the President of India which classified the Railway servants into Group A Group B Group C and Group D according to the minimum and maximum scale of pay of the posts held by them Indeed it was not disputed on behalf of the petitioners that the Assistant Audit Officers of the Railway Audit Department who are on the pay scale of Rs 2000 3200 are treated on par with the Railway servants Officers who are on the pay scale of Rs 2000 3200 in matters of giving the facilities or conferring of privileges What has happened is that the Railway Servants Pass Rules 1986 when are made certain extra privileges relating to issuance of PassesPT0s are conferred on Railway servants that is Officers in Group A and Group B However Group B Railway servants according to classification made by the president of India on revision of their pay scales are those whose pay scales are Rs2000 3500 What is contended for on behalf of the Assistant Audit Officers is that the fact that their 304 scale of pay is lower then Rs 2000 3500 as applicable to B Group Gazetted Officers of the Railways should be ignored and the status that is conferred upon them by the Comptroller and Auditor General of India as Group B Gazetted alone should form the basis to give them facilities or confer privileges on par with B Group Gazetted Railway servants The submission made on behalf of the Railways was to the contrary According to the submission the fact that the Assistant Audit Officers in the Railway Audit Department on the pay scale of Rs 2000 3200 are designated by the Comptroller and Auditor General of India as Group B Gazetted is not sufficient to equate them with Group B Officers of the Indian Railways who hold higher posts with scale of pay of Rs 2000 3500 If the Railways give the facilities and privileges to the Assistant Audit officers who are not Railway servants treating them on par with Railway servants of Group B they could find no valid reason to deny such facilities and privileges to the Railway servants holding posts on the pay scale of Rs 2000 3200 If that has to be done the Indian Railways would be required to extend similar facilities and privileges to all Railway servants who hold posts in the Indian Railways on the scale of pay of Rs 2000 3200 It means extending the benefits to thousands of Railway servants involving heavy financial burden on the Indian Railways We find that the contentions raised on behalf of the Assistant Audit Officers are unacceptable in that if accepted they would lead to unjust results of the Indian Railways conferring special privileges and facilities upon persons belonging to foreign Department of Comptroller and Auditor General of India while their own servants who hold equivalent posts on the same scale of pay will be denied such privileges and facilities Therefore there is substance in the submissions made on behalf of the Indian Railways that the grievance sought to be made out on behalf of the Assistant Audit Officers lacks merit and calls to be rejected We accordingly reject the contention advanced on behalf of the Assistant Audit Officers that they should be treated by the Indian Railways on par with Railway servants classified in Group B in matters relating to the conferring of privileges and giving of facilities Again when the Railway Servants Pass Rules 1986 made in consonance with the classification of Railway servants rightly made by the President of Indian consequent upon the Railway services Revised Pay Rules 1986 issued under the proviso to Article 309 of the Constitution confer facilities or privileges according to the class to which Railway servants belong they cannot be treated as Rules which are violative of Article 14 of the Constitution Nor can they be regarded as arbitrary Hence the contentions raised on behalf of the Assistant Audit Officers on the unsustainability of the Railway Servants Pass Rules 1986 based on Article 14 of the Constitution wan ant rejection as those lack in merit 305 Coming to the last contention viz that the privileges given to and facilities conferred on the Assistant Audit Officers who had been given the status of Group B Gazetted by the comptroller and Auditor General of India between 1st March 1984 and 31st December 1985 are discriminatory all that we would wish to say is that even if such discrimination is brought about by the Railways in regard to the officers of the same category that is Assistant Audit Officers such discriminatory treatment accorded to a small number cannot be availed of by the petitioners to obtain the benefit of such wrongly conferred privileges and facilities However we do not consider it appropriate to pronounce upon the correctness of the conferment of such privileges and facilities on a small number of Assistant Audit Officers in these petitions when they are not impleaded by the petitioners as party respondents in these petitions Hence we reject the last contention as well We therefore find no good reason to disagree with the order of the Tribunal impugned in these Special Leave Petitions In the result we dismiss these Special Leave Petitions Howeverin the facts and circumstances of the cases we make no order as to costs SLPs dismissed

The nomination paper of the fourth respondent who was one of the candidates for election to the Legislative Assembly of the State was rejected by the returning officer on the ground that as he was the Headmaster of a Government aided school he was disqualified under section 7d and e of the Representation of the People Act 1951 to be chosen for election One of the voters of the constituency filed a petition praying that the election of the appellant be declared void under section 1001c of the Act on the ground that the rejection of the nomination paper of the fourth respondent was improper because the latter had ceased to be a Headmaster at the time of his nomination and that further the institution was a private one The appellant who was the second respondent in the petition contended that the nomination paper of the fourth respondent was rightly rejected not only on the ground put forward before the returning officer but also for the reasons that he was interested in Government contracts and that he had agreed to serve as a teacher under the District Board The question was whether in an election petition challenging the validity of the rejection of a nomination paper under s 1001c of the Act it was open to the parties to raise grounds 624 of disqualification other than those put forward before the returning officer It was contended for the respondent that the proceedings before the Election Tribunal were really by way of appeal against the decision of the returning officer and that therefore the scope of the enquiry in the election petition must be co extensive with that before the returning officer and must be limited to the grounds taken before him Held that an election petition is an original proceeding instituted by the presentation of a petition under section 81 of the Representation of the People Act 1951 and that the jurisdiction which a Tribunal exercises in hearing an election petition even when it raises a question under section 1001c of the Act is not in the nature of an appeal against the decision of the returning officer Held further that in considering whether a nomination paper was improperly rejected under section 1001c the real question for decision would be whether the candidate was duly qualified and was not subject to any disqualifications as provided in section 362 of the Act The Tribunal would consequently be competent to entertain grounds of disqualification other than those put forward before the returning officer The expression improperly rejected in section 1001c of the Act explained Mengh Raj vs Bhimandas Tej Singh vs Election Tribunal JaiPur and Dhanraj Deshlehara vs Vishwanath Y Tamaskar 1958 15 E L R 260 approved

Appeal Nos 1583 1584 NT of 1977 From the Judgment and Order dated 22111976 of the Bombay High Court in IT Application No 191 of 1976 SC Manchanda Dr KP Bhatnager C Ramesh TV Ratham for P Parmeswaran for the Appellant Mrs AK Verma SV Pathak for JBD Co for the Respondent The judgment of the Court was delivered by BP JEEVAN REDDY J These appeals are preferred by the Revenue against an order of the Bombay High Court rejecting an application under section 256 2 of the Income Tax Act By means of the said application the Revenue sought to raise the following three questions 1 Whether on the fact and in the circumstances of the case the Tribunal was right in holding that the commission paid by the assessee company to its directors was an additional remuneration forming part and parcel of the salary allowed to them and that the said remuneration would not be covered by section 40 a v of the Income tax Act and thereby allowing the assessee s claim for allowing the deduction of the whole amount of commission paid to the directors iiWhether the Tribunal was right in their view that the words Whether convertible into money or not used in section 40 a v of the Act postulated that the 88 benefit amenity or perquisite mentioned therein covers benefit amenity or perquisite allowed in Kind but not in cash iiiWhether the Tribunal was right in holding that the expenditure of Rs 19386 for the assessment year 1971 72 and Rs 29283 for the assessment year 197273 did not represent entertainment expenditure within the meaning of section 37 ii of the Income tax Act The assessment years concerned here in are 1971 72 and 1972 73 The first two questions go together The provision applicable for the AY 1971 72 was Section 40 a v whereas for the A Y 1972 73 the provision applicable is Section 40 a 5 which is a successor provision to Section 40 a v The respondent is a private limited company trading in tractors and earth moving equipment During the accounting years relevant to the aforesaid assessment years the assessee paid to three of its Directors commission on sales in addition to salary as follows Assessment Director Salary Commission year 1971 72 Sh SB Lal 39000 36171 Sh SB Mathur 18000 36171 Sh AB Mathur 7800 36171 1972 73 Sh SB Lal 39000 40792 Sh SB Mathur 18000 40792 Sh AB Mathur 7800 40792 The commission in the above table means the commission paid to the said Directors on the sales effected by the assessee at a prescribed percentage The Income Tax Officer treated the commission on sales as perquisites and disallowed the same applying Section 40 a v for the year 1971 72 and Section 40 A 5 for the assessment year 1972 73 fie also disallowed the expenses referred to 89 in question No iii as entertainment expenses On appeal the Assistant Appellate Commissioner held that the commission on sales cannot he treated as perquisites He also held that the expenditure on dinner and tea cannot be characterised as entertainment expenditure and ought not to have been disallowed The Revenue preferred appeals before the Tribunal against the orders of the AAC which appeals were dismissed by the Tribunal following its order dated August 25 1973 relating to assessment years 1967 68 to 1968 70 The order dated August 25 1973 dealt anter alia with the questions arising herein ind held the same against the Revenue An application under section 256 1 was dismissed by the Tribunal The first question urged before us which was also the question urged before the Tribunal is whether commission on sales paid in cash falls within the fourcornersot Section40 a vSection40A 5 It Would be appropriate to set out the said provisions in so far as they are relevant Section 40 Amounts not deductible Notwith standing anytime to the contrary in section 30 to 38 the following amounts shall not be deducted in computing the income chargeable under the head Profits and gains of business or profession a in the case of any assessee v any expenditure which results directly or indirectly in the provision of any benefit or amenity or perquisite whether convertible into money or not to an employee including any sum paid by the assessee in respect of any obligation which but for such payment would have been payable by such employee or any expenditure or allowance in respect of any assets of the assessee used by such employee either wholly or partly for his own purpose or benefit to the extent such expenditure or allowance exceeds one fifth of the amount of salary payable to the employee or an amount calculated at the rate of one thousand rupees for each month or part thereof com 90 prised of his employment during the previous year whichever is less Note The two provisos and the two explanations are omitted as not necessary for the purpose of this case Section 40 A 5 which in so far as it is material is substantially in the same terms reads as follows Section 40 A Expenses or payments not deductible in certain circumstances 5 a Where the assessee i incurs any expenditure which results directly or indirectly in the payment of any salary to an employee or a former employee or ii incurs any expenditure which results directly or indirectly in the provision of any perquisite whether convertible into money or not to an employee or incurs directly or indirectly any expenditure or is entitled to any allowance in respect of any assets of the assessee used by an employee either wholly or partly for his own purposes or benefit then subject to the provisions of clause b so much of such expenditure or allowance as is in excess of the limit specified in respect thereof in clause c shall not be allowed as a deduction Explanation 2 In this sub section b perquisite means i rent free accommodation provided to the em ployee by the assessee ii anv concession in the matter of rent respecting any 91 accommodation provided to the employee by the assessee iiiany benefit or amenity granted or provided free of cost or at concessional rate to the employee by the assessee ivpayment by the assessee of any sum in respect of any obligation which but for such payment would have been payable by the employee and v payment by the assessee of any sum whether directly or through a fund other than a recognised provident fund or an approved superannuation fund to effect an assurance on the life of the employee or to effect a contract for in annuity Incidentally Section 40 A 5 which was inserted repealing section 10 a v his itself been deleted with effect from April 1 1989 by the Direct Tax Laws Amendment Act 1987 The sister provision contained in sub clauses i and ii of clause c of section 40 applicable to directors of a company and other persons mentioned therein has also been deleted by the very same enactment with effect from April 1 1989 Since the relevant provisions in section 40 a v and 40 A 5 are substantially similar we smile consider the language employed in the latter provision Sub clause 5 of section 40 A is applicable in the following Situations 1 Where the assessee incurs any expenditure which results directed or indirectly in the payment of any salary to in employee or it former employee or 2 Where the assessee incurs any expenditure which results directly or indirectly in the provision of any perquisite whether convertible into money or not to an employee 3 it Where the assessee incurs directly or indirectly any 92 expenditure or provides an allowance in respect of any assets of the assessee used by the employee either wholly or partly for his own purpose or benefit bWhere an employee of the assessee is provided any allowance entitled to any allowance in respect of any assets of the assessee used by such employee either wholly or partly for his own purposes or benefit In either of these situations so much of such expenditure or allowance as is in excess of the limits specified will not be allowed as a deduction The question is whether the commission paid to its directorsemployees on the sales effected by the assessee falls within any of the situationsclauses mentioned above The Revenue relies upon the second one among them According to them the commission paid is a perquisite which submission they say is borne out by the words within the brackets whether convertible into money or not immediately following the word perquisite On the other hand the contention of the assesses which his been accepted by the AAC and situationsclauses contemplated by sub section 5 Having regard to the language employed in clause c we are inclined to agree with the assessee The language of sub section 5 is significant The first two situations as we have called them start with the words where the assessee incurs any expenditure which results directly or indirectly It is difficult to say that payment of a certain cash amount by wayof commission on sales directly to an employee can be said to fall within the words where the assessee incurs any expenditure which results directly or indirectly Such a payment cannot also fall within the two sub clauses of clause 3 in our analysis since they speak of an expenditure or allowance in respect of any assents of the assesee used by the employee Learned counsel for the Revenue Shri Manchanda argued that the words whether convertible into money or not bring out the intention of the Parliament and support his contention He says there is no reason not to include cash payment within the ambit of sub section5 to Section 40 A We are however not concerned with the generality of cash payments but only with the payment concerned herein Reading the Sub section as a whole and having regard to the language employed therein the the Tribunal is that Such cash payment does not fall within any of the 93 payment concerned herein does not fit into it The employees concerned herein also happen to be directors The provision in clause c of Section 40 applies to directors among others Of course Section 40 A 5 is applicable only to companies where as Section 40 A 5 is applicable to employees whether of companies or others In the case of directors who are also employees both the provisions will be attracted the higher of the two ceilings has to be applied The learned counsel for the respondent assessee brought to our notice it circular issued by the Central Board of direct Taxes which inter alia say its read is payment of commission to the employees the question whether it forms part of salary or perquisite has to he decided on the acts of each case If the terms and conditions of service are such that commission is paid not as a bounty or benefit but is paid is part and parcel of the remuneration for the service renders by the employees such payment partake the nature of salary rather than as a benefit or perquisite If however on terms and conditions of service either there is no obligation for the employer to pay the commission or it is a matter purely in the discretion of the employer such payment should he treated is a benefit by way of addition to salary rattler thin in lieu of salary It is not necessary for us to make any comment on the said circular For the above reasons we are of the opinion that the High Court was justified refusing to direct the Tribunal to state question 1 and 2 under section 256 2 So far its question No3 is concerned it his not been seriously pressed before us having regard to the smallness of the amount involved It is also stated that the said question is pending consideration is a batch of appeals before this Court We do not propose to express any opinion on question No 3 for the reason that the amount involved is quite small having regard to the income of the assessee respondent The appeals accordingly fail and are dismissed No costs Appeal dismissed

On 2851984 the High Court intimated the government of ten vacancies in the category of Munsifs and requested it to initiate appropriate steps for selection of candidates Written test was held in the year 1985 and viva voce was also held by the Public Service Commission On 10121985 the High Court requested the Government to select twenty candidates in the place of ten On 27121885 the Government requested the public Service Commission to select twenty candidates On 1131986 the public service commission sent three select lists one containing twenty candidates the other containing three Scheduled castes candidates and a waiting list of ten candidates The Government received several complaints against the pro cess of selection It was toying with the idea of scrapping the entire list and asking for a fresh selection 95 On 23121986 as the High Court said that there was urgent need for at least thirteen Munsifs the government approved the name of thirteen persons out of the list recommended by the Public Service commission and published the same They were appointed on 3012 Meanwhile a writ petition had been riled in the High Court for a direction to the Government to approve and publish the list recommended by the Public Service Commission On 30121986 the State stated before the High court that it has already approved thirteen names and approval of the remaining seven persons was under its active consideration The High Court dismissed the writ petition as settled The Government did not approve any other names in the list in view of the complaints against the selection process by the Public Service Commission The candidates in the select list below serial No 13 were pressing the Government to approve and publish the list and the High Court was also pressing the Government to approve the list in view of the vacancies Another writ petition was riled to direct the Government to approve the remaining seven names from the select list The High Court Single judge allowed the writ petition and directed the Government to approve and publish the list of the remaining candidates submitted by the Public Service Commission to it for appointment as Munsifs immediately in accordance with the Jammu and Kashmir Civil Services judicial Recruitment Rules 1967 and to consider the appointment of the candidates including the writ petitioner as Munsifs in the vacancies existing or likely to arise in accordance with the recommendations to he made by the High Court On appeal the division Bench of the High Court reversed the decision of the Single Judge The present appeals by special leave were flied against the 96 decision of the Division Bench contending that once the Public Service Commission prepared and recommended a select list the Government had no power to sit in judgment over it that the Government was bound to approve the list as recommended that the function of the Government under Rule 39 of the 1967 Rules was merely ministerial and formal that the Government s action was arbitrary and capricious and vitiated by any admissible and extraneous consideration The State Government submitted that the function of the Gov ernment under Rule 39 was not merelY formal or ministerial that the Government being the appointing authority was entitled to scrutinies the list open to the Government either to approve or disapprove the list either whollY or in part that a number of complaints were received bY the Government against the selection and many of them were found to he not without substance that in view of the pressing need expressed by the High Court the first thirteen candidates in the list were approved in the interest of judicial administration that refusal to approve the remaining seven names inasmuch as no vacancies were available at that time was a valid and bonafide exercise of power and discretion ton the part of the Government that the appellants had no legal right to be appointed just because their names were included in the select list prepared by the Public Service Commission Dismissing the appeals this Court HELD 11 It is true that the Government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the Government has an absolute power Such an argument does violence to the constitutional scheme 102 F 12 Rule 39 does not confer an absolute power upon the Government to disapprove or cancel the select list sent by the Public Service Commission Where however the Government is satisfied after due enquiry that the selection has been vitiated either on account of violation of a fundamental procedural requirement or is vitiated by consideration or corruption favourtism or nepotism it can refuse to 97 approve the select list In such a case the Government is bound to record the reasons for its action and produce the same before a Court if and when summoned to do so apart from placing the same before the Legislature as required by clause 2 of Article 323 103 F H 13 article 323 2 is meant as a check upon the power of the Government The provision militates against the theory of absolute power in the Government to disapprove or reject the recommendations of the commission For the same reason it must he held that the Government cannot pick and choose candidates out of the list It is equally not open to the Government to approve a part of the list and disapprove the balance 104 B 14 Where is respect of any particular candidates an material is discovered disclosing his involvement in any criminal activity the Government can always refuse to appoint such person but this would not he a case touching the select list prepared and recommended by the commission 104 C 15 In this case the Government itself had asked for a list of twenty and the commission had sent a list of twenty It could not have been approved in part and rejected in part The number of vacancies available on the date of approval and publication of the list is not material By merely approving the list of twenty there was no obligation upon the Government to appoint them forthwith Their appointment depended upon the availability of vacancies The list remains valid for one year from the date of its approval and publication if within such one year any of the candidates therein is not appointed the list lapses and a fresh list has to be prepared 104 E F 16 If the Government wanted to disapprove or reject the list it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded Not having done that and having approved the list partly thirteen out of twenty names they cannot put forward any ground for not approving the remaining list Indeed when it approved the list to the extent of thirteen it ought to have approved the entire list of twenty or to have disapproved the 98 entire list of twenty The objection the Government have pertains to the very process of selection ie to the entire list and not individually to any of the remaining seven candidates 104 G 17 Mere inclusion in the select list does not confer upon the candidates included therein an indefeasible right to appointment 104 H State of Haryana vs Subhash Chandara Marwaha M section Jain vs State of Haryana AIR 1977 SC and State of Kerala vs A Lakshmikutty AIR 1987 SC 331 referred to 111 E 18 The other aspect is the obligation of the Government to act fairly The whole exercise cannot be reduced to a more farce Having sent a requisitionrequest to the commission to select a particular number of candidates for a particular category in pursuance of which the commission issues a notification holds a written test conducts interviews prepares a select list and then communicates to the Government the Government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment 105 B C Shankarsan Dash vs Union of India referred to The Government s action In not approving the rest of the seven names in the select list is unsustainable but there are certain circumstances which induce the Court not to interfere in this matter They are 1 During the period of one year from the date of approval of thirteen names 2312198630121986 no vacancy had arisen which means that even if the list of twenty had been approved and published on December 23 or December 30 1986 none of the seven persons would have been appointed At the end of one year the list lapses and becomes inoperative II When the Government failed to act within a reasonable period from the date of the order December 30 1986 of the High Court in writ petition 131684 which was disposed of recording the statement of the Advocate General the petitioners ought to have moved in the matter They did not do so They waited for more than twenty months and approached the High Court only on 99 September 14 1988 This delay disentitles the petitioners from any relief in the facts and circumstances of the case 106 C G

P C Nos 118979892 etc From the Judgment and Order dated 2881992 of the Delhi High Court in Civil Writ Petition Nos 1152 1157 of 1992 VR Reddy Addl Solicitor General Kapil Sibbal PP Rao Rama Jois A Temton Dr Shankar Ghosh K K Venugopal Harish Salve FS Nariman AN Haksar Shanti Bhushan KN Bhat TR Andhyarujina CV Subba Rao PP Singh Mrs B Sunita Rao Sudhir Kulshreshtha Rohit Tandon Parijat Sinha Ms Sunanda Roy Ms section Bhattacharya BD Ahmed Man Mohan Singh Gopal Subramanium DN Mishra AM Dittia PK Ganguli Manoj K Das Amit Prabhat Tripurary Roy KL Mehta section Ganesh Pratap Venugopal KJ John Pramod Dayal Ajay K Jain and DN Nanjunda Reddy for the appearing parties The judgment of the Court was delivered by 137 K JAYACHANDRA REDDY J By our order dated 14th January 1993 while disposing of these special leave petitions we gave our conclusions and we proposed to deliver the detailed judgment at a later stage giving all the reasons in support of those conclusions We hereby deliver the detailed judgment In our earlier order we stated the relevant facts and the issues involved in a concised form However we think it appropriate and necessary to refer to some of them for a better appreciation of the reasons in their proper perspective Every year the Railway Board enters into contracts with the manufacturers for the supply of cast steel bogies which are used in turn for building the wagons Cast steel bogies come under a specialised item procured by the Railways from the established sources of proven ability There are 12 suppliers in the field who have been regularly supplying these items Two new firms Simplex and Beekay also entered the field Among them admittedly Ms HDC Mukand and Bharatiya are bigger manufacturers having capacity to manufacture larger quantities On 251091 a Iimited tender notice for procurement of 19000 cast steel bogies was issued to the regular suppliers as well is the above two new entrants for the year namely from 1492 to 31393 The last date for submission of offers to the Ministry of Railways was 271191 by 230 PM and the tenders were to be opened on the same day at 3 PM It was also stated therein that the price was subject to the price variation clause and the base date for the purpose of escalation was 1991 and that the Railways reserved the right to order additional quantity upto 30 of the ordered quantity during the currency of the contract on the same price and terms and conditions with suitable extensions in delivery period The offers were to remain open for a period of 90 days On that day the tenders were opened in the presence of all parties The price quoted by the three manufacturers ie Ms HDC Mukand and Bharatiya was an identical price of Rs 77666 per bogie while other tenders quoted between 83000 and 84500 per bogies After the tenders were opened and before the same could be finalised the Government of India announced two major concessions namely reduction of custom duty on the import of steel scrap and dispensation of freight equalisation fund for steel The tenders were put up and placed before the Tender Committee of the Railways which considered all the aspects The Committee concluded 138 that three of the tenderers namely Ms HDC Mukand and Bharatiya who had quoted identical rates without any cushion for escalation between 1791 and 1991 have apparently formed a cartel The Tender Committee also noted that the rates quoted by them were the lowest Taking into consideration the reduction of Rs 1500 as result of the concessions in respect of the reduction of customs duty on the import of steel scrap and dispensation of the freight equalisation fund for steel The Tender Committee concluded that the reasonable rate would be Rs 76000 per bogie On the question of distribution of quantities to the various manufacturers the Tender Committee decided to follow the existing procedure The Tender Committee signed these recommendations on 4292 but on the same day the Member Mechanical of the Committee received letters from Ms HDC and Mukand Ms HDC in its letter stated that in view of the concessions and also on the basis that per Kg rate of casting per bogie could be reduced from Rs 3750 to Rs 29 the cost of casting can also be reduced and therefore they would be in a position to supply the bogies at a lesser rate in case a negotiation meeting is called Ms Mukand in its letter also offered to substantially reduce he prices and they would like to co operate with the Railways and the Government and brings down the prices as low is possible and asked for negotiations Though this was post tender correspondence the Department felt that the offers made by Ms HDC and Mukand could be considered The whole matter was examined by the Advisor Finance in the first instance and by an collaborate note lie observed that the need for encouraging open competition to improve quality and brings down costs his been recommended by the government and if it is intended to continue the existing policy of fixing a rate and distributing the order among all the manufacturers then negotiations may not he useful as uniform prices offered to all manufacturers have to be sufficient even for the smaller and less economical units and that as any review of the existing policy would take time the present tender can be decided on the basis of the existing policy With this noting the file was immediately sent to the Member Mechanical the net higher authority The with some observations however recommended the acceptance of the Tender Committee s recommendations The file was then put up to Financial Commissioner He noted that the Tender Committee was convinced that the three manufacturers who quoted identical price of Rs 77666 had formed a cartel He also considered the offers made by Ms HDC and Mukand and observed that these three manufacturers who quoted 139 a cartel price intended to get a larger order on the basis of such negotiated price which would eventually nullify the competition from the other manufacturers and lead to their industrial sickness and subsequently to monopolistic price situation He however approved the Tender Committee s recommendations that a counter offer of Rs 76000 may he accepted but in the case of Ms HDC a price lower by Rs 11000 may be offered as per their letter dated 4292 He also recommended that the two manufacturers Ms Cimmco and Texmaco may be given orders to the extent of their capacity or quantity offered by them whichever is lower in view of the fact that they are wagon builders and the present formula regarding the distribution of quantities may be applied to all manufacturers except the three who have formed a cartel The also recommended some recoveries from these three manufacturers who are alleged to have formed a cartel on the basis of their letters wherein they have quoted prices which were much less than the updated price as on 1991 of Rs 79305 He also made certain other recommendations and finally concluded that the post tender letters may be ignored and that for short term gains the Department can not sacrifice long term healthy competition After these recommendations of the Financial Commissioner the file was put up to the approving authority ie the Minister for Railways who in general agreed with the recommendations of the Financial Advisor He also noted that these three manufacturers have formed a cartel lie also noted that subsequent to the Financial Commissioner s note besides Ms 1 1 D C and Mukand has also offered to reduce the price by 10 or more vide their letter dated 19292 if called for negotiations Taking these circumstances into consideration the Minister ordered that all these three firms may he offered a price lower by Rs 11000 with reference to the counter offer recommended by the Tender Committee and the quantities also be suitably adjusted so that the cartel is broken The Minister also noted that as a result of this a saving of about Rs 11 crores would be effected In his note the Minister also ordered redistribution of the quantities The also ordered that 30 option should straightaway be exercised After the approving authority took these decisions the file went to the Chairman Railway Board for implementing the decisions The noted that action will be taken as decided by the Minister but added that it results in dual pricing namely one to the three manufacturers and the higher one to the others and therefore the Minister may consider whether they could counter offer the lower price to all the manufacturers as that would result in saving much more 140 The file was then again sent to and was considered by the Financial Commissioner who noticed this endorsement made by the Chairman Railway Board The however noted that so far all the other firms are concerned it is Rs 3305 less than the present contract price but it would not be equitable to offer the lower price put forward by the three manufacturers as it Would make the other units unviable and that incidentally the price of Rs 76000 now proposed to be counteroffered to the other firms is also in line with the recommendations of the Tender Committee The however noted that some of the units were sick units and owe a lot of money to the nationalised banks and it would therefore be in the national interest to accept dual pricing Therefore the file was again put up to the approving authority who agreed with the recommendations of the Financial Commissioner and the Tender Committee and directed that the same may be implemented In view of this final decision taken by the approving authority a telegram was issued to the three manufacturers giving them a Counter offer of Rs 65000 per bogie The counter offer was also made to the other nine manufacturers at the rate of Rs 76000 per bogie namely the price worked out by the Tender Committee Soon after the receipt of this telegram dated 18392 Ms HDC and Mukand filed writ petitions in the Delhi high Court challenging the so called discriminatory counteroffer Ms Bharatiya also filed a similar petition in Calcutta High Court but the same was withdrawn but another writ petition was filed later in the Delhi High Court In the writ petitions filed by Ms HDC and Mukund the High Court stayed the operation of the telegram dated 18392 and issued notice to the Union of India and to the Executive Director and Director of the Railways Stores who figured as respondents in those writ petitions Ms M DC and Mukand also wrote to the Minister of Railways in reply to the telegram that they were not prepared to accept the counter offer at the rate of Rs 65000 and instead they offered lo supply the bogies at the rate of Rs 67000 per bogie The Railways accepted this offer and intimated Ms HDC and Mukand accordingly The High Court at an interlocutory stage pending the writ petitions passed an order on 2492 directing the Ministry to accept the allocation of bogies recommended by the Tender Committee and to pay a price at the rate of Rs 67000 only per bogie and that would be subject to the final decision of the writ petitions Being aggrieved by this order the Railways filed a petition for special leave to appeal No 551292 and this Court while refusing to interfere at that interlocutory stage made the following observations 141 on 28492 However we may observe and so direct that during the pendency of the writ petition if any of the suppliers in terms of the package of distribution indicated by the High Court including the petitioners in the High Court in the writ petition seek an on account payment representing the difference between the sum of Rs 67000 indicated as price by the High Court and the sum of Rs 76000 contemplated by the Railways the order of the High Court shall not prohibit the government making such on account payment to such suppliers on each wagon on the condition that the said on account payment of Rs 90000 per bogie should he covered by a bank guarantee for its prompt repayment together with interest at 20 per annum in the event the on account payment cannon be observed in the price structure that may ultimately come to be determined pursuant to the final decision in the writ petitions The special leave petitions are disposed of accordingly Thereafter the High Court took up the writ petitions for final hearings any by the impugned judgment allowed the writ petitions filed by Ms HDC and Mukand and directed that all the suppliers should make the supplies at the rate of Rs 67000 per bogie and also set aside the quantity allocation and directed that the same should he considered afresh on a reasonable basis and pending such fresh consideration future supplies should be made on the basis of the recommendations of the Tender Committee In the course of the judgment the High Court also made certain observations to the effect that the decision of the approving authority is arbitrary and that the Government has no justification to offer a higher price than the market price to any supplier to rehabilitate it It was further observed that the stand of the Railways that those three manufacturers formed a cartel is based on extraneous considerations The learned judges of the High Court also observed that they failed to understand as to why the Railway authorities could 142 not initiate negotiations with those manufacturers who had offered to reduce their offer which could result in saving crores of rupees to the Railways Aggrieved by this judgment of the High Court the Union of India filed SLP Civil Nos 11897 9802 Before the High Court in the two writ petitions filed by Ms HDC and Mukand the other manufacturers figured as respondents Nos 4 to 12 and Ms Bharatiya otherwise known as Besco figured as respondent No 13 The other SLPs are filed by those nine manufacturers Ms Bharatiya respondent No 13 has not questioned the judgment of the High Court As mentioned above Ms Bharatiya filed a separate writ petition No 1753 92 in the Delhi High Court after withdrawing an earlier writ petition filed in the Calcutta High Court The same also was disposed of in terms of the judgment in the other two writ petitions Nos 1152 and 115792 But they have not questioned the same Consequently Ms Bharatiya figures as a respondent before us in the SLP filed by the Union of India In our earlier order we have already referred to the various Submissions made by the learned counsel on behalf of Union of India and on behalf of the respondents particularly Ms HDC Mukand and Bharatiya and other smaller manufacturers After considering the various submissions and issues involved we have given our conclusions in our earlier order which briefly stated are as follows 1There is no enough of material to conclude that Ms HDC Mukand and Bhartiya formed a cartel However there was scope for enter training suspicion by the Tender Committee that they formed a cartel since all the three of them quoted identical price and the opinion entertained by the concerned authorities including the Minister that these three big manufacturers formed a cartel was not per se malicious or was actuated by any extraneous considerations and the authorities acted in a bonafide manner in taking the stand that the three big manufacturers formed a cartel 2The direction of the High Court that the supply of bogie should be at Rs67000 by every manufacturer can not he sustained and that a fresh consideration of a reasonable price is called for The Tender Committee shall reconsider the question of fixation of reasonable price While doing so it shall consider the offer of Rs 67000 made by 143 Ms HDC and Mukand alongwith the data that would given by them in support of their offer and the percentage of profits available to all the manufacturers and other relevant aspects and then fix a reasonable price at which the manufacturers would be able to supply 3 Dual pricing under certain circumstances may be reasonable and the stand of the railways to adopt dual pricing under the circumstances is bonafide and not malafide Ms HDC Mukand and Bharatiya must be deemed to be in a position to supply at the rate of Rs 67000 per bogie and thus they form a distinct category The smaller manufacturers belong to a different category and if a different price is fixed for them it is not discriminatory 4 If the price that to be fixed by the Tender Committee as directed by us happens to be more than Rs 67000 than that would be applicable to the smaller manufacturers only and not to Ms HDC Mukand and Bharatiya who on their own commitment have to supply at the rate of Rs 67000 5 The price thus fixed by the Tender Committee which applies only to the smaller manufacturers shall he deemed to be final and the respective contracts shall be deemed to be concluded so for the price is concerned 6 Coming to the allotment of quota of bogies the Tender Committee made recommendations on the basis of the existing practice The Minister of Railways in his ultimate decision has made some variations taking into consideration the recommendations of the Financial Commissioner and other authorities In making these variations the Minister accepting the suggestion that a cartel was formed by the three manufacturers reduced the allotment of quota to them by way of reprisal Since we are of the view that formation of a cartel is not established such a reduction of quota can not be justified The Minister of Railways as the final authority as be justified in takings a particular decision in the matter of allotment of quota but such decision must be taken on objective basis In allotting these quotas the Government is expected to be just and fair to one and all 7The three big manufacturers Ms HDCMukandand Bharatiya 144 should be allotted the quantities as per the recommendations of the Tender Committee However the quantities finally allotted by the competent authority to the smaller manufacturers need not be disturbed and the railway authorities may make necessary adjustments next year in the matter of allocation of quantities to them takings into consideration the allotments given to them this year 8It will be open to the Railways to exercise 30 option if not already exercised 9Taking all the circumstances and the time factor into consideration the time to complete the supply is extended upto 3131993 Before we proceed to consider each of these issues and give our reasons we shall deal with few general submissions regarding the tender system and the economic policy of the Government in the matter of stopping monopolistic tendencies Shri KK Venugopal learned counsel appearing for Ms HDC at the outset submitted that in a case of this nature the Government must either by way of public auction or by way of inviting tenders work out he lowest price and award the contract accordingly as that would safeguard the interests of the public exchequer The further submission in this regard is that the Railways having invited tenders and having further entertained post tender correspondence offering the lower price should have accepted the price quoted by the three big manufacturers Shri Sibal learned counsel appearing for the Union of India however contended that it is a matter of policy decision by the Government and that where the Government realises that the lowest rice offered is not reasonable and realistic it may for a variety of good and sufficient reasons reject the same It is true as it is today that the Government in a welfare State has the wide powers in regulating and dispensing of special services like leases licences and contracts etc The magnitude and range of such Governmental function is great The Government while entering into contracts or issuing quotas is expected not to act like private individual but should act in conformity with certain healthy standards and norms Such actions should not be arbitrary irrational or irrelevant In the 145 matter of awarding contracts inviting tenders is considered to be one of the fair ways If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory In the instant case the Railways every year used to enter into contracts with the established manufacturers for the supply of cast steel bogies and there are 12 such suppliers On 251091 a limited tender notice for the procurement of steel bogies was issued to these suppliers Under Clause 5 of the Tender notice the Railways reserved the right to order additional quantity of 30 of the ordered quantity during the currency of the contract on the same price and term with suitable extension in delivery period Clause 7 is to the effect that the tender will be governed by the IRS conditions of the contract In the instructions appended to the Tender notice it is again reiterated that the contracts made under the tender would be governed by the IRS conditions of contract and also the instructions in the invitation of tender Clause 93 of the instructions lays down that the price is subject to price variation clause and the base date for the purpose of escalation is 1991 Under Clause 23 it is made clear that the Department does not pledge itself to accept the lowest or any tender and reserves to itself the right of acceptance of the whole or any part of the tender Pursuant to this notice and subject to lie conditions mentioned therein 12 manufacturers in the field a well as two new manufacturers Ms Simplex and Beekay submitted their offers and they are as follows NAME OF THE FIRMS PRICE QUOTED FOR 203T AXLE LOAD 1 Himmat 84510 2 Texmaco 83950 3 Titaoarh 84100 4 BECO Ltd 83350 5 Anup 84980 6 Sri Ranga 84600 750 146 8 Bum Standard 83000 9 CIMMCO 84800 10 Mukand 77666 II Bharatiya 77666 12 HDC 77666 13 Simplex 78100 14 BEEKAY 75000 These offers were got technically evaluated by the Research Development and Standard Organisation RDSO for short Thereafter a three men Tender Committee comprising the officers of the rank of Joint Secretary designated as Executive Directors in the Railways Board considered the offers Since the three big suppliers namely Ms HDC Mukand and Bharatiya quoted an identical price of Rs 77666 which was lower than the updated price of the previous contract the base date of which was 1991 the Tender Committee formed an opinion that they have formed law carte 1 The offers made by the two new firms however were not accepted The Tender Committee made their own recommendations and fixed Rs 76000 as a reasonable price at which counter offer could be made Then as already mentioned there was post tender correspondence and ultimately a dual price was fixed In this regard the submission is that having entertained post tender correspondence the Government either should have accepted the same or rejected the same and in any event the lowest offer should have been accepted From a perusal of the proceedings of the Tender Committee as well as the opinion expressed by the Financial Commissioner and the other members of the Board it is clear that Rs 76000 per bogie can be the reasonable price and Rs 67000 was not a reasonable price It is also clear that the post tender offer at a lower price was made with the hope that they would get the entire or larger quantity allotted The stand taken by the Railways is that the three big manufacturers originally formed a cartel and the post tender offers at least by two of them confirmed the same and if these three big manufacturers are allotted entire or larger quantity that would result in monopoly extinguishing the smaller manufacturers The question is whether such a stand taken by the Government as a policy is unfair and arbitrary as to warrant interference by the courts 147 It must be mentioned at this stage that the validity of the conditions in the tender as such are not questioned Consequently the Government had the right to either accept or reject the lowest offer but that of course if done on a policy should he on some rational and reasonable grounds In Eurasian Equipment and Chemicals Ltd vs State of West Bengal this court observed as under When the Government is trading with the public the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions The activities of the government have a public element and therefore there should be fairness and equality The State need not enter into any contract with anyone hut if it does so it must so fairly without discrimination and without unfair procedure Approving these principles a Bench of this Court in Ramana Dayaram Shetty vs The International Air port Authority of India and Ors1979 3 SCR 10 14 held thus This proposition would hold good in all cases of dealing by the Government with the public where the interest sought to be protected is a privilege It must therefore be taken to be the law that where the Government is dealing with the public whether by way of giving job so entering into contracts or issuing quotas or licences or granting other forms of largess the Government cannot act arbitrarily at its sweet will and like a private individual deal with any person it pleases but its action must be in conformity with standard or norms which is not arbitrary irrational or irrelevant The power or discretion or the Government in the matter of grant of largess including award of jobs contracts quotas licences etc must be con fined and structured by rational relevant and nondiscriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases the action of the Government 148 would be liable to be struck down unless it can he shown by the Government that the departure as not arbitrary but was based on some valid principle which in itself was not irrational unreasonable or discriminatory ln Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir and Anr an order awarding contract by the Government to a party was questioned on the ground that it was arbitrary malafide and not in public interest and the same created monopoly in favour of that party and that the contract was awarded without affording an opportunity to others to compete and the same is not based on any rational or relevant principle and therefore was violative of Article 14 of the Constitution and also the rule of administrative law which inhibits the arbitrary action by the State A Bench of this Court while approving the principles laid down in the above cases further observed thus Though ordinarily a private individual would be guided by economic considerations of self gain any action taken by him it is always open to under the law to act contrary to his self interest or to oblige another in entering into a contract or dealing with his property But the Government is not free to act is it likes in granting largess such as awarding a contractor selling or leasing out its property Whatever be its activity the Government is still the Government and is subject to restraints inherent in its position in a democratic society The constitutional power conferred on the Government cannot be exercised by it arbitrarily or capriciously or in an unprincipled manner it has to be exercised for the public good Every activity of the Government has a public element in it and it must therefore be informed with reason and guided by public interest Every action taken by the Government must be in public interest the Government cannot act arbitrarily and without reason and if it does its action would be liable to be invalidated If the Government awards a contract of leases out or 149 otherwise deals with its property or grants any other largess it would be liable to be tested for its validity on the touch stone of reasonableness and public interest and if it fails to satisfy either test it would be unconstitutional and invalid Now coming to the test of reasonableness which pervades the constitutional scheme this Court in several cases particularly with reference to Articles 14 19 and 21 has considered this concept of reasonableness and has held that the same finds its positive manifestation and expression in the lofty ideal of social and economic justice which inspires and animates the Directive Principles and that Article 14 strikes at arbitrariness in State action vide Maneka Gandhi vs Union of India 1978 2 SCR 621 and EP Royappa vs State of Tamil Nadu Anr f After referring to these decisions it was further held in Kasturi Lal Lakshmi Reddy s case supra as under Any action taken by the Government with a view to giving effect to any one or more of the Directive Principles would ordinarily subject to any constitutional or legal inhibitions or other over riding consid erations qualify for being regarded as reasonable while an action which is inconsistent with or runs counter to a Directive Principle would incur the reproach of being unreasonable So also the concept of public interest must as far as possible receive its orientation from the Directive Principles What according to the founding fathers constitutes the plainest requirement of public interest is set out in the Directive Principles and they embody par excellence the constitutional concept of public interest If therefore any governmental action is calculated to implement or give effect to a Directive Principle it would ordinarily subject to any other overriding considerations be informed with public interest Where any government action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest it would be liable to be 150 struck down as invalid It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State such an action would be both unreasonable and contrary to public interest The Government therefore cannot for example give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it unless of course there are other considerations which render it reasonable and in public interest t o do so Such considerations many that some Directive Principle is sought to be advanced or implemented or that the contract or the property is given not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of a particular group or secretion of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property We have referred to these considerations only illustratively for there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particular action that the Court would have to decide whether the action of the Government is reasonable and in public interest emphasis supplied On the question of courts interference in an action taken by the Government it was further observed as under But one basic principle which must guide the Court in arriving at its determination on this question is that there is always a presumption that the Governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest This burden is a heavy one and it has 151 to be discharged to the satisfaction of the Court by proper and adequate material The Court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because as we said above there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the Court would not strike down government action as invalid on this ground unless it is clearly satisfied that the action is unreasonable or not in public interest But where it is so satisfied it would be the plainest duty of the Court under the Constitution to invalidate the governmental action I his is one of the most important functions of the Court and also one of the most essential for preservation of the rule of law emphasis supplied On the question of the power of the Government in granting largess it was also observed that The second limitation on the discretion of the Government in grant of largess is in regard to the persons to whom such largess may be granted It is now well settled as a result of the decision of this Court in Ramanad Shetty vs International Airport Authority of India Ors supra that the Government is not free like an ordinary individual in selecting the recipients for its largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion The law is now well established that the Government need not deal with anyone but if it does so it must do so fairly without discrimination and without unfair procedure where the Government is dealing with the public whether by way of giving jobs or entering into contracts or granting other forms of largess the Government cannot act arbitrarily at its sweet will and like a private individual deal with any person it pleases but its action must be in conformity with some standard or norm which is not arbitrary irrational or 152 irrelevant The governmental action must not be arbitrary or capricious but must be based on some principle which meets the test of reason and relevance This rule was enunciated by the Court as a rule of administrative law and it was also validated by the Court as an emanation flowing directly from the doctrine of equality embodied in article 14 emphasis supplied In State of Uttar Pradesh and others vs Vijay Bahadur Singh and others this Court considered the circumstances under which the Government is not always bound to accept the highest bid offered in a public auction under which a contract was to be awarded to fell trees and exploit forest produce and held as under It appears to us that the High Court had clearly misdirected itself The Conditions of Auction made it perfectly clear that lie Government was under no obligation to accept the highest bid and that no rights accrued to the bidder merely because his bid happened to he the highest Under condition 10 it was expressly provided that the acceptance of bid at the time of auction was entirely provisional and was subject to ratification by the competent authority namely the State Government Therefore the Government had the right for good and sufficient reason we may say not to accept the highest bid but even to prefer a tenderer other than the highest bidder The High Court was clearly in error in holding that the Government could not refuse to accept the highest bid except on the ground of inadequacy of the bid Condition 10 does not so restrict the power of the Government not to accept the bid There is no reason why the power vested in the Government to refuse to accept the highest bid should be confined to inadequacy of bid only There may be a variety of good and sufficient reasons apart from inadequacy of bids which may impel the Government not to accept the highest bid In fact to give an antithetic illustration the very enormity of a bid may make 153 it suspect It may lead the Government to realise that no bonafide bidder could possibly offer such a bid if he meant to do honest business Again the Government may change or refuse its policy from time to time and we see no reason why change of policy by the Govern ment subsequent to the auction but before its confirmation may not be a sufficient justification for the refusal to accept the highest bid It cannot be dispute that the Government has the right to change its policy from time to time according to the demands of the time and situation and in the public interest If the government has the power to accept or not to accept the highest hid and if the Government has also the power to change its policy from time to time it must follow that a change or revision of policy subsequent to the provisional acceptance of the bid but before its final acceptance is a sound enough reason for the Government s refusal to accept the highest bid at an auction that is precisely what has happened here emphasis supplied In State of Orissa and Ors vs Harinarayan Jaiswal and Ors it was observed as under It is for the Government to decide whether the pi ice offered in an auction sale is adequate While accepting or rejecting a bid it is merely performed and executive function The correctness of its conclusion is not open to judicial review We fail to see how the plea of contravention of article 19 1 g or article 14 can arise in these cases The Government s power to sell the exclusive privileges set out in section 22 was not denied It was also not disputed that those privileges could be sold by public auction Public auctions are held to get the best possible price Once these aspects are recognised there appears to be no basis for contending that the owner of the privileges in question who had offered to sell then cannot decline to accept the highest bid if he thinks that the price offered is inadequate There is no 154 concluded contract till the bid is accepted Before there was a concluded contract it was open to the bidders to withdraw their bids see Union of India and ors vs Ms Bhimsen Walaiti Rani By merely giving bids the bidders had not acquired any vested rights The fact that the Government was the seller does not change the legal position once its exclusive right to deal with those privileges is conceded If the Government is the exclusive owner of those privileges reliance on article 19 1 g or article 14 becomes irrelevant Citizens cannot have any funda mental right to trade or carry on business in the properties or rights belonging to the Government nor can there he any infringement of article 14 if the Government tries to get the best available price for its valuable rights emphasis supplied In GB Mahajan and others vs Jalgaon Municipal Council and others it was observed thus The reasonableness in administrative law must therefore distinguish between proper use and improper abuse of power Nor is the test the court s own standard of reasonableness as it might conceive it in a given situation In State of Madhay Pradesh ors vs Nandlal Jaiswal ors it was observed thus We must not forget that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call trial and error method and therefore its validity cannot be tested on any rigid a priori considerations or on the application of any straight jacket formula The court must while adjudging the constitutional validity of an executive decision relating to economic matters grant a certain measure of freedom or play in the 155 joints to the executive xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx The Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical The Court can interfere only if the policy decision is patently arbitrary discriminatory or mala fide It is against the back round of these observations and keeping the mind that we must now proceed to deal with the contention of the petitioners based on article 14 of the Constitution In India Cement Ltd and others vs Union of India and others1990 4SCC 356 a question arose whether the fixation of Rs 100 per tonne of cement as the uniform retention price for the entire industry with the exception of Ms Travancore Cement Ltd was rational and reasonable This Court held as under It is therefore clear that fixation of Rs 100 per tonne as die uniform retention price for the entire industry with the solitary exception of Ms Travancore Cement Ltd Kottayam for which justification has been shown was on a rational basis taking into account all relevant data and factors including the cement industry s acceptance of the principle of a uniform retention price for the entire industry the only difference being in die price actually fixed it Rs 100 per tonne instead of Rs 104 per tonne claimed by the cement industry It is obvious that the fixation of Rs 100 per tonne being shown to be made on a principle which has not been faulted the actual fixation of Rs 100 instead of Rs 104 to be received by the industry is not within the domain of permissible judicial review if the principle of a Uniform retention price for the entire industry cannot be faulted emphasis supplied The Bench in die above case after referring to die decision of the Constitution 156 Bench in Shri Sitaram Sugar Co Lid vs Union of India observed thus It was pointed out that what is best for the industry and in what manner the policy should be formulated and implemented hearing in mind the object of supply and equitable distribution of the commodity at a fair price in the best interest of the general public is a matter for decision exclusively within the province of the Central Government and such matters do not ordinarily attract the power of judicial review It was also held hit even if some persons are at a disadvantage and have suffered losses on account of the formulation and implementation of the government policy that is not by itself sufficient ground for interference with the governmental action Rejection of the principle of fixation of price unit wise on actual cost basis of each unit was reiterated and it was pointed out that such a policy promotes efficiency and provides and incentive to cut down the cost introducing an element of healthy competition among the units xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx It is therefore clear that the principle of fixation of uniform price for the industry is an accepted principle and this has to be done by fixing a uniform price on the basis of the cost of a reasonably efficient and economic representative cross section of manufacturing units and not with reference to the cost in relation to each unit Obviously such a practice is in larger public interest and also promotes efficiency in the industry providing an incentive to the uneconomic units to achieve efficiency and to reduce their cost Regarding the differential treatment given to Ms Travancore Cement Ltd this Court held that 157 The only surviving question for consideration is the argument in Civil Appeal No 2193 of 1972 for a differential treatment to the appellant Ms Chettinad cement Limited on the anology of Ms Travancore Cement Ltd Kottayam In the counter affidavit of Shri G Ramanathan Under Secretary to the Government of India the reason for treating Travancore Cement Limited differently has been clearly stated It has been stated that it is a sub standard unit with a capacity of 50000 tonnes per annum only without any scope for expansion while the standard capacity for a unit is two lakh tonnes per annum so that this unit is not capable of expanding the capacity and it is on the whole an uneconomic unit deserving a special consideration No material has been produced by the appellant Ms Chettinad Cement Corporation Limited to show that it is a similar substandard uni t without any capacity for expansion so that it too must continue to be an uneconomic unit like Ms Travancore Cement Limited Kottayam deserving a similar treatment The counter affidavit therefore shows a rational basis for classifying Ms Travancore Cement Limited Kottayam differently as a sub standard and an uneconomic unit without any scope for improvement in comparison to other units This argument also is untenable In RK Garg vs Union of India 19814 SCC 675 a Constitution Bench of this Court observed as under Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching the civil rights such as freedom of speech religion etc It has been said by no less a person than Holmes J that the legislature should be allowed some play in the joints because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait jacket formula and this is particularly true in case of legisla 158 ion dealing with economic matters where having regard to the nature of the problems required to be dealt with greater play in the joints has to he allowed to tile legislature The Court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation then in other areas where fundamental human rights are involved Nowhere has this admonition been more felicitously expressed than in Morey vs Doud where Frankfurter J said in his inimitable style In the utilities tax and economic regulation cases there are good reasons for judicial self restraint if not judicial deference to legislative judgment The legislature after all has the affirmative responsibility the courts have only the power to destroy not to reconstruct When these are added to the complesity of economic regulation the uncertainty the liability to error the bewildering conflict of the experts and the number of times the judges have been overruled by events self limitation can be seen to be the path of judicial wisdom and institutional prestige and stability emphasis supplied In Peerless General Finance and Investment Co Limited and Another vs Reserve Bank of India etc the accent of power of the Courts interfering in such economic policy matters was considered and it was held as under The function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority It is well settled that a public body invested with statutory powers must take care not exceed or abuse its power It must keep within the limits of the authority committed to it It must act in good faith and it must act reasonably Courts are not to interfere with economic policy which is the function of experts It is not the function 159 of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies In such matters even expert can seriously and doubtlessly differ Courts cannot be expected to decide them without even the aid of experts It was further observed thus The function of the Court is not to advise in matters relating to financial and economic policies for which bodies like Reserve Bank are fully competent The Court can only strike some or entire directions issued by the Reserve Bank in case the Court is satisfied that the directions were wholly unreasonable or violative of any Provisions of the Constitution or any statute It would be hazardous and risky for the courts to tread an unknown path and should leave such task to the expert bodies This Court has repeatedly said that matters of economic policy ought to be left to the government At this juncture it is also necessary to consider whether the policy of the Government in the matter of fixation of price and in allotment of the largess from the point of view of prohibiting monopolistic tendencies and encouraging healthy competition among the units is in any manner unreasonable or arbitrary As submitted by the learned counsel the policy of the Government is to promote efficiency in the administration and to provide an incentive to the uneconomic units to achieve efficiency The object underlying the C MRTP Act for short is to prevent the concentration of economic power and to provide for a control on monopolies prohibition of monopolistic trade practices and restrictive trade practices The Monopolies Inquiry Commission in its report stated that There are different manifestations of economic power in different fields of economic activity One such manifestation is the achievement by one or more units in an industry of such a dominant position that they are able to control the market by regulating prices 160 or output or eliminating competition Another is the adoption by some producers and distributors even though they do not enjoy such a dominant position of practices which restrain competition and thereby deprive the community of the beneficent effects of the rivalry between producers and producers and distributors and distributors to give the best service It is needless to say that such practices must inevitably impede the best utilisation of the nation s means of production economic power may also manifest itself in obtaining control of large areas of economic activity by a few industrialists by diverse means Apart from affecting the economy of the country this often results in the creation of industrial empires tending to cast their shadows over political democracy and social values In USA under the Sherman Act of 1890 every contract or combination in the form of trust or otherwise or conspiracy in restraint of trade or commerce is declared to be illegal By that at every person who monopolised or attempted to monopolise or combined or conspired with any other person or persons to monopolise any part of the trade or commerce was guilty of mis demeanour Regarding the constitutionality of the said Act a passage in American jurisprudence 2d vol 54 pages 668 669 reads thus 2 Constitutionality The Sherman Act 15 USCSS 1 7 is a constitutional exercise of the commerce power Its general language does not render it invalid as an unconstitutional delegation of legislative power to the courts or as an unconstitutionally vague criminal statue Its application to a monopolistic association of newspaper publisher does not abridge freedom of the press nor does its application to the continuance after its enactment of a contract made previously subject it to attack as ex post facto legislation 161 In England the Competition Act 1980 controls anti competitive practices and if a person in the course of his business pursues a course of conduct which has or is intended to have or it likely to have the effect of restricting distorting or preventing competition in connection with the production supply or acquisition of goods is deemed to engage in anti competition practices which is illegal Therefore the avowed policy of the Government particularly from the point of view of public interest is to prohibit concentration of economic power and to control monopolies so that the ownership and control of the material resources of the Community are so distributed as best to subserve the common good and to ensure that while promoting industrial growth there is reduction in concentration of wealth and that the economic power is brought about to secure social and economic justice Bearing the above principles in mind we shall now proceed to examine the action taken by the Railways in the matter of fixation of the price and distribution of quantities and see whether the same has been done pursuant to a policy and thus reasonable or whether there has been an arbitrary exercise of power We have already noted that it is a case of limited tender meant for the 12 manufacturers who have been supplying the railway bogies The offers made by the tenders were got technically evaluated by the RDSO and thereafter they were examined by the render Committee as well as by the Railways Board and finally by competent authority The assessed capacity of each manufacturer is the one assessed by the RDSO a wing of the Railways and the same is based on the molten capacity of the manufacturers and other relevant factors After fixing the reasonable price the quantity distribution can be determined based on the assessed actual capacity of the manufacturers best performance outstanding orders to be executed and on the average of previous four years performance It is not in dispute that this formula was evolved in 1983 Later to avoid certain inequalities and better utilisation of the installed capacity by larger units and uneconomic ordered quantity and under utilisation of capacity by smaller units it was felt that in the interest of the economy an equitable distribution has to he effected A perusal of the Tender Committee s recommendations the enclorsements made by the members of the Railway Board and the views expressed by the competent authority 162 could show that for the year in question they want to bring about some changes in the policy of distribution pending a permanent policy being evolved The render Committee in the first instance examined the prices quoted by the tenderers The Committee decided that while placing orders only the RDSO permitted deviations will be allowed and the suppliers have to adhere to rest of the specifications as was being done in the earlier years Then coming to the prices the Tender committee noted that the three big manufacturers quoted identical price in terms by forming a cartel among themselves Having applied the price variation formula the updated price was fixed at Rs 79305 as on 1 991 However taking into consideration the two concessions is respect of import duty and fie freight equalisation the Committee ultimately recommended the price of Rs 76000 The Tender Committee also noted that this price is very near to the lowest among the updated price Regarding the distribution of quantities the Tender committee recommended that the same may be distributed among the various manufacturers as shown in he annexure to their recommenda tions In recommending such distribution to various manufacturers the Tender committee has taken into consideration the fact that the four wagon builders namely Ms HDC Texmaco Cimmco and Burn should be given weightage The Tender Committee ultimately recommended that a counter offer at the price of Rs 76000 for 203 T bogies can be made and the quantities can be distributed as indicated in the be annexure This was done on 4 2 92 and then the post tender correspondence was there hereby two of the three big manufacturers offered to reduce their price if negotiations be held Then the file went to the Railway Board Advisor Finance particularly indicated that a view has to be taken whether a large number of manufacturers should be continued manufacturing these bogies in small quantities as at present or to permit a small number of manufacturers to expand their production at the cost of other prices and that the policy which has been followed by the Railways so far is to encourage a large number of parties to manufacture the bogies with the idea of generation competition as also by way of encouraging small scale industries fie however pointed out that since the review of policy would take time the tender could be decided on the basis of the existing policy The Member Mechanical agreed with this recommendation Then the file went to Financial Commissioner He noted that the three big manufacturers have formed a cartel and they have given offer to reduce their price if negotiations are held and their intention apparently is to get a 163 larger share on the basis of such negotiated price which would eventually nullify the competion from the other manufacturers and Subsequently to monopolistic price situation Having stated so he recommended that the wagon builders and other smaller manufacturers must he given larger quantities and that the three big manufacturers should be given the balance In the last paragraph the Financial Commissioner noted thus Now due to the new economic policy the structural changes are in a flux and as a monopoly buyer it is incumbent on the part of the Railway not to precipitate any crisis by resorting to negotiation on the basis of II DC s letter at SN 26 but treat carefully and protect smaller firms from being gobbled up In other words for short term gains we may be sacrificing long term healthy competition 1 therefore advocate that this post tender letter may be ignored as the prices quoted by firms are in the close range or prices updated by Tender Committee for counter offer With these nothings the file went to the Railway Minister and in his order he noted that the three big manufacturers have formed a cartel and that under the circumstances all the three of them may be offered a price lower by Rs 11000 and the quantities also should be suitably adjusted so that the cartel is broken and he ordered 1795 2376 and 2500 number of bogies to Ms H DC Mukandand Bharativa respectively The Minister further observed that since the present formula suffers from serious blemishes as pointed out by the Financial Commissioner a judicious distribution of order is called for between the other suppliers and that some of them are sick units and owe a lot of money to the nationalised banks and their cases are pending before BIFR and that it would be in the national interest to give them sufficient order so that they are able to rehabilitate themselves and repay the loans In this view of the matter he ordered redistribution of the balance quantities as follows Bum 500 Cimmco 1200 Texmaco 1200 164 Sri Ranga 1560 Anup TSL 1400 Himmat 1150 BECO 1600 The Minister also ordered that straight away 30 option should be exercised The further noted that as a result of this policy the Railways would be effecting a saving of about Rs 11 crores Then the file with this order went back to the Member Mechanical and others for being implemented he however noted that the Minister for Railways may consider whether the lower price could be counter offered to all the companies The Financial Commissioner again noted that dual pricing would be in the national interest and finally the Minister having noted these endorsements of the Member Mechanical as well as the Financial Commissioner made an endorsement that if some are allowed to hold monopoly instead of giving protection to smaller units who have formed a cartel they may gang up and fight and fritter the smaller ones and that Railways should always demonstrate of its own vision of long term Railway interest and not short terms gains and finally agreed with the recommendations of the Financial commis sioners and also the recommendation of the Fender Committee and directed the implementation of the same without further delay The above documents would show that a particular policy has been adopted by the Government though it resulted in a change as compared to the previous one As held by the courts change of policy by it self does not affect the pursuant action provided it is rational and reasonable However the submission is that the decision taken pursuant to this policy in the matter of fixation of price and distribution of quantities is based on wrong grounds and suffers from the vice of unreasonableness SShri Nariman Venugopal and Shanti Bhushan learned counsel appearing for Ms Mukand HDC and Bharatiya respectively submitted in this context that the grounds namely that the three big manufacturers formed a cartel and that the post tender price offered by them was predatory are unfounded and that dual pricing and the ultimate allotment of the quantities in a punitive manner are based 165 on a wrong premise and the final decision arrived at is consequently unreasonable and arbitrary The further submission is that these manufacturers have a legitimate expectation of being treated in certain ways by the administrative authorities on the basis of practice and policy of the previous years and such a decision which is punitive and which defeats such legitimate expectation and which is taken without affording an opportunity to these manufacturers to explain is violative of principles of natural justice First we shall consider the submissions regarding the formation of cartel by these big manufacturers The word Cartel has a particular meaning with reference to monopolistic control of the market In collins English Dictionary the meaning of the word Cartel is given as under cartel I also called trust a collusive international association of independent enterprises formed to monopolize production and distribution of a product or service control prices etc In Webster Comprehensive Dictionary International Edition the meaning of the word Cartel is given thus cartel xx 3 An international combination of independent enterprises in the same branch of production aiming at a monopolistic control of the market by means of weaking or eliminating competition xx In Chambers English Dictionary the word Cartel is defined thus Cartel A combination of firms for certain purposes especially to keep up prices and kill competition XX In Black s Law Dictionary fifth edition the meaning of the word Cartel is given thus 166 Cartel A combination of producers of any product joined together to control its production sale and price and to obtain a monopoly in any particular industry or commodity Also an association by agreement of companies or sections of companies having common interests designed to prevent extreme or unfair competition and allocate markets and to promote the interchange of knowledge resulting from scientific and technical research exchange of patent rights and standardization of products In American Jurisprudence 2d Vol 54 page 677 it is mentioned thus A cartel is an association by agreement of companies or sections of companies having common interests designed to prevent extreme or unfair competition and to allocate markets and perhaps also to exchange scientific or technical knowledge or patent rights and to standardize products with competition regulated but not eliminated by substituting computational in quality efficiency and service for price cutting An international cartel arrangement providing for a worldwide division of a market has been held a per se violation of 15 USC S 1 An American corporation violates the Sherman Act by entering into agreements with English and French companies to 1 allocate world trade territories among themselves 2 fix prices on products of one sold in the territory of the others 3 co operate to protect each other s markets and eliminate outside competition and 4 participate in cartels to restrict imports to and exports from the United States In a Dictionary of Modern Legal Usage by Bryian AGemerit is noted thus cartlizeto organize into a cartel See IZE Yet cartel has three quite different meanings 1 an 167 agreement between hostile nations 2 an anticompetitive combination usu that fixes commercial prices and 3 a combination of political groups that work toward common goals Modern usage favours sense 2 The cartel therefore is an association of producers who by agreement among themselves attempt to control production sale and prices of the product to obtain a monopoly in any particular industry or commodity Analysing the object of formation of a cartel in other words it amounts to an unfair trade practice which is not in the public interest The intention to acquire monopoly power can be spelt out from formation of such a cartel by some of the producers However the determination whether such agreement unreasonably restrains the trade depends on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolise the same Dealing with the provi sions of Sherman Anti Trust Act in National Electrical Contractors Associations Inc etal vs National Contractors Association etal Federal Reporter 2d Series 678 page 492 it was observed as under We know of no better statement of the rule than that of this court in United States vs Society of Ind Gasoline Marketers 624 F 2d 461 465 4th Cir 1979 cert 101 SCt 859 where stated Since in a price fixing conspiracy the conduct is illegal per se further inquiry on the issues of intent or the anti competitive effect is not required The mere existence of a price fixing agreement establishes the defendants illegal purpose since the aim and result of every price fixing agreement if effective is the elimination of one form of competition It was also observed that The critical analysis in determining whether a particular activity constitutes a per se violation is whether the activity on its face seems to be such that it would always or almost always restrict competition and 168 decrease output instead of being designed to increase economic efficiency and make the market more rather than less competitive Matsushita Electric Industrial Co Ltd et al vs Zenith Radio Corporation et al is a case where American manufacturers of consumer electronic products brought suit against a group of their Japanese competitors in the United States District Court alleging that these competitors had violated Sections 1 and 2 of the Sherman Act and other federal statutes It was alleged that the Japanese companies had conspired since 1950 to drive domestic firms from the American Market by maintaining artificially high prices for these products in Japan while selling them at a loss in the United States The District Court after excluding bulk of evidence finally granted the Japanese companies motion for summary judgment dismissing the claims The United States Court of Appeal reversed and remanded for further proceeding On a certiorari the United States Supreme Court while considering the standards supplied by the Court of Appeals in evaluating the summary judgment observed thus To survive petitioners motion for summary judgment respondents must establish that there is a genuine issue of material fact as to whether petitioners entered into an illegal conspiracy that caused respondents to suffer a cognizable injury It was further observed that A predatory pricing conspiracy by nature speculative Any agreement to price below the competitive level requires the conspirators to forgo profits that free competition would offer them The forgone profits may be considered an investment in the future For the investment to be rational the conspirators must have a reasonable expectations of recovering in the form of later monopoly profits more than the losses suffered 169 xxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx The alleged conspiracy s failure to achieve its ends in the two decades of its asserted operation is strong evidence that the conspiracy does not in fact exist Since the losses in such a conspiracy accrue before the gains they must be repaid with interest And because the alleged losses have accrued over the course of two decades the conspirators could well require a correspondingly long time to recoup Maintaining supra competitive prices turn depends on the continued cooperation of the conspirators an the inability of other would be competitors to enter the market and not incidentally on the conspirator ability to escape antitrustliability for their minimum price fixing cartel Each of these factors weighs more heavily as the time needed to recoup losses grows If the losses have been substantial as would likely be necessary in order to drive out the competition petitioners would most likely have to sustain their cartel for years simply to break even emphasis supplied In this context one of the submissions is that the price of Rs 67000 offered by these manufacturers during the post tender stage was not predatory and that the view taken by the authorities that such an offer of lower price was predatory one confirming the formation of a cartel is also unwarranted In Matsushita s case supra it was observed that predatory pricing conspiracies are by nature speculative and that the agreement to price below the competition level requires the conspirators to forgo profits that free competition would offer them It was also held therein as under To survive a motion for a summary judgment a plaintiff seeking damages for a violation of S 1 of the Sherman Act must present evidence that tends to 170 exclude the possibility that the alleged conspirators acted independently Thus respondents here must show that the inference of a conspiracy is reasonable in light of the competing inferences of independent action or collusive action that could not have harmed respondents emphasis supplied Therefore mere offering of a lower price by itself though appears to be predatory can not be a factor for inferring formation of a cartel unless an agreement amounting to conspiracy is also proved In webster Comprehensive Dictionary International Edition The meaning of the word Predatory is given as under predatory 1 characterized by or under taken for plun dering Addicted to pillaging 3 Constituted for living by preying upon others as a beast or bird raptorial In A Dictionary of Modern Legal Usage by Bryan A Garner predatory is defined thus Predatory preying on other animals The word is applied figuratively in the phrase from antitrust law predatory pricing The forms predaceous predatorial and predative are needless variants The spelling predacious has undergone differentiation and means devouring rapacious In collins English Dictionary Predatory is defined thus predatory 1 another word for predacious sense 12 of involving or characterized by plundering robbing etc xxxx In Black s Law Dictionary Predatory intent is defined asunder Predatory intent predatory intent in purview of Robinson patmen Act means that alleged price dis 171 criminator must have at least sacrificed present revenues for purpose of driving competitor out of market with hope of recouping losses through subsequent higher prices International Air Industries Inc vs American Excelsior Co CA Tex 723 In The oxford English Dictionary Vol VIII predatory is defined thus Predatory 1 Of pertaining to characterized by or consisting in plundering pillaging or robbery xx 2 Addicted to or living by plunder plundering marauding thieving in modern use sometimes applied to the criminal classes of great cities xx 3 Destructive consuming wasteful deleterious xx 4 Of an animal That preys upon other animals that is a beast bird or other creature of prey carnivorous Also of its organs of capture xx We have noticed that monopoly is the power to control prices or exclude competition from any part of the trade or commerce among the producers The price fixation is one of the essential factors In American jurisprudence 2d Volume 54 a passage at page 695 reads thus The Sherman Act does not out law price uniformity An accidental or incidental price uniformity or even pure conscious price parallelism is not itself unlawful Moreover a competitor s sole decision to follow price leadership is not a violation of 15 USC S 1 On the other hand a price fixing conspiracy does not necessarily involve an express agreement oral or written It is sufficient that a concert of action is contemplated and that the defendants conform to the arrangement The fixing of prices by one member of 172 a group pursuant to express delegationacquiescence or under standing is just as illegal as the fixing of prices by direct joint action A price fixing combination is illegal even though the prices are fixed only by one member and without consultation with the others emphasisd supplied A mere offer of a lower price by itself does not manifest the requisite intent to gain monopoly and in the absence of a specific agreement by way of a concerted action suggesting conspiracy the formation of a cartel among the producers who offered such lower price can not readily be inferred In the instant case the fact that two of the three big manufacturers entered into post tender correspondence and also offered a lower price of Rs 67000 is not dispute Though they did not place the necessary material in support of their offer as to how it is viable and workable they however sought to contend before us that the price offered by them is not predatory and is only a reasonable price By our earlier order dated 14th January 1993 we directed the Tender Committee to examine the matter afresh regarding the reasonable price on the basis of the data that may be placed by these big manufacturers in support of their offer of Rs 67000 Therefore no conclusion can be reached definitely that offer of the price of Rs 67000 by itself was predatory and the manufacturers who offered such a price consequently formed a cartel Therefore whether in a given case there was formation of a cartel by some of the manufacturers which amounts to an unfair trade practice depends upon the available evidence and the surrounding circumstances In the instant case initially the Tender Committee formed the opinion that the three big manufacturers formed a cartel on the ground that the price initially quoted by them was identical and was only a cartel price This in our view was only a suspicion which of course got strengthened by post tender attitude of the said manufacturers who quoted a much lesser price As noticed above it can not positively be concluded on the basis of these two circumstances alone In the past these three big manufacturers also offered their own quotations and they were allotted quantities on the basis of the existing practice However a mere quotation of identical price and an offer of further reduction by themselves would not entitle them automatically 173 to comer the entire market by way of monopoly since the final allotment of quantities vested in the authorities who in their discretion can distribute the same to all the manufacturers including these three big manufacturers on certain basis No doubt there was an apprehension that if such predatory price has to be accepted the smaller manufacturers will not be in a position to compete and may result in elimination of free competition But there again the authorities reserved a right to reject such lower price Under these circumstances though the attitude of these three big manufacturers gave rise to a suspicion that they formed a cartel but there is not enough of material to conclude that in fact there was such formation of a cartel However such an opinion entertained by the concerned authorities including the Minister was not malicious nor was actuated by any extraneous considerations They entertained a reasonable suspicion based on the record and other surrounding circumstances and only acted in a bonafide manner in taking the stand that the three big manufacturers formed a cartel SShri Nariman Venugopal and Shanti Bhushan learned counsel appearing for Ms Mukand HDC and Bharatiya respectively contended that the Railways were bound to follow the rules and standards pertaining to the tender system and on the basis of these provisions and the course of conduct followed by the Railways in the matter of fixation of price and allotment of quota in the past let the manufacturers believe that the same course of conduct would be followed and the manufacturers legitimately expected that they would be treated equally and in a non arbitrary manner and such legitimate expectation is a right guaranteed under Article 14 In Food Corporation of India vs Ms Kamdhenu Cattle Feed Industries JT Justice JS Verma Speaking for the Bench observed as under In contractual sphere as in all other State actions the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non arbitrari ness is a significant facet There is no unfettered discretion in public law A public authority possesses powers only to use them for public good This imposes 174 the duty to act fairly and to adopt a procedure which is fairplay in action Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the state and its instrumentalities with this element forming a necessary component of the decision making process in all State actions To satisfy this requirement of non arbitrariness in a State action it is therefore necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bonafides of the decision in a given case The decision so made would be exposed to challenge on the ground of arbitrariness Rule of law does not completely eliminate discretion in the exercise of power as it is unrealistic but provides for control of its exercise by judicial review The mere reasonable or legitimate expectation of a citizen in such a situation may not by it self be a distinct enforceable right but failure to consider and give due weight to it may render the decision arbitrary and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non arbitrariness a necessary concomitant of the rule of law Every legitimate expectation is a relevant factor requiring due consideration in a fair decision making process Whether the expectation of the claimant is reasonable or Legitimate in the context is a question of fact in each case Whenever the question arises it is to be determined not according to the claimant s perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant A bonafide decision of the public authority reached in this manner would 175 satisfy the requirement of non arbitrariness and withstand judicial scrutiny The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent emphasis supplied In Navjoti coo Group Housing Society etc vs Union of India Others justice GN Ray speaking for the Bench observed as under In the aforesaid facts the Group Housing Societies were entitled to legitimate expectation of following consistent past practice in the matter of allotment even though they may not have any legal right in private law to receive such treatment The existence of legitimate expectation may have a number of different consequences and one of such consequences is that the authority ought not to act to defeat the legitimate expectation without some overriding reason of public policy to justify its doing so In a case of legitimate expectation if the authority proposes to defeat a person s legitimate expectation it should afford him an opportunity to make representations in the matter In this connection reference may be made to the discussions on legitimate expectation it page 151 of volume 11 of Halsbury s Laws of England Fourth Edition Re issue We may also refer to a decision of the House of Lords in Council of civil Service Union and others versus Minister for Civil Service reported in 1985 3 All England Reporter page 935 It has been held in the said decision that an aggrieved person was entitled to judicial review if he could show that a decision of the public authority affected him of some benefit or advantage which in the past he had been permitted to enjoy and which he legitimately expected to be permitted to continue to enjoy either until he was given reasons for withdrawal and the opportunity to comment on such reasons 176 It may be indicated here that the doctrine of legitimate expectation imposes in essence a dun on public authority to act fairly by taking into consideration all relevant factors relating to such legitimate expectation Within the conspectus of fair dealing in case of legitimate expectation the reasonable opportunities to make representation by the parties likely to be affected by any change of consistent passed policy come in We have not been shown any compelling reasons taken into consideration by the Central Government to make a departure from the existing policy of allotment with reference to seniority in Registration by introducing a new guideline emphasis supplied Relying on these decisions it was contended that the decision of the Railways in fixing the price and in allotment of the quantities is arbitrary and unreasonable affecting the right to such legitimate expectation To appreciate these contentions it becomes necessary to refer to some of the rules governing these contracts and followed by the Railways before we examine the impact of the doctrine of legitimate expectation The Rules prescribed by the Minister for Railways for entering into contracts lay down certain norms and contains guidelines The rules provide for constitution of Tender Committee and the Procedure to be followed in the matter of inviting tenders They also provide for negotiations but lays down that selection of contracts by negotiations is an exception rather than a rule and can be resorted to only under certain circumstances Regarding splitting of tendered quantity in more than one form we find some guidelines in Annexure 50 which reads as under 30 Where warranted the tendered quantity may be split and tender decided in favour of one or more firms on merits of each case in consultation with Associate Finance and with the approval of the authority competent to accept the tender having due regard to the following factors i VitalCritical nature of the items iiQuantity to be procured iiiDelivery requirements ivCapacity of the firms in the zone of consideration v Past performance of firms xxxxxxx xxxxxxxx xxxxxxxxx 50 Splitting should not be done merely with a view to utilising developed capacity of the different sources but should be for valid reasons to be recorded in writing for splitting the tendered quantity Annexure 213 contains the Railway Board letter dated 19490 addressed to General Managers All Indian Railways and others dealing with the subject of Non acceptance of latedelayedpost Tender offers The relevant portion reads thus 2 Instances have come to notice of the Board where on a strict application of the above instructions even late Tenders submitted by Public Sector firms for highly specialised equipments have been rejected 3The matter has therefore been reconsidered by the Board and it has been decided that where late Tenders from establishedreliable suppliers and conferring a substantial financial advantage is to be considered notwithstanding the general ban it will be open to the Railways to seek the Board s approval for the consideration of such Tenders since this should be a very exceptional situation such cases should be recommended for consideration of the Board with the personal approval of the General Manager duty concuffed in by the FA CAO 4The Railways should not enter into any dialogue with the agency submitting a delayed Tender without obtaining Board s prior clearance 178 Now coming to the notice inviting tender in the instant case we have already noted that the price quoted is subject to price variation clause and the Railways reserved a right to accept the lowest price or accept the whole or any part of the tender of portion of the quantity offered The notice however mentioned that the tenderer is at liberty to tender for the whole or any portion or to state in the tender that the rate quoted shall apply only if the entire quantity is taken from him From these provisions it becomes clear that the tenderer can not expect that his entire tender should be accepted in respect of the quantity and that the Railways have a night to accept the tender as a whole or a part of it or portion of the quantity offered It is not in dispute that in the past also there were many instances where the Railways as per the procedure followed arrived at decisions in respect of both price and quantity for good and justifiable reasons In the year 1991 the quantities of Ms HDC and Bharatiya were in fact reduce from the allocations made by the Tender Committee which made its recommendations on the basis of certain data It has to be noted that the Tender Committee is not a statutory authority and its proposals are recommendatory in nature and have to be considered in the distribution procedure culminating in the decision of the approving authority who as a matter of fact also can take decisions in respect of price and allotment of quantities taking into consideration various other aspects from the point of view of public interest Therefore it is evident that there is no legally fixed procedure regarding fixation of price and particularly regarding allotment giving scope to a legitimate expectation However with this facture background we shall consider the contention regarding legitimate expectation In Halsbury s Laws of England Fourth Edition Volume 11 151 a passage explaining the scope of legitimate expectations runs thus 81 Legitimate expectations A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment The expectation may arise either from a representation or promise made by the authority including an implied representation or from consistent past prac tice 179 The existence of a legitimate expectation may have a number of different consequences it may give locus standi to seek leave to apply for judicial review it may mean that the authority ought not to act so as to defeat the expectation without some overriding reason of public policy to justify its doing so or it may mean that if the authority proposes to defeat a person s legitimate expectations it must afford him an opportunity to make representation on the matter The courts also distinguish for example in licensing cases between original applications to renew and revocations a party who has been granted a licence may have legitimate expectation that it will be renewed unless there is some good reason not to do so and may therefore be entitled to greater procedural protection than a mere applicant for a grant emphasis supplied We find that the concept of legitimate expectation first stepped into the English Law in Schmidt vs Secretary of State for Home Affairs wherein it was observed that an alien who had been given leave to enter the United Kingdom for a limited period had a legitimate expectation of being allowed to stay for the permitted time and if that permission was revoked before the time expires that alien ought to be given an opportunity of making representations Thereafter the concept has been Considered in a number of cases In AG of Hong Kong vs Ng Yeun shiu 1983 2 AC 629 Lord Fraser said that the principle that public authority is bound by its undertakings as to the procedure it will follow provided they do not conflict with its duty is applicable to the undertaking given by the government of Hong Kong to the respondent that each case would be considered on its merits In Council of Civil Service Unions and others vs Minister for the Civil Service 1984 Vol 3 All ER 359 a question arose whether the decision of the Minister withdrawing the right to trade union member 180 ship without consulting the staff which according to the appellant was his legitimate expectation arising from the existence of a regular practice of consultation was valid It was contended that the Minister had a duty to consult the staff as per the existing practice and that though the employee did not have a legal right he had a legitimate expectation that the existing practice would be followed On behalf of the Minister on the basis of the evidence produced it was contended that the decision not to consult was taken for reasons of national security The Court held as under An aggrieved person was entitled to invoke judicial review if he showed that a decision of a public authority affected him by depriving him of some benefit or advantage which in the past he had been permitted to enjoy and which he could legitimately expect to be permitted to continue to enjoy either until he was given reasons for its withdrawal and the opportunity to comment on those reasons or because he had received an assurance that it would not be withdrawn before he had been given the opportunity of making representations against the withdrawal The appellants legitimate expectation arising from the existence of a regular practice of consultation appellants could reasonably expect to continue gave rise to an implied limitation on the Minister s exercise of the power contained in article 4 of the 1982 order namely an obligation to act fairly by consulting the GCHQ staff before withdrawing the benefit of trade union membership xxxxxxxx xxxxxxx xxxxxxxx Once the Minister produced evidence that her decision not to consult the staff before withdrawing the right to trade union membership was taken for reasons of national security that overrode any right to judicial review which the appellants had arising out of the denial of their legitimate expectation of consultation The appeal would therefore be dismissed xxxxxxxx xxxxxxxx xxxxxxxx 181 Administrative action is subject to control by judicial review under three heads 1 illegality where the decision making authority has been guilty of an error of law e g by purporting to exercise a power it does not possess 2 irrationality where the decision making authority has acted so unreasonably that no reasonable authority would have made the decision 3 procedural impropriety where the decision making authority has failed in its duty to act fairly emphasis supplied Therefore the claim based on the principle of legitimate expectation can be sustained and the decision resulting in denial of such expectation can be questioned provided the same is found to be unfair unreasonable arbitrary and violative of principles of natural justice vide Food Corporation of India s case and Navjyoti Coo Group Housing Society s case supra The learned counsel for these three big manufacturers however relied on various decision in Amarjit Singh Ahluwalia vs The State of Punjab Ors Ramana Dayaram Shetty s case and Peerless General Finance and Investment Co Limited s case supra and contended that failure to follow the existing procedure resulting in denial of a right directly arising out of legitimate expectation is per se arbitrary and unreasonable and therefore illegal and consequently violative of Article 14 of the constitution Of late the doctrine of legitimate expectation is being pressed into service in many cases particularly in contractual sphere while canvassing the implications underlying the administrative law Since we have not come across any pronouncement of this court on this subject explaining the meaning and scope of the doctrine of legitimate expectation we would like to examine the same a little more elaborately at this stage Who is the expectant and what is the nature of the expectation When does such an expectation become a legitimate one and what is the foundation for the same What are the duties of the administrative authorities while taking a decision in cases attracting the doctrine of legitimate expectation Time is a three fold present the present as we experience it the 182 past as a present memory and future as a present expectation For legal purposes the expectation can not be the same as anticipation It is different from a wish a desire or a hope nor can it amount to a claim or demand on the ground of a right However earnest and sincere a wish a desire or a hope may be and however confidently one may look to them to be fulfilled they by themselves can not amount to an assertable expectation and a mere disappointment does not attract legal consequences A pious hope even leading to a moral obligation can not amount to a legitimate expectation The legitimacy of an expectation can be inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence Again it is distinguishable from a genuine expectation Such expectation should be justifiably legitimate and protectable Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense It has to be noticed that the concept of legitimate expectation in administrative law has now undoubtedly gained sufficient importance It is stated that Legitimate expectation is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action and this creation takes its place beside such principles as the rules of natural justice unreasonableness the fiduciary duty of local authorities and in future perhaps the principle of proportionality A passage in Administrative Law Sixth edition by HWR Wade page 424 reads thus These are revealing decisions They show that the courts now expect government departments to honour their published statements or else to treat the citizen with the fullest personal consideration Unfairness in the form of unreasonableness here comes close to unfairness in the form of violation of natural justice and the doctrine of legitimate expectation can operate in both contexts It is obvious furthermore that this principle of substantive as opposed to procedural fairness may undermine some of the established rules about estoppel and misleading advice which tend to operate unfairly Lord Scarman has stated emphatically that unfairness in the purported exercise of a power can amount to an abuse or excess of power and this seems likely to develop into an important general doctrine Another passage at page 522 in the above book reads thus It was in fact for the purpose of restricting the right to be heard that legitimate expectation was introduced into the law It made its first appearance in a case where alien students of scientology were refused extension of their entry permits as an act of policy by the Home Secretary who had announced that no discretionary benefits would be granted to this Sect The Court of Appeal held that they had no legitimate expectation of extension beyond the permitted time and so no right to a hearing though revocation of their permits within that time would have been contrary to legitimate expectation Official statements of policy therefore may cancel legitimate expectation just as they may create it as seen above In a different context where car hire drivers had habitually offended against airport bye laws with many convictions and unpaid fines it was held that they had no legitimate expectation of being heard before being banned by the airport authority There is some ambiguity in the dicta about legitimate expectation which may mean either expectation of a fair hearing or expectation of the licence or other benefit which is being sought But the result is the same in either case absence of legitimate expectation will absolve the public authority from affording a hearing emphasis supplied In some cases a question arose whether the concept of legitimate expectation is an impact only on the procedure or whether it also can have a substantive impact and if so to what extent For New South Wales vs Quin 1990 Vol 64 Australian Law Journal Reports 327 is a case from Australia in which this aspect is dealt with In that case the Local Courts Act abolished Courts of Petty Sessions and 184 replaced them by Local Courts Section 12 of the Act empowered the Governor to appoint any qualified person to be a magistrate in the new Courts System Mr Quin who had been a Stipendiary Magistrate in charge of a Court of petty Sessions under the old system applied for but was refused an appointment under the new system That was challenged The challenge was upheld by the appellate court on the ground that the selection committee had taken into account an adverse report on him without giving a notice to him of the contents of the same In the appeal by the Attorney General against that order before the High Court it was argued on behalf of Mr Quin that he had a legitimate expectation that he would be treated in the same way as his former colleagues considering his application on its own merits Coming to the nature of the substantive impact of the doctrine Brennan J observed that the doctrine of legitimate expectations ought not to unlock the gate which shuts the court out of review on the merits and that the Courts should not trespass into the forbidden field of the merits by striking down administrative acts or decisions which failed to fulfill the expectations In the same case Mason CJ was of the view that if substantive protection is to be accorded to legitimate expectations that would encounter the objection of entailing curial interference with administrative decisions on the merits by precluding the decision maker from ultimately making the decision which he or she considers most appropriate in the circumstances In R vs Secretary of State for the Home Department ex parte Ruddock and others Taylor J after referring to the ratio laid down in some of the above cases held thus On these authorities I conclude that the doctrine of legitimate expectation in essence imposes a duty to act fairly Whilst most of the cases are concerned as Lord Roskill said with a right to be heard I do not think the doctrine is so confined Indeed in a case where ex hypothesis there is no right to be heard it may be thought the more important to fair dealing that a promise or undertaking given by a minister as to how he will proceed should be kept Of course such promise or undertaking must not conflict with his statutory duty or her duty as here in the exercise of a preroga 185 tive power I accept the submission of counsel for the Secretary of State that the respondent cannot fetter his discretion By declaring a policy he does not preclude any possible need to change it But then if the practice has been to publish the current policy it would be incumbent on him in dealing fairly to publish the new policy unless again that would conflict with his duties Had the criteria here needed changing for national security reasons no doubt the respondent could have changed them Had those reasons prevented him also from publishing the new criteria no doubt he could have refrained from doing so Had he even decided to keep the criteria but depart from them in this single case for national security reasons no doubt those reasons would have afforded him a defence to judicial review as in the GCHQ case emphasis supplied In Breen vs Amalgamated Engineering Union and Others 1971 2 Law Reports Queen Bench Division 175 Lord Denning observed as under if a man seeks a privilege to which he has no particular claim such as an appointment to some post or other then he can be turned away without a word He need not be heard No explanation need be given see the cases cited in Schmidt vs Secretary of State for Home Affairs 170 171 But if he is a man whose property is at stake or who is being deprived of his livelihood then reasons should be given why he is being turned down and he should be given a chance to be heard I go further If he is a man who has some right or interest or some legitimate expectation of which it would not be fair to deprive him without a hearing or reasons given then these should he afforded hint according as the case may demand emphasis supplied At this stage it is necessary to consider the scope of judicial review when a challenge is made on the basis of the doctrine of legitimate 186 expectation In Findlay vs Secretary of State for the Home Department 19841 3 All E R 801 it was observed as under The doctrine of legitimate expectation has an important place in the developing law of judicial review It is however not necessary to explore the doctrine in this case it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the court to apply for judicial review These two applicants obtained leave But their submission goes further It is said that the refusal to accept them from the new policy was an unlawful act on the part of the Secretary of State in that his decision frustrated their expectation But what was their legitimate expectation Given the substance and purpose of the legislative provisions governing parole the most that a convicted prisoner can legitimately expect is that his case will he examined individually in the light of whatever policy the State sees fit to adopt provided always that the adopted policy is a lawful exercise of the discretion conferred on him by the statute Any other view would entail the conclusion that the unfettered discretion conferred by the Statute on the minister can in some cases be restricted so as to hamper or even prevent changes of policy Bearing in mind the complexity of the issues which the Secretary of State has to consider and th e importance of the public interest in the administration of parole I cannot think that Parliament intended the desecration to be restricted in this way In Council of Civil Service Unions case Lord Diplock observed thus To qualify as a subject for judicial review the decision must have consequences which affect some person or body of persons other than the decisions although it may affect him too It must affect such other person either a by altering rights or 187 obligations of that person which are enforceable by or against him in private law or b by depriving him of some benefit or advantage which either i he has in the past been permitted by the decision maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational ground for withdrawing it on which he has been given an opportunity to comment or ii lie has received assurance from the decision maker will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn 1 prefer to continue to call the kind of expectation that qualifies a decision for inclusion in class b a legitimate expectation rather than a reasonable expectation in order thereby to indicate that it has consequences to which effect will be given in public law whereas an expectation or hope that some benefit or advantage would continue to he enjoyed although it might well be entertained by a reasonable man would not necessarily have such consequences In Attorney General for New South Wales case it is observed as under Some advocates of judicial intervention would encourage the courts to expand the scope and purpose of judicial review especially to provide some check on the Executive Government which nowadays exercises enormous powers beyond the capacity of the parliament to supervise effectively Such advocacy is misplaced If the courts were to assume a jurisdiction to review administrative acts or decisions which are unfair in the opinion of the court not to product of procedural fairness but unfair on the merits the courts would be assuming a jurisdiction to do the very thing which is to be done by the repository of an administrative power namely choosing among the courses of action upon which reasonable minds might differ 188 xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx If judicial review were to trespass on the merits of the exercise of administrative power it would put its own legitimacy at risk The risk must be acknowledged for a reason which Frankfurter J stated in Trop vs Dulles at 119 All power is in Madison s phrase of an encroaching nature Judicial power is not immune against this human weakness It also must he on guard against encroaching beyond its proper bounds and not he less so since the only restraint upon it is sell restraint If the courts were to postulate rules ostensibly related to limitations on administrative power but in reality calculated to open to the gate into the forbidden field of the merits of its exercise the function of the courts would be exceeded of R vs Nat Bell Liquors Ltd at 156 If the courts were to define the destine of legitimate expectations as something less than a legal right and were to protect what would be thus defined by striking down administrative acts or decisions which failed to fulfil the expectations the courts would be truncating the power which are naturally apt to affect those expectations 7o strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adript on a featureless sea of pragmatism Moreover the notion of a legitimate expectation falling short o a legal right is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law The authority of the courts and their salutary capacity judicially to review the exercise of administrative power depend in the last analysis on their fidelity to the rule of law exhibited by the articulation of general principles 189 To lie within the limits of judicial power the nation of legitimate expectation must be restricted to the illumination of what is the legal limitation on the exercise of administrative power tit a particular case of course if a legitimate expectation were to amount to a legal right the court would define the respective limits of the right and any power which might be exercised to infringe it so as to accommodate in part both the right and the power or so as to accord to one priority over the other That is a common place of cruial declarations but a power which might be so exercised as to affect a legitimate expectation falling short of a legal right cannot be truncated to accommodate the expectation So long as the notion of legitimate expectation is seen merely as indicating the factors and kinds of factors which are relevant to any consideration of what are the things which must be done or afforded to accord procedural fairness to an applicant for the exercise of an administrative power see per Mahoney IA in Macrae at 285 the notion can with one important proviso be useful but only if the power is so created that the according of natural justice conditions its exercise the notion of legitimate expec tation may useful focus attention on the content of natural justice in a particular case that is on what must be done to give procedural fairness to a person whose interests might he affected by an exercise of the power But if the according of natural justice does not condition the exercise of the power the notion of legitimate expectation can have no role to play If it were otherwise the notion would become a stalking horse for excesses of judicial review emphasis supplied In this very case Brennan J after referring to Schmidt s case supra observed thus 190 Again when a court is decidsing what must be done in order to accord procedural fairness in a particular case it has regard to precisely the same circumstances as those to which the court might refer in considering whether the applicant entertains a legitimate expectation but the inquiry whether the applicant entertains a legitimate expectation is superfluous Again if an express promise be given or a regular practice be adopted by a public authority and the promise or practice is the source of a legitimate expectation the repository is bound to have regard to the promise or practice in exercising the power and it is unnecessary to inquire whether those factors give rise to a legitimate expectation But the Court must stop short of compelling fulfillment of the promise or practice unless the statute so requires or the statute permits the repostitory of the power to hind itself as to the manner of the future exercise of the power It follows that the notion of legitimate expectation is not the key which unlocks the treasury of natural justice and it ought not unlock the gate which shuts the court out of review on the merits The notion of legitimate expectation wits introduced at a time when the courts were developing the common law to suit modern conditions and were sweeping away the unnecessary archaisms of the prerogative writs but it should not be used to subvert the principled justification I or curial intervention in the exercise of administrative power emphasis supplied In the same case Dawsom J observed thus It also follows that the required procedure may very according to the dictates of fairness in the particular case Thus in order to succeed the respondent must be able to point to something in the circumstances of the case which would make it unfair not to extend to him 191 the procedure which he seeks There is no doubt that the respondent had a legitimate expectation of continuing in his position as a stipendiary magistrate such that it should apart from statute have been unfair to remove him from that position without according him a hearing If the principle of judicial independence expended to a stipendiary magistrate then no doubt that would have strengthened his expectation But the respondent was not removed from his position of stipendiary magistrate by administrative decision He was removed by a statute which abolished the position of stipendiary magistrate and established the new position of magistrate Not only that the statute the Local Courts Act clearly contemplated that not all the former stipendiary magistrates would be appointed as magistrates pursuant to its terms Accordingly it made provision for those who where not so appointed It may be possible to deprecate the manner in which the statute removed the respondent from office but it is not possible to deny its effect Any unfairness was the product of the legislation which conferred no right upon the respondent to a procedure other than that which it laid down emphasis supplied On examination of some of these important decisions it is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved The protection of such legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise In other words where a person s legitimate expectation is not fulfilled by taking a particular then decision maker should justify the denial of such expectation by showing some overriding public interest Therefore even if substantive protection of such expectation is contemplated that does not grant 192 an absolute right to a particular person It simply ensures the circumstances in which that expectation may be denied or restricted A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfill The protection is limited to that extent and a judicial review can be within those limits But as discussed above a person who bases his claim on the doctrine of legitimate expectation in the first instance must satisfy that there is a foundation and thus has locus standi to make such a claim In considering the same several factors which give rise to such legitimate expectation must be present The decision taken by the authority must be found to be arbitrary unreasonable and not taken in public interest If it is a question of policy even by way of change of old policy the courts cannot interfere with a decision In a given case whether there are such facts and circumstances giving rise to a legitimate expectation it would primarily be a question of fact If these tests are satisfied and if the court is satisfied that a case of legitimate expectation is made out then the next question Would be whether failure to give an opportunity of hearing before the decision affect such legitimate expectation is taken has resulted in failure of justice and whether on that ground the decision should he quashed If that be so then what should be the relief is again a matter which depends on several factors We find in Attorney General for New South wales case that the entire case law on the doctrine of legitimate expectation has been considered We also find that on an elaborate an erudite discussion it is held that the courts jurisdiction to interfere is very much limited and much less in granting any relief in a claim based purely on the ground of legitimate expectation In Public Law and Politics edited by Carol Harlow we find an article by Gabriele Ganz in which the learned author after examining the views expressed in the cases decided by eminent judges to whom we have referred to above concluded thus The confusion and uncertainty at the heart of the concept stems from its origin It has grown from two separate roots natural justice or fairness and estoppel but the stems have become entwined to such an extent that it is impossible to disentangle them This makes it that it is very difficult to predict how the hybrid will 193 develop in future This could be regarded as giving the concept a healthy flexibility for the intention behind it is being it has been fashioned to protect the individual against administrative action which is against his interest On the other hand the uncertainty of the concept has led to conflicting decisions and conflicting interpretations in the same decision However it is generally accepted and also clear that legitimate expectation beings less than right operate in the field of public and not private law and that to some extent such legitimate expectation ought to be protected though not guaranteed Legitimate expectations may come in various forms and owe their existence to different kind of circumstances and it is not possible to give an exhaustive list in the context of vast and fast expansion of the governmental activities They shift and change so fast that the start of our list would be obsolete before we reached the middle By and large they arise in cases of promotions which are in normal course expected though not guaranteed by way of a statutory right in cases of contracts distribution of largest by the Government and in somewhat similar situations For instance in cases of discretionary grant of licences permits or the like carries with it a reasonable expectation though not a legal right to renewal or non revocation but to summarily disappoint that expectation may be seen as unfair without the expectant person being heard But there again the court has to see whether it was done as a policy or in the public interest either by way of GO rule or by way of a legislation If that be so a decision denying a legitimate expectation based on such rounds does not qualify for interference unless in a given case the decision or action taken amounts to an abuse of power Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power the concept of legitimate expectation can have no role to play and the court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply and objective standard which leaves to the decising authority the full range of choice which the legislature is presumed to have intended Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is 194 taken fairly and objectively the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected For instance if an authority who has full discretion to grant a licence and if he prefers an existing licence holder to a new applicant the decision can not be interfered with on the ground of legitimate expectation entertained by the new applicant applying the principles of natural justice It can therefore be seen that legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited It would thus appear that there are stronger reasons as to why the legitimate expectation should not be substantively protected than the reasons as to why it should be protected In other words such a legal obligation exists whenever the case supporting the same in terms of legal principles of different sorts is stronger than the case against it As observed in Attornry General for New South Wales case To strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adrift on a featureless sea of pragmatism Moreover the notion of a legitimate expectation falling short of a legal right is too nebulous to form a basis for invalidating the exercise of power when its exercise otherwise accords with law If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary discriminatory unfair or based gross abuse of power or violation of principles of natural justice the same can be questioned on the well known grounds attracting Article 14 but a claim biased on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles It can be one of the ground to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case It follows that the concept of legitimate expectation is not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits particularly when the element of speculation and uncertainty is inherent in that very concept As cautioned in Attorney General for 195 New South Wales case the courts should restrain themselves and restrict such claims duty to the legal limitations It is a well meant caution Otherwise a resourceful litigant having vested interests in contracts licences etc can successfully indulge in getting welfare activities mandated by directive principles thwarted to further his own interests The caution particularly in the changing scenario becomes all the more important In view of our conclusions in respect of the quantities allotted and the price fixed it may not be necessary for us to enter into further discussion on this aspect We have already directed 0that the Tender Committee should consider afresh as to what should be the reasonable price and to that extent the price of Rs 67000 fixed in respect of smaller manufacturers is set aside and directed to be revised So far these three big manufacturers are concerned we held that on their own commitment they are bound to supply at the rate of Rs 67000 per bogie So far the quantities are concerned we held that these three big manufacturers should be allotted the quantities as per the recommendations of the Tender Committee However we considered this aspect to some extent only to show that the decision in respect of price fixation as well as allotment of quantities even though to some extent at variation with the procedure followed during the previous years was not based on any irrelevant consideration The Railways particularly the Financial Commissioner as well as the Minister and initially the Tender Committee formed an opinion that these three big manufacturers formed a cartel and also quoted and unworkable predatory price at the post tender stage Therefore from the point of view of preventing monopoly in the public interest the decision in question was taken in a bonafide manner However on a factual basis we held that the alleged formation of cartel was only in the realm of suspicion and in that view the decision was modified as already indicated However we make it clear that the said modifications by way of judicial review is not on the ground of legitimate expectation and violative of principles of natural justice but on the other ground namely the decision of the authorities was based on wrong assumption of formation of a cartel The next submission is that the decision taken by the Railways resulting in reduction of the quantities and making a counter offer of Rs 65000 to these three big manufacturers is punitive in nature 196 visiting with civil consequences and such a decision taken without giving an opportunity to these manufacturers is violative of principles of natural justice In view of our above mentioned conclusions resulting in modification of the decision of the authorities both in respect of price fixation and in allotment of quantities there is no necessity to consider this aspect again in detail It was next contended that the consideration that some manufacturers are small and others are BIFR companies taken into account by the approving authority for deviating from the age old practice in allocation of quantities is irrelevant and discriminatory and therefore the decision is bad It may be mentioned that status of a manufacturers being a BIFR company or a small manufacturers was not taken into account so far as the fixation of the price is concerned and these considerations were deemed relevant only for the purpose of allocation of quantities The stand taken by the Railways is that smaller manufacturers should survive from the point of view of arresting monopolistic tendencies and from the point of view of public interest The Tender Committee proceedings would indicate that on the basis of certain formulae namely the past performance capacity etc the allotment was being made Therefore these can not be said to be irrelevant considerations and as a matter of fact they had been duly given effect to and weightage was given accordingly in respect of allotment of quantities to various manufacturers within the four corners of the limited tender The learned counsel however contended that the allotment of the quantities to the smaller manufacturers also is not based on any acceptable principle and that some of them are given larger quantities without any justification rendering the decision bad because of arbitrariness The proceedings mentioned above particularly the nothings of the Financial commissioner as well as the competent authority would show that some of the smaller manufacturers namely Ms Himmat Texmaco and Sri Ranga were BIFR companies As no price preferential treatment was given to any one of them the approving authority considered that enhancement in allocation of quantities was necessary Likewise Ms Cimmco and Texmaco who are wagon builders and whose business in entirely with the Railways were also given some weightage We can not say that these are irrelevant considerations for 197 the purpose of arriving at a decision In the past also there were such variations based on these circumstances In any event for different reasons we have varied this decision and directed that the three big manufacturers should be given allotment as per the recommendations of the Tender Committee In our earlier order we have noticed that there has been some departure in respect of one or two smaller manufacturers in allotting the quantities We have already indicated that the Railways authorities should in future make a proper consideration of the relevant factors in respect of each tenderer in an objective manner in allotting the quantities Now coming to the question of dual pricing the submission is that in respect of same set of manufacturers some of them can not be made to supply at a lower price and the others namely smaller manufacturers can not be given advantage to supply at a higher price and such dual pricing is unreasonable and arbitrary As already noted the Tender Committee worked out an upgraded price and taking into other relevant factors like cost of the material etc into consideration and applying the formula as was being done in the past and particularly taking into consideration the two concessions in respect of custom and freight fixed Rs 76000 as the reasonable price This was very close to the price quoted by the three big manufacturers But at a post tender stage they entered into correspondence offering a lower price and ultimately the three big manufacturers committed themselves to supply at the rate of Rs 67000 per bogie In our earlier order we indicated that these big manufacturers formed a different category namely that they may be in a position to supply at that rate as is evident from their own commitment but to apply the same price which is much lower than the reasonable and workable price fixed by the Tender Committee to other smaller manufacturers would again result in ending the competition between the big and the small which ultimately would result in monopoly of the market by the three big manufacturers That is a very important consideration from the point of view of public interest However as already mentioned we directed the render Committee to consider the matter afresh an even if it results in dual pricing it would not be had in the circumstances mentioned above 198 These are all the reasons in support of our conclusions given in our order dated 14th January 1993

Petitioners were in service under Comptroller and Auditor General of India C AG for short as Assistant Audit Officers AAO for short Group B Gazetted in pay scale Rs 2000 3200 and were working in Railway Audit Department after December 311985 In 1960 Railway Board spelled out its policy stating that scale of passesPT0s and the rules governing their issue to staff of the Railway Audit Department will be the same as applicable to Railway servants However some distinctions were made as regards Indian Audit and Accounts Service Officers IA AS Officers of Railway Audit Department on recommendations of the C AG Central Government sanctioned higher scale of pay effective from March 1 1984 for 80 per cent of Section officers in the Railway Audit Department to be designated as AAOs Group B Gazetted Their pay scale was revised to Rs 2000 3200 from January 1 1986 on recommendation of Fourth Pay Commission They continued to have the privileges and facilities of Group B Officers of Indian Railway In 1987 consequent to the revision of pay scales of Railway posts on recommendation by the Fourth pay Commission the posts under Indian Railways were re classified Posts in scale of Rs 2000 3200 were classified as Group C instead of Group B In 1989 the Railway Board in view of restructuring of cadre of Indian Audit and Accounts Department creation of posts of AAOs in scale of Rs 2000 3200 classified as Group B Gazetted status issued instructions that Audit Officers in Scale of Rs 2000 3200 may 297 be given privileges and facilities viz PassesPT0s Quarters etc as admissible to Railway employees in identical scale Consequently they were not entitled to the privileges and facilities admissible to gazetted Railway Officers classified in Group B in scale of Rs 2000 3500 However Assistant Audit Officers given Gazetted status between March 1 1984 and December 31 1985 were allowed to continue to enjoy the facilities of Passesp TOs quarters etc Petitioners filed application before the Central Administrative Tribunal Principal Bench claiming that Assistant Audit Officers given Gazetted status Group B after December 31 1985 were also entitled to the privileges and facilities admissible to Railway Officers classified Group B The application was rejected by the Tribunal and the Petitions filed Special Leave petition seeking redressal This Court dismissed the special leave petition and HELD That conferring special privileges and facilities to Assistant Audit Officers which are not provided to Railway servants in identical pay scale would lead to unjust results It would result in conferring special privileges and facilities by the Indian Railways to persons belonging to foreign department of Controller and Auditor General of India while their own servants who hold equivalent posts on the same scale of pay will be denied such privileges and facilities The Railway Board s letter dated April 14 1960 also shows that the staff of the Railway Audit Department is treated more generously than the officers if the same Audit Department in matters of issuance of PassesPT0s The Assistant Audit Officers who had been given status of gazetted Group B by the comptroller and Audit General cannot be treated by the Indian Railways on par with Railway servants classified group B In matters relating to conferring privileges and giving of facilities The Railway Servant Pass Rules 1986 made in Consonance with classification of Railway servants rightly made by the President of India consequent upon the Railway services Revised Pay Rules 1986 issued under the proviso to Article 309 of the Constitution confer facilities and privileges according to class to which Railway servants belong they can not be treated as Rules violative of Article 14 of the Constitution Nor can they be regarded as arbitrary 303 C 304 G That even if discrimination was brought about by the Railways in regard to officers of the same category that is Assist Ant Audit Officers such discriminatory treatment accorded to a small number cannot be availed of by the Petitioners to obtain she benefit of such wrongly conferred privileges and facilities However this Court did not consider it appropriate to pronounce 298 upon the correctness of the conferment of such privileges and facilities to the Assistant Audit Officers given status of Gazetted Group B between March 1 1984 and December 31 1985 when they had not been impleaded as party respondents 305 A C

minal Appeal No 69885 with 5986 From the Judgment and Order dated 3041985 of the Punjab and Haryana High Court in Crl A No 345 DB of 1984 RL Kohli and Prem Malhotra for the Appellants in Crl A No 69885 O P Sharma RC Gunbrele KR Gupta Mrs Nanita Sharma Vivek Sharma and Kamaljeet Singh for the Appellant in Crl A No 5986 KC Bajaj and Ms Indu Malhotra NP for the Respondent J One appeal is on behalf of Hari Singh and the other is on behalf of Satbir and Gulbir They were put on trial along with 67 Suresh Vijender and Virender for having committed the murder of Mange Ram on 7th October 1982 Virender being a minor his trial was separated so that the said may be conducted by Children Court The remaining five accused were convicted for offences under section 302 read with 149 Section 148 and Section 323 read with 149 Sentence of imprisonment for life was imposed against all the five accused persons under Section 302 read with 149 Whereas under Section 148 each one of them was sentenced to undergo rigorous imprisonment for one year and rigorous imprisonment for three months under Section 323 read with 149 The Sentences were directed to run concurrently The High Court dismissed their appeal Special Leave Petition Criminal No2160 of 1985 was filed on behalf of accused Hari Singh Suresh and Vijender On 23rd September 1985 this Court granted special leave to appeal to appellant Hari Singh but dismissed the said Special Leave Petition so far Suresh and Vijender were concerned Leave was granted to appellants Satbir and Gulbir on a separate Special Leave Petition filed on their behalf The case of the prosecution is that in the night intervening 6th and 7th October 1982 Mange Ram hereinafter referred to as the deceased and Ram Kishan PWI6 who is the first cousin of the deceased were returning after witnessing the Ram Leela At that very time Suresh Satbir Vijender Virinder and Gulbir were also returning after the show Near the baithak of Jit Ram the accused persons teased some girls of the village who had also gone to see the Ram Leela The deceased and PW 16 objected to the behaviour of the accused persons towards the girls of their own village On this it is said that the accused persons abused them which was followed by exchange of abuses from both the sides Budhi PW 13 intervened and pacified them Next day at about 230 PM the deceased and PW 16 went to their flour mill to bring back their bullocks and fodder cart Suresh and Satbir with Pharsas Hari Singh with a Ballam Virinder Vijender and Gulbir with sticks came there Suresh abused the deceased and PW16 saying that they would teach them a lesson for abusing them ie accused persons on the previous night Having said so accused Suresh gave a Pharsa blow from the blunt side on the head of the deceased Satbir also gave a Pharsa blow from the blunt side on the head of the deceased PW 1 6 raised an alarm Virinder Vijender and Gulbir gave stick blows to the 68 deceased It is further the case of the prosecution that when PW16 tried to intervene Hari Singh gave a Ballam blow from the blunt side on his head and Vijender gave a stick blow on the left elbow of PW16 Thereafter an alarm was raised and accused persons fled away from the place of occurrence The victim was taken to BK Hospital Faridabad on a tractor From there he was referred to AIIMS New Delhi by Dr OP Sethi PW 1PW 1 also sent information to the Police Post No 5 Faridabad at about 415 PM the victim reached the AIIMS At about 725 PM where he was examined Raghbir Singh ASI PWI7 who had got the information about the occurrence at the Police Station Chhainsa at 535 PM the same evening from the Police Station New Township Faridabad went to the Institute aforesaid and recorded the statement of PWI6 at 830 PM which was forwarded to the Police Station Chhainsa where a case was registered at 1130 PM the same night PW 1 7 took up the investigation and visited the place of occurrence and collected blood stained earth The victim died in the Institute the next morning at 700 AM The postmortem examination was held by PW 1 5 on 8th October 1982 at 430 PM He found three stitched wounds one on the right varietal region second on the middle of the scalp and the third on the left varietal region One out of three wounds was an operational surgical wound From internal examination fracture of right occipital bone and right frontal base was found He also found contusions on the right thigh left eye and left fore arm of the victim According to the opinion of PWI 5 the injuries found on the deceased had been caused by application of blunt force and were sufficient in ordinary course of nature to cause death The Pharsas from which according to the prosecution case the aforesaid injuries had been caused were shown to PW 1 5 the doctor and he stated as follows I have seen the alleged weapon of offence Pharsa EXP 1 and the ante mortem injuries which are noted on the head cannot be inflicted by this weapon On the opposite side of Pharsa there are two projecting devices for holding the Pharsa with Bamboo having a distance of 15 cm from each other Even if Pharsa EXP 1 is used from any of its two sides Between iron blade and the two iron projections referred above 69 even then head injuries mentioned above are not likely to cause At this stage another sealed parcel containing a Pharsa EXP2 opened at the instance of defence counsel It was found containing a Pharsa exhibit P2 1 have been this Pharsa also The distances between two projections holding iron blade with bamboos is about 115 cm and as such the injuries in question could not be caused by this weapon also either used iron blunt side or iron any of the two sides as stated by me with reference to EX P 1 It is correct that the injury No 2 is a operational Surgical wound which correspond with internal examination of head and corresponding piece of bone was absent having a size of 12 cm X 10 cm On the person of PWI6 only few superficial injuries were found On 12th October 1982 the aforesaid Dr OP Sethi PWI of BK Hospital Faridabad examined accused Suresh under the orders of Shri Raj Kumar HCS Judicial Magistrate Faridabad and found the following injuries on the persons of Suresh 1 A diffused and tender swelling over back of left hand all over the wrist joint and lower half of left fore arm There were bluish mark of two bruises abraised each 12 x 12 over back fore arm Xray were advised for left wrist joint including lower half of the fore arm and the hands It was advised for posterior interior and lateral views A partially healed injury 1 x 18 placed at the top of head 5 above the pinna of right ear X ray advised for skull in superior view A partially healed injury 34 x 18 at the left half of head 2 behind the interior hair line X ray was also advised A liniar injury having 34 x 18 at right half of head 1 12 behind interior hair line X ray skull was advised A vertical injury mark 2 x 12 at the left shin 5 12 above left ankle joint The duration of the time in respect of the injuries aforesaid was three to six days PWI stated in the Court that accused Suresh had been medically examined at the request of the Police and a copy of the medical report was also handed over to the Police It was urged on behalf of the appellants that on the materials on record the Courts below should have come to the conclusion that prosecution has suppressed the real manner of occurrence and has disclosed a version of the occurrence which cannot be accepted It was pointed out that accused Suresh Vijender and Virinder are the sons of accused Hari Singh who was aged about 60 years as such it was highly improbable on the part of Hari Singh to join his sons for commiting the murder of Mange Ram who had protested the behaviour of the sons of Hari Singh the previous night with the girls of the village From the evidence of Rang Lal PW7 it appears that the flour mill of the deceased and the fields of the accused persons are across the same road The tube well of accused Hari Singh is situated adjoining the mill where Hari Singh has also got tile residential unit It was urged that in view of the admitted position that the residential unit tube well are by the side of the flour mill of the deceased there was no question of the accused persons going to the flour mill of the deceased to assault the deceased and PWI6 The accused persons and the deceased both having their flour mill and residential unit side by side most probably clashed as a result of a sudden fight in which injuries were caused to the victim as well as to PW16 on the side of the prosecution and on Suresh on the accused side It may be mentioned that in the First Information Report only the name of Suresh one of the six accused was mentioned in connection with the previous night s incident saying that he along with four or five boys were coming after seeing the Ram Leela and then they started teasing the girls and thereafter an exchange of abuses took place In the First Information Report it was also stated by PWI6 that accused Suresh and Satbir gave Pharsa blows on the 71 head of the deceased In the First Information Report PWI6 the informant did not state that the injuries on the head on the head of the victim were caused by the back side of the Pharsa On behalf of the appellants it was pointed out that this change was introduced after it was found during the postmortem examination that injuries had been caused by application of blunt force which was inconsistent with the case of assault on the head of the deceased by Pharsa But merely on the ground that PWI6 the informant did not mention the name of any other accused in connection with the previous _night incident except Suresh or in the First Information Report having said that Suresh and Satbir gave Pharsas blows on the head of the deceased Modified the same in court by saying that they gave one Pharsa blow each by the back side of the Pharsa his evidence cannot be rejected outright But at the same time the case of the prosecution that Hari Singh along with Five accused including a child went to the flour mill of the deceased with an intention to cause the death of the victim because of the previous night abuses and altercations also does not appear to be the real version of the occurrence If the intention of the accused persons was to commit the murder then they would not have given blows by the back side of the Pharsa on the head of the deceased In all probabilities because of the previous night s incident at about 230 PM a sudden fight took place in which accused Suresh and Satbir are alleged to have given blows from the back side of the Pharsa on the head of the deceased PW 15 the doctor who held the postmortem examination has stated that those injuries had been caused by application of blunt force and has emphatically repudiated that injuries on the head of the deceased could have been caused by two Pharsas Ex P 1 and P2 which had been seized and shown to him during the course of his examination The injuries from the back side of the Pharsa can be said to have been caused by blunt force It has been rightly submitted that on basis of the evidence adduced including the evidence of PW 16 the informant it cannot be said be said that accused persons had an intention to cause such injuries on the victim which may result in his death When they caused those injuries by the blunt side of the Pharsa it will be presumed that they had knowledge that those injuries can cause the death but there was no intention on their part to cause death As such the Trial Court and the 72 High Court should not have convicted the appellants under Section 302 read with Section 149 On behalf of the State an objection was taken that in view of the dismissal of the Special Leave Petition filed on behalf of two accused Suresh and vijender against whom similar allegations had been made it is not open to this Court now to entertain any plea on behalf of the three appellants because it will be deemed that while dismissing the Special Leave Petition filed on behalf of Suresh and Vijender this Court has affirmed the findings recorded by the Trial court and the High Court in respect of manner of occurrence and participation of the accused persons including the three appellants It was also pointed out that if any of the appellant is acquitted or the convictions and sentences imposed against them are altered in any manner it will lead to inconsistency in the different orders passed by this Court It is true that system of the justice which is being administered by the Courts one of the basic principles which has to be kept in view is that Courts of co ordinate jurisdiction should have consistent opinions in respect of an identical set of facts or on question of law If Courts express different opinions on the identical sets of facts or question of law while exercising the same jurisdiction then instead of achieving harmony in the judicial system it will lead to judicial anarchy But before any such principle is appliedit must be held that the earlier order passed by this Court dismissing the Special Leave Petition of the coaccused amounts to a judgment or an affirmness of the findings of the High court about the manner of the occurrence participation of the different accused persons and the nature of offence committed by them Article 136 1 of the Constitution confers overriding and extensive powers of granting special leave to appeal or rejection thereof in the discretion of this Court Article 136 does not confer a right to appeal it confers only a right to apply for special leave toappeal which taking all facts and circumstances into consideration may be granted or rejected Even in a case where special leave application is rejected the Order of the High Court does not merge in the Order of this Court as is the case while exercising the appellate power Similarly when Special Leave Petition is entertained against any final or interlocutory 73 order this court does not convert itself in a court of appeals It was said in the case of Gain chand V Kunjbeharilal Chandrachud J as he was then With regard to the first submission it may he pointed out that an application for special leave under Article 136 of the Constitution against a judgement or an order cannot be equated with the ordinary remedy of appeal as of right under any provisions of law It is an extraordinary right conferred under the constitution within the discretion of this Court and such an application for special heave does not come within the contemplation of appeal pending before the Court under Section 13 A a It is a basic principle of the administration of justice that like cases should be decided alike It is a very sound rule and practice otherwise on same question of law or same set of facts different persons approaching a Court can get different orders But can the appeal of an accused who has been granted special leave to appeal be dismissed on the ground that the Special Leave Petition filed on behalf of a coaccused with more or less similar charges has already been rejected by this court althouhgh this Court is satisfied that either such accused whose appeal is being heard is entitled to acquittal or ought to have been convicted for a different offence with a different sentence The doctrine of precedent is not applicable to an order passed by this Court rejecting a Special Leave Petition Any such order cannot be held to be stare decisis so that it is a binding on us If it is held that as the Special Leave Petition filed on behalf of Suresh and Vijender having been rejected this Court cannot alter the conviction or sentence passed against the three appellants including the acquittal of any one of them althogh the Court is satisfied on the materials on record then what was the purpose while rejecting the Special Leave Petition of the co accused Suresh and Vijender to grant leave to appeal so far the present three appellants are concerned At the same time it need not be impressed that rejection of the Special Leave Petition gives a finality to an order of the High Court inasmuch as the same accused cannot file more then one Special Leave Petition 74 But in rare and exceptional cases this Court has exercised power under Article 32 of the Constitution so that there should not he miscarriage of justice and to avoid a direct conflict and confrontation between two orders of this Court In the case of Harbans Singh vs State of U P two accused persons had been sentenced to death by a common judgment Special Leave Petition filed on behalf of one of the accused persons was dismissed So far the other accused who had also been sentenced to death is concerned his Special Leave Petition was entertained on question of sentence Ultimately his death sentence was commuted to imprisonment for life The other accused person whose Special Leave petition had been dismissed filed it petition under Article 32 His death sentence was also commuted by the Supreme Court In that connection it was said Since Kashmira Singh s death sentence was commuted by this Court it would be unjust to confirm the death sentence imposed upon the petitioner That will involve the Court as well as the authorities concerned in the violation of rudimentary norms governing the administration of justice In the well known case of AR Antulay vs RS Nayak AIR 1988 SC 153 1 it was pointed Out that the Supreme Court is not Powerless to correct its error affairs Court is satisfied that if such power is not exercised it will lead to manifest injustice because no man can suffer for the mistake of the Court Again in the case of Pyare Singh vs State of Madhya Pradesh 1992 Supp 3 SCC 45 this Court in exercise of power under Article 136 of the constitution while altering the convictions and reducing the sentences of the four out of six accused persons who had filed Special leave petitions before this Court extended the same benefit and relief to other two accused persons who had not even filed any Special Leave petition against their convictions and sentences because this court felt that if the same benefit of alteration of conviction and modification in sentence is not given to other two convicted accused persons it will lead to gross injustice 75 The mere rejection of the Special Leave Petition of co accused persons cannot seal the fate of the appeals of the appellants which have been entertained after leave having been granted by this Court The appellants to whom leave has been granted can urge all questions within the frame work of Article 136 of the Constitution for consideration by this Court and a relief to which such appellants may be entitled cannot be denied to them merely on the ground that Special Leave Petition in respect of co accused persons with more or less similar charges evidence and convictions has already been rejected On materials on record the prosecution has not been able to prove and establish hit appellants had the common object or shared the common intention to cause the murder of the victim From the evidence of the prosecution itself it appears that the flour mill of the deceased and the residential unit of the accused persons being adjacent to each other suddenly a fight took place in which the appellant Satbir gave a blow by the back side wooden part of the Pharsa which caused one of the two injuries on the head of the deceased It cannot be held that appellant Satbir had an intention to cause the death of the victim In the circumstances of the case It can he said that he had only knowledge that such blow may cause an injury resulting in the death of the victim Accordingly he should have been convicted under Section 304 Part 11 of the Penal Code So far appellant Gulbir is concerned according to the prosecution case he was carrying a stick and he is alleged to have given a stick blow to the deceased on a non vital part of the body In this background according to us he can he held to have committed the offence on under Section 325 of the Penal code As already pointed out according to the prosecution case itself the appellant Hari Singh who was aged about 60 years at the time of the occurrence is said to have given a stick lathi blow to the informant PW 16 tie is not alleged to have given any blow to the deceased Once it is held that different accused persons neither had any common object nor any common intention which they shared together to commit an offence under Section 302 or alike the appellant Hari Singh has to he held guilty for an offence only under Section 323 of the Penal Code In the result the conviction of the appellants under Section 302 read with Section 149 of the Penal Code is set aside The conviction under Sections 148 and 323 read with 149 is also set aside The appellant Satbir is convicted for an offence under 76 Section 304 Part 11 and is sentenced to undergo rigorous imprisonment for seven years The appellant Gulbir is convicted for an offence under Section 325 of the Penal Code and is sentenced to undergo rigorous imprisonment for three years So far the appellant Hari Singh is Concerned he is convicted for an offence under Section 323 of the Penal Code and is sentence to the period of imprisonment already under gone Accordingly the appeals are allowed in part to the extent indicated above N V K Appeal allowed

The respondent assessee was a private limited company trading in tractors and earth moving equipment During the relevant the assessee pain commission on sales in addition to salary to its directors at a prescribed percentage of the sales effected by the assessee The Income Tax Officer treated the commission on sales as perquisites and disallowed the same applying section 40 a v for the year 1971 72 and section 40 A 5 for the assessment year 1972 73 Which are the concerned assessment years herein On appeal the Appellate Assistant Commissioner held that commission on sales cannot betreated as perquisites The Tribunal dismissed the Revenue s appeal The question before this court was whether commission on sales paid in cash falls within the four corners of section 40 a v Section 40 A 5 Dismissing the appeal this court HELD 1 Regarding Section 40 1 v 40 A 5 as a whole the cash payment of the nature concerned in this case does not fall within any of the situationsclauses contemplated by sub section 5 92 D Payment of a certain cash amount by way of commission on sales directly to an employee cannot be said to fall with the words where the assessee incurs an expenditure which results directly or indi 87 rectly in Section 40 A 5 92 F Nor can such a payment fall within a provision which speaks of an expenditure or allowance in respect of any assets of the assessee used by the employee DE 92 F

Appeal No 1944 of 1993 From the Judgment and Order dated 2111993 of the Kerala High Court in OPNo 13371 of 1992 G Prakash for the Appellant VR Reddy Addl Solicitor General CV Subba Rao B Parthasarthy and R Sasiprabhu for the Respondents The following Order of the Court was delivered Leave granted Heard counsel for the parties Having regard to the broader considerations of equality of opportunity this Court directed in Dr Pradip Jain vs Union of India 1984 3 SCC 654 that a certain percentage of seats in the post graduate medical courses should be made available to the candidates on the basis of All India Competition The percentage was later determined at 25 In Dr Dinesh Kumar vs Motilal Nehru College 19863 SCC 327 this Court prescribed a schedule for the All India Competitive Examination which was modified in certain respects in Dr Dinesh Kumar vs Motilal Nehru College 19874 SCC 459 In subsequent decisions this Court has been impressing upon the concerned authorities the necessity of adhering to the time frame prescribed in the matter of holding All India Competitive Examination and for making admissions According to the system in vogue a candidate who applies for admission in the All India quota is required to indicate eight medical colleges and six subjects in the order of preference to which he seeks admission There are severity medical collegesinstitutions and forty specialities The post graduate courses comprise degree courses as well as diploma courses After the results of examinations are published the admissions are made on the basis of merit cum preference cum eligibility with the aid of a computer In the first instance a list of admissions is issued But it so happens that for one or the other reason many of the candidates in the list do not turn up to join the course Hence a second list is issued and then a third But while preparing the second list or the third list the overall merit cum preference cum eligibility is not again examined with the result that sometimes 340 a candidate with lesser score gets a better subject than a candidate with higher score We may illustrate what we say In the first list a candidate with say 250 marks is allotted a seat in MS General Surgery and a candidate with 225 marks is allotted a seat in MS Opthalomology Now for some reason the candidate allotted a seat in MS General Surgery does not join That seat falls vacant When the second list is taken up the candidates available will necessarily be those who have secured less than 225 marks Since the merit cum preference cum eligibility is not determined overall again what happens is that a candidate with 220 marks gets MS General Surgery while the candidate with 225 marks has to continue in MS Opthalomology though given a choice he would very muchlike to come into MS General Surgery That there have been many such instances is beyond dispute and has been commented upon by the Kerala High Court in the judgment under appeal Besides the above there is yet another circumstance Inspite of promptings from this court the authorities in charge of holding All India competitive examination have not been able to adhere to the prescribed schedule In such a situation it is bound to happen that issuance of second and third lists delay the process of admission still further By the time the second and third lists are communicated half the course is over This aspect has been agitating us while hearing this appeal We have therefore discussed this matter thoroughly with Sri VR Reddy Additional Solicitor General for the respondents He in turn discussed the matter with the concerned authorities and has placed before us a modified scheme for allotment of the candidates declared successful in All India post graduate entrance examination for admission to MDMSDiploma and MDS courses We must make it clear that the modification which we are proposing herewith is only with respect to the procedure to be followed in the matter of making admission and is designed to eliminate unequal results and the delay mentioned above In the place of present requirement of a candidate indicating his preference for eight colleges and six subjects on the basis of which admissions are finalised we wish to introduce the system of what is called counselling which is in vogue in some of the States and is working satisfactorily The learned Additional Solicitor General agreed whole heartedly that this would be a definite improvement and would eliminate grievances which are arising from the present system and would also help the authorities to adhere to the time frame prescribed by this Court The new system in short is this after the examination is over the results would be published in the order of merit The selection committee will call 150 candidates a day in the order of merit A chart will be kept ready and displayed at all relevant places indicating the colleges and subjects wherein the seats are available Candidates will be called in the order of merit and asked to indicate hisher choice The slot chosen by himher then gets closed This procedure will be gone through 341 until all the seats are filled up There would be no second or third list Any seats remaining vacant thereafter will be surrendered to the State Government But this modification will apply to and come into effect only for and from the admissions for the year 1994 It will not apply to the admissions currently underway In approving the modifications we have kept in mind the fact that most of the candidates for post graduate admissions are employed and have the means to come to Delhi for a day for counselling We accordingly approve the modifications mentioned below as suggested by the Director General of Health Services New Delhi The All India PG Entrance Examination will be conducted on second Sunday of January The candidates will not be required to give any choices at the time of submission of the application forms The results will be announced by the third week of February every year The merit list will consists of number of candidates equal to the number of seats available for allotment A waiting list containing not more than 10 of the merit list will also be declared from amongst the successful candidates who have secured more than 50 marks in the competitive examination The allotment by personal appearance will start from the first of March every year and will continue upto 15th March In the Bulletin of Information the dates for allotment by personal appearance and the venue at Delhi will be notified The time schedule for personal appearance will also be notified alongwith the results in the newspapers For personal appearance the candidates will be called in batches of 150 each day in the order of merit The candidates shall have the right to choose any one of the available seats at hisher rank The same will be allotted to himher and the allotment letters will be issued on the next day In case a candidate is unable to appear in person on a notified date for personal appearance heshe can send hisher representative with an authority letter for allotment The allotment made to the authorised representative shall be binding on the candidate 342 9Each candidate shall be given 15 days time to join the allotted college and course The last date of joining shall be 31st March every year The allotments made will be firm and final The candidates who will not appear for allotment on the notified dates or who will reject the available seats for allotment or those who will not join the allotted course and college by the 3 1st March shall forfeit the claim for a seat under the All India Scheme 12All the seats remaining vacant after the allotment shall be deemed to have been surrendered back to the respective States In all other respects the scheme in vogue shall continue to be effective Now coming to the relief to be granted to the appellant we regret we are not in a position to make any positive direction The appellant had appeared for All India competitive examination He was not allotted any seat in any college according to the merit cum preference cum eligibility His grievance now is that students with lesser marks than him are being admitted to college in Kerala He says that he may be given a seat in any subject in any of the colleges in Kerala or for that matter anywhere alse We are afraid we cannot do so at this stage After the first second and third lists pertaining to All India seats were published the remaining vacant seats have been surrendered to the State Government already The State Government has already filled almost all of them We cannot withdraw one seat from the State Government at this stage the course has begun in the month of September 1992 itself and give it to the appellant Even otherwise it is not certain that there are no other candidates who had appeared in the All India competitive examination who may have scored higher marks than the appellant We cannot also give any direction for his being considered against the 1993 vacancies because he has not appeared for the 1993 examination The only observation we can make is this if in case any seat is lying vacant in any of the medical courses in Kerala the second respondent Director of Medical Education Thirvananthapuram shall consider admitting the appellant against such seat relating to the year 1992 The appeal is disposed of with the above directions and observation No costs Appeal disposed of

These special leave petitions were disposed of by this Court s order dated 1411993By the said order the Court gave its conclusions and certain directions observing that reasons In support thereof would be given at a later stage Giving the reasons in support of the conclusions this Court HELD 11 The Government in a Welfare State has the wide powers in regulating and dispensing of special services like leases licences and contracts etc The Government while entering Into contracts or issuing quotas is expected not to act like a private individual but should act in conformity with certain healthy stan 129 dards and norms Such actions should not be arbitrary irrational or irrelevant In the matter of awarding contracts inviting tenders is considered to be one of the fair ways If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory 144 G H 145 A Erusian Equipment and Chemicals Ltd vs State of West Bengal Ramana Dayaram Shety vs The International Airport Authority of India and Ors and Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir and Anr relied on 12 The concept of reasonableness rinds its positive manifestation and expression in the lofty ideal of social and economic justice which inspires and animates the Directive Principles and Article 14 strikes at arbitrariness In State action 149 C Maneka Gandhi vs Union of India 1978 2 SCR 621 and EP Royappa vs State of Tamil Nadu Anr relied on 13 The policy of the Government is to promote efficiency in the administration to provide an incentive to the uneconomic units to achieve efficiency to prohibit concentration of economic power and to control monopolies so that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and to ensure that while promoting industrial growth there is reduction in concentration of wealth and that the economic power is brought about to secure social and economic justice 159 F 161 C Monopolies Inquiry Commission s Report referred to American Jurisprudence 2 vol p 668 referred to 14 In view of the conditions in the tender notice validity whereof was not questioned the Government had the right to either accept or 130 reject the lowest offer From a perusal of the proceedings of the Tender Committee as well as the opinion expressed by the Financial Commissioner and the other members of Railway Board it is clear that Rs 76000 per bogie could be the reasonable price and the post tender offer at a lower price was made with the hope that the three big manufacturers would get the entire or larger quantity allotted which if accepted would result in monopoly extinguishing the smaller manufacturers 46 D G State of Uttar Pradesh and others vs Vijay Bahadur Singh and others 19822 SCC365 State of Orissa and Ors vs Harinarayan Jaiswal and Ors GB Mahajan and others V Jalgaon Municipal Council and others State of Madhya Pradesh ors vs Nandial Jaiswal Ors Shri Sitaram Sugar Co Ltd V Union of India RK Garg vs Union of India and Peerless General Finance and Investment Co Limited and another etc vs Reserve Bank of India etc relied on 21 The cartel is an association of producers who by agreement among themselves attempt to control production sale and prices of the product to obtain a monopoly in any particular industry or commodity It amounts to an unfair trade practice which is not in the public interest The intention to acquire monopoly power can be spelt out from formation of such a cartel by some of the producers167B C Collins English Dictionary Webster comprehensive Dictionary International Edition chamber s English Dictionary Black s Law Dictionary A Dictionary of Modern Legal Usage by Bryan A Garner American Jurisprudence 2d Vol 54 page 677 referred to 22 However the determination whether an agreement unrea sonably restrains the trade depends on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolise the same 167 C D 131 National Electrical contractors Associations Inc et at National constructors Associations et al Federal Reporter 2d Series 678 page 492 Matsushita Electric Industrial Co Ltd et at vs Zenith Radio Corporation et al 89 LEd 2d 538 referred to 23 Monopoly is the power to control prices or exclude competition from any part of the trade or commerce among the producers The price fixation is one of the essential factors 171 E American Jurisprudence 2d Vol 54 referred to 24 A mere offer of a lower price by itself though may appear to be predatory does not manifest the requiste intent to gain monopoly and in the absence of a specific agreement by way of a concerted action suggesting conspiracy the formation of a cartel among the producers who offered such lower price cannot readily be inferred 172 B C Matsushita Electric Industrial Co Ltd et vs Zenith Radio Corporation et referred to Webster Comprehensive Dictionary International Edition A dictionary of Modern Legal Usage by Bryan A Garner Collins English Dictionary Black s Law Dictionary The oxford English Dictionary Vol VIII referred to 25 The opinion of the Tender Committee that the identical price quoted by the three big manufacturers was a cartel price was only a suspicion which got strengthened by post tender attitude of the said manufacturers who quoted a much lesser price and cannot positively be concluded on the basis of these two circumstances alone There is not enough material to conclude that in fact there was formation of a cartel 173 B C 26 A mere quotation of identical price and an offer of further reduction by themselves could not entitle the said manufacturers automatically to corner the entire market by way of monopoly since the final allotment of quantities vested in the authorities who in their 132 discretion can distribute the same to all the manufacturers including these three big manufacturers on certain basis Besides the authorities reserved a right to reject a lower price 172 F 173 A B 27 However the opinion regarding formation of a cartel entertained by the concerned authorities including the Minister was not malicious nor was actuated by any extraneous considerations They entertained a reasonable suspicion based on the record and other surrounding circumstances and only acted in a bonafide manner in taking the stand that the three big manufacturers formed a cartel 173 C 31 The legitimacy of an expectation can be Inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence It Is distinguishable from a genuine expectation Such expectation should be justifiably legitimate and protectable Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil The claim based on the principle of legitimate expectation can be sustained and the decision resulting in denial of such expectation can be quashed provided the same is found to be unfair unreasonable arbitracy and violative of principle of natural justice 182 C 192 A Food Corporation of India vs Ms Kamdhenu Cattle Feed Industries JT relied on Halsbury s Law of England fourth Edition vol 1 1 151 Administrative Laws of England Sixth Edition by HWR Wade page 424 522 referred to Schmidt vs Secretary of State for Home Affairs 1969 2 Ch 149AG of Hong Kong vs Ng Yeun Shiu 1983 2AC629In Council of Civil Service Unions and others vs Minister for the Civil Service 1984 Vol3 All ER 935 Amarjit Singh Ahluwalia vs The State of Punjab Ors Att for New South Wales vs Ouin 1990 Vol 64 Australian Law 133 Journal Reports 327 R vs Secretary of State for the Home Department ex parte Ruddock Ors 19872 All E R 518 Breen vs Amalcamated Engineering Union Ors 1971 2 Law Reports Queen Bench Division 173 referred to 32 Legitimate expectation gives the applicant sufficient locus standi for judicial review and the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystalised right as such is involved 191 F Navyoti Coo Group Housing Society etc vs Union of India Others Findlay vs Secretary of State for the Home Department 1984 3 All E R801 and Council of Civil Service Unions case Lord diplock 33 Legitimate expectation being less then right operate in the field of public and not private law and to some extent ought to be protected thought not guaranteed 193 C 34 Legitimate expectations may come in various forms and owe their existence to different kind of circumstances By and large they arise in cases of promotions which are in normal course expected though not guaranteed by way of a statutory right in cases of contracts distribution of largess by the Government and in somewhat similar situations 193 D 35 Protection of legitimate expectation would not be available where an overriding public interest requires otherwise The protection is limited to that extent and a judicial review can be within those limits 191 H 192 A B 36 A person who bases his claim on the doctrine of legitimate expectation in the first instance must satisfy that there is a foundation and thus has locus standi to make such a claim The decision taken 134 by the authority must be found to be arbitrary unreasonable and not taken in public interest It that be so then what should be the relief is again a matter which depends on several factors 192 C D E 37 The courts jurisdiction to interfere is very Much limited and much less in granting any relief in a claim based purely on the ground of legitimate expectation A decision denying a legitimate expectation based on a policy or change of an old policy or in the public interest either by way of GO rule or is made by way of a legislation does not qualify for interference unless in a given case the decision or action taken amounts to an abuse of power 193 E F Att Gen for New South Wales vs Quin 1990 Vol 64 Australian Law Journal Reports 327 referred to Public Law and Politics edited by Carol Harlow referred to 38 Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power The concept of legitimate expectation can have no role to plan and the Court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed to have intended Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected 193 G A 194 A 39 If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrarydiscriminatory unfair or based gross abuse of power or violation of principles of natural justice the same can be questioned on the well known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference 194 E F 135 310 The concept of legitimate expectation is not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits particularly when the element of speculation and uncertainty is inherent in that very concept The courts would restrain themselves and restrict such claims duly to the legal limitations It is a well meant caution Otherwise a resourceful litigant having vested interests in contracts licences etc can successfully indulge In getting welfare activities mandated by directive principles thwarted to further is own interests The caution particularly in the changing scenario becomes all the more important 194 G H 195 A B Att Gen for New South Wales vs Quin 1990 Vol 64 Austraian Law Journal Reports 327 referred to 311 In the instant case the Rules for entering into contracts lay down certain norms and contain guidelines They provide for constitution of Tender Committee and the procedure to be followed in the matter of inviting tenders They also provide for negotiations but lay down that selection of contracts by negotiations is an exception rather than a rule and can be resorted to only under certain circumstances As per the notice inviting tender the price quoted is subject to price variation clause and the Railways reserved a right to accept the lowest price or accept the whole or any part or the tender or portion of the quantity offered The tenderer cannot expect that his entire tender should be accepted in respect of the quantity In the past also there were man instances where the Railways as per the procedure followed arrived at decisions in respect of both price and quantity for good and justifiable reasons 178 A B C 312 There is no legally fixed procedure regarding fixation of price and particularly regarding allotment giving scope to a legitimate expectation The Tender Committee is not a statutory authority and its proposals are recommendatory in nature and have to be considered in the distribution procedure culminating in the decision of the approving authority who as a matter of fact also can take decisions in respect of price and allotment of quantities taking into consideration various other aspects from the point of view of public interest 178 D E 136 4 The modifications In the decision of the Railways by way of judicial review are not on the ground of legitimate expectation and violation of principles of natural justice but on the other ground namely the decision of the authorities was based on wrong assumption of formation of Cartel 195 F G 5The status of a manufacturer being a BIFR company or a small manufacturer was not taken Into account so far as the fixation of the price is concerned and these considerations were deemed relevant only for the purpose of allocation of quantities The stand taken by the Railways is that smaller manufacturers should survive from the point of view of arresting monopolistic tendencies and from the point of view of public interest The Tender Committee proceedings would indicate that on the basis of certain formulae namely the past performance capacity etc the allotment was being made Therefore these cannot be said to be irrelevant considerations and as a matter of fact they had been duly given effect to and weightage was given accordingly in respect of allotment of quantities to various manufacturers within the four corners of the limited tender 196 C E

cement of additional security deposit It stands to reason that if there is a revision in the rate of tariff there must he an upward revision in the consumption security deposit since it has direct hearing to the level of supply in consumption of electricityThis being a condition of supply no reason need be given at the timeof upward revision 278 C 277 A C CIVILAPPELLATE JURISDICTION Civil Appeal Nos 2117 to 2122 of 1993 etc From the Judgment and Order dated 2841989 of the Andhra Pradesh High Court in W P Nos 1116284 1896887 1200784 1513187 505082 and 1574687 Altaf Ahmed VR Reddy Addl Solicitor General Narasimha murthy K Parasaran Anil B Divan Harish N Salve Soli j Sorabjee G Ramaswamy PP Rao Gobind Mukhoty Dr Shanker Ghosh Shanti Bhushan GL Sanghi Pawan Kumar PS Poti BM Patnaik Sanjay Parikh P Niriop Kailash Vasdev section Khaitan K K Khaitan Darshan Singh Sushi Kumar Jain AP Dhamija section Atreya EC Agarwal A V Palli Atul Sharma Ms Reena Aggarwal A K Mehta R K Gupta PC Kapur TVSN Chari B Reddy Ms Pramila Anil K Sangal Ajay K Tayal Koka Raghava B Kanta Rao Shiv Prakash Pandey Ms Rekha Pandey RK Priyokumar Singh TV Ratlinain KR Chowdhary K Ram Kumar Ashok Kr Gupta RB Misra Pradeep Misra Mrs Sheil Mohini Seth Jain Hansaria Co RP Gupta Ms Sarla Chandra Ms Mitter Mitter Co Ms Abha Jain Ranjit Kumar MP Jha SK Jain Vinoo Bhagat Surva Kant Aruneshwar Gupta Badridas Sharma Prabhu Dayal Sudarshan La Aneja R Venkataramani YP Rao DK Garg KC Agarwals OP Khaitan PB Agarwala Mohinder Rupal Mrs Kamakshi Mehllwal Ms Archna Kau For Gagrat Co Vijay Hansaria R section Sodhi DA Dave Raian Karanjwala Mrs Manik Karanjawala Rajesh mar Ms Suruchi Aggarwal KJ John Ms Deepa Dixit For 213 Swarup John Co A T Patra SR Agarwal Ms Bina Gupta Prashant Bhushan K Rajendra Choudhary Rakesh K Sharma Shivi Shamia Anil K Chopra Pallav Sisodia Ravinder Narain For JBD Co Praveen Kumar Virender Kaushal Bimal Rao Jad Ms Malini Poduval KK Lahri and section Sukumaran for the appearing parties The judgment of the Court was delivered by MOHANJ Leave granted These civil appeals are directed against the judgment of the Division Bench of Andhra Pradesh High Court reported in Southern Steel Ltd vs A P State Electricity Board Hydrabad AIR 1990 Andhra Pradesh 58 The facts briefly are as under The Andhra Pradesh State Electricity Board is constituted under Section 5 of the Electricity Supply Act 1948 hereinafter referred to as the Act The said board is engaged in generation distribution and supply of electricity in the State of Andhra Pradesh Electric energy is supplied for industrial commercial agricultural and domestic purposes To such of these industries using energy about a particular level it is supplied at a higher voltage They are classified as high tension consumers HT consumers All the appellants herein belong to that category Section 49 of the Act empowers the Board to notify the terms and conditions upon which it will supply electricity to a person It is also empowered to frame uniform tariffs in that behalf Sub section 2 specifies in fixing the uniform tariff the Board shall have regard to all or any or the following factors namely a the nature of the supply and the purposes for which it is required b the coordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner with particular reference to such development in areas not for the time 214 being served or adequately served by the licensee c the simplification and standardisation of methods and rates of charges for such supplies d the extension and cheapening of supplies of electricity to sparsely developed areas Sub section 3 empowers the Board to enter into a special agreement with any consumer any prescribe different tariffs for Wm Under Section 4 an obligation is cast on the Board not to show undue preference to any person while fixing the tarrif and terms and conditions for the supply of electricity In all these cases the appellants are covered by the general terms and conditions notified under Section 49 1 of the Act The terms and conditions were notified by the Board and the BPMS No 690 dated 17th of September 1975 It is not necessary to refer in detail to the various terms and conditions However what requires to be noticed is the terms and conditions oblige every consumer executing an agreement in the prescribed form undertaking to abide by the term and conditions prevailing on the date of agreement and also agreed to be bound by the terms and conditions as may be notified from time to time It is important to note under Section 25 the Board has unilateral right to vary the term from time to time under clause 251 The terms and conditions for supply of electricity by special or general proceedings Condition 32 1 provides the Board shall as far as possible within 15 days after the expiration of each calendar month cause to be delivered to every consumer a bill of charges stating the amounts payable by the consumer towards charges for energy supplied and any other sum in connection with supply of energy by the Board Conditions 322 1 obliges the consumers to pay the amount shown in the bill within 15 days of the date of the bill in default whereof they are liable to pay an additional charge of 2 per month or part thereof for the period of delay in paying the bill Condition 323 empowers the Board to disconnect the supply in case of default in paying the bill without prejudice to its right to recover the amount due Condition 243 also lays down that the consumer shall pay to the Board 215 every month the charges for electrical energy supplied to him during the preceding month at the tariff in force from time to time Condition 28 obliges the consumers to deposit an amount equivalent to three months consumption charges with the Board It would be appropriate to set out condition No 28 as far as it is necessary for our purposes committing what is not relevant as under 28Consumption deposits 281 Initial consumption deposit The consumer shall deposit with the Board a sum in cash equivalent to estimated three month s consumption charges The consumer coming under the LT category domestic shall however pay at Rs 3000 per Kilowatt or part thereof connected load Provided that the Board may in the case of industrial consumers accept by way of consumption deposit a sum equivalent to two months consumption charges during a period of three years from the date of first release of supply of electricity 2812In the event of the consumer failing to pay to the Board any sum that may become due for payment to the Board on the dates fixed for payment thereof the Board may in addition to and without prejudice to the other rights of the Board appropriate a part or whole of such deposit towards the sum due from the consumer 282Additional Consumption Deposit All consumers other than those LT Domestic consumers whose monthly bills are less than Rs 500 for a continuous period of six months shall keep with the Board an amount equivalent to charges for three months demand and energy charges as consumption deposit The aduacy of the consumption deposit shall be reviewed by the Board usually once in every year and or at any time during the year if so warranted dur to upward revision of tariffs enhancement of the con 216 tracted demand by the consumer charges in the pattern of consumption by the consumer relaxation of power restrictions or such other factors which in the opinion of the Board warrant review of the adequacy of the existing consumption deposit The review shall take into account the following factors iIn the case of consumers where there is no change in the contracted demand the average consumption for the preceeding twelve months after taking into consideration the quantum and nature of restrictions imposed if any during that period shall be the basis iiin the case of consumers who were sanctioned additional demand and availed it during a part of the period average recorded consumption for the period of review shall be from the date of utilisation of increased demand to the date of review after taking into consideration the nature and quantum of restrictions imposed if any during that period iiiThe demand shall be contracted demand of the consumer at the time of review ivThe rates at which the demand or energy charges shall be calculated will be tariff rates prevailing as on the date of review Based on such review if the consumption deposit of the consumer is found inadequate or has fallen short on account of adjustments made as indicated in clause 2812hereof the consumer shall deposit within 30 days of receipt of notice in this regard such additional amountas may be required by the Board or replenish the required amount as the case may be 283 Interest on consumption deposit Interest shall be paid by the Board on deposits of more than Rs 60 made in cash at the rate of 3 per annum or such other 217 rate as may be fixed by the Board from time to time Full calender months only shall be taken into account for the purpose of calculating interest and interest shall be calculated to nearest five paisa The interest accruing to the credit of the consumer shall be adjusted every year in the month of April in the Electricity Supply bills 284 Disconnection or non payment of consumption deposit If the consumer does not make payment of amount of consumption deposit or additional consumption deposit or where the deposit is given in Government security or National Saving Certificate Bank guarantee etc he fails to replace them by deposit in cash when so demanded by Board within the notice period of 30 days supply of consumer shall be liable for disconnection 285 The Consumption Deposit so calculated as per the Clause 281 and or 282 above shall not be less than three times the monthly minimum charges applicable to the consumer under the category to which he belongs 286 All consumers shall pay the Consumption Deposit or additional consumer deposit within thirty days from the date the demand notice if there be any delay in payment the consumer shall pay surcharge thereon equal to 1 12 per month or such other percentage to be fixed by the Board from time to time of the demanded amount for each month of delay or part thereof This will be without prejudice to the Board s right to disconnected supply of electricity Clause 1 of condition 28 is general in nature It applies to all consumers 12 enables the Board to appropriate a part or whole of the said deposit towards any amount due to the Board and not paid within the prescribed period 2 applies to all consumers except those LT Domestic consumers whose monthly bills are less than Rs 218 500 per month for a continuous period of six months Such consumers are obliged to keep with the Board an amount equivalent to three months demand and energy charges as consumption deposit The deposit is liable to be reviewed by the Board from time to time having regard to the factors mentioned in the said clause 3 prescribes interest which the Board has to pay on such deposit It is 3 per annum Clause 4 empowers the Board to disconnect the supply if consumption deposit additional consumption deposit is not made or is not replaced whenever called upon to do so Clause 5 prescribes a certain floor below which consumption deposit shall not go Clause 6 says that the consumption deposit or additional deposit shall be paid within thirty days of the notice demanding such deposit In default not only interest is payable but the supply also is liable to be disconnected The attack before the High Court was that according to Condition No 32 1 the bill is served within 15 days of the expiration of each calendar month The amount covered by the bill is payable within 15 days of the date of the bill The period of 15 days for payment is calculated not from the date of service of the bill but from the date of the bill A bill could be served even on the very first day of the succeeding month in which event it will become payable within 15 day of the date of the bill In such a situation it is not correct to say that a consumer goes on availing and enjoying energy for a period of three months without paying for it Invariably it does not exceed six weeks or at any rate two months In the event of non payment under Condition No 323 supply of energy can be disconnected without seven days notice as contemplated under Section 24 of the Therefore 1It was urged that the consumption deposit should in no event exceed two months average consumption charges 2The second attack was the payment of 3 interest by the Board on such consumption deposit is no longer good law in view of the judgment of Supreme Court rendered in Ms Jagdamba Paper Industries p Ltd vs HS E Board since this Court had taken the view that the interest on such deposit should be paid at the same rate as is paid by the schedule bank on fixed deposit 219 It was generally urged that the Electricity Board being a State within the meaning of Article 12 it has to act fairly Any term of condition will have to answer the test of reasonableness On the contrary if it is arbitrary it would be violative of Article 14 The High Court after analysing the object behind Condition No 28 relating to the consumption deposit held The condition requiring the consumer to pay the charges within 15 days from the date of the bill and on such failure a right is conferred on the Board to disconnect the supply The condition merely refer to the power of the Board Existence of power is distinct from exercise of power The Board cannot blindly act upon Condition 323 and disconnect the supply the moment 15 days time from the date of the bill expires It has to take a realistic view of the situation After all these industries are engaged in production of goods essential to the community A blind and mechanical adherence to Condition 323 instant disconnection may indeed prove counter productive in larger sense It was also not possible for the Board to notice the non payment immediately in view of the large number of consumers and the extensive nature of organisation Besides huge sums are required by the Electricity Board as rotating capital It borrows large amounts from organisations like LIC and Banks on which it pays interest to them Hence it is well entitled to require the consumer to co operate by paying their bills regularly by furnishing security deposits and by conforming to the terms and conditions of supply Under these circumstances the requirement of three months deposit could not be said to be unreasonable and unjustified As regards the payment of 3 interest the High Court was of the view that the decision of this Court in Jagdamba Paper Industries P Ltd supra could not be read as a decision of the Supreme Court on the basis of which it could be declared that the earlier Bench decisions of the High Court were no longer binding Accordingly it dismissed the writ petitions Aggrieved by this decision the present SLPs have come to be preferred Mr RN Narasimha nmurthy learned counsel for the appellant 220 after drawing our attention to clauses 28 and 32 would submit that if there is any laxity on the part of the Board in preparing the bill that cannot be a ground to make a consumer to pay three months deposit The tariffs of 1974 provided for the payment of bills within 14 days from the date of the bill while the quantum of deposit is three months consumption charges Originally the time for payment was 30 days from the date of the bill That has been reduced to 15 days which is a drastic change The security deposit is a provision for continued default of the consumer The quantum of such a deposit is reckoned on the basis of the lapse of time between the consumption charges that become due after expiry of time required for reading of meter billing delivery of the bill to the consumer grace time allowed and the reasonable time required for disconnecting the consumer s service connection The reduction to 15 days has great relevance on the quantum of deposit as the deposit is intended to cover the defaulted amount by the time of disconnection However considering that the bills of power intensive industries are prepared within 3 days of meter reading and also considering the close monitoring that is feasible in verification of payments of bills of these consumers and the small number of these consumers distributed among the several Circle Offices of the Board any default is detectable within 20 days of the bill for appropriate action to be taken immediately The purpose of consumption deposit is only to safeguard the actual consumption charges that become payable by the time penal action could be initiated Even the judgment of the High Court indicates that a time lapse of 37 days from the date of the meter reading without considering the 7 days notice prescribed under Section 24 of the The balance time of 23 days to make up for 90 days is provided for the laxity in the Board administrative system which justifiably cannot be passed on to the consumer by way of consumption deposit In view of the high stakes involved in the case of power intensive consumers the Board should evolve a suitable system of payments and must keep the security deposit to the minimum instead of three months It is further submitted that the security deposit could be in the form of bank guarantee There is no justification to require cash deposit As a matter of fact as noted in Ms Haryana Ice Factory vs Municipal 221 Corporation of Delhi and Another AIR 1986 Delhi 78 the security in the form of Government Bond is permissible In Jagdamba Paper Industries Case supra paragraph 11 of the judgment deals with rate of interest That is a case where 8 was increased to 10 by consent If really it is in the nature of a deposit there is no Justification as to why bank rate should not be awarded It seen from The Chairman Karnataka Electricity Board and Others vs Gadag Mining Co Ors etc AIR 1986 Karnataka 252 10 interest had been awarded Mr Anil B Divan learned counsel for the appellant in SLP c No 256492 would submit is under Power intensive units like the appellant s form a distinct class of consumers The Ferro Silicon plant of petitioner No 1 is a power intensive one where the cost of electricity constitutes about 55 of the price of the ferro silicon produced Electricity thus is the basic raw material for this industry On an average the appellant is consuming electricity worth Rs 16 crores per month If there was full supply of electricity without there being a power cut the monthly bill would be approximately Rs 4 crores at a present tariff The power intensive plant of the appellant maintains a very high load factor of 09 Ordinary HT consumers work at a load factor of only 60 and the units consumed at only 50 per KVA demand The HT 111 tariff for power intensive consumers requires a minimum consumption of 4033 units per KVA demand This means more than 8 times that of HT consumers The Electricity Board has always classified power intensive units as a separate category At present there is a special tariff called HT III tariff with a fist of power intensive industries specified in the tariff notification The appellant No 1 had deposited Rs 107 crores in cash towards the security deposit A bank guarantee for Rs 5364 lacs had also been furnished A further demand of Rs 965 lacs prompted the filing of the writ petition in the High Court As per the order of this Court in SLP No 1207784 it was directed on 621987 that a sum of Rs 1 crore be paid by the 3rd of every month and the balance within 7 days of the 222 presentation of the bill This order came to be modified that Rs1 Crore was to be paid on the 30th of the month and the balance within one week of the receipt of the bill The said arrangement has been working satisfactorily There has not been any default in payment of electricity bills Therefore the entire dispute is a theoretical one as to what the quantum of the security deposit can or ought to be A deposit in cash of an amount equal to three months average bills at full supply at the present tariff without any power cut will amount to Rs 12 cores on the basis of tariff revised in October 1992 With ever increasing tariffs the deposit demanded will also keep increasing Under these circumstances the condition requiring three months security deposit is arbitrary and illegal for power intensive consumers The paid up share capital of appellant No 1 is Rs 38 crores The gross value of the plant and machinery of the power intensive unit is Rs 794 crores The total advances made by the consortium of bankers for working capital is Rs 425 crores The total net worth of all the divisions of appellant No 1 that is Merine products Sugar Engineering Machine Building and the power intensive Ferro Silicon Plant is Rs 146 crores The security already furnished namely Rs 57 crores is crippling the Ferro Silicon Plant division A demand of three months cash deposit would be in the range of Rs 12 crores It is arbitrary and unjustifiable to require appellant No 1 to deposit several times its share capital by way of security If this demand is enforced strictly the plant of the appellant will become sick and ultimately will have to be wound up In other States the provision is not so harsh If the security deposit is consumption deposit and it is for meeting the cost of supply in advance then the Electricity Board cannot charge penal interest at 2 per month for non payment of bills within the stipulated period The deposit first must be appropriated against the dues and the interest charged only if there is balance due The Stand of the Electricity Board is perverse and illegal Equally there can be no question of supply on credit if deposit is adjusted against consumption all the time The consumer has got a right to negotiate In The Indian Aluminum Co vs Karnataka Electricity Board this Court directed the Electricity Board to adopt a realistic policy Here also Condition No 28 must be altered 223 There is no power under the Electricity Supply Act to enable the Board to raise revenue or to cover its capital cost etc except by way of adjusting tariffs as seen from under Section 59 of the Supply Act 1948 Therefore consumption deposit cannot be used for the purpose of revenue or raising revenue In this case the Electricity Board had not placed any material to give interest only at 3 Mr K Parasaran learned counsel appearing in SLP No 13004 89 after referring to the passage occurring at page 66 of Haryana Ice Factory case supra submits that the security deposit cannot go to buildup the capital or fixation or tariff Under Sections 49 and 59 of the Supply Act finance is required to be adjusted including the payment of interest Demand of three months consumption deposit cannot be resorted to In support of his submission reliance is placed on Hindustan Zinc Ltd etc vs Andhra Pradesh State Electricity Board Ors Mr Kailash Vasudev learned counsel for appellant in SLP 1300489 submits that under Section 49 of the Supply Act it is enjoined upon the Board to adjust its tariffs by keeping the factors detailed in the said Supply Act Therefore the Board cannot have recourse methods not provided under the said Act The demand for a deposit to ensure the due payment of the bills for electrical energy consumed amounts to framing an additional tariff The Board cannot do indirectly what it cannot do directly The Board being a state monopoly has to act reasonably and not arbitrarily The terms and conditions of supply cannot be unfair and oppressive Mr R Venkataramani learned counsel in his written submis sions in Writ Petition Nos 129389 135389 and SLP c Nos 4791 9290 4793 9490 would urge that Section 49 of the Supply Act is unconstitutional since there are no guidelines for framing the terms and conditions of supply of electricity The said Section does not specifically spell out fairness of action Clause 28 of the terms and conditions of supply is a clear illustration of arbitrariness and subordinate legislation 224 The words as the Board thinks fit ought to be interpreted so as to be consistent with the fairness of State action They are to be construed as reasonably thinks fit as held in Roberts vs Hopwood and Granite vs Minister of Housing and Local Government Clause 28 of the terms and conditions of supply relation to fixation of 3 interest and additional charges are vitiated due to non application of mind Under clause 286 of the terms and conditions in the event of delay in payment of consumption deposit or additional consumption deposit within the stipulated period the consumer is obliged to pay surcharge at 18 The obligation to pay surcharge and the power of the Board to vary the percentage from time to time would constitute draconian provision Money wherever it is held in deposit could only be used to earn some interest Therefore paying 3 interest on the consumer deposit is not at all justified A public institution cannot be allowed to get excessive interest In meeting these arguments the learned Additional Solicitor General submits that under Electricity Supply Act the finances of the Board are controlled to the minutest detail Originally prior to 1978 Section 59 required the Board as far as practicable and after taking credit for any subvention from the State Government not to carry on its operation on loss For this purpose it was empowered to adjust its charges accordingly from time to time Section 59 was amended by Act 23 of 1978 After the amendment the Board after taking credit for any subvention from the State Government was required to carry on its operations and to adjust its tariffs so as to ensure that the total revenues in any year after meeting of the expenses left such surplus as state government may specify from time to time This Court has taken the view in Kerala State Electricity Board vs SN Govinda Prabhu Bros Ors that even if the Government had not prescribed surplus the Electricity Board could generate surplus After the amendment by Act 16 of 1983 which came into force on 225 141985 the Board was to create a minimum surplus of 3 or such higher percentage as the State Government would specify in this behalf It is in this background the matter will have to adjuged The reason why three months security deposit is demanded is for two months the consumer gets free electricity For supply of such electricity the Board has to borrow and make payment of interest If there are no consumer deposits the tariff shall have to be increased That will effect all the consumers Interest at 2 is charged in case of default only in order to ensure proper payment It is penal in character In the judgment under appeal the High Court held that the burden relating to interest can be reflected either in the tariff or could be set off by calling upon the consumer to make deposit In fact this Court has upheld the tariff revision effected by Andhra Pradesh Electricity Board as seen from Hindustan Zink Ltd Etc v Andhra Pradesh State Electricity Board Others It cannot be contended that the three months consumption deposit is arbitrary This argument ignores the following important factors iThis is not a security deposit but a consumption deposit ii It in the nature of an advance payment iiiIn the event of failure to pay it could be proceeded against as seen from clause 2812 iv Consumption deposit is variable as per clause 282 iv If therefore the object of consumption deposit is to ensure proper payment with reference to electricity supply there is nothing arbitrary or unjustifiable The fact that some of the appellants pay large amounts by way of electricity charges will have nothing to do with the nature of deposit Merely because it is a power based unit it cannot be treated separately Nor can the appellant make a virtue out of necessity The terms of supply relating to consumer deposit must be uniform therefore it is not correct to contend that the power based unit must be treated separately As regards payment of interest at 3 electricity supply is made on 226 credit basis Therefore it is a matter of adjustment of Board finances Strictly speaking the consumer deposit is in the nature of fidelity guarantee to ensure proper payment by consumer The consumer may not be entitled to interest at all However where the Board has so adjusted finances and pay 3 interest the Board cannot be defaulted Jagdamba Paper Industries case supra cannot be said to be a decision as to the rate of interest payable by the Electricity Board Upon reading paragraph 11 of the judgment it will be clear that it proceeded on the consent of the counsel RAJASTHAN The writ petitioners applied to appellant Board for the supply of high tention power for their factories After the execution of the necessary agreement and furnishing of security deposit power connections were given Subsequently the Board issued notice requiring the consumers to deposit the enhanced amount of cash security as well as the bank guarantee on the basis of maximum power consumption of three months With regard to security deposit Part 11 of the General Conditions of Supply and Scale of Miscellaneous Charges in Note II stated that no interest will be paid by the Board on the security deposit Two contentions were raised in the petitions i Note II providing for no interest was bad in law ii the enhanced security must be calculated not on three months maximum consumption but on the basis of minimum power consumption These two contentions found favour with the learned Single Judge The Rajasthan Electricity Board filed special appeals while the consumers filed cross appeals The Division Bench held as under iThe Board has power to demand additional security but the average consumption of three months should be taken as the basis for calculating the amount of such security iiThe clause relating to non payment of interest was not reasonable Interest must be allowed on the entire amount of cash security from the date of the writ petition The appeals by the Board were dismissed while cross appeals by the consumers were allowed Ag 227 grieved by this judgment the present SLPs have come to be preferred by the Rajsthan Electricity Supply Board Mr Soli J Sorabjee learned counsel appearing for the appellant argued as follows There is no legal obligation to pay interest on a deposit made by the consumer with the Board in terms of Clause 20 a c of the General Conditions of Supply Nor even interest is payable under common law or in equity In this connection the learned counsel draws our attention to Halsbury s 4th Edition volume 32 pages 54 55 There is no legal or equitable obligation to pay interest for detention of monies In support of this argument learned counsel relies on Bengal Nagpur Railway company Ltd vs RuttanjiRamji 1937 LR 65 IA 66 and Union of India vs AL Rallia Ram pages 187 189 190 There is no contract or agreement which provides for payment of interest On the contrary Clause 9 b ii of the General Conditions expressly provides that no interest will be paid by the Board on security deposit There is no statutory provision which casts an obligation on the Board to pay interest on the security deposit The High Court erred in relying on the model form of draft conditions of supply because the said model form is applicable to only licensee as defined under Section 2 h of Electricity Act It is not applicable to a Board which is not a licencee Further it is not necessary on the part of the Board to adopt model form Schedule VI of 1948 Act again cannot be pressed into service as the Board is not a licencee clause 2 b v of Schedule VI merely specifies interest on security deposit as properly incurred item of expenditure for the purpose of determining the clear profit of the licencee The said clause does not and cannot by itself impose an obligation on the licencee to pay interest on security deposit Should interest be paid then it qualifies as an item of expenditure properly incurred The High Court also erred in relying on Section 4 2 of the Section 4 2 has no application where on account of contractual term or a statutory provision payment of interest is not permitted Section 4 2 of the merely enlarges the 228 categories of cases mentioned under Section 4 1 The said Section cannot override other statutory provisions or a contract between the parties The non obstante clause under Section 4 2 is restricted only to the provisions of Interest Act 1948 It is submitted that under the billing practice prevalent with the Rajasthan Electricity Board the consumer has free use of electricity during the period between consumption of electricity and expiry of period after notice During this period which varies from 2 to 2 12 months the consumer in effect enjoys a credit facility Therefore if security deposit is demanded for three months it is neither unreasonable nor arbitrary As a matter of fact the security demanded by the appellant Board is in the form of cash for one month and bank or insurance guarantee for two months Therefore it is all the more reasonable In support of this reliance is placed on Kistna Cement Works Tadepalli vs The Secretary APSEB Vidyut Soudha AIR 1979 AP 291 BR Oil Mills Bharatpur vs Assistant Engineer D RSEB Bharatpur AIR Municipal Corporation for Greater Bombay vs Ms Devidayal Metal Industries Haryana Ice Factory vs Municipal Corporation of Delhi AIR 1986 Delhi 78 and Southern Steel Ltd vs The AP State Electricity Board Hyderabad AIR 1990 AP 58 On the question of the constitutionality of the provisions regarding non payment of interest and whether it is violative of Article 14 it is submitted iArticle 14 does not mandate mathematical exactitude or scientific precision iiThe mode and period of security should be related to the billing practice prevailing in Rajasthan Electricity Board iiiThe consumer with open eyes has entered into the agreement and has solemnly undertaken to abide by the condition regarding nonpayment of interest He cannot resile from that condition There is nothing inherently objectionable nor is the condition illegal or void as opposed to public policy Even assuming the contract between the consumer and the Board is an adhesion contract it is not necessarily unconscionable In this connection reference is invited to Black s Law Dictionary 6th Edition page 40 That passege has been cited with 229 approval in Central Inland Water Transport Corpn vs Brojo Nath Ganguly In such matters relief is given to the party only if the contract is so unreasonable as to be unconscionable In this connection reliance is placed on Gillespie Brothers Ltd vs Roy Bowles Ltd at 200 g Farmsworth on Contracts 2nd Edition 319 320 para 427 The rate of interest on security deposit cannot be equated with the rate of interest payable on fixed deposit because the nature and character of a security deposit is basically different from fixed deposit This is clearly brought out by the Companies Acceptance of Deposits Rules 1975 The said Rules expressly exempt security deposit in definition of Rule 2 clause v vi In Jagdamba paper Industries case supra the rate of interest was based on a concession by the parties The Court had no occasion to decide the rate of interest That part of the judgment proceeds sub silentio The argument based on surcharge levied for delayed payment is a non sequitur If the provision for non payment of interest is valid and not arbitrary it does not become arbitrary and unconstitutional because surcharge is levied at 2 per month In fact surcharge has not been challenged Surcharge is attracted only if the bill is not paid within the due date The submissions based on Sections 57 59 of the Supply Act in relation to security deposit proceed on a misconception of the nature and character of payment as a security deposit The object of security deposit is to secure prompt payment of electricity bills They are not intended to finance the Board s transaction Section 57 read with sixth Schedule is meant to ensure a reasonable return expression charges in the Sixth Schedule clearly shows that security deposits are not included within the expression charges There is no mutual exclusivity between increase of tariffs and earning interest on security deposits It is also incorrect to contend that prompt payees of electricity bills are treated on par with the defaulters and thus anequals are treated alike The real test is whether in the general application of law there is any discrimination In support of this submission the learned counsel placed his reliance on The Collector of Customs Madras vs Nathella Sampathu Chetty 230 Vivian Joseph Ferreira vs Municipal Corporation of Greater Bombay B Banerjee vs Anita Pan 975 2 774 and Fatehchand Himmatlal vs State of Meharashtra The last submission of the learned counsel is that a statutory provision may be struck down as unconstitutional only if it is palpably arbitrary and irrationality is writ large Merely because the Court considers a particular provision to be unwise or undesirable it is never struck down The learned counsel fairly concedes that the enhanced security deposit could be calculated only on the average consumption of three months of the previous years Mr Altaf Ahmad learned counsel supporting the arguments of Mr Soli J Sorabjee would urge In this case the consumers are those who use HT and E H T lines Section 49 3 gives the clue that each Board can have its own scheme Section 79 of the Supply Act speaks of the power to make regulation Clauses i and j are relevant because they talk of principles governing the making of arrangements with licensees under Section 47 and other then licensees under Section 49 The industrial consumers constitute the majority user of the electricity amounting to 4951 per cent the transmission losses for 1992 93 alone are 22 per cent Besides the Board is also purchasing power from other corporations and States Therefore the demand for security deposit is fully justified and there is nothing arbitrary in not providing for interest That is what is provided under clause 21 a of the agreement in relation to high tension supply The consumption deposit cannot be equated to the deposit in a bank and interest could be demanded as of right Mr Kapil Sibal learned counsel appearing for the Haryana Board which Board has now withdrawn payment of interest has filed intervention application since the present day position of the Haryana Board is on a par with Rajasthan Mr RK Mehta learned counsel for the intervenor on behalf of 231 the Orissa Electricity Board through his written submissionsurges that it may be that the regulations in the case of Andhra Pradesh Utter Pradesh and Bihar Provide for payment of interest at a certain rate on the security deposit However the Rajasthan and Orissa regulations provide that no interest shall be payable on the securities furnished by the Board In the impugned judgment the Division Bench has not given any cogent or valid reason for striking down Condition No 20 of the General Conditions of the Rajasthan Electricity Board The High Court had failed to appreciate the following factors while quashing the impugned clause of the regulations Electricity is an item which cannot be sold and supplied immediately after generation For the sale of electricity one has to take meter reading meant for the said purpose and therefore the Board sends the bill for particular duration It is obvious that the reading of the meter could not be taken at every point of time but only for durationperiod In the process 2 12 months elapse The Board does not charge any interest at least for 2 12 month from its consumers At the same time the Board needs finance for production supply and other charges necessary for supply of electricity The Board is thus obliged to take loans from various financial institutions The consumers who are utilising electricity for 2 12 months without making any payment will be unjustifiably enriched at the cost of general public in the absence of security deposit Further taking of advance money without interest for Providing other services in the market is a general practice Therefore a similar provision in the general conditions for supply of the Board cannot be treated as arbitrary or unreasonable A consumer is not entitled to claim interest on his security deposit having regard to the following considerations 1The security deposit is furnished in consideration of the performance of the consumer s obligation for obtaining the service essential to the life and the well being of community The electricity supply is made to that consumer on credit withoutrequiring him to make instant payment The billing time taken by the Board is for the benefit and convenience of the consumer as he saves additional expenditure on 232 account of instant or shorter billing time possibly through electronic devices which will be included in the tariffs 4The public revenues Ire blocked in the generation transmission and distribution of electricity for the performance of supply on which the Board pays interest in so far as they form part of the loans borrowed by the Board for performing the public service On the return of the blocked moneys the Board gets no interest from the consumers 5The Board needs back its blocked money to carry out service with a reasonable recompense 6The Board is not essentially a commercial Organisation to which the consumer furnishes the security deposit to earn interest Having entered into a contract with open eyes it is not open to the consumer to say that interest should be paid The basis of supply of electricity and the conditions on which it is supplied being statutory the provisions under the conditions of supply that the Board shall not pay interest on the security deposit has statutory basis and accordingly cannot be struck down as arbitrary on the basis of a commercial transaction governing a bank deposit Therefore it is submitted that regulation 7 of the Orissa State Electricity Board General conditions of Supply Regulations 1981 providing that no interest would be payable on security deposit is just and reasonable and is not arbitrary or violative of Article 14 of the Constitution Mr Shanti Bhushan learned counsel opposing the stand of Rajasthan Electricity Board submits that the only question in this special leave petition is whether Electricity Board is obliged to pay interest on the cash security deposits as the Board compels industrial consumers to secure against default in payment of electricity bills In the first place as laid down in Jagdamba Paper Industries Pvt Ltd vs Haryana State Electricity Board this Court has indicated that the security amount should bear the same interest as admissible on fixed deposit of scheduled banks The interest rate on 10 per cent was decided not really on the basis of admission but on a positive finding Apart from this this Court has in several other writ petitions ordered interest at 12 per cent 233 It is submitted that the scheme of Indian Electricity Rules of 1956 and the scheme of the Electricity Supply Act also show that the interest on security deposit is supposed to be payable The Board is not entitled to use the deposits to augment its finances They are meant only to secure the default in payment of the bills Section 59 of the Supply Act indicates that the only condition in which the Board could raise the revenue is by adjustment of its tariff Section 49 of the Act makes provision for the sale of electricity by the Board to persons other then licensees under the terms and conditions as the Board thinks fit It can be seen from the definitions of the Sixth Schedule to the Supply Act that the scheme was meant to be applicable to licensees The place of the licensees has been taken over by the Board That is why clause 2 b v of Schedule VI of the definition of clear profit states that the interest on security deposits was to be a part of the expenditure properly incurred by licensees Then again the manner in which the accounts are to be maintained by the licensees also shows that the licensees have to make a provision for payment of interest on security deposits The High court is right in relying on Section 4 of the Interest Act The contract in the instant case is between a consumer however high he might be and a monopolistic public utility company It is clearly an adhesion contract This Court in Central Inland Water Transport Corporation vs Brojo Nath Ganguly has clearly held that an unreasonable term of an adhesion contract will not be enforced by the Court Interest on security deposit is also admissible under equity or common law Halsbury s 4th Edn 32 paragraph 106 at page 53 defines interest as the return or compensation for the use or retention by one person of a sum of money belonging to or owing to another The Board is clearly in the position of a trustee in respect of this money since the money is deposited by the consumers in trust with the Board to secure the Board against default in payment of bills The deposit of security is like the usufructory mortgage which is provided for in Section 76 of the Transfer of property Act Section 76 G H 234 provide that the mortgagee in a usufructory mortgage would have to keep account of the incomes received from the mortgagee in his use and would have to pay compensation for the benefit derived by the user of the mortgaged property The position here is more or less similar It is not correct to state that security is an advance payment If it is so it would amount to Board taking three months advance payment from the consumers In such a case the Board cannot disconnect the electricity until the period of three months is over But the rules of the Board enable it to disconnect even if the consumer fails to pay his bills on the due date Then again a penal interests is charged in case of default If it is in the nature of an advance payment there is no scope for charging 2 12 per cent penal interest Lastly it is submitted that even under English Law interest is payable on security for electricity as seen from Halsbury s Volume 16 paragraph 129 129 Giving of security Security required under the Schedule to be Electric Lighting Clauses Act 1899 to be given to an electricity board See the Electric Lighting Clauses Act 1899 Schedule sections 25 2 27 2 3 and paras 115 118 ante may be by deposit or otherwise and of an amount agreed or failing agreement determined by a magistrates court and that court may deal with the caused of the proceedings and its decision is final and binding on all parties bid Schedule section 71 Electricity Act 1947 section 57 2 1 Sch 4 Part 111 Where security is given by way of deposit the party to whom it is given must pay interest at the rate of 4 per annum an every sop for each period of Six months during which it remains so deposited Electric Lighting Clauses Act 1899 Schedule section 71 proviso Decimal Currency Act 1969 section 10 I UTTAR PRADESH STATE ELECTRICITY BOARD The question raised before the High Court was as to the rate of 235 interest The respondent UPState Electricity Board amended the rate of security deposit as Rs 2 per KVA On such deposit it paid only 3 per cent interest whereas on late payment of the bills it charged more than 24 per cent surcharge from the consumer The appellants preferred writ petitions in so far as they were denied 12 per cent interest on the deposit taken from the consumers The Division Bench of the High Court held These petitions are dismissed with a direction that in case the Supreme Court decided that the interest at a rate higher that 3 should be paid on such security and additional security deposit the benefit of the same judgment shall also be extended to the petitioners herein without the necessity of any further proceedings being taken by the petitioners Hence the special leave petitions Mr G Ramaswami learned counsel for the appellants would urge that Jagdamba s case supra has decided that rate of interest Therefore that should govern In a number of matters this Court has also ordered interest at 12 per cent The same principle should apply to this case as well 1Security Deposit is a compulsory levy The consumer has no option 2Even in contractual matters if the Board which is a State does not behave fairly this Court can always interfere 3The Board cannot compel the consumer to make a security deposit without corresponding obligation to pay interest Deposit does not contemplate appropriation Prior to appropriation what is the character of the deposit requires to be determined It is not the payment of money by way of 236 advance As to the meaning of interest it could be gathered from the case in Riches vs West minister Batik Limited 1947 Appeal Cases 390 at 400 In Union of India vs AL Rallia Ram this Court held that interest is awardable in equity A distinction will have to be made between unreasonable and unconscionable In Administrative Law mere unreasonableness is enough to set aside a contract while unconscionable relates to private law If interest is not paid security deposit cannot be demanded as this will amount to unconscionable bargain As to the meaning of unconscionability Black s Law Dictionary Fifth Edition at page 1367 can be usefully referred to Basic test of unconscionability of contract is whether under circumstances existing at time of making of contract and in light of general commercial background and commercial needs of particular trade or case clauses involved are so one sided as to oppressor unfairly surprise party Division of Triple 7 Service Inc vs Mobil oil Corp 60 Misc 2d 720 201 Unconscionability is generally recognized to include an absence of meaningful choice on the part of one of the parties to a contract together with contract terms which are unreasonably favorable to the other party Gordon vs Crown Central Petroleum Corn DC Ga 423F Supp 58 61 Typically the cases in which unconsionablity is found involve gross overall one sidedness or _gross one sidedness of a term disclaiming a warranty limiting damages or granting procedural advantages In these cases one sidedness is often coupled with the fact that the imbalance is buried in small print and often couched in language unintelligible to even a person of moderate education Often the seller deals with a particularly susceptible clientele Kugler vs Romain 58 NJ 522 237 As to the meaning of reasonableness it is stated in GB Mahajan and Ors vs Jalgaon Municipal Council and Ors at 109 Under English Law relating to electricity supply as seen from Halsbury s Vol 16 at paragraph 129 it is clearly stated that interest on security deposit is payable Therefore all the more the reason why here also it must be held to be payable Mr Kapil Sibal opposing the stand of Mr G Ramaswami arguers that there is no order of this Court adjudicating the rights of the Board on the consumer in respect of the validity of consumption security deposit being condition precedent for the supply of electricity by the Board as we II as the liability of the Board to pay interest to the consumer in respect of the consumption security deposit In the absence of any such adjudication the question of Board being bound by the previous orders of this Court does not arise In cases where 12 per cent interest was awarded it was only by way of ad interim measure The other orders are also not conclusive on this aspect Therefore the matter will have to be decided afresh in the instant cases Far from being a compulsory levy the consumption security deposit is not only a deposit in cash to safeguard recovery of electricity dues for the energy supplied to the consumer on credit but also a security towards payment or satisfaction of any money For example theft which may become due and payable to the Board by the consumer The obligation to pay interest to the consumer proceed on the assumption that the Board is keeping the security deposit and depriving the consumer of tile use of the money which is alleged to be earning interest with the Board This assumption is not warranted for the followings reasons 1 The cycle of billing demonstrates that in the very nature of things the consumer is supplied energy on credit The security deposit is hardly sufficient to secure the payment to the Board by the time the formal bill by the Board is raised on the consumer 2The consumption security deposit indeed represents only part of he money which is payable to the Board at the end of the billing 238 cycle The said amount can be appropriated at any time towards the payments that are due to the Board and reflected in the formal bill 3In the nature of billings cycle it is the Board which has to receive interest on the energy supplied to the consumers on credit 4The concept of interest earned on a fixed deposit is alien to the issue The liabilities of the consumer increase on a daily basis depending on the level of supply and consumption Therefore the amounts due are liable to be appropriated forthwith That is not possible where moneys are placed either on fixed deposit or a savings bank account It is incorrect to contend that the amount is lying in trust with the Board The amount lying with the Board could also be appropriated for satisfaction of any amount liable to he paid by the consumer for violation of any conditions of supply in the context of wide scale theft of energy and tempering with meters Therefore the security deposit serves not only to secure the interest of the Board but also serves as a deterrent on the consumer in discharging his obligation towards the Board Under section 49 the Board is enabled to supply electricity upon such terms and conditions as it thinks fit under Article 226 of the constitution the Court is to conduct a limited scrutiny whether by imposing such a condition the Board has not acted as a private trader and there by shd off its public utility character Should the Coust come to the conclusion that the Board has not acted as a private trader and tile nature of deposit has a rational relationship the issue will fall outside the scope of judicial purview Section 49 must be read alongwith Section 59 The contention that the Board can achieve a surplus by adjusting its credit does not flow from the language of Section 59 The requirement of consumption security deposit is a condition of supply It has a direct bearing on the operation of the Board Hence it is per se reasonable and constitutional If there is a revision in the rate of tariff there has to be an upward revision of the consumption security deposit since it has a direct bearing on the level of supply in consumption of electricity In October 239 1986 the tariffs in the State of Uttar Pradesh were adjusted upwards The revision in the form of an additional security deposit with interest at the rate of 3 per cent was made in January 1987 These facts would suggest the rationale in the imposition of additional security deposit This being a condition of supply no reasons need be given at the time of upward revision Union of India vs AL Rallia Ran relates to the award of interest by an Arbitrator The nature of consumption security deposit is such that it represents the moneys of the Board There is no relationship of debtor and creditor There is no deprivation of property which alone will entail the consequences like payment of interest The learned counsel has also filed a tabulated statement to show that the security deposit made by the appellant is 7242 lakh for all industries while the affairs in electricity come to 96573 lakh A formal chart has been filed based on the figures for August September and October 1991 to show that after the third month the consumption charges total to 4509 lakh While security that is offered is 1595 The same is the position with reference to other industries as well concerning whom the learned counsel has filed a tabulated statement This so to establish how the Electricity Board has supplied electricity on credit to the various consumers and the security deposit is hardly sufficient even for one month s consumption BIHAR SLP 11799 of 1989 The appellant Bihar Electricity Board provided 4 per cent interest per annum on security deposit When this was questioned in CWJC No 3000 of 1987 in the matter of Dhanbad Flour Mills a Division Bench of the High Court was of the view that an interest at 4 per cent appeared to be unreasonable and directed the Board to examine the question of enhancement of the rate of interest Similar directions were issued in another case The appellant Board after examining the matter issued a Notification on 27th of May 1988 and enhanced the rate of simple interest to 5 per cent per annum This was because the amount of security deposit was kept in the savings account which earned 5 per cent interest which was passed on the consumer The said notification was questioned before the High Court by seeking 240 a writ of mandamus claiming interest at the rate payable on fixed deposit by a nationalised bank in view of the decision by this court in Jagdamba s case supra By the impugned judgment the High Court directed payment of interest on security deposit at the rate payable on fixed deposit by nationalised banks Aggrieved by this judgment the Bihar State Electricity Board has preferred the special leave petition Mr G L Sanghi learned counsel appearing for the Bihar Board draws our attention to clause 153 of the tariff notification and submits that the consumption security deposit is not only for the supply of energy on credit but also for satisfaction of any money payable by him If the consumer does not pay the dues in time the arrears of consumption charges will have to be adjusted against the security deposit Therefore the security deposit can never be kept in bank under fixed deposit This is the reason why the amount is kept in savings bank account and whatever interest is earned thereon that is passed on to the consumer Therefore the High Court was not right in awarding a higher rate of interest In other respect the learned counsel adopts the argument of the other learned counsel appearing for the various Boards including the contention that Jagdamba s case supra did not lay down the rate of interest Normally in market transaction when any one supplies on credit to a consumer a guarantee is taken for the payment on dues Such a guarantee may be in the shape of a bank guarantee fixed deposit Similarly the Board when it supplies electricity on credit it keeps tile security for the amount of supply of the electricity According to Board s standing order No 433 dated 311274 dues at any time are not allowed to exceed amount of security deposit and adjustment is to be made against the security deposit after the disconnection of supply Therefore it is not correct to state that the security is not adjusted towards the bill and is kept in tact Section 24 of the Electricity Act is the only provision to ensure payment is indicated in Bihar State Electricity Board Patna vs Ms Green Rubber Industries and other 1990 1 SCC 731 In meeting these arguments it is submitted by Mr MP Jha learned counsel for the respondent that the stand of the Board in 241 making payment of interest at 45 per cent is clearly arbitrary The security aspect of the Board requirement can easily be satisfied by the board resorting to liquidation of security deposit As a matter of fact the security deposit was never adjusted by the appellant Board As a result large amounts were kept without investing them in fixed deposit Learned counsel for the respondent relies on the orders issued by this Court and submits that the question of interest is settled by the ruling in Jagdamba s case supra Section 24 is of no help for payment of a lower percentage of interest WP No 578 of 1987 In this writ petition under Article 32 of the Constitution the challenge is to the increase of security deposit for L and H power consumers above 100 BHP It has been increased from Rs 170 to Rs 200 No reason whatever has been assigned for such an increase of security deposit That will he bad in law as laid down in Central Inland Water Transport Corporation Limited supra This is the argument of Mr Gobind Mukhoty This is countered saying that when there is an increase in tariff the security deposit also is liable to be increased PUNJAB WP NO 1317 of 1990 In this writ petition the challenge is to the validity of Sections 49 and 79 of the Supply Act According to the respondent Punjab State Electricity Board the writ petition is not maintainable A challenge to the imposition of advance consumption of deposit does not involve any fundamental right The Punjab State Electricity Board is a licensee of the State of Punjab The electrical energy is generated through hydro as well as thermal plants for ultimate sale to consumers 50 of powers generated through hydro while the remaining through thermal plants which consume coaloil The coal companies and those major suppliers of power plants are demanding cost of coal in advance On these advances no interest is payable to the Board Therefore while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers the consumers also use and consume electricity 242 on credit ranging from 2 to 3 months depending upon the category of consumers To off set part of the amount that the consumer owes to the Board constantly and also to ensure timely payment of advances by the Board to its suppliers an advance consumption deposit is insisted upon before commencing supply to the consumer If this is not so taken the Board will be left with no other option than to increase the tariff This advance deposit cannot be termed as a fixed deposit as the amount cannot be utilized against non payment of dues from consumers Besidesthe consumers can also ask for the refund Sections 491 and 79 j cannot be termed as arbitrary In fact this Court has upheld the validity of Section 49 1 in Jagdamba s case supra Lastly it is submitted that the Board is generating electricity and each unit so generated costs the Board rupee one per unit The Board is selling at an average rate of 50 paisa per unit to the consumer which includes the agricultural sector Therefore the amendment to clause 23 of abridged conditions of supply requiring to pay advance consumption deposits is perfectly reasonable Mr PP Rao learned counsel appearing as intervenor on behalf of Calcutta Electricity Supply Corporation supplements the submissions of Mr Soli J Sorabjee The deposit though called security deposit is really an adjustable advance payment of consumption charges The amount is revisable from time to time depending upon the average consumption charges on the basis of actual consumption over a period The true nature of transaction in these cases is one of advance for consumption of electricity estimated for a period of three months subject to adjustment revision if necessary Such an advance is liable to be made good and kept at a stipulated level from month to month It is open to the consumer to permit adjustment of the advance in the first instance Thereafter make good the shortfall in consumption charges and the security deposit before actual disconnection of supply which takes at least about three months In short it is in the nature of a running account The security deposit does not remain in tact like a fixed deposit but gets depleted day after day depending on the extent of consumption More often than not the consumption charges and other dues exceed the security deposit That necessitates calling for 243 additional advance to make up a shortfall In the absence of any usage or contract or any provision of law requiring payment of interest is not payable for wrongful detention of money In this case there is no wrongful detention of even Section 4 2 of the Interest Act has no application to this deposit When electricity supply is duly made with a consequential liability to pay for each day s consumption the so called security deposit is not a deposit in the real sense for the consumers to claim the benefit of Interest Act We will now proceed to consider the correctness of the above submissions with reference to the following aspects i Whether Section 49 is bad for want of guidelines iiThe nature of consumption deposit irrespective of the nomenclature by which it is called iiia The liability of the Electricity Board to pay interest b Whether the clause in the terms of supply providing for nonpayment of interest is unconstitutional or arbitrary ivThe demand for additional consumer deposit Whether valid VALIDITY OF SECTION 49 The law relating to electricity is principally contained in two Acts iThe of 1910 hereinafter referred to as the Electricity Act Ms provides for grant of licences in relation to supply of electricity and the projects of undertakings It also provides for supply of electricity including the protective clauses iiThe of 1948 hereinafter referred to as the Supply Act provides for constitution of State Electricity Boards the powers and duties of such Boards Certain important 244 provisions of the Act may now be seen Section 2 is interpretation Section Under Section 2 2 the Board means a State Electricity Board constituted under Section 5 Under Section 2 10 states that regulation means regulations made by the Board under Section 79 Section 5 deals with the constitution and composition of State Electricity Board Section 49 is the provision for sale of electricity by the Board to persons other than the licensees Sub section 1 of the said Section commences with the words Subject to the provisions of this Act and of Regulations This means if there are any provisions regulating the Board in the matter of supplying electricity to any persons not being a licensee then the supply by the Board will he subject to all those provisions It has been so laid down in Mysore State Electricity Board vs Bangalore Woollen Cotton and Silk Mills Ltd 28 at page 1136 The expression Subject to the provisions of this Act merely that if there are any provisions regulating the Board in the matter of supplying electricity to any person not being a licensee then the supply by the Board will be subject to those provisions No provision has been brought to our notice which regulates the Board in the matter of the charges which it may fix for the supply of electricity This Court had occasion to deal with the scope of the said Section and Section 59 In Hindustan Zinc Ltd vs Andhra Pradesh State Electricity Board at pages 317 319 it has been observed thus Section 49 makes provision for the sale of electricity by the Board to persons other than licensees Sub 245 section 1 starts with the words Subject to the provisions of this Act and of regulations if any made in this behalf This means that the provision made therein is subject to other provisions of the Supply Act and the regulations It then proceeds to say that the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs Sub section 2 then enumerates several factors which the Board is required to have regard to in fixing the uniform tariffs The meaning of the expression have regard to is well settled it means that the factors specifically enumerated shall be taken into account while performing the exercise which in this case is fixation of the uniform tariffs Ordinarily therefore uniform tariffs are required to be framed by the Board for making such supply Sub section 3 then proceeds to say that nothing in the earlier enacted provisions shall derogate from the power of the Board if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person having regard to the geographical position of any area the nature of the supply and purpose for which supply is required an d any other relevant factors Sub section 4 then says that in fixing the tariffs and terms and conditions for the supply of electricity the Board shall not show undue preference to any person In other word subsection 4 provides against any unreasonable dis crimination in fixing the tariffs and terms and conditions for supply of electricity The power of fixation of tariffs in the Board is provided in this manner by Section 49 of the Supply Act which requires the fixation of uniform tariffs ordinarily having regard particularly to the specified factors and enables fixation of such tariffs for any person having regard to the factors expressly stated and any other relevant factors providing further that no unreasonable or undue preference shall be shown to any person by the Board in exercise of its powers of fixin the tariffs 246 The next important provision is Section 59 of the Supply Act For appreciating the argument based on Section 59 it is necessary to bear in mind the distinction in Section 59 as it stood prior to 1978 as amended by Act 23 of 1978 and finally as amended by Act 16 of 1983 quoted earlier Prior to 1978 Section 59 required the Board as far as practicable and after taking credit for any subventions from the State Government under Section 63 not to carry on its operations under this Act at a loss and for this purpose it was empowered to adjust its charges accordingly from time to time Under the provision as it then existed the main thrust was to avoid the Board incurring any loss and for that purpose it could adjust its charges accordingly from time to time Section 59 as amended by Act 23 of 1978 required the Board after taking credit for any subventions from the State Government under Section 63 to carry on its operations under this Act and to adjust its tariffs so as to ensure that the total revenues in any year after meeting all expenses properly chargeable to revenue including those specifiedleft such surplus as the State Government specified from time to time The shift was therefore towards having a surplus as the State Government specified from time to time Sub section 2 then provided guidelines for the State Government in specifying the surplus under sub section 1 and mentioned the factors to which regard was to be had for this purpose The effect of the amendment made in Section 59 by Act 16 of 1983 which came into effect from April 1 1985 was to provide for a minimum surplus of three per cent or such higher percentage as the State Government is to specify in this behalf In other words prior to 1978 amendment the requirement from the Board was towards ensuring a surplus as specified by the State Government and after the 1983 amendment the Board is required to ensure a surplus of at least three per cent unless the State Government specifies a higher sur 247 plus This is the scheme of Section 59 and it is Section 59 as amended by 1978 Act but prior to its amendment by the 1983 Act with which we are concerned in the present case It cannot be doubted that Section 59 requiring the Board to adjust its tariffs for the purpose of Board s finance is to be read along with Section 49 which provides specifically for fixation of tariffs and the manner in which that exercise has to be performed while dealing with any question relating the revision of tariffs into force from April 1 1985 is that the Board entitled to adjust its tariffs to ensure generating a surplus of not less than three per cent even without such specification by the State Government and when the State Government specifies a higher surplus then the Board must ensure generating the higher specified surplus This is of course subject to the accepted norm of the Board acting in consonance with its public utility character and not entirely with a profit motive like that of a private trader The pre 1978 concept of the Board s functioning to merely avoid any loss is replaced by the shift after 1978 amendment towards the positive approach of requiring a surplus to be gener ated the quantum of Surplus being specified by the State Government with a minimum of three per cent surplus in the absence of the specification by the government of a higher surplus after the 1983 amendment This construction made of Section 59 as it stood at different times in Govinda prabhu case indicated earlier cannot be faulted in any manner In Govinda Prabhu case the same argument which is advanced before us was expressly rejected We are of the same view The next Section is Section 79 which talks of power to make 248 regulations Clause j deals with the principles governing the supply of electricity by the Board to persons other than the licensees under Section 49 In accordance with this each of the Boards has framed regulations All consumers are required to execute agreements governing the supply of energy The attack against Section 49 is that it does not contain any norm of guideline with regard to framing of terms and conditions for the supply of electricity and in particular the demand of payment of interest on the amounts due to the Board Further the principle of fairness of action has not been explicitly set out so as to make it a visible guide The words occurring in the Section as the Board thinks fit must be construed as reasonably thinks fit We are unable to countenance this argument A careful reading of Section 49 clearly discloses as was noted in Hindustan Zinc Ltd vs APSEB at 317 sub section 1 of the said section starts with the words Subject to the provisions of the Act and all regulations if any made in this behalf Therefore the Board has to conform to the various provisions of the Act and the regulations Section 49 contains two powers 1 To prescribe terms and conditions of supply and 2 fix the tariff No guidelines are required in this regard In Jagdamba Paper Industries Pvt Ltd vs Haryana State Electricity Board at 513 14 it was pointed out as follows We are of the view that the Board has been conferred statutory power under Section 49 1 of the Act to determine the conditions on the basis of which supply is to be made This Court in Bisra Stone Lime Company Ltd vs Orissa State Electricity Board took the view that enhancement of rates by way of surcharge was well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act What applied to the tariff would equally apply to the security that being a condition in 249 the contract of supply Each of the petitioning consumers had agreed to furnish security in cash for payment of energy bills at the time of entering into their respective supply agreements There was no challenge in these writ petitions that the demand of security at the time of entering into supply agreements has to be struck down as being without jurisdiction Section 49 1 of the Act clearly indicates that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit In exercise of this power the Board had initially introduced the condition regarding security and each of the petitioners had accepted the term Emphasis supplied Where therefore under Section 49 read with Section 79 j regulations are made the validity of the regulations could be examined by the Court whether they are reasonable or not In Southern Steel Ltd Hyderabad vs The Andhra Pradesh State Electricity Board AIR 1990 Andhra Pradesh 58 at 66 67 it was observed Before we proceed to deal with the rival contentions it would be appropriate to notice the scope of judicial scrutiny by this Court in such matters Acting under article 226 of the Constitution this Court does not sit as an appellate authority over the Electricity Board Indeed the Act has not chosen to provide an appeal against the terms and conditions under S49 The jurisdiction exercised by this Court under article 226 is supervisory in nature It is to ensure the observance of fundamental right the rule of law and to keep the authorities within their bounds Undoubtedly the Electricity Board is a State within the meaning of article 12 and hence it is subject to Parts III and IV of the Constitution The scope of enquiry therefore would be to examine whether the power conferred 250 upon the Board by S49 of the Act has been exercised so unreasonably and arbitrarily that interference by this Court is called for For the purpose of this enquiry it is not necessary for us to go into the question whether the terms and conditions notified under S49 are statutory in nature or not We shall proceed on the assumption that they are not statutory We shall also proceed on the assumption that the terms and conditions notified under section 49 ought to be reasonable in the sense that they must be related to the object and purpose for which they are issued We are equally aware that the power under section 49 cannot be allowed to be used for oblique purposes or for purposes unrelated to the one sought to be achieved by a given condition In Ms Mills Bharatpurv Assistant EngineerD RSE B Bharatpur AIR at 109 it was observed Where demand for deposit of cash security for one month s estimated consumption charges and bank security equal to two months estimated charges as contemplated by Regulation 20 read with the Schedule theret o was made by the Electricity Board from a consumer of high tension electricity the demand could not be said to be unreasonable and the consumer would not be entitled to continuation of the energy under Sec 24 of the Electricity Act on his failure to deposit such security even if no agreement had been entered into between the consumer and the Board after the commencement of high tension supply Once the supply for electricity had commenced the consumer was bound by the terms and conditions of supply contained in the Regulations Further in such a case merely because the Board did not encase or could not encash a small portion of the security deposited in the form of National Saving Certificates before coming into force of the Regulations it could 251 not be said that the demand of cash security in the form of Bank guarantee by the Board under the Regulations was unreasonable furthermore the demand of security from the consumer which was in accordance with the Regulations framed by the Board could not be said to be unreasonable merely because no interest is paid on the cash security deposited by the consumer In other words the terms and conditions notified under Section 49 must relate to the object and purpose for which they are issued Certainly that power cannot be exercised for a collateral purpose In this view we hold Section 49 as valid NATURE OF CONSUMPTION SECURITY DEPOSIT Each of the Electricity Boards before us is a State within the mening the meaning of Article l2 the Constitution of India The Boards are different from licensees Emphasis supplied Each of the Board has framed the tern is and conditions of supply One such condition relates to security deposits Such a deposit varies from Board to Board For example under the terms and conditions notified by Andhra Pradesh Electricity Board under Condition No 28 11 the consumer is required to deposit with the Board a sum in cash equivalent to estimated three months consumption charges In the case or Rajasthan the security is in the form of cash for one month and bank or insurance guarantee for two months The legislative Sanction behing the power of the Board to direct a consumer to furnish security may be examined It has already been seen that the Supply Act is complementary to the Electricity Act 1910 Section 26 of the supply Act states that the Board shall have all the powers and obligations of a licensee under the Electricity Act And this shall be deemed to be a licence of the Board for the purpose of the Act Under the regulations framed by the Board in exercise of powers of Section 49 read with Section 79 j the consumer is only entitled and the Board has an obligation to supply energy to the consumer upon such terms and conditions as laid down in the regulations If therefore the regulations prescribed a security deposit that will have to be complied with It also requires to be noticed under clause 6 of Schedule II of 252 the Electricity Act that the requisition for supply of energy by the Board is to be made under proviso a after a written contract is duly executed with sufficient security This together with the regulations stated above could be enough to clothe it with legal sanction In cases where regulations have not been made Rule 27 of the Rules made under the Electricity Act enables the adoption of model form of draft conditions of supply Annexure VI in clause 14 states that the licensee may require any consumer to deposit security for the payment of his monthly bills for energy supplied and for the value of the meter and other apparatus installed in his premises Thus the Board has the power to make regulations to demand security from the consumers The next question will be what is the object in demanding security The deposit though called security deposit is really an adjustable advance payment of consumption charges The payment is in terms of the agreement interpreting the conditions of supply This security deposit is revisable from time to time on the basis of average consumption charges depending upon the actual consumption over a period This is the position under the terms of supply of energy with reference to all the Boards As a matter of fact electricity is supplied in anticipation of payment In almost every case it takes nearly 2 12 months for the recovery of the amount before action for disconnection could be taken We will give one illustration as is in the case of Rajasthan The followingis the billing cycle a Consumption period 30 days b Period consumed after taking the meter readings to issue bills 10 days c Period allowed for payment 17 days d Notice for disconnecting 253 supply if consumer fails to deposit energy bill in 7 days time e Period taken in actual disconnection after expiry of notice 10 days Total 74 days In practice some time is also taken between the period allowed for payment and the notice of disconnection At the same time there is no obligation that the consumer must use only a particular quantum of electricity He could even consume more than the average consumption The Board after 2 12 months recovers amount for the electricity supplied by it It could charge late surcharge in case of high tension tariff after the expiry of the said period Thus it will be clear that the true nature of the transaction in these cases is one of advance payment of charges for consumption of electricity estimated for a period of approximately three months Such an advance is liable to be made good and kept at the stipulated level from month to month It is open to the consumer to permit adjustment of the advance in the first instance Thereafter he could make good the shortfall in consumption charges and the security deposit before actual disconnection Actually speaking it is only after three months the disconnection takes place Hence it is like a running current account The cycle of billing by the Board demonstrates that in the very nature of things the consumer is supplied energy on credit The compulsory deposit in the context of billing cycle is hardly adequate to secure payments to the Board by the time the formal bill by the Board is raised on the consumer In one sense the consumption security deposit represents only a part of the money which is payable to the Board on the bill being raised against the consumer Thus the Board secures itself by resorting to such deposit to cover part of the liability For supply of electricity the Board needs finance for production supply and other charges necessary for supply of electricity For this purpose it takes loans from various financial institutions This is best 254 illustrated if one looks at the transactions of Punjab Electricity Board where electric energy is generated through hydro as well as thermal plants for ultimate sale to the consumers of the total power generated about 50 per cent is through hydro plants The remaining energy is generated through thermal power plants which are operated on coal oil Due to limited hydro resources within the State of Punjab the dependency on power on thermal plants is on the increase The present requirement for working of thermal plants is more than 52 lakh tonnes of coal per annum In addition 60 thousand kolo litre of furnace oil is required The coal companiesCoal India Limited together with major suppliers of power plant like Ms BHEL demand cost of coal sparesprojects in advance for the supply of material The Board is also required to purchase power from Central projects NTPC NHPC in order to meet the demand for power by the consumers For purchase of such power again advance payment are made by the Board On such advances the Board is not paid any interest The effect is the Board is obliged to bear the liability of hundreds of crores of rupees per annum It has no option but to pay the charges and deposits in order to keep the power available at a level to meet with the demand of the consumers It is the case of the Board that it has opened letters of credit by making advance deposits in favour of National Thermal Power Corporation and the suppliers Coal India Limited has also asked the Board to open revolving letters of credit in favour of Coal companiesCoal India Limited Despatch of coal is only against the letter of credit From the above it is clear that while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers the consumers use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers To off set part of the amount the consumer owes to the Board continually to ensure timely payment of bills by the Board to its suppliers the advance consumption deposit is required to be kept with the Board before commencing supply to the consumer The clauses in the contract in relation to conditions of supply of electric energy enable the Board to adjust the bill against such deposits Therefore this is not a case of mere deposit of money as in commercial transaction In demanding security deposit it is open to the Court to take note of pilferage as laid down in Ashok Soap Factory vs Municipal Corporation of Delhi JT at page 137 255 The variation in the electricity consumed by different consumers indicated that the charge of pilferage of electricity and gross under utilisation or consumption of electricity compared to the sanctioned load was not without foundation The meaning of he term deposit is given in Corpus Juris Secundum Vol quoted in Davidson vs US CCAPa 752 as follows In the sense of an Act A deposit has been described as a mere incident of custody and in its ordinary signification implies something more than mere possession negatives all idea of loan with contemplation of use for profit and has been defined as an act by which a person receives the property of another binding himself to preserve it and return it in kind the act of one person giving to another with his consent the possession of personal property to keep for the use and benefit of the first or of a third party It may mean a permanent disposition of the thing placed or deposited or a mere temporary disposition or placing of the thing In these circumstances we conclude that the object of security deposit is to ensure proper payment of bills Three months security deposit cannot be characterised either unreasonable or arbitrary This Court had occasion to point out in Jagdamba Paper industries Pvt supra at paragraph 10 which reads as under We agree however on the facts placed that the stand of the Board that a demand equal to the energy bill of two months or a little more is not unreasonable Once we reach the conclusion that the Board has the power to unilaterally revise the conditions of supply it must follow that the demand of higher additional security for payment of energy bills is unassailable provided 256 that the power is not exercised arbitrarily or unreasonably Several High Court decisions also had taken this view as seen from KC Works vs Secretary APSEB Vidyut Soudha AIR 1979 Andhra Pradesh 291 at 294 The reasonableness of such a requirement is explained by the Board in its counter in WP No 2359 75 out of which WA No 156 of 1977 arises In the counter it was stated as follows The consumer is billed for such month separately The consumers electricity consumption during the month is billed at the end of the succeeding month and 30 days time is given to him for payment of the bill If he does not pay the bill his supply is liable to be disconnected after giving one week s notice under Section 24 of the Meanwhile he will be consuming the power So by the time the supply is disconnected to a defaulting consumer the would have consumer energy for 3 months The Board s interest requires that there should be some protection by way of security of advance payment in respect of the consumption of this three months period This is how the Board sought to explain the reasonableness of the requirement of security representing three months average consumption charges Nobody can say that this is unreasonable For three months a consumer can go on consuming electrical power without paying any charges It is therefore eminently reasonable for the Board to require the consumer to furnish security for three months charges Therefore we are satisfied that the requirement of security for three months consumption charges is reasonable At page 295 it was observed thus 257 As a matter of fact it may be that the writ appellant and the writ petitioner before us are prompt in paying their electrical dues but the Board alees with lakhs and lakhs of consumers and it should have a uniform policy in demanding security It cannot make a dis tinction or discrimination from one consumer to another That is why a uniform policy has been laid down by incorporating it in the conditions aforesaid For these reasons we are satisfied that the requirement of security for three months average consumption charges by way of cash deposit is reasonable In Municipal Corporation for Greater Bombay vs Ms DM Industries at 256 it was observed thus This brings us to the last argument advanced by Mr Hidayatullah that Clause 12 of the draft agreement is arbitrary and unreasonable The argument was that the power to impose conditions cannot be exercised to impose unreasonable conditions and it must also be ascertained whether the condition achieves the object for which it is imposed On principle the proposition is undisputable Clause 12 which can be described as unreasonable and whether this Clause has no nexus with the object of the Act and the Rules The argument appears to be that if the object of security is to secure payment of bills then insistence on cash deposits would be unreasonable because the object could also be served by furnishing of any security and it is said that the consumer was willing to furnish a bank guarantee In addition it is urged that the period of consumption for which these security is required should not exceed two months and therefore the determination of three months is arbitrary In Haryana Ice Factory vs Municipal Corporation of Delhi AIR 1986 Delhi 78 It was held thus Also the demand of the security was corelated to the 258 consumption Pattern of the consumers and to cover the energy charges from the date of its consumption till the date of ultimate disconnection as a result of non payment of the changes due The court cannot enter into mathematical calculations to come to a conclusion that in stead of three months it should be 212 months The fixing of the period of security equal to energy consumption of three months is reasonable It may be that the Haryana Electricity Board has fixed the period of security deposit equal to the amount of energy consumed for a period of two months but that would depend upon the billing cycle adopted by the Haryana State Electricity Board In Southern Steel Ltd Hvderabad V The AP State Electricity Board AIR 1 990 Andhra Pradesh 58 at pages 68 69 it was observed It is also stated by the Board that huge sums are required by it as rotating capital that it borrows large amounts from organisations like LIC and Banks that it pays interest to them and that in such circumstances it is well entitled to require the consumer to co operate by paying their bills regularly by giving security deposits and by conforming to the terms and conditions of supply It is argued that this consideration was also one of the bases of condition No 28 We do not think it necessary to express any opinion on this question though the truth of the matter cannot be denied There are two views upon the matter The petitioners say that the interest burden should be reflected in the tariffs while the Board says that interest burden can be reflected in consumption deposits and not necessarily in tariffs All that can say is that there no hard and fast rule in this behalf The interest burden can be reflected either in tariffs or can be sought to be set off by calling upon the consumers to make deposits In this case however It is unnecessary to go into this aspect since the requirement of three months deposit in our opinion cannot be said to be unreasonable and unjustified having regard to the facts mentioned above It cannot be said that the said condition is so unreasonable and arbitrary as to call for interference by this Court under article 259 226 of the Constitution We reiterate that even if this court comes to the conclusion that the deposit should not be 3 months but 2 months 7 days or 2 12 months it would not be entitled to interfere in the matter not being an appellate authority It cannot substitute its own opinion for the opinion of the Board It can interfere only when the exercise of power is shown to be arbitrary and unrelated to the object sought to be achieved We are in agreement with the above extracts The liability of Electricity Board to pay interest on Security Deposit Now we come to the crucial question as to whether interest is payable on security deposit or advance consumption deposit We will examine from the following angle a The scheme of Electricity Acts b Schedule VI of the Supply Act c d Equity or Common Law a 6 Scheme of Electricity Acts Schedule VI of Supply Act It is the submission of Mr Shanti Bhushan learned counsel appearing for the respondent against Rajasthan Electricity Board that the scheme of the Electricity Act and Supply Act together with the rules suggest the payment of interest The Board is not entitled to utilize the security deposits for augmenting its finances as they are meant to secure the Board against default in payment of the bills The correctness of this argument may now be seen There is no statutory provision which casts an obligation on the Board to pay interest on security deposit However reliance is placed on model form of draft conditions of supply as is found in Annexure VI traceable to Role 27 of Indian Electricity Rules 1956 Clause 14 relating to security deposit of the said Annexure reads 260 Interest at the rate of per cent per annum will be paid by the licensee on deposits exceeding Rs 251 Emphasis supplied The model form is applicable only to a licensee as defined in Section 2 4 of the Electricity Act Though Rule 27 prescribes a model form it is not compulsoryeven for a lincesee to adopt the model condition of supply This is because Rule 27 itself Stipulates the model conditions of supply contained in Annexure VI may with such variations as the circumstances of each case require be adopted by the licensee Therefore there is an option available to adopt with such modifications In such a case the adoption of the model form becomes permissive In this connection Section 26 of the Supply Act to which we have made a reference earlier must be looked at Though the Board is to have powers and obligations of a licensee under the Electricity Act the second proviso to this Section assumes importance It reads Provided further that the provisions of Clause VI of the Schedule to that Act shall apply to the Board in respect of that area only where distribution mains have been laid by the Board and the supply of energy through any of them has commenced Second proviso of the Supply Act leads us to Schedule VI This Schedule has been framed in exercise of powers under Sections 57 and 57A In defining clear profit paragraph 2 of clause XVII Item v makes a reference as interest of security deposits which is a part of expenditure properly incurred by the licensee From this it is impossible to hold that this clause imposes an obligation on the licensee to pay interest on security deposits All that would mean is if interest is paid then it qualifies as an item of expenditure properly incurred This is the position with regard to licensee But this cannot apply to the Board which as stated above is not a licensee For the same reason Item L 1 c of Form IV of the Electricity Rules relating to interest paid and accrued on consumers security deposits is of no avail because that relates to the manner of keeping accounts by the licensee not being applicable to a Board 261 In the above premises it follows that there is nothing to indicate under the scheme of the Electricity Act or Schedule VI of the Supply Act that interest must be paid on the security deposit c applicability As regards the applicability of we find that the Division Bench of Rajasthan High Court has erred in holding that it is applicable Section 42 g of the of 1978 reads as under Notwithstanding the aforesaid and without prejudice to the generality of the provisions of sub section 1 the Court shall in each of the following cases allow interest from the dates specified below to the date of institution of the proceedings at such rate as the Court may consider reasonable unless the court is satisfied that there are special reasons why interest should not be allowed namely aWhere money or other property has been deposited as security for the performance of an obligation imposed by law or contract from the date of the deposit This section has no application to a case where on account of a contractual term or a statutory provision payment of interest is not permitted A careful reading of Section 42 of the would disclose that it merely enlarges the category of cases mentioned in Section 41 Even otherwise there is nothing to indicate that section 42 could override other statutory provisions or a contract between the parties No doubt Section 42 contains a non obstante clause But such a clause is restricted to the provisions of and cannot extend to other laws or a contract between the parties Accordingly we overrule the judgment of Rajasthan High Court which holds the is applicable 262 The deposit made cannot be equated to a fixed deposit It has already bee In seen that in the case of daily supply of electricity there is a consequential liability to pay for each day s consumption of electricity To ensure that payment the security deposit is furnished Hence it cannot be equated to a deposit at all It is in the nature of a running current account d Position in Equity or Common Law If this be the position could interest be claimed either on equity or common law The argument on behalf of the consumers is if money belonging to any person is used by someone else he is oblilsed to pay interest for the period of its user Halsbury s Volume 32 page 53 para 106 defines interest as the return or compensation for the use or retention by one person of a sum of money belonging or owed to another Therefore it is contended that the Board is clearly in the position of a trustee in respect of this money since the money is deposited by the consumer in trust with the Board to secure the Board against default in payment of interest The object of the deposit is to secure the payment of consumption charges These charges may very depending upon the daily consumption depending on the level of supply The amount due by way of consumption charges would also be liable to be appropriated Therefore it is incorrect to state that the Board is a trustee The relationship between the Board and consumer is not that of a trustee and a beneficiary but a depositor and deposited This is not even a case of a constructive trust under Section 90 of the Indian Trust Act since no advantage is gained by the Electricity Board in derogation of the rights of the consumer in view of what we have observed above Strictly speaking the word interest would apply only to two cases where there is a relationship of debtor and creditor A lender of money who allows the borrower to use certain funds deprives himself of the use of those funds He does so because he charges interest which may be described as a kind of rent for the use of the funds For example a bank or a lender lending out money on payment of interest In this case as already noted there is no relationship of debtor and creditor We may now refer to Halsbury s Vol 32 para 108 26 108 When interest is payable at common law At common law interest is payable 1 where there is an express agreement to pay interest 2 where an agreement to pay interest can be implied from the course of dealing between the parties or from the nature of the transaction or a custom or usage of the trade or profession concerned 3 in certain cases by way of damages for breach of a contract other than a contract merely to pay money where the contract if performed would to the knowledge of the parties have entitled the plaintiff to receive interest Except in the cases mentioned debts do not carry interest at common law Consumption security deposit does not fall under any of categories mentioned above Para 109 says Equitable right to interest In equity interest may be recovered in certain cases where a particular relationship exists between the creditor and the debtor such a mortgagor and mortgagee obligor and obliged on a bond personal representative and beneficiary prin cipal and surety vendor and purchaser principal and agent solicitor and client trustee and beneficiary or where the debtor is in a fiduciary position to the creditor Interest is also allowed on pecuniary legacies not paid within a certain time on the dissolution of a partnership on the arrears of an annuity where there has been misconduct or improper delay in payment or in the case of money obtained or retained by fraud It may also be allowed where the defendant ought to have done something which would have entitled the plaintiff to interest at common law or has Wrongfully prevented the plaintiff from doing something which have so entitled him This Paragraph is also inapplicable to the present case 264 Even a case of wrongful detention of money cannot arise In Bengal Nagpur Railway vs RuttanjiRamji AIR 1938 PC67 the question arose whether interest was payable on damages on account of wrongful detention of money It was held The however contains a proviso that interest shall be payable in all cases in which it is now payable by law This proviso applies to cases in which the Court of equity exercises jurisdiction to allow interest As observed by Lord Tomlin in Maine and New Brunswick Electrical Power Co Ltd vs Hart 1 In order to invoke a rule of equity it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction as for example non performance of a contract of which equity can give specific performance The present case does not however attract the equitable jurisdiction of the Court and cannot come within the purview of the proviso The very passage was noted by this Court in Union of India vs AL Rallia Ram at 188 189 The argument of Mr G Ramaswami learned counsel that the deposit does not contemplate appropriation is not correct because in the nature of contract it is liable to be appropriated for the satisfaction of any amount liable to be paid by the consumer to the Board for violation of any conditions of supply in the context of wide scale theft of energy tempering with the meters and such other methods adopted by the consumers Therefore the said consumption security deposit serves not only to secure the interest of the Board for any such violation but should serve as a deterrent on the consumer in discharging his obligations towards the Board Mr G Ramaswami would rely on Riches vs Westminster Batik Limited 1947 Appeal Cases 390 at 400 265 That is a case which arose under Income Tax Act That has no application to this case What came up for consideration in AL Rallia Ram s case supra was the power of the Board to award interest Hence that case has no application Accordingly it is held that the claim for interest cannot be legally founded either on common law or equity As is rightly contended by Mr Kapil Sibal learned counsel and the other learned counsel appearing for the various Boards it is the Board which should be entitled to receive interest on energy supplied to the consumers on credit as the consumers enjoy a credit facility as noted already We are also unable to accept the argument advanced on behalf of consumers that because the Electricity Boards charge interest on belated payments interest must be paid on security deposit Interest on belated payments is by way of penalty That has no bearing Clause providing for non payment of interest Whether unrea sonable While the terms and conditions of supply of Andhra Pradesh Uttar Pradesh and Bihar provide for payment of interest at certain rate in the case of Rajasthan and Orissa the Boards have clearly stipulated that no interest shall be payable on the securities furnished to the Board Whether that clause could be considered unconstitutional or arbitrary In examining the constitutionality of this provision in that it is violative of Article 14 of the Constitution of India the following factors have to be borne in mind 1Article 14 does not mandate mathematical exactitude or scientific precision 2The mode and the period of security vis a vis the billing practice must form the consideration 3The consumer with open eyes has entered into the agreement and solemnly undertaken to abide by the conditions regarding nonpayment of interest He cannot resile from the condition because there is nothing inherently objectionable about such a condition nor is such a condition per se illegal or void as opposed to public policy It is not uncommon in commercial transaction such a provision is entered into 266 The argument that the Board is monopolistic in character and therefore the consumers have no other option but to enter into contract appears to be misconceived The Board under Section 49 of the Supply Act is entitled apart from framing uniform tariff to insist upon such terms and conditions as the Board thinks fit This has also been so stated in Jagdamba case Supra The consumption security deposit whether or not it carries interest is a condition precedent for the supply of electric energy We are clearly of the view that the scrutiny by the Court in determining the unconstitutionality of a provision not providing for interest must be tested on the following touchstone In imposing such a condition has the Board acted as a private trader and thereby shed off its public utility character By referring to Hindustan Zinc Ltd supra we have earlier pointed out the interrelationship between Sections 49 and 59 as noted by this Court We are therefore of the view that in imposing such a condition the Board has not acted as a private trader The nature of deposit has a rational relationship to the object which is incorporated as a condition of supply Some of the learned counsel appearing for the consumers would draw our attention to Section 59 of the Supply Act as well Under the said section the Board is obligated to carry on its operation as to ensure that it generates a surplus of 3 per cent or as specified by the State Government The Board is obligated to adjust its tariffs for ensuring such surplus The condition of supply requiring a consumption security deposit has a direct bearing on the operations of the Board which are to be conducted in such a manner as to ensure a surplus The language in Section 59 of the Supply Act is carry on its operations under this Act and adjust its tariffs The language of the said section is not by adjusting tariff Therefore the argument that the only manner in which the Board can achieve a surplus is to adjust its tariffs does not flow from the language of Section 59 So read in the context of the insistence of a security deposit which has direct bearing on the operations of the Board is per se reasonable and constitutional We will assume for a moment that the contract is an adhesion contract But still it is not unconscionable 267 In Central Inland Water Transport Corporation vs Brojo Nath Ganguly at 208 adhesion contract is defined quoting Black s Law Dictionary Fifth Edition at page 38 as follows Adhesion contract Standardized contract form offered to consumers of goods and services on essentially take it or leave it basis without affording consumer realistic opportunity to bargain and under such condition that consumer cannot obtain desired product or services except by acquiescing in forth contract Distinctive feature of adhesion contract is that weaker party has no realistic choice as to its terms is Not every such contract is unconscionable With reference to these contracts the Court offered relief to the parties against such a clause if it is so unreasonable as to be unconscionable As a matter of fact at page 21 1 paragraph 83 of Central Inland Water Transport Corporation vs Brojo Nath Ganguly it stated thus Yet another theory which had made its emergence in recent years in the sphere of the law of contracts is the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power Lord Denning MR appears to have been the pro pounder and perhaps the originator at least in England of this theory In Gillespie Brothers Co Ltd vs Roy Bowled Transport Ltd 416 where the question was whether an indemnity clause in a contract on its true construction relieved the indemnifier from liability arising to the identified from his own negligence Lord Denning said at pages 415 416 The time may come when this process of construing the contract can be pursued no further The words are too clear to permit of it Are the courts then powerless Are they to permit the party to enforce his unreasonable clause even when it is so unreasonable 268 or applied so unreasonably as to be unconscionable When it gets to this point I would say as I said many year ago there is the vigilance of the common law which while allowing freedom of contract watches to see that it is not abused John Lee Son Grantham Ltd vs Railway Executive 584 It will not allow a party to exempt himself from his liability at common law when it would be quite unconscionable for him to do so emphasis supplied Farms worth on Contracts 2nd Edn 319 320 para 427 states 427 Precursors of Unionscionability Courts of equity did not share the reluctance of common law courts to police bargains for substantive unfairness Though mere inadequacy of consideration alone was not a ground for with holding equitable relief a contract that was inequitable or unconscionable one that was so unfair as to shock the conscience of the court would not be enforced in equity In one such case a man promised to give a 20 percent interest in all property that he might later acquire in Alaska in return for the Promisee s payment of 1000 and his cancellation of an 11225 debt of questionable collectability When the promiser acquired property worth over 750000 the promises sought specific Performance The court refused to grant it Though the fairness of the bargain was to be judged as of the time that the bargain was made in equity as at common law here the inadequacy of consideration for the promise sought to be enforced was so gross as to render the contrast unconscionable In dealing with the validity of the agreement containing a clause 269 relating to minimum guarantee this Court had occasion to observed in Bihar State Electricity Board vs Green Rubber Industries 1990 1 SCC 731 at page 740 as follows It is true that the agreement is in a standard form of contract The standard clauses of this contract have been settled over the years and have been widely adopted because experience shows that they facilitate the supply of electric energy Lord Diplock has observed If fairness or reasonableness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would arise a strong presumption That their terms are fair and reasonable SchroederA Music Publishing Co Ltd vs Macaulayr 624 in such contracts a standard form enables the supplier to say If you want these goods or services at all these are the only terms on which they are available Take it or leave it It is a type of contract on which the conditions are fixed by one of the parties in advance and are open to acceptance by anyone The contract which frequently contains many conditions is presented for acceptance and is not open to discussion It is settled law that a person who signs a document which contains contractual terms is normally bound by them even though he has not read them even though he is ignorant of the precise legal effect In the light of the above discussion we hold that the clause not providing for interest is neither arbitrary nor palpably unreasonable nor even unconscionable In holding so we have regard to the following 1The consumer made the security deposit in consideration of the performance of Ms obligation for obtaining the service which is essential to Wm 2The electricity supply is made to the consumers on credit as has been noted above 270 3 The billing time taken by the Board is to the advantage of the consumer 4Public revenues are blocked in generation transmission and distribution of electricity for the purpose of supply The Board pays interest on the loans borrowed by the Board This is in order to perform public service On those payment made by the Board it gets no interest from the consumers 5The Board needs back its blocked money to carry out public service with reasonable recompense 6The Board is not essentially a commercial Organisation to which the consumer has fumished the security to earn interest thereon Weshould also observe that the rate of interest on security deposit cannotbe equated with the rate of interest on the fixed deposit First of all if the consumption charges are to be appropriated the moneys accrued by way of deposits cannot be held in fixed deposits Nor all deposits need carry interest in every transaction Secondly the nature and character of the security deposit is essentially different from fixed deposit It is worthwhile in this connection to refer to Companies Acceptance of Deposits Rules 1975 In Rule 2 it is stated 2 Definitions In these Rules unless the context otherwise requires a b deposit means any deposit of money with and includes any amount borrowed by a company but does not include i ii iii 271 iv v any amount received from an employee of the company by way of security deposit vi any amount received by way of security or as an advance from any purchasing agent selling agent or other agents in the course of or for the purposes of the business of the company or any advance received against orders for the supply of goods or properties or for the rendering of any service We may add that merely because the English Acts provide for interest it is not necessary the same should be adopted here as well Thus we hold that the Division Bench of the Rajasthan High Court erred in striking down Condition No 20 of the General Conditions of the Rajasthan Electricity Board as violative of Article 14 of the Constitution of India Has this Court decided the question of rate of interest in jagdamba Paper Industries Pvt Ltd vs Haryana State Electricity Board In that case the following two points were raised as seen from paragraph 3 at page 51 1 1The enhancement made in the security amount towards the meter is without any justification The enhancement of security deposit was not warranted On the question of interest in paragraph 11 at page 515 in Jagdamba s case supra it is stated thus On the security amount interest at the rate of 4 per cent was initially payable The same has already been enhanced to 8 per cent per annum Since the amount is held as security we indicated to the counsel for the Board that security amount should bear the same 272 interest as admissible on fixed deposits of Scheduled Banks for a term of years and we suggested keeping the present rate of interest in view that it should be enhanced to 10 per cent Board s counsel has now agreed that steps would be taken to enhance the present rate of interest of 8 percent to 10 percent with effect from October 1 1983 It requires to be carefully noted that the question of interest on security was not raised before the Court Therefore the Court had no occasion to decide this issue of interest That part of the judgment as rightly contended by Mr Soli J Sorabeejee learned counsel is sub silentio However the learned counsel for the consumers pressed into service the various orders passed by this Court in relation to interest and urged that it is concluded by those orders We are unable to accept his argument All the orders have their root in Interlocutory Application No1 of 1989 in Writ petition No 578 of 1987 That order is extracted in full We have heard counsel for the parties Mr Gopal Subramaniam counsel for the State Electricity Board on instructions states that the initial deposit which has been made by the consumer petitioner to the tune of Rs 100737881 was intended as security for pay ment of energy dues In terms of our order of 5th May 1988 the petitioner would be entitled to the interest on that amount from the date of the deposit at the rate of 12 per annum Mr Gobind Mukhoty counsel for the petitioner now agrees to deposit the balance amount of Rs 691621 minus the interest which is said to be the additional security and while making the deposit of the additional amount the petitioner is entitled to deduct the interest already accrued on the deposit of Rs 100737881 from the date of the deposit at the rate of 12 per annum The balance amount after deduction of the interest shall be deposited in two equal quarterly instalments the first being due by 151089 273 The application for directions is disposed of accordingly Based on this in Writ Petition No 613 of 1990 it was stated thus In view of the order made by this Court in the connected matters on September 7 1989 after hearing parties in Writ Petition No 57887 on the amount deposited by the consumer as security interest at the rate of 12 would be admissible The Writ petition is disposed of accordingly Two other orders remain to be seen One rendered in WP 5582 of 1989 which was disposed of by consent and the other in WPNo576 of 1990 where the writ petition was disposed of in the following manner If the Electricity Board has been directed to allow interest at the rate of 12 per annum on the security deposited with the Board by the petitioners similarly situated the claims of the petitioners should similarly be dealt with by the Board The Writ Petition is disposed of On careful examination of the above orders we do not think the Court ever intended to adjudicate upon the rate of interest or render a decision on that question Therefore it cannot be contended that the disposal of Writ Petition No 613 of 1990 though by a Bench of 3 judges would be binding on us because as pointed out above It was entirely based on Interlocutory order We are of the view that we are free to decide the question on its merits The argument of Mr Anil Divan learned counsel that unequals are treated equals has no basis It may be that the consumers of electricity where it is raw material would be prompt in their payment in their own interest On that basis it cannot be contended that they 274 cannot be treated in the same way as defaulters The test in our considered opinion is whether in the general application of law there is any discrimination Merely because some of the consumers are prompt those related cases cannot render the provision constitutional We may usefully refer to the following cases The Collector of Customs Madras vs Nathella at 829 30 it was observed The deleterious effects of smuggling as pointed out in the extract from the Report are real and it is not in dispute that the prevention and eradication of smuggling is a proper and legally attainable objective and that this is sought to be achieved by the relevant law If therefore for the purpose of achieving the desired objective and to ensure that the intentions of Parliament shall not be defeated a law is enacted which operates somewhat harshly on a small section of the public taken in conjunction with the position that without a law in that form and with that amplitude smuggling might not be possible of being effectively checked the question arises whether the law could be held to be violative of the freedom guaranteed by article 19 1 f g as imposing an unreasonable restrain That the restrictions are in the interest of the general public is beyond controversy In Vivian Joseph vs Municipal Corporation Bombay at 276 77 it was observed The levy of the cess under section 27 of the Act is not based on the principle of quid pro quo Its object is not to repair all residential premises but to preserve and prolong their lives in order to avert the dilema caused by the acute shortage of residential accommodation on the one hand and the reluctance andor inability of the owners to carry out repairs resulting from the Rent Act on the other and to establish an agency so that structural repairs to buildings in dangerous or ruinous 275 conditions can be carried out The finances for these objects are provided from a fund from the impugned cess and contributions by the State and the Corporation The contention that some of the buildings falling in categories B and C would not need structural repairs throughout the life of the Act or that such repairs would carried out in buildings not cared for by defaulting landlords takes no notice of the fact that the primary object of the Act is not to repair all buildings subject to cess but to prevent the annually recurrent mischief of house collages and the human tragedy and deprivations they cause The cess being thus levied to prevent such disasters there is no question of unequal treatment between one class of owners and another The classification of buildings into three categories is based as already stated on their age and the construction current during the periods of their erection It istherefore based on an intelligible differentia and is closely related to the objects of the legislation There is therefore no question of unequals being treated as equals as each building of the Board and has to be structurally repaired if the need were to arise In B Banerjee vs Anita Pan at 787 88 it was observed Moreover what is the evil corrected by the Amendment Act The influx of a transferee class of evictors of tenants and institution of litigation to eject and rack rent or re build to make larger profits Apparently the inflow of such suits must have been swelling slowly over the years and when the stream became a flood the Legislature rushed with an amending bill Had it made the law merely prospective these who had in numbers already gone to Court and induced legislative intention would have escaped the inhibition This would defeat the object and so the application of 276 the additional than to pending actions could not be called unreasonable To omit to do so would have been unreasonable folly The question is whether those cases which were filed several years ago should have been carved out of the category of transferees hit by the act Where do you draw the line When did the evil assume proportions These are best left to legislative wisdom and not court s commensense although there may be grievances for some innocent transferees If this be the paradigm of judicial review of constitutionality we have to ignore exceptional cases which suffer misfortune unwittingly The law is made for the bulk of the community to produce social justice and isolated instances of unintended injury are inevitable martyre for the common good since God Himself has failed to make perfect laws and perfect justice Freaks have to be accepted by the victims rightly or wrongly as froensic fate In Fatelichand Himmatlal vs State of Maharashtra at 851 it was observed May be some stray money lender may be good souls and to stigmatize the lovely and unlovely is simplistic betise But the legislature cannot easily make meticulous exceptions and has to proceed on broad categorisations not singular individualisations so viewed pragmatics overrule punctilious and unconscionable money lenders fall into a defined group Nor have the creditors placed material before the Court to contradict the presumption which must be made in favour of the legislative judgment After all the law makers representatives of the people are expected to know the socioeconomic conditions and customers Since nice distinctions to suit every kindly creditor is beyond the law making process we have to uphold the grouping as reasonable and the restrictions as justified in the circumstances of the case In this 277 branch there are no finalities The attack on additional consumer deposit is that no reasons have been adduced for additional demand It stands to reason that if there is a revision in the rate of tariff there must be an upward revision in the consumption security deposit since it has direct bearing to the level of supply in consumption of electricity For examplein the State of Uttar Pradesh the tariffs were adjusted upwards in October 1986 The revision in the form of an additional security deposit with interest at the rate of 3 per cent was made in January 1987 These facts indicate the rationale in the demand of additional security deposit As stated above this being a condition of supply no reason need be given at the time of upward revision Therefore we reject the argument of Mr Govind Mukhoty learned counsel in this regard In view of the above finding upholding the clause relating to nonpayment of interest for example Rajasthan and Orissa what is to happen to such of those cases where interest is provided like Andhra Pradesh Utter Pradesh and Bihar In all those cases wherever the electricity boards have framed a provision for payment of interest after adjusting its finances at a stated rate they cannot be allowed to delete such a clause The provision for interest has been made by the various Boards having regard to the overall budgetary and financial position Further keeping in view the quantum and made of security deposit and billing and recovery practice Nor again could the Board withhold payment of interest on the basis of this judgment However if there is any change in the circumstances affecting the budgetary and financial position the Board can examine the case and decide the future course of action But any change resulting in non payment or reduction of interest will have to be justified by cogent reasons and materials having a bearing on the financial position of each Board and facts and circumstances of each case We also add that not withstanding Jagdamba s case supra as on today Haryana Electricity Board has dispensed with payment of interest We make it clear by this judgment that we are not deciding the validity of such provision since the matter is stated to be pending Inconclusion We hold 278 1 Section 49 of the Supply Act is valid 2 The nature of consumption deposit is to secure prompt payment and is intended for appropriation 3There is no liability on the Electricity Board either tinder the statute or common law or equity to pay interest 4Conditions and the terms of supply providing for non payment of interest is not so unconscionable as to shock the conscience of the Court 5No reason need be given for enhancement of additional security deposit Accordingly we uphold the judgment of Andhra Pradesh High Court and reverse the judgment of Rajasthan High Court In the result the following cased filed against Andhra Pradesh Electricity Board are dismissed SLP c Nos 1300489 14995891462989148998915739 8915817897475906374909661 65905461906371005294 90 677990 549290 592190 555990 4793 9490 4791 9190 637590 657090 1227090 992690 1154890 260090 63727390 6035 4490 650590637490 609400 6765 6890646290 5306 0890 913200 1242490 637090 CA No 177990 SLP c Nos 1746591 1767991 17865 6691 2012591 1953291 1804391 19586 9391 19597 600 2007691 2192 64992 2564925782 83928336929124 2592948892123189212506 92 1261092 1280592 1280492 1281492 1443992 1444992 1455592 1739 4343A92 1359392 CA No 240992 WP c Nos 6039245592 355883 56692 135389 4892 36292 1293 89 677090 The Transfer Petition c No 36692 filed by the Andhra Pradesh Electricity Board is allowed 279 The following cases filled by Rajasthan State Electricity Board are allowed CA Nos 471491 4028 4391S1Pc Nos4469270392 1294190 433 3692 439 4292 A Nos 534292 1187 8892 451292 45 1092 451192 280092 120492 406 43692 section L P c No 20924602479250925302449 45292494025169248924992510252925492559243 459256 7292428 43292 443 44492453 45792503 0892 512 1492530 33921445092 The following cases filed by the Bihar Electricity Board are allowed SLPc Nos 1179989 185690 831892 1602892 The following cases against Uttar Pradesh Electricity Board are dismissed WP c Nos 51387 80487 114487 74387 53187 72587 73987 52691 57687 57787 80187 83387 76987 67687 578 87 72887 76287 81887 52687 74487 74287 54087 123887 7388768487 SLP c Nos 2952 561987 1588591 129029 1 The WP c No 131790 filed against Punjab Electricity Board is dismissed All the IAs are allowed However there shall he no order as to costs T N A Petitions disposed of

The three appellants In the two appeals along with 3 others were tried for having committed murder One of the accused being a minor his trial was separated so that the same could he conducted by the Children Court The case of the prosecution was that on the night intervening 6th and 7th October 1982 the deceased and PW16 who was the first cousin of the deceased were returning after witnessing Ram Leela At that time the aforesaid 5 accused were also returning from the show and it was alleged that they teased some girls of the village who had also gone to see the Ram LeeLa and that the deceased and PWI6 objected to this behaviour of the accused persons On this the accused persons abused them which was followed by exchange of abuses from both the sides PW13 intervened and pacified them Next day at about 230pmthe deceased and Pw16 went to their flour mill to bring back 62 their bullocks and fodder cart Tub of the accused with Pharsas one with a Ballam and three others with sticks came there One of the accused abused the deceased and Pw16 saying that they would teach them a lesson for abusing them the previous night Having said so one of the accused gave a pharsa blow from the blunt side on the head of the deceased The other gave a pharsa blow on the head of the deceased PW16raIsed an alarm and the remaining accused gave blow to PWI6 PW16 also got a blow of Ballam from the blunt side on his head Thereafter an alarm was raised and all the accused persons fled away from the place of occurrence The victim was taken to the local Hospital on a tractor and thereafter he was referred to AIIMS New Delhi where PWI examined him and also sent information to the police post at about 415 pm The victim reached the AIIMS at about 725 pm where he was examined ASI PW17 who had got the information about the occurrence went to the Institute and the statement was recorded PW17 took up the investigation The victim died in the Institute the next morning at 700 am The postmortem examination was held by PW15 on 8th October 1982 at 430 pm on 12th October 1982 PWI examined one of the accused Suresh under the orders of judicial Magistrate and he made a report regarding the injuries he had received the duration of the time in respect of the injuries which he stated was 3 to 6 days The five accused were put up for trial and the Session Judge convicted and sentenced all these accused for offences under Section 302 read with 149 Sections 148 and 323 read with Section 149 to imprisonment for life The High court having dismissed their appeals the three appellants filed two appeals to this Court In the appeals to this court it was contended on behalf of the appellants that on the materials on record the Courts below should have come to the conclusion that the prosecution had suppressed the real manner of occurrence and had disclosed a version of the occurrence which cannot be accepted It was pointed out that the accused Suresh Vijender and Virender were the sons of accused Hari Sing who was age d about 60 years and that it was highly improbable on the part of Hari Singh to join his sons for committing the murder of the deceased 63 Mange Ram who had protested about the behaviour of his sons It was submitted that in view of the admitted position that the residential unit and the tube well being by the side of the flour mill of the deceased there was no question of the accused persons going to the flour mill of the deceased to assault the deceased and PWI6 It was further submitted that in the First Information Report the name of accused Suresh was mentioned in connection with the previous night s incident and that he and Satbir gave pharsa blows on the head of the deceased that PW 16 modified his version of the FIR in court by saying that the injuries on the head of the victim were caused by the back side of the pharsa and that this improvement was introduced after it was found during the postmortem examination that injuries had been caused by application of blunt force which was inconsistent with the case of assault on the head of the deceased by pharsa The State raised an objection that in view of the dismissal of the Special Leave Petition of the two accused namely Suresh and Vijender against whom similar allegations had been made it was not open to this Court to entertain any plea on behalf of the present 3 appellants because it will be deemed that while dismissing the special leave petition this Court had affirmed the findings recorded by the Trial court and the High Court in respect of the manner of occurrence and participation of the accused persons including the 3 appellants Allowing the appeals in part and setting aside the convictions of the appellants under Section 302 read with Section 149 of the Penal Code under Sections 148 and 323 read with Section 149 this court HELD 1 Appellant Satbir convicted under section 304 Part II and sentenced to undergo rigorous imprisonment for seven years Appellant Gulbir convicted for an offence under Section 325 Penal code and sentenced to undergo rigorous imprisonment for three years Appellant Hari Singh convicted for an offence under Section 323 of the penal code and sentenced to the period of imprisonment already undergone 75 H 76 A B 2 a In the system of the justice which is being administered by the Courts One of the basic principles which has to be kept in view is that Courts of coordinate jurisdiction should have consistent 64 opinions in respect of an identical set of facts or on question of law If Courts express different opinions on the identical sets of facts or question of law while exercising the same jurisdiction then instead of achieving harmony in the judicial system it will lead to judicial anarchy 72 D E b Before any such principle is applied It must be held that the earlier order passed by this Court dismissing the Special Leave Petition of the co accused amounts to a judgement or an affirmance of the findings of the High Court about the manner of the occurrence participation of the different accused persons and the nature of offence committed by them 72 F 3 Article 136 1 of the constitution confers overriding and extensive powers of granting special leave to appeal or rejection thereof in the discretion of this Court Article 136 does not confer a right to appeal it confers only a right to apply for special leave to appeal which taking all facts and circumstances into consideration may he granted or rejected Even in a case where the special leave application is rejected the order of the High Court does not merge In the Order of this Court as is the case while exercising the appellate power Similarly when Special Leave Petition is entertained against any final or interlocutory order this Court does not convert itself to a Court of appeal 72 D H Gian Chand vs Kunjbehanlal referred to 76 E 4 It is a basic principle of the administration of justice that like cases should be decided alike It is a very sound rule and practice otherwise on same question of law or same set of facts different persons approaching a Court can get different orders 73 D 5 The doctrine of precedent is not applicable to an order passed by this Court rejecting a Special Leave Petition Any such order cannot be held to be stare decisis so that it is a binding on the Court 73 F 6 Rejection of the Special Leave Petition gives a finality to an 65 order of the High Court Inasmuch as the same accused cannot file more than one Special Leave Petition But In rare and exceptional cases this Court has exercised power under Article 32 of the Constitution so that there should not he miscarriage of justice and to avoid a direct conflict and confrontation between two orders of this court 73 H 74 A Harbans Singh vs State of U P Pyare Singh vs State of Madhya Pradesh 1992 SUPP 3 SCC 45 and 77 F AR Antulay vs RS Nayak referred to 78 C 7 The mare rejection of the Special Leave Petition of co accused persons cannot seal the fate of the appeals of the appellants which have been entertained after leave having been granted by this Court The appellants to whom leave has been granted can urge all questions within the framework of Article 136 of the Constitution for consideration by this Court and a relief to which such appellants may be entitled cannot be denied to them merely on the ground that a Special Leave Petition In respect of co accused persons with more or less similar charges evidence and convictions has already been rejected 75 F G 8 On the basis of the evidence of PW16 the informant it cannot he said that the accused persons had an Intention to cause such injuries son the victim which may result In his death When they caused the injuries from the blunt side of the Pharsa it will have to be presumed that they had knowledge that those Injuries can cause the death but there was no intention on their part to cause death As such the Trial Court and the High Court should not have convicted the appellants under Section 302 read with Section 149 71 G H 9 a On the materials on record in the Instant case the prosecution has not been able to prove and establish that the appellants had the common object or shared the common intention to cause the murder of the victim From the evidence of the prosecution Itself It appears that the flour mill of the deceased and the residential unit of the accused persons being adjacent to each other suddenly a right took place in which the appellant Satbir gave a blow by the back side wooden part of the Pharsa which caused one of the two injuries on 66 the head of the deceased It cannot be held that appellant Satbir had an intention to cause the death of the victim In such circumstances it can be said that he had only knowledge that such blow may cause an injury resulting in the death of the victim He should have therefore been convicted under Section 304 Part II of the Penal Code 75 C E b So far as appellant Gulbir is concerned according to the prosecution case he was carrying a stick and he is alleged to have given a stick blow to the deceased on a non vital part of the body In this background he can be held to have committed the offence only under Section 325 of the Penal Code 75 F c In regard to the appellant Hari Singh he was aged about 60 years at the time of the occurrence and the prosecution case itself is that he is said to have given a stick lathi blow to the informant PW 16 He is not alleged to have given any blow to the deceased He has thereforeto be held guilty for an offence only under Section 323 of the Penal Code 75 G

Appeal Nos 2621 22 of 1977 From the Judgment and Order dated 9111976 of the Calcutta High Court in Civil Rule Nos 1817 and 1818 of 1972 PS Poti and Rathin Das for the Appellant Dr Shankar Ghosh for the Respondent The Judgment of the Court was delivered by SAWANT J On 18th December 1970 the Assistant Settlement Officer Diamond Harbour initiated proceedings under Section 44 2a of the West Bengal Estate Acquisition Act 1953 the Act for revising the finally published record of rights in respect of Khatians Nos 10 11 of Mouza Haradhanpore and Khatians Nos 671315 and 24 of Mouza Kailpara within his jurisdiction According to him incorrect entries were made in favour of the respondent in the record of rights in respect of the said Khatians based on the purchases made by the respondent in auction sales of the Khatians in execution of the decrees for arrears of rent Two different cases Case No 15670 and No 2270 were respectively initiated in regard to the two properties In both these cases in the record of rights the name of the respondent auction purchaser was entered as raiyat on the basis of the said sales These sales were effected on 6th November 1954 and 3rd December 1954 respectively The sales were admittedly of the rights of the raiyats and hence the Assistant Settlement Officer took proceedings for revision of the record of rights taking the view that such rent execution sales effected after 1st June 1954 would be invalid under Section 5B of the Act By his orders dated 8th January 1971 and 27th January 1971 respectively passed in the two cases he directed the correction of the record of rights by substituting the names of the original raiyats for the auction purchaser The auction purchaser preferred appeals before the Tribunal appointed for the purpose under Section 443 of the Act being EA Nos 86 and 87 of 1971 The Tribunal allowed the appeals and set aside the orders of the Assistant Settlement Officer holding that Section 5B of the Act had no application to raiyati interest Against the decision of the appellate authority the appellant State of West Bengal approached the High Court by way of a writ petition under Article 227 of the Constitution The Division Bench before which the matters came referred them to a Special Bench since questions of public importance relating to the interpretation of the provisions of Section 5B of the Act were involved The Special Bench 348 held that i the effective date in section 5B in respect of sales of raiyati and underraiyati holdings under the relevant statutes mentioned therein is 1st June 1954 as provided therein ii Section 5B does not operate as a bar to the execution of decree for arrears of rent as money decree against raiyati or under raiyati interests and Section 168A 1 of the Bengal Tenancy Act is impliedly repealed by the vesting of the interests of the intermediary which include raiyats and under raiyats in the State In this view of the provisions of the Act the High Court held that the initiation of the proceedings by the Assistant Settlement Officer Under Section 44 2a was without jurisdiction and confirmed the order of the appellate authority It is this order which is questioned before us In order to appreciate the answer to the question raised before us it is necessary to have a brief glance at the relevant provisions of the Act As its preamble shows the Act has been placed on the statute book to provide for the acquisition of estates of the rights of intermediaries therein and also certain rights of raiyats and under raiyats and of the rights of certain other persons in the lands comprised in the estates Section 2 i of the Act defines intermidiary as follows intermediary means a proprietor tenure holder under tenureholder or any other intermediary above a raiyat or a non agricultural tenant and includes a service tenure holder and in relation to mines and minerals includes a lessee and a sub lessee By virtue of Section 2 p the tenure holder and raiyat as defined under the Bengal Tenancy Act 1885 hereinafter referred to as to the Tenancy Act are to be read in the present Act They are defined under Section 5 1 2 of the Tenancy Act as follows 5 Meaning of Tenure holder and Raiyat 1 Tenure holder means primarily a person who has acquired from a proprietor or from another tenure holder a right to hold land for the purpose of collecting rents or bringing it under cultivation by establishing tenants on it and includes also the successors in interest of persons who have acquired such a right 2 Raiyat means primarily a person who has acquired a right to hold land for the purpose cultivating it by himself or by members of his family or by servants or labourers or with the aid of partners 349 and includes also the successors in interest of persons who have acquired such a right Explanation Coming back to the present Act Chapter II of the Act deals with the acquisition of estates and of the rights of intermediaries therein and consists of Sections 4 to 13 For our purpose the relevant sections are Sections 455A and 5B Sub sections 1 and 2 of Section 4 read as follows 4 Notification vesting estates and rights of intermediaries 1 The State Government may from time to time by notification declare that with effect from the date mentioned in the notification all estates and rights of every intermediary in each such estate situated in any district or part of a district specified in the notification shall vest in the State free from all incumbrances 2 The date mentioned in every such Notification shall be the commencement of an agricultural year and the notifications shall be issued so as to ensure that the whole area to which this Act extends vests in the State on or before the 1st day of Baisakh of the Bengali year 1362 Section 5 refers to the effect of notification published under Section 4 and states that on or from the date of vesting among other things the estates and the rights of intermediaries in the estates to which the declaration applies shall vest in the State free from all incumbrances It further states that in particular and without prejudice to the generality of the provisions everyone of the following rights which may be owned by an intermediary shall vest in the State Among the rights so mentioned are the rights in sub soil in mines and minerals in hats bazaars ferries etc Clause c of Sub section 1 of the said section then states as follows 5 Effect of notification 1 Upon the due publication of a notification under section 4 on and from the date of vesting a b 350 c Subject to the provisions of sub section 3 of section 6 every non agricultural tenant holding any land under an intermediary and until the provisions of Chapter VI are given effect to every raiyat holding any land under an intermediary shall hold the same directly under the State as if the State had been the intermediary and on the same terms and conditions as immediately before the date of vesting x x x x x x XI Section 5A places restrictions on certain transfers Sub sections 1 and 2 thereof read as follows 5A Restrictions on certain transfers 1 The State Government may after the date of vesting enquire into any case of transfer of any land by an intermediary made between the 5th day of May 1953 and the date of vesting if in its opinion there are primafacie reasons for believing that such transfer was not bonafide 2 If after such enquiry the State Government finds that such transfer was not bonafide it shall make an order to that effect and thereupon the transfer shall stand cancelled as from the date on which it was made or purported to have been made Then comes Section 5B which without its proviso with which we are not concerned reads as follows 5B Estate or tenure not liable to be sold under Act XI of 1859 Cooch Behar Act V of 1897 Bengal Regulation VIII of 1819 and Act VIII of 1885 On and from the 1st day of June 1954 no estate tenure or under tenure shall be liable to be sold under the Bengal Land Revenue Sales Act 1859 or the Cooch Behar Revenue Sales Act 1897 or the Bengal Patni Taluks Regulation 1819 or the Bengal Tenancy Act 1885 as the case may be and any sale which took place on or after that day under any of those acts or that Regulation shall be deemed to have been void and of no effect We are not concerned in the present case with Chapter IIl which deals with assessment and payment of compensation for the estates of the intermediaries acquired Chapter IV which relates to mines and minerals and which has overriding effect over other provisions of the Act and Chapter V which relates to 351 the preparation of the record of rights Chapter VI deals with the acquisition of rights of raiyats and under raiyats As it stood at the relevant time it consisted of Sections 49 and 52 which were newly inserted in place of the old Sections 49 and 52 retrospectively by the Amending Act 35 of 1955 The same amending Act deleted Sections 50 and 5 1 Section 49 reads as follows 49 When this Chapter is to come into force The provisions of this Chapter shall come into force on such date and in such district or part of a district as the State Government may by notification in the Official Gazette appoint and for this purpose different dates may be appointed for different districts or parts of districts Section 52 without its proviso is as follows 52 Application of Chapters 11 III V and VII to raiyats and underraiyats On the issue of a notification under section 49 the provision of Chapters 11 III V and VII shall with such modifications as may be necessary apply mutatis mutandis to raiyats and under raiyats as if such raiyats and under raiyats were intermediaries and the land held by them were estates and a person holding under a raiyat or an under raiyat were a raiyat foe the purposes of clauses c and d of section 5 It is on record that by notification No 6804 L Ref dated 9th April 1956 published in Calcutta Gazette Extraordinary of the same day Part Chapter VI came into force in all the districts of West Bengal with effect from the 10th April 1956 It is clear from the aforesaid provisions of the Act that when notifications are issued under Section 4 all estates and rights of every intermediary in each such estate vest in the State free from all incumbrances The notifications under that Section have to be issued so as to ensure that the whole area to which the Act extends vests in the State on or before 15th April 1955 which corresponds to the 1st day of the Baisakh to the Bengali year 1362 mentioned therein When Chapter VI of the Act comes into force by virtue of the notification issued under Section 49 Section 52 which falls under that Chapter makes the provisions of Chapter II among others applicable also to the raiyats and the under raiyats as if such raiyat and under raiyat were intermediaries and the lands held by them were estates In other words Sections 4 5 5A and 5B among others of Chapter II become applicable to the raiyati and the under raiyati interests on the issuance of such 352 notification In the present case as stated above the notification under Section 49 was brought into force wef 10th April 1956 It was not given retrospective effect from 15th April 1955 The effect of this notification was that by virtue of Section 4 the intermediary interests stood vested in the State at the latest from 15th April 1955 while the raiyati and the under raiyati interests stood vested in the State with effect from 10th April 1956 The restriction on transfer of the said interests however came into effect retrospectively on or from 1st June 1954 by virtue of Section 5B since that date is mentioned in the Section itself Hence there cannot be any dispute that no estate tenure or under tenure including raiyati and under raiyati interests could be sold under the statutes mentioned in section 5B including the Tenancy Act with which we are concerned on and after 1st June J954 and a sale after that date under any of those statutes would be void and have no effect under that Section Admittedly the present auction sales were held in execution of the decrees for the arrears of rent under the Tenancy Act and took place on 6th November and 3rd December 1954 respectively What came to be sold under the said sales were the raiyati interests of the judgment debtors and the respondents were entered in the record of rights as raiyats in place of the original raiyats on the basis of the said sales The High Court has rightly held that the effective date in Section 5B for prohibition of the sales of raiyati and under raiyati holdings under the statutes mentioned therein is 1st January 1954 as is provided therein This conclusion of the High Court is not challenged before us However the High Court has further held that Section 5B does not operate as a bar against the sale of raiyati or underraiyati interests if the execution of the rent decree is treated as an execution of money decree under the Code of Civil Procedure hereinafter referred to as the Code According to the High Court the sale made pursuant to the execution of the money decree under the Code even though for rent and of the raiyati or underraiyati interest holder would not be a sale under the statutes mentioned in Section 5B including the Tenancy Act It is this conclusion of the High Court which is under challenge before us In order to arrive at the said conclusion the High Court has reasoned that Section 5B only declares void sales of tenures of holdings under the statutes mentioned therein but does not prohibit the sales under the Code According to the High Court the Section has no concern with other sales since the tenure or holding was transferable and inheritable under the provisions of the Tenancy Act and other connected regulations till the estates vested in the State wef 15th April 1955 by notification issued under Section 49 of the Act 353 6 We are afraid that the interpretation placed by the High Court ignores some obvious provisions of law In the first place it is not correct to say that the sale or transfer of the holding or tenure was permissible till the estates vested in the State Section 5A of the Act applies to the case of transfer of any land by an intermediary made between the 5th May 1953 and the date of vesting Under that section the legislature has given power to the State Government to make an inquiry into the question whether such a transfer was bonafide or not and if the State Government came to the conclusion that the transfer was not bonafide consequences stated in the said section followed It cannot be suggested that the voluntary transfers of the tenure or under tenures or raiyati or under raiyati interests in the estates the sale of which is prohibited under the relevant statutes mentioned in Section 5B is not covered by Section 5A of the Act Secondly the Tenancy Act is a piece of legislation which amends and consolidates certain enactments relating to the law of landlord and tenant Under section 3 6 of that Act landlord is defined as a person immediately under whom a tenant holds and includes the Government while under Section 3 17 of that Act tenant is defined as a person who holds land under another person and is or but for a special contract would be liable to pay rent for that land to that person The classes of tenants mentioned under Section 4 of that Act include i tenure holders including under tenure holders ii raiyats and iii under raiyats The said Act further exclusively governs the relations between the landlord and the tenant as is evident from the provisions of that Act It is not necessary to refer to all the said provisions Suffice it to say that the matters relating to the fixation payment and enhancement of rent the grounds of ejectment of the tenant and the procedure for their ejectment transfer and surrender of tenancies improvements on land record of rights the occupancy and non occupancy rights the judicial procedure to be followed in suits between landlord and tenant the sale of interests in land for arrears under a decree the restrictions on the exclusion of the provisions of the Act by agreement between the landlord and the tenant the limitation for suits to be filed under the Act the penalties for illegal interference with the produce of the land damages for denial of landlord s title and even matters relating to the agents and representatives of landlords are all subjects regulated by the said Act We are concerned in the present case with regard to the suit for the arrears of rent and with the execution of the decree obtained in such suit Chapter XIII which contains Sections 143 to 158 relates to the judicial procedure to be followed in suits between the landlord and the tenant Section 143 gives power to the High Court to make rules from time to time with the approval of the State Government consistent with the said act declaring that any portion of the Code shall not apply to suits between landlord and tenant as such or to any specified classes of such suits or shall apply to them subject to modifications specified in the rules made 354 by the High Court Subject to any rules so made and subject also to the other provisions of the said Act the Code applies to all suits between the landlord and the tenant Section 144 confers jurisdiction on the suits under the Act on the civil courts which would have jurisdiction to entertain a suit for the possession of the tenure or holding in connection with which the suit is brought The section also makes clear that no suit between landlord and tenant under the Act shall be instituted in any court other than such court Section 145 specifies the persons who can be recognised agents of the landlord and the manner in which they are to be authorised by the landlord to be his agents and notwithstanding anything contained in the said Act every such agent is empowered to verify the pleadings on behalf of the landlord without the permission of the Court Section 146 ordains that the particulars of the suits between the landlord and the tenant should be entered in a special register to be kept by each civil court in such form as the State Government may prescribe in this behalf instead of in the register of civil suits prescribed by the court Section 146A makes a special provision for joint and several liability for rent of co sharer tenants notwithstanding anything contained in the Contract Act Section 146B likewise lays down a special procedure in rent suits against co sharer tenants notwithstanding anything contained in the Limitation Act Section 147 prevents a landlord from instituting successive rent suits against a raiyat except under circumstances mentioned therein Section 147A prevents the Court from wholly or partly adjusting by agreement or compromise any suit between landlord and tenant unless the agreement can be enforced under the said Act viz the Tenancy Act This provision again is made notwithstanding anything contained in this behalf under the Code Section 148 then lays down a special procedure to be followed in rent suits It states in clause a thereof that Sections 68 to 72 of the Civil Procedure Code and rules 1 to 13 of Order XI rule 83 of Order XXI and Rule 2 of Order XLVIII in Schedule 1 of the said Code and Schedule III thereof shall not apply to such suit Clause b thereof states that the plaint in such suit shall contain in addition to the particulars specified in the code certain additional particulars which are mentioned therein Clauses c and d require further particulars in such plaints in certain situations mentioned therein Clause e thereof states that the summons shall be for the final disposal of the suit unless the court is of opinion that it should be for the settlement of issues only Clause f lays down a special mode of service of summons if the High Court by rule so directs and also permits the Court to presume service of summons in certain circumstances Clauses g and h similarly relate to the special procedure of summons in such suits Clause i requires leave of the Court to file a written statement Clause i makes the rules for recording the evidence of witnesses contained in rule 13 of Order XVIII in Schedule 1 to the Civil Procedure Code applicable in the trial of such suits whether 355 an appeal is allowed or not Sub clause j of Clause k permits a Court to issue a special summons under certain circumstances notwithstanding anything contained in the Code and Sub clause ia thereof and also provides for the procedure for effecting the service of the special summons and Sub clause ii provides for the consequences for the non appearance of the defendants in answer to such special summon Clause m permits the Court to order execution of oral application of the decree holder unless the decree is for ejectment for arrears Clause n requires the Court not to insist on a fresh vakalatnama or to file a copy of the decree for the purpose of executing the decree notwithstanding any thing contained in the Code Likewise notwithstanding anything contained in the Code Clause o prohibits an application for the execution of a decree for arrears by an assignee of the decree unless the landlord s interest in the land is vested in such assignee Section 148A permits a co sharer landlord to sue for rent in respect of his share in the tenure Section 149 requires the defendant to deposit the amount in Court once he admits that money is due from him even though he pleads that it is not due to the plaintiff but to a third person Section 150 likewise requires the defendant to deposit the admitted amount due to the landlord notwithstanding the defendant s plea that the plaintiff s claim is in excess of the amount due Section 153 then provides for appeals in rent suits and while doing so lays down conditions under which the appeal will lie and will not lie Section 153A lays down special conditions under which an application to set aside decree or for review of the judgment won Id lie Section 154 provides for the dates from which the decree for enhancement of rent would take effect Then comes Section 155 which provides for relief against forfeiture under certain circumstances and Section 156 lays down the rights of ejected raiyats and under raiyats in respect of crops and land prepared for sowing Section 157 lays down special power of the Court to fix fair rent as alternative to ejectment Section 158 gives power to the Court to determine incidence of tenancy on the application either of the landlord or tenant Chapter XIV of the Act provides for Sale for arrears under Decree We are directly concerned with the said Chapter Section 159 thereof details general powers of purchaser as to avoidance of incumbrances Section 160 mentions the protected in terests within the meaning of the said Chapter Section 161 gives a special meaning of incumbrance and registered and notified incumbrance for the purpose of the said Chapter Section 162 gives the particulars of the statement which a decree holder has to produce when he makes an application for attachment and sale of the tenure or 356 holding in execution of the decree Section 163 makes special provision for a combined order of attachment and proclamation of sale to be issued notwithstanding anything contained in the code on the subject Section 164 provides for the sale of tenure or holding subject to registered and notified incumbrance and the effect thereof Section 165 is another special provision which provides for sale of tenure or holding with power to avoid all incumbrances and states the effect thereof Likewise Section 166 makes provision for sale of occupancy holdings with power to avoid all incumbrances and for the effect thereof Section 167 gives procedure for annulling incumbrances under Sections 164 165 or 166 Section 168A with which we are directly concerned in the present case then states as follows 168A Attachment and sale of tenure or holding for arrears of rent due thereon and liability of purchasers thereof 1 Notwithstanding anything contained elsewhere in this Act or in any other law or in any contract a decree for arrears of rent due in respect of a tenure or holding whether having the effect of a rent decree or money decreeor a certificate for such arrears signed under the Bengal Public Demands Recovery Act 1913 shall not be executed by the attachment and sale of any movable or immovable property other than the entire tenure or holding to which the decree or certificate relates Provided that the provisions of this clause shall not apply if in any manner other than by surrender of the tenure or holding the term of the tenancy expires before an application is made for the execution of such a decree or certificate b The purchaser at a sale referred to in clause a shall be liable to pay to the decree holder or certificate holder the deficiency if any between the purchase price and the amount due under the decree or certificate together with the costs incurred in bringing the tenure or holding to sale and any rent which may have become payable to the decree holder between the date of the institution of the suit and the date of the confirmation of the sale 2 In any proceeding pending on the date of the commencement of the Bengal Tenancy Amendment Act 1940 in execution of a decree or certificate to which the provisions of sub section 1 apply if there has been attached any immovable property of the 357 judgment debtor other than the entire tenure or holding to which the decree or certificate relates and if the property so attached has not been sold the Court or Certificate officer as the case may be shall on the application of the judgment debtor direct that on payment by the judgment debtor of the costs of the attachment the property so attached shall be released 3 A sale referred to in clause a of sub section 1 shall not be confirmed until the purchaser has deposited with the Court or Certificate officer as the case may be the sum referred to in clause b of that sub section We will revert to this section soon Section 169 provides for special rules for disposal of the sale proceeds instead of the rules contained in the Code Similarly Section 170 provides for circumstances under which tenancy of holding is to be released from attachment notwithstanding the provisions of the Code in that behalf Section 173 enables a decree holder to bid for the purchase of the tenure or holding in an auction sale without the permission of the Court which is against the provisions of the Code Section 174 provides for application to set aside the sale and makes the relevant provisions of the Code inapplicable in certain circumstances Section 174A provides for the circumstances under which sale shall become absolute or shall be set aside and purchase money will be returned It is also necessary to refer to Section 178 in Chapter XV of the Act which expressly provides for restrictions on the exclusion of the Act by agreement between the parties Sub section c in particular of that section states that nothing in any contract between a landlord and a tenant made before or after the passing of the said Act shall entitle a landlord to eject a tenant otherwise than in accordance with the provisions of the said Act Section 184 provides for special limitation in suits appeals and applications filed under that Act and Section 185 makes certain provisions of the Limitation Act inapplicable to such suits Section 186 provides for penalties for illegal interference with produce Section 186A provides for damages for denial of landlord s title Section 187 gives landlord power to act through agents These are all the provisions which are necessary for us to notice It will be apparent from the said provisions that the Act is a self contained Code governing the relations between the landlord and the tenant for resolution of their disputes for the suits to be filed by them for the procedure to be followed in such suits and the conditions on which decrees may be passed in such suits for the execution and 358 satisfaction of the said decrees The Act incorporates certain provisions of the Code in toto while others with modification At the same time it makes still other provisions inapplicable to the proceedings in the suit filed under it The Act by implication prevents any suit between landlord and tenant to be filed otherwise than under its provisions Thus all proceedings in the suit filed under the Act from its inception to the satisfaction of the decree are to be governed by its provisions and the provisions of the Code are applicable to such proceedings only to the extent and subject to the conditions stated therein The Code as such is not applicable to the proceedings or to any part of it and hence no part of the proceedings can be prosecuted under the Code It is thus clear that even if simple money decree is obtained for the arrears of rent no interest of the tenant can be brought to sale in execution of such decree except under the provisions of the Act In other words no such interest can be sold under the Code an independently of the Act Secondly if any doubt in that behalf was left it is removed by the provisions of Section 168A The said section which is reproduced above begins with the non obstante clause which excludes all other provisions of the Tenancy Act itself as well as of any other law and the provisions of any contract as well Clause a of that section states that a decree for arrears of rent whether having the effect of a rent decree or a money decree or even a certificate for such arrears under the Bengal Public Demands Recovery Act 1930 shall not be executed by the attachment and sale of any movable or immovable property other than the entire tenure or holding to which the decree or certificate relates That provision will not apply only if the term of the tenure has expired before an application is made for the execution of such decree or certificate What is further when the entire tenure or holding is purchased in execution of a decree for arrears of rent in respect thereof Clause b of sub section 1 of that section provides that the purchaser shall pay to the decree holder or certificate holder as the case may be the deficiency if any between the purchase price and the amount due under the decree or the certificate together with the cost incurred for the auction sale and also the rent which may have become due between the date of the institution of the suit and the date of the confirmation of the sale This provision is inconsistent with the provisions of the Code The High Court has held that the said Section 168A 1 stands impliedly repealed by the vesting in the State of the interests of the intermediary which include raiyati and under raiyati interests and attract the proviso thereunder leaving the decree holder free to execute his decree as money decree in view of Section 5B of the Act against any other property of the judgment debtor tenureholder or tenant There is no doubt that after the intermediary interests vest in the State they cannot be brought to sale and the remedy of the decree holder is to proceed against other property of the judgment debtor if any In that event Section 168A would not come in the picture 359 However the High Court has gone further and observed as follows In Bithika Maity s case it was correctly decided that the effective date in section 5B in respect of raiyati and under raiyati holdings is also the first day of June 1954 The decision however failed to take notice that the impugned sale therein held on September 10 1954 could be treated a a sale under the Code of Civil Procedure as a sale in execution of a money decree This aspect of the case was not taken in consideration possibly because the case was heard exparte We are accordingly unable to approve the decision that all sales between the first day of June 1954 to the vesting of raiyati interest are to be deemed as being under the Statutes mentioned therein and hence to be declared void as was summarily held by it On the contrary such sales though deemed as invalid and of no effect under the aforesaid acts are to be treated and will have the effect of sales under the Code of Civil Procedure in execution of money decrees if otherwise valid Accordingly accepting Mr Mitra s contention we hold that the name of the opposite party being auction purchaser of the right title and interest of the judgment debtor was validly recorded as raiyat in respect of the disputed holdings in the finally published record of rights in place and stead of defaulting judgment debtors who held the sake sic holdings It is difficult to appreciate these observations which are self contradictory There is a conflict of view on the question as to when the raiyati and the underraiyati interests vested in the State viz whether on 15th April 1955 when Section 4 became applicable to them by virtue of the retrospective operation of Sections 49 and 52 or on 10th April 1956 when the notification under Section 49 was issued It is not necessary for us to go into that question on the facts of the present case nor was the question debated before us Hence we would refrain from expressing any opinion on the point there is however no dispute before us that the sales even of raiyati and under raiyati interests effected after 1st June 1954 were invalid under Section 5B of the Act Hence the sales of the raiyati interest in the present case effected on 6th November 1954 and 3rd December 1954 were obviously invalid After 15th April 1955 or 10th April 1956 as the case may be according to the conflicting views of the High Court when the raiyati and under raiyati interests came to be vested in the State no sale could have been held of those interests and the decree holder would have been required to proceed against the other properties of the judgment debtor However admittedly in the present case it is the raiyati interests of the judgment debtor in the land in question which were sold Hence the sales were void The High Court has reasoned that the sales can be treated as 360 being pursuant to a money decree and therefore under the Code and independently of the Tenancy Act The High Court unfortunately missed the vital fact that whether it is a money decree or a rent decree the entire raiyati interests of the judgement debtor in the land in question had to be sold under the said Section 168A but could not be sold in view of the bar imposed by Section 5B of the Act The bar cannot be overcome by treating the sale under the Code to circumvent the provisions of the Tenancy Act and in particular of Section 168A of that Act We have already pointed out that the decree pursuant to the suit under the Tenancy Act cannot be executed except under the provisions of that Act There cannot therefore be a sale of the property in question pursuant to such decree under the provisions of the Code What is further the intention of the legislature in enacting Section 5B was to prevent sales of the intermediary interests after 161954 In view of the provisions of the Tenancy Act the said interests could be sold only under and in accordance with the provisions of that Act The sale of such interests in the land pursuant to a decree for arrears of rent in respect of that land could not therefore be made under the Code Admittedly in the present case the raiyati interests were sold after 161954 in execution of the decree for arrears of rent in respect of the land in question Hence the proceedings initiated by the Assistant Settlement Officer to revise the entries in the record of rights made in favour of the auction purchaser and the orders passed by him on January 8 and 27 1971 recording the name of the former raiyats as raiyats with possession of the lands and deleting the names of the auction purchaser were valid We therefore set aside the impugned decision of the High Court and restore that of the Assistant Settlement Officer The appeals are allowed accordingly In the circumstances of the case there will be no order as to costs RP Appeals allowed

The appellant had appeared for All India competitive examination He was not allotted any seat in any college according to the merit com preference cum eligibility His grievance now is that students with lesser marks than him are being admitted to Colleges in Kerala He says that he may be given a seat in any subject in any of the colleges in Kerala or for that matter anywhere else After the first second and third lists pertaining to All India seats were published the remaining vacant seats have been surrendered to the State Government already The State Government had already filled almost all of them Disposing of the appeal this Court HELD11 This Court cannot withdraw one seat from the State Government at this belated stag course has begun in the month of September 1992 itself and give it to the appellant Even otherwise it is not certain that there are no other candidates who had appeared in the All India competitive examination who may have scored higher marks than the appellant No direction can be given for his being considered against the 1993 vacancies because he has not appeared for the 1993 examination If in case any seat in lying vacant in any of the medical courses in Kerala the second respondent Director of Medical Education Thiruvananthapuram shall consider admitting the appellant against such seat relating to the year 1992 342 G 338 102 The post graduate courses comprise degree courses as well as diploma courses After the results of examinations are published the admissions are made on the basis of merit cum preference cum eligibility with the aid of a computer 339 G 103 According to the system in vogue a candidate who applies for admission in the All India quota is required to indicate eight medical colleges and six subjects in the order of preference to which he seeks admission 339 G 104 In the first instance a list of admissions is issued But it so happens that for one or the other reason many of the candidates in the list do not turnup to join the course Hence a second list is issued and then a third But while preparing the second list or the third list the overall merit cum preferencecum eligibility is not again examined with the result that sometimes a candidate with lesser score gets a better subject than a candidate with higher score 339 H 105Inspite of promptings from this court the authorities in charge of holding All India competitive examination have not been able to adhere to the prescribed schedule In such a situation it is bound to happen that issuance of second and third lists delay the process of admission still further By the time the second and third lists are communicated half the course is over 340 D 106 The new system in short is this after the examination is over the results would be published in the order of merit The selection committee will call 150 candidates a day in the order of merit A chart will be kept ready and displayed at all relevant places indicating the colleges and subjects wherein the seats are available Candidates will be called in the order of merit and asked to indicate hisher choice The slot chosen by himher then gets closed This procedure will be gone through until all the seats are filled up There would be no second or third list Any seats remaining vacant thereafter will be surrendered to the State Government But this modification will apply to and come into effect only for and from the admissions for the year 1994 It will not apply to the admissions currently underway 340 H 341 A 107 In all other respects the scheme in vogue shall continue to be effective 339 Dr Pradip Jain v Union of India Dr Dinesh Kumar Motilal Nehru college and Dr Dinesh Kumar v Motilal Nehru College 19874 SCC459 referred to

Appeal No 3908 NT 1983 From the Judgment and Order dated 20111979 of the Madras High Court in Tax Case No 330 of 1976 A Raghuvir and Ms A Subhashini for the Appellant TA Ramachandran and Mrs Janaki Ramachandran for the Respondent The Judgment of the Court was delivered by BP JEEVAN REDDY J This appeal is preferred against the Judgment of the Madras High Court answering the question referred to it in the affirmative ie in favour of the assessee and against the Revenue The question referred under section 256 1 of the Income tax Act reads as follows Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in holding that the total sum of Rs 22000 received by the assessee from the Indian Oil Corporation and All India Highway Motor Rally should not be brought to tax The assessment year concerned is 1974 75 The assessee GR Karthikeyan assessed as an individual was having income from various sources including salary and business income During the accounting year relevant to the said assessment year he participated in the All India Highway Motor Rally He was awarded the first prize of Rs 20000 by the Indian Oil Corporation and another Sum of Rs 2000 by the All India Highway Motor Rally The Rally was organised jointly by the Automobile Association of Eastern India and the Indian Oil Corporation and was supported by several Regional Automobile Associations as well as Federation of Indian Motor Sports Clubs and the Federation of Indian Automobile Associations The rally was restricted to private motorcars the length of the rally route was approximately 6956 kms One could start either from Delhi Calcutta Madras or Bombay proceed anti clock wise and arrive at the starting point The rally was designed to test endurance driving and the reliability of the 331 automobiles One had to drive his vehicle observing the traffic regulations at different places as also the regulations prescribed by the Rally Committee Prizes were awarded on the basis of overall classification The method of ascertaining the first prize was based on a system of penalty points for various violations The competitor with the least penalty points was adjudged the first prize winner On the above basis the assessee won the first prize and received a total sum of Rs 22000 The Income Tax Officer included the same in the income of the respon dent assessee relying upon the definition of income in clause 24 of section 2 On appeal the Appellate Assistant Commissioner held that inasmuch as the rally was not a race the amount received cannot be treated as income within the meaning of section 2 24 ix An appeal preferred by the Revenue was dismissed by the Tribunal The Tribunal recorded the following findings aThat the said rally was not a race It was predominantly a test of skill and endurance as well as of reliability of the vehicle b That the rally was also not a game within the meaning of section 224 ix c That the receipt in question was casual in nature It was nevertheless not an income receipt and hence fell outside the provisions of section 10 3 of the Act At the instance of the Revenue the question aforementioned was stated for the opinion of the Madras High Court The High Court held in favour of the assessee on the following reasoning a The expression winnings occuring at the inception of sub clause ix in section 224 is distinct and different from the expression winning The expression winnings has acquired a connotation of its own It means money won by gambling or betting The expression winnings controls the meaning of several expressions occurring in the sub clause In this view of the matter the sub clause cannot take in the receipt concerned herein which was received by the assessee by participating in a race which involved skill in driving the vehicle The rally was not a race In other words the said receipt does not represent winnings b A perusal of the memorandum explaining the provisions of the Finance Bill 1 972 which inserted the said sub clause in section 224 also shows that the idea behind the sub clause was to rope in windfalls from lotteries races and card games etc 332 c Section 74 A which too was introduced by the Finance Act 1972 supports the said view Section 74 A provides that any loss resulting from any of the sources mentioned therein can be set off against the income received from that source alone The sources referred to in the said section are the very same sources mentioned in sub clause ix of section 224 namely lotteries crossword puzzles races including horse races card games etc The correctness of the view taken by the High Court is questioned herein The definition of income in section 224 is an inclusive definition The Parliament has been adding to the definition by adding sub clause s from time to time Sub clause ix which was inserted by the Finance Act 1972 reads as follows ix any winnings from lotteries crossword puzzles races including horse races card games and other games of any sort or from gambling or betting of any form or nature whatsoever We may notice at this stage a provision in section IO Section 10 occurs in chapter HI which carries the heading Incomes which do not form part of total income Section 10 in so far as is relevant reads thus 10 Incomes not included in total income In computing the total income of a previous year of any person any income failing within any of the following clauses shall not be included d any receipts which are of a casual and non recurring nature not being winnings from lotteries to the extent such receipts do not exceed one thousand rupees in the aggregate The clause has been amended by Finance Act 1986 but we are not concerned with it Similarly it is not necessary to notice the proviso to the said clause It is not easy to define income The definition in the Act is an inclusive one As said by Lord Wright in Kamakshya Narayan Singh vs CIT P C income is a word difficult and perhaps impossible to define in any precise general formula It is a word of the broadest connotation In Gopal Saran Narain Singh vs Commissioner of Income Tax 3ITR 237 PC the Privy Council pointed out that anything than can properly be described as income is taxable under the Act unless expressly exempted This Court had to deal with the ambit of the expression income in Navin Chandra Mafatlal vs CI TBombay 26 ITR SC 333 The Indian Income tax and Excess Profits Tax Amendment Act 1947 had inserted section 12 B in the Indian Income tax Act 1922 Section 12B imposed a tax on capital gains The validity of the said Amendment was questioned on the ground that tax on capital gains is not a tax on income within the meaning of entry 54 of list 1 nor is it a tax on the capital value of the assets of individuals and companies within the meaning of entry 55 of list 1 of the seventh schedule to the Government of India Act 1935 The Bombay High Court repelled the attack The matter was brought to this Court After rejecting the argument on behalf of the assessee that the word income has acquired by legislative practice a restricted meaning and after affirming that the entries in the seventh schedule should receive the most liberal construction the Court observed thus What then is the ordinary natural and grammatical meaning of the word income According to the dictionary it means a thing that comes in See Oxford Dictionary Vol Vp 162 Stroud vol II pp 14 16 In the United States of America and in Australia both of which also are English speaking countries the word income is understood in a wide sense so as to include a capital gain Reference may be made to Eisner vs Macomber Merchants Loan and Trust Co vs Smietanka 1920 L and United States of America vs Stewart and Resch vs Federal Commissioner of Taxation In each of these cases very wide meaning was ascribed to the word income as its natural meaning The relevant observations of learned Judges deciding those cases which have been quoted in the judgment of Tendolkar J quite clearly indicate that such wide meaning was put upon the word income not because of any particular legislative practice either in the United States or in the Commonwealth of Australia but because such was the normal concept and connotation of the ordinary English word income Its natural meaning embraces any profit or gain which is actually received This is in consonance with the observations of Lord Wright to which reference has already been made The argument founded on an assumed legislative practice being thus out of the way there can be no difficulty in applying its natural and grammatical meaning to the ordinary English word income As already observed the word should be given its widest connota 334 tion in view of the fact that it occurs in a legislative head conferring legislative power Since the definition of income in section 224 is an inclusive one its ambit in our opinion should be the same as that of the word income occurring in entry 82 of list 1 of the Seventh Schedule to the Constitution corresponding to entry 54 of list 1 of the Seventh Schedule to the Government of India Act In Bhagwandas Jain vs Union of India SC The challenge was to the validity of section 232 of the Act which provided that where the property consists of house in the occupation of the owner for the purpose of his own residence the annual value of such house shall first be determined in the same manner as if the property had been let and further be reduced by one half of the amount so determined or Rs 1800 whichever is less The contention of the assessee was that he was not deriving any monetary benefit by residing in his own house and therefore no tax can be levied on him on the ground that he is deriving income from that house It was contended that the word income means realisation of monetary benefit and that in the absence of any such realisation by the assessee the conclusion of any amount by way of notional income under section 232 of the Act in the chargeable income was impermissible and outside the scope of entry 82 of list 1 of the Seventh Schedule to the Constitution The said contention was rejected affirming that the expression income is of the widest amplitude and that it includes not merely what is received or what comes in by exploiting the use of the property but also that which can be converted into income Sub clause ix of section 224 refers to lotteries crossword puzzles races including horse races card games other games of any sort and gambling or betting of any form or nature whatsoever All crossword puzzles are not of a gambling nature Some are some are not See State of Bombay vs RMD Chamarbaugwala AIR 1957 SC699Even in card games there are some games which are games of skill without an element of gamble See State of Andhra Pradesh vs K Satyanarayan1968 2 SCR 515 The words other games of any sort are of wide amplitude Their meaning is not confined to games of a gambling nature alone It thus appears that sub clause ix is not confined to mere gambling or betting activities But says the High Court the meaning of all the aforesaid words is controlled by the word winnings occurring at the inception of the subclause The High Court says relying upon certain material that the expression winnings has come to acquire a particular meaning viz receipts from activities of a gambling or betting nature alone Assuming that the High Court is right in its interpretation of the expression winnings does it follow that merely because 335 winnings from gamblingbetting activities are included within the ambit of incomethe monies received from non gambling and non betting activities are not so included What is the implication flowing from insertion of clause ix If the monies which are not earned in the true sense of the word constitute income why do moneies earned by skill and toil not constitute income Would it not look odd if one is to say that monies received from games and races of gambling nature represent income but not those received from games and races of non gambling nature The rally in question was a contest if not a race The respondent assessee entered the contest to win it and to win the first prize What he got was a return for his skill and endurance Then why is it not income which expression must be construed in its widest sense Further even if a receipt does not fall within subclause ix or for that matter any of the sub clauses in section 224 it may yet constitute income To say otherwise would mean reading the several clauses in section 224 as exhaustive of the meaning of income when the Statute expressly says that it is inclusive It would be a wrong approach to try to place a given receipt under one or the other sub clauses in section 224 and if it does not fall under any of the sub clauses to say that it does not constitute income Even if a receipt does not fall within the ambit of any of the sub clauses in section 224 it may still be income if it partakes of the nature of the income The idea behind providing inclusive definition in section 224 is not to limit its meaning but to widen its net This Court has repeatedly said that the word income is of widest amplitude and that it must be given its natural and grammatical meaning Judging from the above standpoint the receipt concerned herein is also income May be it is causal in nature but it is income nevertheless That even the casual income is income is evident from section 10 3 Section 10 seeks to exempt certain incomes from being included in the total income A casual receipt which should mean in the context casual income is liable to be included in the total income if it is in excess of Rs 1000 by virtue of clause 3 of section 10 Even though it is a clause exempting a particular receiptincome to a limited extent it is yet relevant on the meaning of the expression income In our respectful opinion the High Court having found that the receipt in question does not fall within sub clause ix of section 224 erred in concluding that it does not constitute income The High Court has read the several sub clauses in section 224 as exhaustive of the definition of income when in fact it is not so In this connection it is relevant to notice the finding of the Tribunal It found that the receipt in question was casual in nature but it opined it was nevertheless not an income receipt and fell outside the provision of section 10 3 of the Act We have found it difficult to follow the logic behind the argument For the above reasons we hold that the receipt in question herein does 336 constitute income as defined in clause 24 of section 2 of the Act The appeal is accordingly allowed and the question referred by the Tribunal under section 2561 of the Act is answered in the negative ie in favour of the Revenue and against the assessee There shall be no order as to costs Appeal allowed

Under the General Terms and Conditions for supply of electricity notified by the Andhra Pradesh State Electricity Board under Section 491 of the the consumers were obliged to keep with the Electricity Board an amount equivalent to three month s demand and energy charges as consumption deposit on which Interest at the rate of 3 per annum was payable by the Board In the event of delay in payment of consumption deposit within the stipulated period not only surcharge was payable by consumer but also the supply was liable to be disconnected Various petitions were riled before Andhra Pradesh High Court challenging the validity of terms and conditions contending that the consumption deposit should In no event exceed two months average consumption charges and that In view of the judgment of Supreme Court In Ms Jagdamba Paper Industries vs HSEB Board 1983 4 SCC 508 the Board was liable to pay Interest at the game rate as Is paid by a Scheduled Bank on fixed deposit The High Court dismissed the petitions In appeals to this Court It was contended on behalf of the consumers that 1 Section 49 of the is unconstitutional since there are no guidelines for framing the terms and conditions of supply of electricity 2 in view of the fact that in case of power intensive consumers the cost of Electricity is very high the condition requiring 3 months security deposit is arbitrary and illegal for power intensive consumers and 3 there is no power under the Electricity Supply Act to enable the Board to raise revenue or to cover its capital cost etc except by way of adjusting tariffs as seen from under Section 59 of the Supply Act 1948 Therefore consumption deposit cannot be used for the purpose of revenue or raising revenue On behalf of the Electricity Board it was contended that 1 In view of the fact that the object of consumption deposit which is In the nature of advance payment and not a security deposit Is to ensure prompt payment of electricity supply It cannot be contended that 3 201 month s consumption deposit Is arbitrary 2the fact that some of the consumers pay large amounts by way of electricity charges has nothing to do with the nature of deposit Merely because a unit Is power based it cannot be treated separately for the terms of supply relating to consumer deposit must be uniform In the case of Rajasthan Electricity Board the General Conditions expressly provided that no Interest will be paid by the Electricity Board on security deposit Futher the Electricity Board issued notices requiring the consumers to deposit the enhanced amount of cash security as well as bank guarantee on the basis of maximum power consumption The consumers flied petitions In the Rajasthan High Court contending that provision for no Interest was bad In law and that the enhanced security deposit must he calculated not on three months maximum consumption but on the basis of minimum power consumption A Single Judge of the High Court allowed the petitions On appeal the Division Bench held that the clause relating to nonpayment of interest was not reasonable Relying on Section 4 of the as well as on the Model Form of draft conditions contained In Schedule VI of the 1948 Act the Division Bench held that interest was payable on the security deposit In appeals to this Court it was contended on behalf of the Rajasthan State Electricity Board that 1 there is no statutory provision which casts an obligation on the Board to pay Interest on the security deposit nor even Interest is payable under common law or in equity 2 the High Court erred In relying on the Model Form conditions as well as on the 3 the security deposit for three months is neither unreasonable nor arbitrary 4 even if the contract between the Board and consumer is adhesion contract it is not necessarily unconsciable 5 in Jagdamba Paper Industries case the right of Interest was based on the concession of parties and the Court had no occasion to decide the rate or interest On behalf of the consumers it was contended that 1the scheme of the Electricity Act and Supply Act together with the Rules suggest the payment of interest 2 since the money is deposited but the consumers with the Board to secure the Board against default In payment of bills the Board Is in the position of a trustee in respect of 202 this money 3 even under English Law interest was payable on security for electricity For the intervenor on behalf of the Electricity Board of Orissa it was submitted that Regulation 7 of the Orissa State Electricity Board General Conditions of Supply Regulations 1981 providing that no interest would be payable on security deposit is just and reasonable and is not arbitrary or violative of Article 14 of the Constitution The Uttar Pradesh State Electricity Board was also paving 3 interest on consumption deposit The consumers preferred writ petitions before the Allahabad High Court claiming 12 interest but the same were dismissed In appeals to this Court it was contended on behalf of the consumers that in a number of matters this Court has also ordered interest at the rate of 12 on security deposit and the same principle should apply to this case 2 if interest is not paid security deposit cannot be demanded as this will amount to unconscionable bargain and 3 the security deposit does not contemplate appropriation On behalf of the Electricity Board it was contended that 1 in cases where 12 per cent interest was awarded it was only by way of ad interim measure Therefore orders are not conclusive on this aspect 2 under Article 226 of the Constitution the court is to conduct a limited scrutiny whether by imposing a condition the Board has not acted as a private trader and thereby shed off its public utility character If the Court comes to the conclusion that the Board has not acted as a private trader and the nature of deposit has a rational relationship the issue will fall outside the scope of judicial purview The Bihar State Electricity Board was paying 5 interest on the security deposit The consumers claimed interest at the rate payable on fixed deposit by a nationalised bank and the High Court allowed the same The Electricity Board filed petition in this court contending that the High Court erred in awarding a higher rate of interest On behalf of the consumers it was contended that the increase in security deposit without assigning any reason was had in law 203 In the connected writ petition the challenge is to the validity of Sections 49 and 79 of the Supply Act According to the Punjab State Electricity Board while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers the consumers also use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers To off set part of the amount that the consumer owes to the Board constantly and also to ensure timely payment of advances by the Board to its suppliers an advance consumption deposit is insisted upon before commencing supply to the consumer If this is not so taken the Board will be left with no other option than to increase the tariff Thus advance deposit cannot be termed as a fixed deposit as the amount cannot be utilised against nonpayment of dues from consumers Besides the consumers can also ask for the refund Therefore Sections 491 and 79 j cannot be termed as arbitrary It was also contended on behalf of the Punjab State Electricity Board that the amendment to clause 23 of abridged conditions of supply requiring consumers to pay advance consumption deposits is perfectly reasonable For the intervenor on behalf of Calcutta Electricity Supply Corporation it was submitted that the deposit though called security deposit is really an adjustable advance payment of consumption charges The amount is revisable from time to time depending upon the average consumption charges on the basis of actual consumption over a period In short it is in the nature of a running account The security deposit does not remain in tact like a fixed deposit but gets depleted day after day depending on the extent of consumption More often than not the consumption charges and other dues exceed the security deposit That necessitates calling for additional advance to make up a shortfall In the absence of any usage or contract or an provision of law requiring payment of interest is not payable for wrongful detention of money In this case there is no wrongful detention of even Section 42 of the has no application to this deposit 204 Disposing the petitions this Court HELD1 Section 49 of the is valid Sub section1 of the said section starts with the words Subject to the provisions of the Act and all regulations if any made in this behalf Therefore the Board has to conform to the various provisions of the Act and the regulations Section 49 contains two powers 1 to prescribe terms and conditions of supply and 2 fix the tariff No guidelines are required in this regard 278A 248CE Hindustan Zinc Ltd vs APSEB Mysore State Electricity Bought vs Bangalore Woolen Cotton and Sill Mills Ltd AIR 1963SC 1128 Jagdamba Paper Industries Pvt Ltd vs Haryana State Electricity Board referred to Roberts vs Hopwood Pyx Granite vs Minister of Housing and Local Government cited 11Where regulations are made under Section 49 read with Section 79 j the validity of the regulations could be examined by the court whether they are reasonable or not 249 D Southern Steel Ltd Hyderabad vs The Andhra Pradesh State Electricity Board AIR 1990 Andhra Pradesh 58 and Ms BR Oil Mills Bharatpur vs Assistant Engineer D RSEB Bharatpur AIR referred to 12The terms and conditions notified under Section 49 must relate to the object and purpose for which they are issued Certainly that power cannot be exercised for a collateral purpose In this Section 49 is valid 251 C 2The nature of consumption deposit is to secure prompt payment and is intended for appropriation The deposit though called security deposit is really an adjustable advance payment of consumption charges The payment is in terms of the agreement interpreting the conditions of supply This security deposit is revisable from time to time on the basis of average consumption charges depending upon the actual consumption over a period This is the position under the 205 terms of supply of energy with reference to all the Boards 278 A 252 D E 21The cycle of Billing by the Board demonstrates that in the very nature of things the consumer is supplied energy on credit The compulsory deposit in the context of billing cycle is hardly adequate to secure payments to the Board by the time the formal hill by the Board is raised on the consumer In one sense the consumption security deposit represents only a part of the money which is payable to the Board on the bill being raised against the consumer Thus the Board secures itself by resorting to such deposit to cover part of the liability 253 F G 22The deposit made cannot be equated to a fixed deposit In the case of daily supply of electricity there is a consequential liability to pay for each day s consumption of electricity To ensure that payment the security deposit is furnished Hence it cannot he equated to a deposit at all It is in the nature of a running current account 262 A 23The argument that the deposit does not contemplate appro priation is not correct because in the nature of contract it is liable to be appropriated for the satisfaction of any amount liable to be paid by the consumer to the Board for violation of an conditions of supply in the context of wide scale theft of energy tempering with the meters and such other methods adopted by the consumers Therefore the said consumption security deposit serves not only too secure the interest of the Board for any such violation but should serve as a deterrent on the consumer in discharging his obligations towards the Board 264 F 6 Union of India vs AL Rallia Ram Riches vs West minister Bank Ltd 1947 Appeal Cases 390 held inapplicable 24While the Electricity Board is required to make colossal advances to generate electricity and supply to consumers the consumers use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers To off set part of the amount the consumer owes to the Board continually to ensure 206 timely payment of bills by the Board to its suppliers the advance consumption deposit is required to he kept with the Board before commencing supply to the consumer The clauses in the contract in relation to conditions of supply of electric energy enable the Board to adjust the bill against such deposits Therefore this is not a case of mere deposit of money as in commercial transaction In demanding security deposit it is open to the court to take note of pilferage 254 F H Ashok Soap Factory vs Municipal Corporation of Delhi JT referred to Corpus Juris Secundum Vol26Ap194Davidson vs US CCA Pa 752 referred to 25Three month s security deposit cannot be characterised either unreasonable or arbitrary 1255 F Jagdama Paper Industries P Ltd vs Haryana State Electricity Board 1993 4SCC508 KC Works vs Secretary APSEB Vidyut Soudha AIR 1979 Andhra Pradesh 291 Municipal Corporation for Greater Bombay vs Ms DM Industries Haryana Ice Factory vs Municipal Corporation of Delhi AIR 1986 Delhi 78 referred to Southern Steel Ltd Hyderabad vs The AP State Electricity Board AIR 1990 Andhra Pradesh 58 approved Indian Aluminium Company vs Karnataka Electricity Board cited 26Under the regulations framed by the Board in exercise of powers of Section 49 read with Section 79 j the consumer is only entitled and the Board has an obligation to supply energy to the consumer upon such terms and conditions as laid down in the regulations If therefore the regulations prescribed a security deposit that will have to be complied with In cases where regulations have not been made Rule 27 of the Rules made under the Electricity Act enables the adoption of model form of draft conditions of supply 207 Annexure VI in clause 14 states that the licensee may require any consumer to deposit security for the payment of his monthly bills for energy supplied and for the value of the meter and other apparatus installed in his premises Thus the Board has the power to make regulations to demand security from the consumers 251F H 252A B 27Under Section 59 the Board is obligated to carry on its operation as to ensure that it generates a surplus of 3 per cent or as specified by the State Government The Board is obligated to adjust its tariffs for ensuring such surplus The condition of supply requiring a consumption security deposit has a direct bearing on the operations of the Board which are to be conducted in such a manner as to ensure a surplus The language in Section 59 of the Supply Act is carry on its operations under this Act and adjust its tariffs The language of the said Section is not by adjusting tariff Therefore the argument that the only manner in which the Board can achieve a surplus is to adjust its tariffs does not flow from the language of Section 59 So read in the context of the insistence of a security deposit which has direct bearing on the operations of the Board is per se reasonable and constitutional 266 E 6 Kerla State Electricity Boaed vs SN Govinda Prabhu Bros 3There is no liability on the Electricity Board either under the statute or common law or equity to pay interest on security deposit 278 B 31There is no statutory provision which casts an obligation on the Board to pay interest on security deposit Model form of draft conditions of supply containing Clause 14 relating to interest on security deposit as found in Annexure VI traceable to Rule 27 of Indian Electricity Rules 1956 is applicable only to a licensee as defined in Section 2 4 of the Electricity Act Even for a licensee it is not compulsory to adopt the model condition of supply These is an option available to adopt the model conditions of supply with such modifications as the circumstances of each case require 259G H 260 A C 208 32Schedule VI has been framed in exercise of powers under Sections 57 and 57A In defining clear profit paragraph 2of clause XVII Item v makes a reference as interest on security deposits which is a part of expenditure properly incurred by the licensee From this it is impossible to hold that this clause imposes an obligation on the licensee to pay interest on security deposits All that would when is if interest is paid then it qualifies as an item of expenditure properly incurred This is the position with regard to licensee But this cannot apply to the Board which is not a licensee For the same reason Item L 1 c of Form IV of the Electricity Rules relating to interest paid and accrued on consumers security deposits is of no avail because that relates to the manner of keeping accounts by the licensee not being applicable to a Board Therefore there is nothing to indicate under the scheme of the Electricity Act or Schedule VI of the Supply Act that interest must be paid on the security deposit Accordingly the Division Bench of Rajasthan High Court has erred in holding that is applicable 260 F H 261 A B 33Section 42 of the has no application to a case where on account of a contractual term or a statutory provision payment of interest is not permitted A careful reading of Section 42 would disclose that it merely enlarges the category of cases mentioned in Section 41 Even otherwise there is nothing to indicate that Section 42 could override other statutory provisions or a contract between the parties No doubt Section 42 contains a non obstante clause But such a clause is restricted to the provisions of and cannot extend to other laws or a contract between the parties 261 F 6 Civil Special Appeal No 83 of 1987 decided on 30th July 1991 by a Division Bench of the Rajasthan High Court overruled 34The word interest would apply only to cases where there is a relationship of debtor and creditor A lender of money who allows the borrower to use certain funds deprives himself of the use of those funds He does so because he charges interest which may be described as a kind of rent for the use of the funds For example a bank or a lender lending out money on payment of interest In this case there is no relationship of debtor and creditor Accordingly the claim for 209 interest cannot be legally founded either on common law or equity 262 G 265 A Halshury s Vol 32 para 108 Discussing cases where interest is payable under common law para 109 Discussing cases where there is equitable rights to interest held inapplicable Bengal Nogpur Railway vs Ruttanji Ramji AIR 1939 PC 67 referred to 35The object of the deposit is to secure the payment of consumption charges These charges may vary depending upon the daily consumption depending on the level of supply The amount due by way of consumption charges would also be liable to he appropriated Therefore it is incorrect to state that the Board is a trustee The relationship between the Board and consumer is not that of a trustee and a beneficiary but a depositor and deposits This is not event case of a constructive trust under Section 90 of the Indian Trust Act since no advantage is gained by the Electricity Board in derogation of the rights of the consumer 1262 D F 4The clause not providing for interest on security deposit is neither arbitrary nor palpably unreasonable not even unconscionable for the following reasons aThe consumer made the security deposit in consideration of the performance of his obligation for obtaining the service which is essential to him b The electricity supply is made to the consumers on credit cThe billing time taken by the Board is to the advantage of the consumer dPublic revenues are blocked in generation transmission and distribution of electricity for the purpose of supply The Board pays interest on the loans borrowed by the Board This is in order to perform 210 public service On those payments made by the Board it gets no interest from the consumers e The Board needs back its blocked money to carry out public service with reasonable recompense f The Board is not essentially a commercial organisation to which the consumer has furnished the secu rity to earn interest thereon 269 F H 270 A C 41The argument that the Board is monopolistic in character and therefore the consumers have no other option but to enter contract appears to be misconceived The consumption security deposit whether or not it carries interest is a condition precedent for the supply of electric energy The scrutiny by the Court In determining the uncon stitutionality of a provision not providing for interest must be tested on the touchstone whether in imposing such a condition the Board has acted as a private trader and thereby shed off Its public utility character In imposing such a condition the Board has not acted as a private trader The nature of deposit has a rational relationship to the object which is Incorporated a condition of supply 266 A D Jagdamba Paper Industries Pvt Ltd vs Haryana State Electric in Board referred to 42Assuming that the contract Is an adhesion contract still it is not unconscionable Conditions and the terms of supply providing for non payment of interest is not so unconscionable as to shock the conscience of the Court 266 H Central Inland Water Transport Corporation vs Brojo Nath Ganguly Bihar State Electricity Board vs Green Rubber Industries 1990 1 SCC 731 referred to Farmsworth on Contracts 2nd Edn 319320 para 427 referred to Gillespie Brothers Ltd vs Roy Bowles Ltd 1973 1 A E R 193 211 GB Mahajan and Ors vs Jalalgaon Municipal Council and Ors cited 43In Jagdamba Papers the question of Interest on security was not raised before the Court Therefore the Court had no occasion to decide this issue of interest That part of the judgment is sub silentio 271 E 272 A C Jagdamba Paper Industries Pvt Ltd vs Haryana State Electricity Board explained and held inapplicable 44This Court never Intended to adjudicate upon the rate of interest or render a decision on that question Therefore it cannot be contended that the disposal of the Writ Petition though by a Bench of 3 Judges would be binding on a Bench of two Judges because it was entirely based on interlocutory order Therefore this Court is free to decide the question on Its merits 273 F 6 45The Division Bench of the Rajasthan High Court erred in striking down condition No 20 of the General Conditions of the Rajasthan Electricity Board as violative of Article 14 of the Constitution of India 271 D 46The rate of interest on security deposit cannot be equated with the rate of interest on the fixed deposit Firstly if the consumption charges are to be appropriated the moneys accrued by way of deposits cannot be held in fixed deposits Nor all deposits need carry Interest In every transaction Secondly the nature and character of the security deposit is essentially different from fixed deposit 270 D E 5It may be that the consumers of electricity where it is raw material would be prompt in their payment in their own interest On that basis it cannot be contended that they cannot be treated in the same way as defaulters The test in Court s considered opinion is whether in the general application of law there is any discrimination Merely because some of the consumers are prompt those isolated cases cannot render the provision unconstitutional 273 H 274 Al 212 The Collector of Customs Madras v Nathella Sampathu Chetty Vivian Joseph vs Municipal Corporation Bonmbay Fatehchand Himmatlal vs State of Maharashtra 19772 SCR 828 and B Banerjee vs Anita Pam 19752 SCR 774 referred to

ial Leave Petition C Nos 4304 06 of 1993 From the Judgment and Order dated 18121992 of the Calcutta High Court in Appeal from Original Order Nos and 106 of 1991 Panchugopal Bose in person for the Petitioner DP Gupta Solicitor General AK Sil and G joshi for the Respondent The Judgment of Court was delivered by K RAMASWAMY J These three Special Leave Petitions arise out of Arbitration Agreement said to be executed by the petitioner on May 27 1978 which provided that the petitioner had to execute the work within 9 months It is 363 his claim that while executing the work he sent the bills on July 12 1979 but payment was not made For the first time he sent notice on Nov 28 1989 to the respondent for reference to the arbitration On receipt thereof the respondent filed an arbitration suits in the Calcutta High Court under sections 5 12 and 33 of the for short the Act The learned Single Judge held that the claim was hopelessly barred by limitations There was no proof that the petitioner had sent any claim in July 1979 Since the Claim was made long after 10 years the arbitration cannot be proceeded with Accordingly finding that it to be an exceptional case for interference the learned Single Judge cancelled the arbitration clause 68 of the contract in matter Nos 1326 1364 and 136590 dated November 23 1990 On further appeals the division bench by its order dated December 18 1992 in Appeal Nos 10490 etc dismissed the appeals Thus these special leave petitions The contention of the petitioner appearing in person is that Clause 68 of the Contract provides for appointment of an arbitrator and when the petitioner has legally invoked clause 68 and issued notice to the respondent the respondent is duty bound to appoint an arbitrator and on its failure it is open to him to approach the Court for appropriate remedy under section 8 of the Act for appointment of an arbitrator The High Court scuttled this procedure in exercising the power under section 5 of the Act which is illegal and ultra vires He further contented that Section 5 has no application to the facts of this case We have heard also Shri DP Gupta the learned Solicitor General for the respondent The question for consideration is whether the High Court was justified in permitting the respondent to rescind the contract of Arbitration provided in Clause 68 of the Contract Undoubtedly Clause 68 provides reference to arbitration of all or any of the disputes or differences enumerated therein that have arisen between the parties at the instance of either party to the contract It empowers either party to issue notice calling upon the Engineer to refer the dispute or difference for arbitration In this case as found by the High Court that though the petitioner was said to have made the claim for payment for the first time in July 12 1979 Though there is no proof in that behalf and the respondent claimed that the petitioner had abandoned the contract even assuming that any claim was as a fact made in July 1979 and payment was not made the petitioner had not taken follow up action thereafter for well over 10 years It was open to him to avail Clause 68 of the contract seeking reference to the arbitration No such action was taken till November 28 1989 Immediately on receipt of the notice the respondent invoked the jurisdiction of the Calcutta High Court under sections 5 and 12 at 330 of the Act Section 5 provides thus 364 The authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court unless a contrary intention is expressed in the arbitration agreement Therefore Section 5 postulates that there must be an order of appointing an arbitrator or umpire and thereafter the same cannot be revoked except with the leave of the Court unless a contrary intention is expressed in the agreement Exfacie it would appear that appointment of an arbitrator is a condition to avail the remedy under s5 Section 12 accords consequential power which postulates that the power of the Court where Arbitrator is removed or his authority revoked Subsection 2 says that Where the authority of an arbitrator or arbitrators or an umpire is revoked by leave of the Court or where the Court removes an umpire who has entered on the reference or a sole arbitrator or all the arbitrators the Court may on the application of any party to the arbitration agreement either border that the arbitration agreement shall cease to have effect with respect to the difference referred Therefore by a conjoint reading of sections 5 and 12 2 b it is clear that the court has been given power in given circumstances to grant leave to a contracting party to have the arbitrator or umpire removed and the arbitration agreement entered into with other contracting part revoked Where the Court grants such authority consequentially arbitration agreement shall cease to have effect with respect to the difference or dispute It flows therefrom that there exist implied power vested in the court permitting a party to avail the remedy under sections 5 12 to rescind the arbitration agreement In all cases it is not a condition precedent that there should in the first instance be an order appointing an arbitrator or he should enter upon reference for adjudication In given circumstances and the factual background the court may be justified to exercise the power under ss5 and 12 The question then is under what circumstances such power would be exercised This Court in Ms Amarch and Lalit Kumar vs Shree Ambica Jute Mills Ltd at 969 held thus In exercising its discretion cautiously and sparingly the Court has no doubt kept these circumstances in view and consider that the parties should not be relieved from a tribunal they have chosen because they fear that the arbitrator s decision may go against them The grounds on which leave to revoke may be given have been put under five heads 365 1 Excess or refusal of jurisdiction by arbitrator 2 Misconduct of arbitrator 3 Disqualification of arbitrator 4 Charges of Fraud and 5 Exceptional cases Thus it could be seen that the Court has the power and jurisdiction under sections 5 and 12 to grant leave to the applicant in exceptional circumstances to revoke the contract of arbitration The court should exercise the power sparingly cautiously and with circumspection to permit a party to the contract of a arbitration voluntarily entered into to relieve the party from dispute or difference and to order that the arbitration agreement shall cease to have effect in respect of the dispute or difference In this case we have seen that even assuming that the petitioner had putforward his claim in July 1979 and the respondent had not acted thereon till November 28 1989 for long 10 years he did not move his little finger to approach the Engineer and later the Court For the first time on November 28 1989 he issued notice to the respondent to refer the case for arbitration Clause 68 of the Contract provides that when any disputes or differences has arisen he should approach the Engineer in the first instance seeking reference of it to an arbitration and if the Engineer refuses to act upon or omits to refer the dispute to the arbitration within 15 days from the date of the receipt of notice then it is open to him to approach a Civil Court for reference to the arbitration On his own showing cause of arbitration has arisen in July 1979 the petitioner did not take any action from then On the other hand when notice was issued in November 1989 the respondent immediately approached the Court and sought its leave to rescind the agreement explaining the circumstances The Court exercised the jurisdiction in permitting the respondent to revoke the arbitration agreement The question then is whether it is justified Section 37 1 of the Act provides that all the provisions of the Indian Limitation Act 1908 since amended Act came into force in 1963 shall apply to arbitrations as they apply to the proceedings in court Sub section 2 employing non obstenti clause says that notwithstanding any term in an arbitration agreement to the effect that no cause of action shall accrue in respect of any matter required by the agreement to be referred until an award is made under the agreement a cause of action shall for the purpose of limitation be deemed to have accrued in respect of any such matter at the time when it would have accrued but for that term in the agreement Sub section 3 thereof states that for the purposes of this section and of the Indian Limitation Act 1908 an arbitration shall be 366 deemed to be commenced when one party to the arbitration agreement serves on the other party thereto a notice requiring the appointment of an arbitrator or where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement requiring that the difference be submitted to the person so named or designated Sub sections 4 and 5 are omitted as being not material It would therefore be clear that the provisions of the Limitation Act would apply to arbitrations and notwithstanding any term in the contract to the contrary cause of arbitration for the purpose of limitation shall be deemed to have accrued to the party in respect of any such matter at the time when it should have accrued but for the contract Cause of arbitration shall be deemed to have commenced when one party serves the notice on the other party requiring the appointment of an arbitrator The question is when the cause of arbitration arises in the absence of issuance of a notice or omits to issue for long time or contract to the contrary It is stated in Robertson s History that honest men dread arbitration more than they dread law suits The arbitrations differ from legal proceedings proper only in the choice of tribunal and all ordinary defences legally permissible are available to the Parties Parties to an arbitration may voluntarily determine among themselves the procedure to be followed including the constitution of the arbitral tribunal to adjudicate the dispute or differences arising from the contract including the power of the arbitrator They could also contract restricting the limitation for adjudication Subject to the above section 37 of the Act regulates the limitation for the arbitration proceedings In Ram Dutt Ramkissendass vs Sassoon ED Co 1929 56 Indian Appeals 128 the Privy Council held that although it is indisputable that in a modern arbitration the principles of equity must be applied just as they would now be applied in a court of law since upon a special case for the opinion of the court under Sec 7 if the or the Judicature Act 1925 s94 replacing sec 19 of the the court is and has long been bound to apply equitable rules and relief It is difficult to see how the equitable view of the applicability of Limitation Act 1908 to a case of debt can be excluded in a legal arbitration Although the Limitation Act does not in terms apply to arbitrations they their Lordships of the Judicial Committee think that in mercantile reference of the kind in question it is an implied term of the contract that the arbitrator must decide the dispute according to the existing law of contract and that every defence which would have been open in a court of law can be equally proponed for the arbitrator s decision unless the parties have agreed which is not suggested here to exclude that defence Were it otherwise a claim for breach of contract containing a reference cause could be brought at any time it might be 20 or 30 years after the cause of action had arisen although the legislature has prescribed a limit of three years for the enforcement of such a claim in any application that 367 might be made to the law courts This ratio was approved by House of Lords in Naamlooze Vennootschap Handels En Transport Maatschappij Vulcaan vs AS J Ludwig Mowinckels Rederi 19382 All ER 152 Lord Maugham LC speaking for the unanimous Court held that in considering whether the Limitation Act would apply to arbitration pre statutory arbitrations it was held that this seems to be a good reason for holding that there may well be cases where the object of both parties to the arbitration might be to determine whether a sum was due though possible or certainly not recoverable by legal Proceedings We are however here concerned with an arbitration in which legal rights are being advanced or denied If the defence of the statute is to be deemed in admissible it would seem that the claims of one party or the other might be put forward long after the persons who could give useful evidence had died and the most relevant documents had been destroyed If the legal defence were to be excluded it was in this agreement that one would expect to find such a provision The matter does not rest cause we have to consider how far the suggested elimination of defences available at law or in equity must logically be held to extent in other arbitrations If the party defending may not rely on the Statute of Limitations can he rely on the Statute of Frauds or the Act partially replacing it Could he rely in a commercial arbitration on the Garming Act A number of like questions might be asked It is indisputable that in a modem arbitration the principles of equity must be applied just as they would now be applied in a court of law In the concluding findings it is said thus In the circumstances of this case as above stated it is I think impossible to come to the conclusion that there was an implied agreement between the parties to exclude any defence under any Statute of Limitations In the absence of such an implied agreement the Limitation Act was open to the respondents and the consequence must follow that the arbitrator was acting rightly in admitting the defence under the statute In Pegler vs Railway Executive 1948 Appeal Cases 332 at 338 House of Lords held that just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued so in the case of arbitrations the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued While accepting the interpretation put up by Atkinson J as he then was in the judgment under appeal learned Law Lords accepted the conclusion of Atkinson in the Language thus the cause of arbitration corresponding to the cause of action in litigation treating a cause of arbitration in the same way as a cause of action would be treated if the proceeding were in a court of law 368 In West Riding of Yorkshirs Country Council vs Huddersfield Corporation the Queens Bench Division Lord Goddard C J as he then was held that the Limitation Act applies to arbitrations as it applies to actions in the High Court and the making after a claim has become statute barred of a submission of it to arbitration does not prevent the statute of limitation being pleaded Russell on Arbitration 19th Edition reiterates the above proposition At page 4 it was further stated that the parties to an arbitration agreement may provide therein if they wish that an arbitration must be commenced within a shorter period than that allowed by statute but the court then has power to enlarge the time so agreed The period of limitation for commencing an arbitration runs from the date on which the cause of arbitration accrued that is to say from the date when the claimant first acquired either a right of action or a right to require that an arbitration takes place upon the dispute concerned Therefore the period of limitation for the commencement of an arbitration runs from the date on which had there been no arbitration clause the cause of action would have accrued Just as in the case of civil actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued so in the case of arbitrations the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued In Russell on Arbitration at pages 72 and 73 it is stated thus Disputes under a contract may also be removed in effect from the jurisdiction of the court by including an arbitration clause in the contract providing that any arbitration under it must be commenced within a certain time or not at all and going on to provide that if an arbitration is not so commenced the claim concerned shall be barred Such provisions are not necessarily found together Thus the contract may limit the time for arbitration without barring the claim depriving a party who is out of time of his right to claim arbitration but leaving open a right of action in the courts Or it may make compliance with a time limit a condition of any claim without limiting the operation of the arbitration clause leaving aparty who is out of time with the right to claim arbitration but so that it is a defence in the arbitration that the claim is out of time and barred 369 Nor since the provisions concerned are essentially separate is there anything to prevent the party relying on the limitation clause waiving his objection to arbitration whilst still relying on the clause as barring the claim At page 80 it is stated thus An extension of time is not automatic and it is only granted if undue hardship would otherwise be caused Not all hardship however is undue hardship it may be proper that hardship caused to aparty by his own default should be borne by him and not transferred to the other party by allowing a claim to be reopened after it has become barred The mere fact that a claim was barred could not be held to be undue hardship The Law of Arbitration by Justice Bachawat in Chapter XXXVII at p549 it is stated that just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date when the claim accrues as also in the case of arbitrations the claim is not to be put forward after the expiration of a specified number of years from the date when the claim accrues For the purpose of section 37 1 action and cause of action in the Limitation Act should be construed as arbitration and cause of arbitration The cause of arbitration therefore arises when the claimant becomes entitled to raise the question ie when the claimant acquires the right to require arbitration The limitation would run from the date when cause of arbitration would have accrued but for the agreement Arbitration implies to charter out timous commencement of arbitration availing the arbitral agreement as soon as difference or dispute has arisen Delay defeats justice and equity aid the promptitude and resultant consequences Defaulting party should bear the hardship and should not transmit the hardship to the other party after the claim in the cause of arbitration was allowed to be barred The question therefore as posed earlier is whether the court would be justified to permit a contracting party to rescind the contract or the court can revoke the authority to refer the disputes or differences to arbitration Justice Bachawat in his Law of Arbitration at p 552 stated that in an appropriate case leave should be given to revoke the authority of the arbitrator It was also stated that an ordinary submission without special stipulation limiting or conditioning the functions of the arbitrator carried with it the implication that the arbitrator should give effect to all legal defences such as that of limitation Accordingly the arbitrator was entitled 370 and bound to apply the law of limitation Section 3 of the Limitation Act applied by way of analogy to arbitration proceedings and like interpretation was given to section 14 of the Limitation Act The Proceedings before the arbitration are like civil proceedings before the court within the meaning of section 14 of the Limitation Act By consent the parties have substituted the arbitrator for a court of law to arbiter their disputes or differences It is therefore open to the parties to plead in the proceedings before him of limitation as a defence In Mustiu and Boyd s Commercial Arbitration 1982 Edition under the heading Hopeless Claim in Chapter 31 at page 436 it is stated thus There is no undoubtedly jurisdiction to interfere by way of injunction to prevent the respondent from being harassed by claim which can never lead to valid award for example in cases where claim is brought in respect of the alleged Arbitration agreement which does not really exist or which has ceased to exist So also where the dispute lies outside the scope of Arbitration agreement The case on hand is clearly and undoubtedly hopelessly barred claim as the petitioner by his conduct slept over his right for more than 10 years Statutory arbitrations stand apart In these circumstances it is an exceptional case and the courts below have justifiably exercised their discretionary power and jurisdiction under sections 5 and 122 b to permit the respondent to rescind the arbitration agreement and declared that the arbitration agreement shall cease to have effect with respect to the difference or dispute referred to in the notice of the petitioner and relieved the parties from the arbitration agreement The Special Leave Petitions are accordingly dismissed without costs UR Appeal dismissed

The name of the respondent auction purchaser was entered as raiyat in respect of certain lands on the basis of auction sales dated 6111954 and 3 12 1954 in execution of the decree for arrears of rent in respect thereof In 1970 the Assistant Settlement Officer initiated proceedings under section 442a of the West Bengal Estate Acquisition Act 1953 for revision of the record of rights in respect of the lands taking the view that the rent execution sales being effected after 161954 were invalid under section 5B of the Act Accordingly he ordered correction of the record of rights by substituting the names of the original raiyats for the auction purchaser The respondent filed appeals which were allowed by the appellate authority holding that section 5B of the Act had no application to raiyati interests The State filed writ petition under Article 227 of the Constitution before the 344 High Court The Special Bench of the High Court confirming the decision of the appellate authority held that the effective date in section 5B of the Act in respect of sale of raiyati and under raiyati holdings under the relevant statutes mentioned therein was 161954 that section 5B did not operate as a bar to execution of decree for arrears of rent as a money decree against raiyati or under raiyati interests and section 168A 1 of the Bengal Tenancy Act 1885 was impliedly repealed by the vesting of the interests of the intermediary including raiyats and under raiyats in the State and that the initiation of the proceedings unders 442aof the Act was without jurisdiction The State filled the appeals by special leave The State challenged the judgment of the High Court on the ground that the High Court was not right in holding thats 5B of the Act would not operate as a bar against the sale of raiyati or under raiyati interests if the execution of the rent decree is treated as an execution of money decree under the Code of Civil Procedure and that the sale made pursuant to the execution of the money decree under the Code even though for rent and of the raiyati or under raiyati interest holder would not he a sale under the statutes men tioned in section 5B including the Tenancy Act Allowing the appeals this Court HELD11 The proceedings initiated by the Assistant Settlement Officer to revise the entries in the record of rights made in favour of the respondent auction purchaser and the orders passed by him recording the names of the former raiyats as raiyats with possession of the lands and deleting the name of the auction purchaser were valid as the raiyati interests were sold after 16 1954 in execution of the decree for arrears of rent in respect of the lands in question 360 C E 12By virtue of the notification issued under section 49 section 52 makes the provisions of sections 4 5 5A and 5B among others of Chapter 11 of the Act applicable to the raiyati and the under raiyati interests on the issuance of such notification 351 H 13In the instant case the Notification No 680 dated 941956 issued under section 49 was brought into force with effect from 1041956 It was not given retrospective effect from 1541955 The effect of this notification was that by 345 virtue of section 4 the intermediary interests stood vested in the State at the latest from 1541955 while the raiyati and under raiyati interests stood vested in the State with effect from 1041956 The restriction on transfer of the said interests however came into effect retrospectively on or from 161954 by virtue of section 5B since that date is mentioned in the section itself 352 AB 14 In view of section 5B of the Act no estate tenure or under tenure including raiyati and under raiyati interests could be sold under the statutes mentioned in s 5B including the Tenancy Act on and after 161954 and a sale after that date under any of those statutes would he void and have no effect under that section 352 C 15 The present auction sales being of raiyati interests and effected on 6111954and 3121954 in execution of the decrees for the arrears of rent under the Tenancy Act were obviously invalid 352 D 21 The decree pursuant to the suit under the Tenancy Act cannot he executed except under the provisions of that Act There cannot therefore be sale of the property in question pursuant to such decree under the provisions of the Code of Civil Procedure 358 B 22 The intention of the legislature in enacting section 5B was to prevent sales of the intermediary interests after 161954 In view of the provisions of the Tenancy Act the said interests could be sold only under and in accordance with the provisions of that Act The sale of such interests in the land pursuant to a decree for arrears of rent in respect of that land could not therefore he made under the Code of Civil Procedure 360 D 23 The Bengal Tenancy Act 1885 is a self contained code governing the relations between the landlord and the tenant and for resolution of their disputes The Act incorporates certain provisions of the Code of Civil Procedure in toto while others with modification The Tenancy Act by implication prevents any suit between landlord and tenant to be filed otherwise than under its provisions All proceedings in the suit filed under the Bengal Tenancy Act from its inception to the satisfaction of the decree are to be governed by its provisions and the provisions of the Code are applicable to such proceedings only to the extent and subject to the conditions stated therein The Code as such is not applicable to the proceedings or to any part of it and hence no part of the proceedings can be prosecuted under the Code Even if simple money decree is obtained for the arrears of rent no interest of 346 the tenant can he brought to sale in execution of such decree except under Abe provisions of the Tenancy Act In other words no such interest can be sold under the Code and independently of the Tenancy Act 357 H 358 A C 24 Besides Section 168A of the Tenancy Act removes the doubt if any and provides the procedure for attachment and sale of tenure or holding for arrears of rent due thereon and liability of purchasers thereof The nonobstante clause of the Section excludes all other provisions of the Tenancy Act itself as well as of any other law and the provisions of any contract as well Clause a of the Section states that a decree for arrears of rent whether having the effect of a rent decree or a money decree or even a certificate for such arrears under the Bengal public Demands Recovery Act 1930 shall not be executed by the attachment and sale of any movable or immovable property other than the entire tenure or holding to which the decree or certificate relates That provision will not apply only if the term of the tenure has expired before an application is made for the execution of such decree or certificate When the entire tenure or holding is purchased in execution of a decree for arrears of rent in respect thereof clause b of section 168A 1 provides that the purchaser shall pay to the decree holder the deficiency if any between the purchase price and the amount due under the decree together with the cost incurred for the auction sale and also the rent which may have become due between the date of the institution of the suit and the date of confirmation of the sale This provision in inconsistent with the provisions of the Code 358 C F 25 The High Court was not right in holding that the sales can be treated as being pursuant to a money decree and therefore under the Code and independently of the Tenancy Act The High Court unfortunately missed the vital fact that whether it is a money decree or rent decree the entire raiyati interests of the judgement debtor in the land in question had to be sold under Section 168A of the Tenant Act but could not be sold in view of the bar imposed by Section 5B of the Act The bar cannot be over come by treating the sale under the Code to circumvent the provisions of the Tenancy Act and in particular of Section 168A of that Act 359 H 360 A B 26 After the intermediary interests vest in the State they cannot be brought to sale and the remedy of the decree holder is to proceed against other property of the judgment debtor if any In that event Section 168A would not come in the picture 358 G H

Appeal No 236 of 1954 Appeal from the judgment and order dated October 91953 of the Patna High Court in Misc Judicial Case No 181 of 1953 Mahabir Prasad Advocate General for the State of Bihar Bhagwat Prasad and section P Varma for the appellants P R Das A C Roy and R R Biswas for the respondent April 15 The Judgment of the Court was delivered by 79 615 section K DAS J This is an appeal from the judgment and order of the High Court of Patna dated October 9 1953 in Miscellaneous Judicial Case No 181 of 1953 of that Court It relates to a temple commonly known as the Baidyanath temple situate in the town of Deoghar within the limits of Santal Parganas in the State of Bihar For the purposes of this appeal it will be necessary to refer to some earlier litigation about this temple The history of this temple it is not disputed goes back to remote antiquity According to Hindu tradition referred to in the Siva Purana and Padma Purana extracts from which with translations are given by Dr Rajendra Lal Mitra in his paper on the Temples of Deoghar see Journal of the Asiatic Society of Bengal Part 1 1883 quoted in the Bihar District Gazetteer relating to Santal Parganas 1938 edition pp 373 376 the origin of the temple is traced to the Treta Yuga which was the second age of the world by Hindu mythology Side by side with Hindu tradition there is a Santal tradition of the origin of the temple given by Sir William Hunter see the Annals of Rural Bengal p 191 Satistical Account of Bengal Vol XIV p 323 But these materials afford no evidence as to when and by whom the idol was established or the temple was built The temple sheltering the lingam and dedicated to Mahadeva stands in a stone paved quadrangular courtyard The courtyard contains eleven other temples smaller in size and of less importance than that of Baidyanath Pilgrims visit the temples in large numbers and make offerings of flowers and money in silver or gold rich people offer horses cattle palanquins gold ornaments and other valuables and sometimes rent free land in support of the daily worship There is a high or chief priest Sardar Panda who it appears used to pay a fixed rent to the Rajas of Birbhum during the Muhammadan regime and the administration of the temple was then left entirely in the hands of the high priest It may be here stated that about 300 families of pandas who belong to a branch of Maithil Brahmins were attached to the 627 temple and earned their livelihood by assisting pilgrims in performing the various ceremonies connected with the worship of the God When the British rule began it was decided to take over the management of the temple and with this object an establishment of priests collectors and watchmen was organised in 1787 at Government expense The revenue soon fell off as the chief priest beset the avenues to the tem ples with emissaries who induced the pilgrims to make their offerings before approaching the shrine See the District Gazetteer ibid p 383 In 1791 Government relinquished its claim to a share of the offerings and entrusted the management of the temple to the head priest on his executing an agreement to keep the temples in repair and to perform all the usual ceremonies This agreement was entered into by Ram Dutt the ancestor of the present respondent then high priest of the temple and Mr Keating who was then Collector of the district According to Mr Keating the income of the temple in 1791 consisted of the offerings of the proceeds of 32 villages and 108 bighas of land which he estimated at Rs 2000 a year some years later the total income was estimated at Rs 25000 a year Under the system introduced by the agreement of 1791 the mismanagement of the temple was a source of constant complaint the temple and ghats were frequently out of repair and the high priest was charged with alienating villages from the temple and treating his situation as a means of enriching himself and his family On the death of the high priest in 1820 a dispute over the succession arose between an uncle and a nephew The nephew Nityanand was eventually appointed but neglected to carry out the terms of his appointment Finally Nityanand was charged with malversation of the funds and the uncle Sarbanand was appointed in his stead in 1823 There was a faction which was opposed to Sarbanand s retention in office and asked for Government interference in the internal management of the temple In 1835 Government declined all interference in the matter and the parties were left to have recourse to the established courts of law Sarbanand 628 died in 1837 and Iswaranund Ojha son of Sarbanand Ojha was subsequently elected Sardar Panda Iswaranund was succeeded by his grand son Sailajanund Ojha There were however frequent disputes between the high priest and the pandas regarding the control of the temple and in 1897 a suit was filed under section 539 now section 92 of the Code of Civil Procedure in the Court of the District Judge of Burdwan This was Suit No 18 of 1897 which was decided by the learned Additional District Judge of Burdwan by his judgment dated July 4 1901 Sailajanund Ojha was dismissed by the order of the court as he by his conduct and behavior and by causing loss to the Debutter properties rendered himself unfit and disqualified to hold the post of Sardar Panda and trustee of the temple of Baidyanath It was further ordered by the learned Additional District Judge in the decree granted by him that some fit person be elected as Sardar Panda by the pandas of the temple and that the affairs of the temple be managed under a scheme which was framed by the learned Additional District Judge and formed a part of the decree Under this scheme three persons were to be appointed to look after the temple and its properties and for a proper administration of the same One of these three persons was to be elected from amongst the descendants of Ram Dutt Jha After this Umesbanund Dutt Jha second son of Iswaranund Ojha was elected Sardar Panda On the death of Umeshanund Dutt Jha Bhabapritananda Ojha who was the petitioner in the High Court and is now respondent before us was appointed Sardar Panda Bhabapritananda is the grand son of Sailajanund Ojha and we shall hereinafter refer to him as the respondent The scheme which was framed as a result of the decision in Civil Suit No 18 of 1897 was confirmed by the Calcutta High Court and the decision of the High Court is reported in Shailajananda Dut Jha vs Umeshanunda Dut Jha 1 This scheme was modified in a subsequent litigation in 1909 when one of the members of the committee applied to the District Judge 1 19O5 2 CLJ 460 629 for a modification of the scheme The application was first dismissed but the matter was taken to the Calcutta High Court and on September 8 1910 that Court on the authority of the decision of the Judicial Committee in Prayag Doss vs Tirumala 1 and with the consent of counsel on both sides directed the insertion of two clauses in the decree by one of these clauses liberty was reserved to any person interested to apply to the District Court of Burdwan with reference to the carrying out of the directions of the scheme and by the other clause liberty was reserved to any person interested to apply from time to time to the Calcutta High Court for any modification of the scheme that might appear necessary or convenient Under these two clauses the members of the committee subsequently applied to the District Judge of Burdwan that certain directions might be given to the high priest the high priest opposed the application on the ground that it was in essence an application for modification of the scheme and could be entertained only by the High Court The learned District Judge overruled this objection The matter was again taken to the Calcutta High Court and that Court directed 1 that the committee must prepare ail annual budget of the income and expenditure 2 that provision must be made for quarterly audit and annual inspection of the accounts 3 that provision should be made for joint control of the temple funds after they have been realised 4 that there must be no undue interference on the part of the committee with the high priest in the internal management of the temple and 5 that no one who has any pecuniary interest in the temple properties or is a creditor of the endowment should serve on the committee The High Court further directed that clauses embodying the aforesaid five directions should be inserted in the scheme This decision of the High Court is reported in Umeshananda Dutta Jha vs Sir Ravaneswar Prasad Singh 2 We now come to more recent events which gave rise to Miscellaneous Judicial Case No 181 of 1953 in the 1 196 ILR 2 630 Patna High Court The Bihar Hindu Religious Trusts Act 1950 Bihar I of 1951 hereinafter referred to as the Act received the President s assent on February 21 1951 and came into force on August 15 1951 This Act established the Bihar State Board of Religious Trusts to discharge the functions assigned to the Board by the Act Sometime in August 1952 the President of the Bihar State Board of Religious Trusts acting under section 59 of the Act asked the respondent to furnish a statement in respect of the Baidyanath temple and the properties appertaining thereto The respondent wrote back to say that the administration of the temple and its properties was in the hands of a committee constituted under a scheme made by the District Judge of Burdwan and approved by the Calcutta High Court and these Courts being outside the jurisdiction of the Bihar Legislature the Act did not apply to the temple and the respondent was not in a position to carry out the directions of the President of the Bihar State Board of Religious Trusts which might be in conflict with those of the Calcutta High Court The Board however proceeded to assess and demand payment of Rs 1684 6 6 as fee payable by the respondent in respect of the Baidyanath temple to it under section 70 of the Act The respondent then made an application under article 226 of the Constitution to the High Court of Patna which application gave rise to Miscellaneous Judicial Case No 181 of 1953 On various grounds stated therein the respondent con tended that the Act was ultra vires the Bihar Legislature he further contended that even if intra vires the Act properly construed did not apply to the Baidyanath temple and the properties appertaining thereto by reason of the circumstance that the said temple and its properties were administered under a scheme made by the court of the District Judge of Burdwan and approved by the Calcutta High Court both of which are situate outside the territorial limits of Bihar The State of Bihar the Bihar State Board of Reli gious Trusts and the President thereof now appellants before us contested the application Relying on the 631 principles 1 that there should be as far as possible no conflict or clash of jurisdiction between two equally competent authorities and 2 that no intention to exceed its own jurisdiction can be imputed to the Bihar Legislature and of two possible constructions of the Act the one that would make it intra vires should be preferred the High Court came to the conclusion that the expression religious trust as defined in section 2 1 of the Act must be construed not in the plain and grammatical sense but must be cut down so as to exclude such religious trusts as are administered under a scheme made by a court situate outside the territorial limits of Bihar and therefore the Act did not apply to the Baidyanath temple and the President of the Bihar State Board of Religious Trusts constituted under the Act had no jurisdiction to take any proceedings against the respondent under the provisions of the Act Accordingly the High Court allowed the application of the respondent quashed the proceedings taken against him by the Bihar State Board of Religious Trusts and issued a writ prohibiting the said Board from taking any further proceedings against the respondent under any of the provisions of the Act The State of Bihar the Bihar State Board of Religious Trusts and its President obtained a certificate under article 132 of the Constitution from the High Court and the present appeal has been filed by them in pursuance of that certificate We shall hereinafter refer to them compendiously as the appellants We have had before us a number of appeals in which the validity of the Act has been challenged on several grounds and in some of these appeals further questions were raised as to the application of the Act to private religious trusts and even to public trusts some properties of which are situate outside the State of Bihar These appeals we put in four categories They have been heard one after another and though we are delivering judgment in each category separate ly it has been made clear that the reasons for the decision on points which are common to all or some of the appeals need not be repeated in each judgment In Civil Appeals Nos 225 226 228 229 and 248 of 632 1955 1 which fall in the first category we have con sidered the questions if the Act is bad on the ground that its several provisions infringe the appellants fundamental rights guaranteed under article 14 article 19 1 f andor articles 25 26 and 27 of the Constitution or on the ground that it imposes an unauthorised tax We have given reasons for our conclusion that the Act is not bad on any of the aforesaid grounds These reasons we do not wish to repeat here they govern the present appeal also in so far as the Act is challenged on the self same grounds In Civil Appeal No 343 of 1955 2 which is in the second category we have dealt at length with the definition clause of the expression religious trust in the context of other provisions of the Act and have come to the conclusion that the Act does not apply to private trusts In the appeal under consideration in this judgment the admitted position is that the Baidyanath temple is a public trust so it was held in the earlier litigation to which we have already referred and the scheme was formulated on that footing in Suit No 18 of 1897 In Civil Appeal No 230 of 1955 3 which is the third category we have considered the question if the Act suffers from the vice of extra territoriality by reason of the provisions in section 3 which says that the Act shall apply to all religious trusts whether created before or after the commencement of the Act any part of the property of which is situate in the State of Bihar We have held therein that two conditions must be fulfilled for the application of the Act a the religious trust or institution itself must be in Bihar and b part of its property must be situated in the State of Bihar Those two conditions are fulfilled in this case the Baidyanath temple is in Bihar and it is admitted that the properties belonging to the temple lie mainly in Bihar though there are some properties in the districts of Burdwan Murshidabad and Birbhum in the present State of West Bengal Now we come to the points which have been 1 Mahant Moti Das vs section P Sahi see p 563 ante 2 Mahant Ram Saroop Dasji vs section P Sahi see P 583 ante 3 State of Bihar vs Charusila Dasi see p 601 ante 633 specially raised in this appeal which is in the fourth or last category On behalf of the appellants it has been very strongly contended that the High Court was in error in relying on the doctrine of comity of jurisdictions and cutting down the scope of the Act on such a doctrine It has been submitted that the doctrine of comity of jurisdictions has no application to the facts of the present case and there is no possibility of any conflict or clash of jurisdiction between two equally competent authorities It is pointed out that item 28 of the Concurrent List in the Seventh Schedule to the Constitution of India is Charities and charitable institutions charitable and religious endowments and religious institutions It is argued that the Bihar Legislature has therefore full legislative competence to enact the statute in question and it has been submitted that if the Act does not suffer from the vice of extra territoriality then it is good and all courts must obey it Under section 4 5 of the Act section 92 of the Code of Civil Procedure 1908 has ceased to apply to any religious trust as defined in the Act therefore no action under section 92 Code of Civil Procedure can be taken after the commencement of the Act in respect of religious trusty in Bihar which are governed by the Act and there can be no question of any conflict of jurisdiction in respect of such trusts as between the Bihar State Board of Religious Trusts and a court in Bihar on one side and the courts outside the State of Bihar on the other On these submissions learned counsel for the appellants has argued that the real question for decision is if the Act or any of its provisions suffer from the vice of extra territoriality and if that question is answered in favour of the appellants then the High Court was in error in cutting down the scope and ambit of the Act by invoking the doctrine of comity of Jurisdictions At this stage it is convenient to set out in brief the argument which Mr P R Das learned counsel for the respondent has advanced in support of the judgment of the High Court In one part of its judgment the High Court has referred to the principle that every 80 634 statute should be so interpreted and applied in so far as its language admits as not to be inconsistent with the comity of nations or with the established rules of international law and has referred to certain decisions in support of that principle Mr P R Das has frankly conceded before us that no question of any inconsistency with the comity of nations or with the established rules of international law arises in the present case and he does not contend that the Act or any of its provisions violate any established rule of international law Therefore it is unnecessary to consider this part of the judgment of the High Court Before us Mr P R Das has developed his argument in the following way He has first submitted that Suit No 18 of 1897 which was instituted in the court of the District Judge of Burdwan in respect of the Baidyanath temple and its properties is still pending and the administration of the temple and its properties is being carried on by a committee appointed under a scheme made by the District Judge of Burdwan and later approved and modified by the Calcutta High Court therefore the District Judge of Burdwan and the Calcutta High Court are in full seizin of the trust and its properties and the Bihar Legislature cannot take away or interfere with the jurisdiction of either the District Judge of Burdwan or the Calcutta High Court In this connection he has referred to cl 39 of the Letters Patent of the Patna High Court particularly to item a of the first proviso thereto That clause is in these terms And We do further ordain that the jurisdiction of the High Court of Judicature at Fort William in Bengal in any matter in which jurisdiction is by these presents given to the High Court of Judicature at Patna shall cease from the date of the publication of these presents and that all proceedings pending in the former Court on that date in reference to any such matter shall be transferred to the latter Court Provided first that the High Court of Judicature at Fort William in Bengal shall continue to exercise jurisdiction a in all proceedings pending in that Court on 635 the date of the publication of these presents in which any decree or order other than an order of an interlocutory nature has been passed or made by that Court or in which the validity of any such decree or order is directly in question and b in all proceedings not being proceedings referred to in paragraph a of this clause pending in presents under the 13th 15th 22nd 23rd 24th 25th presents under the 13th 15th 22nd 23rd 24th 25th 26th 27th 28th 29th 32nd 33rd 34th or 35th clause of the Letters Patent bearing date at Westminster the Twenty eighth day of December in the year of Our Lord One thousand eight hundred and sixty five relating to that Court and c in all proceedings instituted in that Court on or after the date of the publication of these presents with reference to any decree or order passed or made by that Court Provided secondly that if any question arises as to whether any case is covered by the first proviso to this clause the matter shall be referred to the Chief Justice of the High Court of Judicature at Fort William in Bengal and his decision shall be final His argument is that the scheme made by the District Judge of Burdwan and later approved by the Calcutta High Court can be modified only by the Calcutta High Court and that High Court continues to exercise jurisdiction in respect of the scheme under item a of the first proviso to clause 39 referred to above and cl 41 of the Letters Patent does not empower the Bihar Legislature to amend any of the clauses of the Letters Patent He has also submitted that on February 9 1917 the Calcutta High Court decided that any application for enforcement of the scheme would lie to the District Judge of Burdwan and not to the Deputy Commissioner of Dumka It may be stated here that Burdwan is in the State of West Bengal and Dumka in the State of Bihar Mr P R Das has contended that in so far as the provisions of the Act interfere with the jurisdiction of courts outside Bihar they have extra territorial operation and must be held to be bad 636 on that ground because under article 245 of the Constitution the Bihar Legislature may make laws for the whole or any part of the State of Bihar but it cannot make any law which will have extra territorial operation He has drawn our attention to the provisions of sections 3 4 5 and 28 of the Act and has laid particular emphasis on the provisions of section 29 of the Act which provisions according to him have extra territorial operation Having set out in some detail the arguments which have been advanced before us on behalf of the appellants and the respondent we proceed now to consider them on merits We agree with learned counsel for the parties that no question arises in this case of any conflict or inconsistency with the doctrine of comity of nations or with any established rule of international law The question which really arises for decision is if any of the provisions of the Act have extra territorial operation This question has two aspects First there is section 3 which says inter alia that the Act shall apply to all religious trusts any part of the property of which is situated in the State of Bihar The argument is that the Bihar Legislature has no power to legislate about trust property which is outside the territorial limits of Bihar and section 3 of the Act in so far as it seeks to operate on trust property outside Bihar makes the Act bad on the ground of extra territorial operation This part of the argument has been fully dealt with and rejected in the decision relating to the Charusila Trust Civil Appeal No 230 of 1955 1 The second facet of the argument is what Mr P R Das has specially emphasised before us in this appeal His argument in substance is that the Act by some of its provisions seeks to interfere with the jurisdiction of courts which are outside Bihar and this in effect is the vice of extra territorial operation from which according to him the Act suffers We are unable to agree with him in this contention Section 3 we have already referred to Sub section 5 of section 4 states inter alia that section 92 of the Code of Civil Procedure 1908 shall not apply to any religious trust 1 State of Bihar vs Charusila Dasi see p 601 ante 637 in the State of Bihar as defined in the Act We have considered the effect of this sub section in the decision relating to the Charusila Trust ibid and have held that the Act applies when the trust itself temple or deity or math is situate in Bihar and also some of its property is in Bihar We have pointed out therein that the trust being situatedin Bihar that State has legislative power over it and over its trustees and their servants or agents who must be in Bihar to administer the trust therefore there is really no question of the Act having extra territorial operation In our opinion this reasoning is equally valid in respect of the argument of Mr P R Das If as we have held it is open to the Bihar Legislature to legislate in respect of relgious trusts situate in Bihar then that Legislature can make a law which says as in sub section 5 of section 4 of the Act that section 92 of the Code of Civil Procedure shall not apply to any religious trust in the State of Bihar If sub section 5 of section 4 of the Act is valid as we hold it is then no question really arises of interfering with the jurisdiction of the District Judge of Burdwan or of the Calcutta High Court in respect of the Baidyanath temple inasmuch as those courts exercised that jurisdiction under section 92 Code of Civil Procedure which no longer applies to the Baidyanath temple and the properties appertaining thereto after the commencement of the Act It is true that the Act does put an end to the jurisdiction under section 92 Code of Civil Procedure of all courts with regard to religious trusts situate in Bihar but that it does by taking these trusts out of the purview of section 92 In other words the Act does not take away the jurisdiction of any court outside Bihar but takes the religious trusts in Bihar out of the operation of section 92 so that a court outside Bihar in exercise of its jurisdiction under section 92 will decline to deal with a religious trust situate in Bihar just as it will decline to entertain a suit under that section regarding a private trust of religious or charitable nature Civil Procedure including all matters included in the Code of Civil Procedure at the commencement of the Constitution is item 13 of the Concurrent List It has not been disputed before us that it is open to the Bihar 638 Legislature to amend the Code of Civil Procedure while legislating in respect of religious endowments and religious institutions in Bihar and the President s assent having beep received to the Act the law made by the Bihar Legislature shall prevail in that State under article 2542 of the Constitution in respect of all religious trusts situate in Bihar In this view of the matter it is unnecessary to consider the further questions if Suit No 18 of 1897 is still pending the proper scope and effect of cl 39 of the Letters Patent of the Patna High Court and which authority can amend the Letters Patent Even if Suit No 18 of 1897 is deemed to be still pending though we do not so decide any further action under the scheme in respect of the Baidyanath temple and its properties can be taken either by the District Judge of Burdwan or the Calcutta High Court only if the jurisdiction under section 92 Civil Procedure Code is still preserved in respect of it If that jurisdiction has come to an end in respect of the Baidyanath temple and its properties then no question of any conflict of jurisdiction between two equally competent authorities arises at all apart altogether from the more debatable question as to whether the Bihar Legislature on one side and the courts in Bengal on the other can be said at all to be equally competent authorities in respect of a religious trust situate in Bihar The question really boils down to this Is the Act bad on the ground of extra territorial operation because it takes certain religious trusts situate in Bihar out of the purview of section 92 Code of Civil Procedure If the answer to this question is in the negative then all the hurdles created by the argument of Mr P R Das must disappear because if the Act is good it must be bindingonall courts and no question of any conflict of jurisdiction can arise Learned counsel for the respondent has made a pointed reference to sections 28 and 29 of the Act Section 28 deals with the general powers and duties of the Board We have examined these powers and duties in our decision in connected Civil Appeals Nos 225 226 228 229 and 248 of 1955 1 and have held that 1 Mahant Moti Das vs SP Sahi see P 563 ante 639 there is nothing in these powers and duties which can be said to have extra territorial operation Our attention has been drawn to el j of section 28 2 which empowers the Board to sanction on the application of a trustee or any other person interested in the religious B trust the conversion of any property of such trust into another property if the Board is satisfied that such conversion is beneficial for the said trust We have pointed out that these powers and duties are really for the fulfillment of the trust and they do not in any way contravene the rights of the trustees Section 29 states 291 Where the supervision of a religious trust is vested in any committee or association appointed by the founder or by a competent Court or authority such committee or association shall continue to function under the general superintendence and control of the Board unless superseded by the Board under subsection 2 2 The Board may supersede any committee or association referred to in sub section 1 which in the opinion of the Board is not discharging its funetions satisfactorily and if the Board does so any decree or order of a Court or authority by which such committee or association was constituted shall be deemed to have been modified accordingly Provided that before making any order under this sub section the Board shall communicate to the committee or association concerned the grounds on which they propose to supersede it fix a reasonable period for the committee or association to show cause against the proposal and consider its explanations and objections if any 3 Such committee or association or any other person interested in the religious trust may within thirty days of any order of the Board under sub section 2 make an application to the District Judge for varying modifying or setting aside such order but subject to the decision of the District Judge on any such application the order of the Board shall be final and binding upon the applicant and every person interested in such trust 640 4 Where such committee or association has been superseded under sub section 2 the Board may make such arrangements as may be necessary for the administration of the religious trust concerned It has been argued that section 29 in terms gives the Bihar State Board of Religious Trusts power to interfere with a committee appointed by the founder or by a competent court or authority The argument is that the Bihar State Board of Religious Trusts can now interfere with the committee appointed under the scheme made by the District Judge of Burdwan and approved by the Calcutta High Court and can even supersede it The answer to this argument is the same as that given before Either the Act is bad on the ground of extra territorial operation or it is not If the Act is bad on the ground of extra territorial operation then there is good reason for cutting down the scope and ambit of section 29 of the Act so that it will apply only to committees appointed by a competent court or authority in Bihar If however in respect of a religious trust in Bihar the Bihar Legislature can amend the Civil Procedure Code and take the trust out of the purview of section 92 Civil Procedure Code then there is no good reason why the ambit of section 29 should be out down in the manner suggested by the High Court It is true that the legislation of a State is primarily territorial and the general rule is that extra territorium jus dicenti impune non paretur There is however no departure from that general rule when the trust itself is in Bihar and in legislating about that trust the legislature lays down what should be done to fulfil the objects of the trust and for that purpose puts an end to an old jurisdiction in the sense explained above and creates a new one in its place The doctrine of territorial nexus which arises in this connection has been commented on before us at great length by learned counsel for the respondent That doctrine and the decisions bearing on it we have considered at some length in our decision relating to the Charusila Trust Civil Appeal No 230 of 1955 We do not wish to repeat what we have said therein 641 The conclusion at which we have arrived is that the Act and its several provisions do not suffer from the vice of extra territoriality in the sense suggested by B learned counsel for the respondent and there is no such conflict of jurisdiction as learned counsel for the respondent has suggested Accordingly the Act is good and applies to the Baidyanath temple and the properties a pertaining thereto The result therefore is that the appeal succeeds and is allowed with costs The judgment and order of the High Court dated October 9 1953 are set aside and the petition under article 226 of the Constitution made by the respondent must stand dismissed with costs Appeal allowed

The assessee participated in an All India Highway Motor Car Rally and on being declared a winner received an amount of Rs 22000 as prize money The Income tax officer included the prize money in his income for the relevant assessment year relying upon the definition of income in clause 24 of Section 2 of Income Tax Act On an appeal preferred by the respondent assessee the Appellate Assistant Commissioner held that as the Rally was not a race the prize money cannot be treated as income within the meaning of section 224 ix The Tribunal on an appeal by the Revenue held that the Rally was not a race and as it was a test of skill and endurance it was not a game within the meaning of Sec 2 24 ix As the prize money received was casual in nature it fell outside Sec 103 of the Act The High Court on a reference at the instance of the Revenueupholding the findings of the Tribunalobserved that the expression winnings cannotes money won by betting or gambling and therefore the prize money not represent winnings Inasmuch as the amount in question was obtained by participating in a rally which involved skill in driving the vehicle it held it cannot he included in the assessee s income also because it fell outside the preview of s10 3 Allowing the Appeal the Court HELD1 The expression income must be construed in its widest sense The definition of income is an inclusive one Even if a receipt does not fall within sub clause ix or any of the sub clauses of Sec224 of the Act it may yet constitute income Hence the prize money received by the respondent 329 assessee constitutes income as defined in clause 24 of Section 2 of the Act 335 C 2The High Court erred in reading several sub clauses in Sec 224 as exhaustive when the statute expressly says that the definition is inclusive Even if a receipt does not fall within the ambit of any of the sub clauses in Sec 224 it may still he income if it partakes of the nature of income The idea behind providing inclusive definition in Sec 224 is not to limit its meaning but to widen its net This Court has repeatedly said that the word income is of widest amplitude and that it must he given its natural and grammatical meaning 335 D Kamakshya Narayan Singh vs CLT PC Navin Chandra Mafatlal vs CIT Bombay 26 ITR SCand Bhagwan Das Jain vs Union of India SC followed Gopal SaranNarain Singh vs Commissioner of Income Tax 3ITR237 PC referred to 3If the monies which are not earned in the true sense of the word Constitute income it is difficult to appreciate why do monies earned by skill and to not constitute income The Rally was a contest if not a race The Respondent assessee entered the contest to win it The Prize money which he got in return for winning the contest was a reward for his skill and endurance It does constitute his income which expression must be construed in its widest sense 335 B 4The sub clause ix of Sec 224 is not confined to games of gambling nature alone Some of them are games of skill State of Bombay vs RM D Chamarbaugwala and Stale of Andhra Pradesh vs K Satyanarayan followed 5As the definition of income in Sec 224 is an inclusive one its ambit should be the same as that of the word income occurring in Entry 82 of list 1 of the Seventh Schedule of the Constitution of India 334 B 6Even casual income is income as is evident from Sec 103 A casual receipt which should mean in the context casual income is liable to be included in the total income if it is in excess of Rs 1000 by virtue of clause 3 330 of Sec 10 The Tribunal erred in its finding that the prize money fell outside the purview of Sec 10 3 inspite of holding that the receipt in question was casual in nature 335 E

APPEAL NOS 2107 1 1993 From the Judgment and Order dated 931992 of the Punjab and Haryana High Court in Civil Writ Petition Nos13587 13588 13926 of 1991 and LPA No II 8 of 1992 Dipankar Prasad Gupta Solicitor General NN Goswami and HK Puri for the Appellants Ranjit Kumar Deepak Sibal Ms Binu Tamta and Tarun Aggarwal for the Respondents The Judgment of the Court was delivered by MOHAN J Leave granted All these appeals raise the identical issue as to the interpretation of the Regulations relating to Diploma in Homeopathic Course Hence they are dealt with under one and the same judgment We will refer to the facts of CWP No 1358791 which will be enough for appreciating the issues involved The respondents joints the Homeopathic Medical College Chandigarh in the year 1987 to secure a diploma in Homeopathic Medicine and Surgery hereinafter referred to as DHMS The said course is of a duration of four years It is divided into 3 12 years of academic study and six months of internship The course of study their duration and the scheme of examination are regulated by the Homeopathy Diploma Course DHMS Regulations 1983 hereinafter called the Regulations These Regulations have been framed by the Central Council of Homeopathy under Section 20 of the Homeopathy Central Council Act 1973 Part VI of the Regulations deals with examination Regulations 8 to 10 occurring in part VI are relevant for our purpose Regulation 8 talks of first First DHMS examination That examination has to be held at the end of 12 months of the Course Regulation 9 deals with second DHMS examination to be held at the end of second year Regulation 10deals with 3rd DHMS examination 112years subsequent to the passing of the second DHMS examination The respondents appeared in the first year DHMS annual examination in 312 June 1988 Since they did not get required percentage of pass marks two or more subjects they had to re appear They were permitted to join the 2nd year class after June 1988 Under the interim orders of the High Court made in CWPNo 4375101990 they appeared in the examination The respondents simultaneously took their third chance for the first year DHMS examination and finallycleared all the papers They also got re appeared in one or more subjects in the 2nd year DHMS examination and accordingly took supplementary examination in June 1990 They were declared pass in that examination The respondents joined the third year DHMS examination and completed the course of study In view of that the Principal of the college in August 1991 recommended and forwarded their examination forms for the third year Examination to the appellant namely the Council of Homeopathic System of Medicines Punjab The appellant declined to permit the respondents to take the examination since they had not completed one year course of study between passing the first DHMS examination and appearing in the second one hence they were not eligible to appear in the third year examination In other words the examination has not been passed in accordance with the scheme prescribed under Regulations 8 9 It was under these circumstances the writ petitions came to be preferred before the High Court of Punjab Haryana in CWP No 1358791 praying for a direction to permit them to take third year DHMS examination commencing from 39 1991 The writ petition came up before a Division Bench By judgment dated 931992 allowing that writ petition on the reasoning that if the minimum course of study as provided by Regulations 9 and 10 if held to be mandatory such a provision would be liable to be struck down in view of the decision of the Court in CWP No 230788 Gurinder Pal Singh vs Punjabi University Ors which in turn has followed Single Judge decision reported in Harinder Kaur Chandok Minor vs The Punjab School Education Board through its Secretory It is the correctness of this judgment which has been questioned in all these appeals The learned Solicitor General took us through Regulations at length Part II deals with course of study Regulation 3 states that a Diploma Course in Homeopathy shall be spread over a period of four years Those four years include six months compulsory internship after the passing of the final year diploma examination When we look at Regulations 8 to 10 three concepts emerge from them 313 i Subjects ii Time ii Marks The duration of the examination is first year 12 months Second Year 12 months and third year 18 months Regulation 8 states that a candidate may be admitted to the first DHMS examination Similarly Regulation 9 also states that a candidate shall be admitted to the second DHMS examination Identical language is used under Regulation 10 for Third DHMS examination The submission of the learned Solicitor General is admission to these examinations is entirely different from admission to a course With reference to admission to each of the examination First Second and Third year the respective Regulations 89 10 prescribe the eligibility Unless and until that eligibility is possessed admission to an examination is impossible The High Court has taken a view that since the duration of the Course is four years this Regulation must be so construed as to fit in within those four years This is wrong Regulation 11 talks of re admission to an examination That Regulation has nothing to do with the eligibility prescribed under Regulation 8 to 10 In other words Regulation 11 cannot control the operation of these Regulations Regulation 11 iv talks of supplementary examination In that supplementary examination it is open to a candidate to pass in a subject or subjects in which he has failed When he so passes Clause v of that Regulation states that he shall be declared to have passed at the examination as a whole Even thereafter if he fails in the subject or subjects at the supplementary examination and he has to appear in the examination in the failed subject or subjects at the next annual examination Clause vi prescribes i Production of a certification ii In addition if he had put a necessary attendance a further course of study in the subject or subjects in which he had failed the minimum number of chances as per this clause are only four If he fails to complete the subjects within these four chances he will have to prosecute a further course of study in all the subjects of all parts for one year in other words he has to start the course afresh and appear for examination in all the 314 subjects Thus it will be clear that all these Regulations talk of re admission to an examination in Order to enable the failed Candidate to undergo supplementary and subsequent examinations On completion of subject in any one of those examinations within the four chances he is declared to have passed the whole examination On this count it is incorrect to hold that passing in the supplementary examination relates back to the original examination A careful reading of Regulation 9 requires the satisfaction of the following conditions for appearing in the Second Year DHMS examination i The candidate had passed the First DHMS examination at the end of one year previously This means there must be a gap of one year between the passing of First year examination and appearing in the Second year examination ii Subsequent to the passing of the examination must have attended the courses of instruction for a period of at least one year Therefore a candidate who fails in the first year examination in a subject or subjects if he passes any supplementary examination cannot take the Second year examination at the next academic year This is because one year duration had not elapsed between the passing of First year examination in the supplementary examination and taking the Second year examination Worse is a case where a candidate passes the First Year examination at the third or fourth attempt The High Court has gone wrong in its construction on Regulation 11 that if a candidate passes a supplementary examination the insistence of one year would require the candidate to wait for one more year Therefore he would inevitably have to study for the next year course from the next academic session No doubt the candidate who passes the supplementary examination will have to sit idle till the next academic session That is his own making On that score the attempted harmonious construction by the High Court cannot be supported The learned Solicitor General finally submits that none of the Regulations indicate a carry forward scheme of the subjects On the contrary it is a case of detention every year Accordingly he submits that the Civil Appeals deserve to be allowed Mr Ranjit Kumar learned counsel in opposition to this would urge that the interpretation placed by the High court on Regulations 8 to 10 is collect Otherwise no useful purpose would be served by conducting a supplementary examination Equally four chances afforded to the candidate could be rendered nugatory if the interpretation as stated by the learned solicitor General is accepted 315 Regulation 11 has to be read along with Regulations 8 to 10 It is not correct to argue that Regulation 11 has nothing to do with admission to an examination As a matter of fact declaration of result of supplementary examination of First DHMS examination was made on 31101989 The next annual examination was held in January 1990 within 2 12 months The respondents passed the course of First and Second DHMS examinations The result of Second Year DHMS supplementary examination was declared in January 1991 In view of such an inordinate delay in the conduct of examinations the appellant cannot contend that one year period must elapse between First and Second DHMS examinations and that the Regulations should have been strictly obeyed The Regulations do not say that after First DHMS examination a student cannot study for Second DHMS course and sit for examination provisionally The declaration of result for the Second DHMS course takes place only after he had cleared the First DHMS examination As rightly held by the High Court the word supplementary denotes supplementing to or in continuation of the annual examination Where therefore provisional admission is given for the Second Year DHMS course the failure to complete he First DHMS examination should not be put against the respondent If the Regulations are so literally interpreted that will lead to absurdity It will run counter to the object of providing a supplementary examination This interpretion is holding the field for a long time This was the reason why in Jaininder Mohan and Others vs The council of Homeopathic System of MedicinePunjab 1992 1 ILR Punjab 159 the court took a view that passing in the supplementary examination will relate back to the date of annual examination Otherwise as rightly pointed out by the High Court anamolous results would follow In so far as the respondents have completed the examination equities must weigh in their favour as laid down by this Court in A Sudha vs University of Mysore and another Chandigarh Administration Orsv Manpreet Singh Ors Shirish Govind Prabhudesai vs State of Maharashtra The learned counsel also relies on Orissa Homeopathic Regulations and contends that carry forward is permitted in similar Homeopathic Regulations In order to appreciate the respective contentions we have to analyse the relevant Regulations relating to the Diploma Course in Homeopathy as contained Homeopathy Diploma course DHMS Regulations 1983 These Regulations are statutory in character in so far as they have come to be framed in exercise of powers conferred under Clauses i j k of Section 33 and sub section 1 of Section 316 20 of Homeopathy Central Council Act Under Section 20 the Central Council may prescribe the minimum standards of education in Homeopathy required for granting recognised medical qualifications by Universities Boards and Medical Institutions in India Section 33 speaks of powers to make Regulations The relevant clauses are i j k They are to the following effect i The courses and period of study of practical training to be undertaken the subjects of examination and the standards of proficiency therein to be obtained in any University Board or Medical institution for grant of recognised medical qualification jthe standards of staff equipment accommodation training and other facilities for education in Homeopathy kThe conduct of professional examinations qualifications of examiners and the conditions of admissions to such examinations Therefore the Central council constituted under Section 3 of the Act has power to make Regulations under Section 33 k regarding the conditions of admission to the examination The very object of this Act is to prescribe minimum standards for admission duration of course of training details of curriculum and syllabus of study and the title of degree or diploma Since they very from State to State and even from Institute to Institute within a same State it had become necessary to constitute a Central Council The Advisory Committee prescribed a course of four years Accordingly in Regulation 3i it is provided that a Diploma Course in Homeopathy shall comprise a course of study spread over a period of four years This includes the compulsory internship of six months duration after passing the final Diploma examination The Regulations contain eligibility to admission the curriculum the syllabus etcin the various parts Part VI deals with examination Regulation 8 talks of First DHMS examination It is stated in clause i A candidate may be admitted to the First DHMS examination provided that he has regularly attended the following course of instruction theoretical and practical for a period of not less than 12 months at a Homeopathy College to the satisfaction of the head of the college 317 From the above it is clear for admission to the First DHMS examination ia student must have regularly attended the courses of instruction theoretical and practical ii for a period of not less than 12 months iii to the satisfaction of the head of the College As regards the Second DHMS examination Regulation 9 takes care That states in Clause i No candidate shall be admitted to the Second DHMS examination unless a he has passed First DHMS examination at the end of one year previously and b he has regularly attended the following courses of instruction both theoretical and practical in the subjects of examination for a period of at least one year subsequent to his passing First DHMS examination from a recognised Homeopathic College to the satisfaction of the head of the college Here again eligibility for admission to Second DHMS examination is based on two conditions i A student has passed his First DHMS examination at the end of one year previously This means one year must elapse between the passing of the First year examination and taking of Second Year Examination ii Subsequent to the passing the First year a he must have regularly attended the courses both theoretical and practical b for a period of at least one year c to the satisfaction of the head of the College Thus unless and until these two conditions are satisfied a student is 318 ineligible for admission to the Second DHMS examination Clause iii states that the Second DHMS examination shall be held at the end of two years of DHMS course The Third DHMS course is provided for under Regulation 10 That reads as follows No candidate shall be admitted to the Third DHMS examination unless a he has passed the second DHMS examination at the end of 1 12 years previously and b has regularly attended the following courses of instructions both theoretical and practical in subjects of examination for a period of at least 112 years subsequent to his passing the Second DHMS examination in a recognised Homeopathic College to the satisfaction of the head of the College Here again the conditions for eligibility for admission to Third DHms examination are i After passing the Second DHMS examinationone and a half years must have elapsed before taking the Third DHMS examination ii Subsequent to the passing of the Second DHMS examination a he must have regularly attended the courses both theoretical and practical b for a period of 112 years c to the satisfaction of the college Thus it will be clear that the pattern of the examination is as rightly urged by the learned Solicitor General 12 months for First DHMS examination 12 months for Second DHMS examination and 18 months for Third DHMS examination These put together with six months of compulsory internship make up the four years prescribed for the Course in Regulation 3 One thing that carefully requires to be noticed is that all the three Regulations 319 8 to 10 speak of admission to an examination First Second and Third year respectively This is entirely different from admission to a course we find great force in this submission of the learned Solicitor General The course of study may consist of four years but that has nothing to do with the scheme of examination Now we come to Regulation 11 That requires to be reproduced in full i Every candidate for admission to an examination shall send to the authority concerned his application in the prescribed form with the examination fee at least 21 days before the date fixed for the commencement of the examination iiAs soon as possible after the examination the examining body shall publish a list of successful candidates arranged in the following manner athe names and roll numbers of the first ten candidates in order of merit and b the roll number of others arranged serially iiiEvery candidate shall on passing the examination receive a certificate in the form prescribed by the examining body concerned iv A candidate who appears at the examination but fails to pass in a subject or subjects may be admitted to supplementary examination in the subject or subjects of that part of the examination in which he has failed to be held ordinarily after six weeks from the publication of result of the first examination on payment of the prescribed fee along with an application in the prescribed form v If a candidate obtains pass marks in the subject or subjects at the supplementary examination or the subsequent examination he shall be declared to have passed at the examination as a whole vi If such a candidate fails to pass in the subject or subjects at the supplementary examination in the subject or subjects concerned he may appear in that subject or subjects at the next annual examination on production of a certification in addition to the certificate required under the regulations to the effect that he had attended to the satisfaction of the Principlea further course of study for a period 320 of next academic year in the subject or subjects in which he had failed provided that all the parts of the examination shall be completed within four chances including the supplementary one to be counted from the date when the complete examination becomes due for the first time viiIf a candidate fails to pass in all the subjects within the prescribed four chances he shall be required to prosecute a further course of study in all the subjects of all parts for one year to the satisfaction of the head of the college and appear for examination in all the subjects Provided that if a student appearing for the Third DHMS Homexamination has only one subject to pass at the end or prescribed chances he shall be allowed to appear at the next examination in that particular subject and shall complete the examination with this special chance viiiAll examinations shall be held on such dates time and places as the examining body may determine ix The examining body may under exceptional circumstances partially or wholly cancel any examination conducted by it under intimation to the Central Council of Homeopathy and arrange for conducting reexamination in those subjects within a period of thirty days from the date of such cancellation This Regulation deals with results and readmission to an examination A close reading of the above brings out the following In clause iv as to what is to happen in the event of a candidate failing to pass in a subject or subjects is spoken to He may be admitted to the supplementary examination Such a supplementary examination is to ordinarily take place after six weeks from the publication of result of First Examination Supposing he passes in that subject or subjects in the supplementary examination he is declared to have passed at the examination as a whole This should obviously be so because once he completes all the subjects he has to necessarily be declared to have passed Merely on this language declared to have passed at the examination as a whole we are unable to understand as to how the 321 doctrine of relation back could ever be invoked The invocation of such a doctrine leads to strange results When a candidate completes the subjects only in the supplementary examination then alone he passes the examination It is that pass which is declared If the doctrine of relation back is applied it would have the effect of deeming to have passed in the annual examination held at the end of 12 months which on the face of it is untrue With this we pass on to clause vi which deals with the stage where the candidate had failed in the First Annual Examination in a subject or subjects and he had not passed in that subject or subjects in the supplementary examination also The next annual examination arrives The appearance in that examination is conditioned upon production of two certificates iA certificate required under the Regulations to the effect that he had attended to the satisfaction of the Principle iiA certificate to the effect that he had undergone a further course of study for a period of next academic year in subject of subjects in which he had failed Whatever it is a candidate has to complete all the subjects within four chances Should he fail to do so he will have to undergo the course in all subjects for one yea unless of course he gets the exemption as stated in proviso to Clause vii Nowhere do we find in Regulation 11 system of carry forward On the contrary it is detention every year The High Court was moved by the fact that if a candidate were to pass in supplementary examination after passing the examination he will have to remain at home till the next annual examination So he is allowed to undergo a course for next academic year provisionally On this line of reasoning clause iv vi of Regulation II are sought to be harmoniously construed We are unable to accept this line of reasoning or the so called harmonious construction because it does violence to the language of the Regulation It clearly violates the mandatory requirements of Regulation 9 It has already been noted as to what those requirements are To repeat i The lapse of one year period between the passing of First DHMS examination and taking the Second DHMS examination ii Subsequent to the passing of the First DHMS examination to undergo the course of study for one year Therefore if a candidate passes in the supplementary examination the requirement of one year cannot be enforced Worse still is 322 a case of a student who passes only at the next annual examination Could he be allowed to take the Second DHMS examination without even completing the First Should he by chance pass the Second DHMS and not complete the First since he is still one more chance to take this examination what is to happen The situation is absurd The same principle should apply to Regulation 10 where the lapse is one and half years The word supplement is defined in Oxford Dictionary Seventh Edition page 1072 think added to remedy deficiencies part added to book etc with further information or to periodical for treatment of particular matters of an angleMathits deficiency from 180ofCOMPLEMENT hence Al ARY mem adjssupplementay benefit MEfL sup plementum f plere fill see ment Thereforethe adjective supplementary means and examination to makeup the deficiencies it stands to reason only when deficiencies are made up the whole becomes complete On this score to say that passing the supplementary examination would relate back to the annual examination will be totally incorrect What counts is when the whole is made up From that time of making up one year or one and half years must elapse for second or Third DHMS examinations as the case Amy be The stand of the appellants counsel as seen from letter dated 12121989 is as follows From Dr PL Verma Secretary Central Council of Homeopathy 10 Community Centre Basant Lok Vasant Vihar New Delhi 110037 TO The Chairman The Council Homoeopathic Systems of Medicine 3027 28 Sector 22 D Chandigarh 323 SubEnforcement of DHMS Diploma Course Regulation 1983 wef1983 84 Academic Sessions students demand for grant of provisional promotion with reappearance in only one subject to the next higher class even beyond supplementary examination even prior to his passing the lower class examination as a whole With reference to your letter No CHSM PV 134 891253 dated 29 30 November 1989 on the subject noted above I am to say that the question of permitting to appear simultaneously for two examinations ie lower reappear subjects and complete subjects of the next higher class does not arise as no candidate has to be admitted to the Second DHMS examination unless he had passed the first DHMS examination at the end of one year previously and has regularly attended the course for one year Similarly no candidate shall be admitted to the Third DHM section examination unless he has passed the second DHMS examination 1 12 years previously and has also attended the course for a period of 1 12 years subsequent to his passing of the Second DHMS Examination COUNCIL OF HOMOEOPATHIC SYSTEM OF MEDICINE 3027 28 Sector 22 D CHANDIGARH UT No CHCH PV 913489AT 198 200 Dated 5290 Copy forwarded to the Principal Lord Mahaveera Homeopathic Medical College LudhianaAboharChandigarh for information and necessary action This may please be notified for information of all the students under intimation to the undersigned The above guidelinesdirections of the Central Council may please be strictly followed and observed in respect of matters indicated therein sd RK Sharma Registrar NoCHMSPV13489AI 201 210 Dated 5290 This stand in our opinion is correct If a student were to sit idle at home after passing the supplementary 324 examination that is his own making To avoid such a situation the Regulation cannot be construed causing violence to the language These Regulations are plain enough and are susceptible only to literary interpretation In Maxwell on the Interpretation of Statutes 12th Edition it is stated at page 29 as under Where the language is plain and admits of but one meaning the task of interpretation can hardly be said to arise The decision in this case said Lord Morris of Borth y Gest in a revenue case calls for a full and fair application of particular statutory language to particular facts as found The desirability or the undesirability of one conclusion as compared with another cannot furnish a guide in reaching a decision Shop and Store Developments Ltd vs IRC 1967 1 AC 472 Where by the use of clear and unequivocal language capable of only one meaning anything is enacted by the legislature it must be enforced however harsh or absurd or contrary to common sense the result may beCartledge vs E Jopling Sons Ltd The interpretation of a statue is not to be collected from any notions which may be entertained by the court as to what is just and expedient Gwynne vs Burnell Words are not to be construed contrary to their meaning as embracing or excluding cases merely because no good reason appears why they should not be embraced or excluded Whitehead vs James Stott Ltd The duty of the court is to expound the law as it stands and to leave the remedy if one be resolved upon to others Sutters vs Briggs We construe the Regulations as they stand without introducing any element of ambiguity or absurdity The manner in which the respondents have passed the examination is set out in the following tabulated statement CWP No 13926 of 1991 Miss Kamaljit eight others of LM Homoeopathic Medical College Ludhiana 1st profAnnual88 Supp88 Annual89 Respondent No Re appear Re appear Pass 325 1 Miss Kamaljit in 3 in 2 Contddo Sawam subjects subjects Singh Admitted in 1987 Resp2 Re appear pass ShNarinder in 2 Contd Kumar so subjects Satya Pal Goyal Admitted in 1987 RespNo 3 Shri Re appear pass ContdMohd Ramzan in 3 Thind so SH subjects Moh Yousaf Admitted in 1987 Resp No4 Shri Re appears Re appears pass Naresh Kumar in 3 subjects in 2 subjects RespNo5 Shri Re appear Re appear pass Jaininder Mohan in 2 in 1 so Shri Sham Lal subjects subject Admitted in 1987 RespNo 6 Shri Re appear Re appear pass Kulbir Singh so in 3 in 2 Sh Tattan Singh subjects subjects Admitted in 1987 ResNo 7 Re appear pass Narinder Singh in1 so ShSant subject Singh Admitted in 1987 Res No 8 Inderjit Mehta do Anant Ram Mehta Admitted in 1987 RespNo 9 Fail Re appear pass Tejvinder Singh in1 so Jaswant Singh Admitted in 1987 326 Continued Part IInd Prof CWP No 481of 1991 3rd Prof CWP No 1392691 Suppl89 Annual90 Suppl91 Re appear Re appear Re appear Allowed to appear in 3 in 3 in1 as per court subjects subjects subject order dt6991 by the Principal of L Homoeopathic Medical College Re appear Re appear pass As per court in 3 in1 order dt6991 subjects subject without court order Re appear Re appear pass Not appeared in 4 in 1 subjects subject Re appear Re appear pass As per court in 3 in1 orderdt 6991 Fail Re appear pass As per court in 2 order subjects dt6991 Re appear Re appear pass As per court in 1 pass Order subject dt6991 Re appear Re appear pass Allowed to in 2 in 2 appear as subjects subjects per Court order dt6991 Mr Ranjit Kumar pleads before us that equities must weigh in favour of students With reference to that plea we hold that he students who had completed the whole course attended all the courses of study for the three sessions of 12 months 12 months and 18 months respectively and had passed all the examinations in all the subjects though not in the sequential order required by the 327 regulations it appears to us that the submission of the counsel for the respondents that they being required to go through the courses all over again and take the examinations after attending the courses afresh might lead to hardship and might require consideration In the words of Anne Sophie Swetchine The world has no sympathy with any but positive griefs it will pity you for what you lose but never for what you lack We think that their cases may perhaps have to be examined from the point of these equities by the Council of Homeopathic System of Medicines The candidates who as on today have attended all the courses and have passed all the examinations might make an appropriate representation to the Council of Homeopathic System of Medicines the appellant to consider their cases The representation shall be filed within a period of four weeks from today The Council of Homeopathic System of Medicines the appellant will take appropriate decision within one month thereafter The Council in doing so shall bear in mind all the relevant circumstances including perhaps the spirit of the corresponding regulations under the Bihar Act in which such sequential purpose is not insisted upon

On May 27 1978 the petitioner entered into an arbitration agreement under which he had to execute a certain work within 9 months He averred that he had sent his bills on July 12 1979 but payment was not made On November 28 1989 for the first time he sent a notice to the respondent for reference to arbitration The respondent approached the High Court under Ss 512 and 33 of the A learned Single Judge held that the claim was hopelessly barred by limitation and cancelled the arbitration agreement A Division Bench dismissed the Appeal On appeal this Court addressed itself to 2 questions Whether the High Court could permit a party to rescind an arbitration agreement and whether delay can be a ground for rescinding such agreement Dismissing the appeal this Court HELD1 The Court has the power and jurisdiction under Ss 5 and 12 to grant leave to the applicant in exceptional circumstances to revoke the contract of arbitration The Court should exercise the power sparingly cautiously and with circumspection in permitting a party to rescind an arbitration agreement he had entered into voluntarily 365 B 2By virtue of section 37 of the the provisions of the Limitation Act would apply to arbitrations notwithstanding any term in the contract to the contrary 366 B 3The period of limitation for the commencement of an arbitration runs from the date on which had there been no arbitration clause the cause of 362 action would have accrued just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued so in the case of arbitrations the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued 368 D E Ram Dutt Ramkissen dass vs SassoonEDCo1929561A 128PC Naamlooze Vennootschap Handels En Transport Maatschappij Vulcan vs AS J Ludwig Mowinckels Rederi 1 938 2 All ER 152 Pegler vs Railway Executive at 338 and West Riding of Yorkshire Country Council Huddersfield Corporation 1957 1 AR ER 669 and Russell on Arbitrations Justice Bachawat Law of Arbitration applied Delay defeats justice Defaulting party should hear the hardship and should not transmit the hardship to the other party after the claim in the cause of arbitration was allowed to he barred 369 F Mustiu and Boyd s Commercial Arbitration 1982 edn referred to The claim in the case on hand is undoubtedly hope lessly barred by limitation as the petitioner by his conduct slept over his right for more than 10 years The High Court justifiably exercised the discretionary power and jurisdiction under Ss 5 and 12 2 b in permitting the respondent to rescind the agreement 370 E

Appeal No 4474 of 1992 From the Judgment and order dated 2871992 of the Andhra Pradesh High Court in WP No 9315 of 1992 WITH WRIT PETITION CIVIL NO 763 OF 1992 Under Article 32 of the Constitution of India AK Ganguli Rakesh K Khanna for RP Singh for the Appellant Petitioners C Sitaramiah Ms Pushpa Reddy and Mrs TVS Narasimhachari for the Respondents J CIVIL APPEAL NO 4474 OF 1992 The appellant is engaged in the manufacture and sale of products like cast iron pipes man hole covers bends etc For the assessment year 1989 90 the Commercial Tax Officer Narayanguda Circle Hyderabad levied sales tax upon the turn over relating to said products treating them as general goods He overruled the petitioner s contention that the said products are declared goods liable to tax at the rate of 4 only The assessees appeal preferred before the Appellate Deputy Commissioner is still pending Evidently because no stay was granted pending the said appeal a notice was issued to the appellant calling upon him to pay the tax assessed against which notice he preferred a writ petition being WP No 9315 of 1992 in the High Court of Andhra Pradesh His main contention in the writ petition was that by virtue of GOMs No 383 Revenue S Department dated 1741985 his products are declared goods and are therefore liable to tax only 4 The Division Bench of the High Court dismissed the writ petition following its earlier decision in Deccan Engineers vs State of Andhra Pradesh reported in 1991 Vol 12 AP Sales Tax Generals 138 84 STC 92 In Deccan Engineers it was held by the AP High Court that the expression cast iron in item2iof the Third Schedule to the Andhra Pradesh General Sales Tax Act does not include cast iron pipes man hole covers and bends etc In this appeal the correctness of the said view is questioned Third Schedule to the Andhra Pradesh General Sales Tax Act pertains to 436 declared goods in respect of which a single point tax only is leviable under section 6 Section 6 was enacted by the AP Legislatureto accord with sections 14 and 15 of the Item2 of the third Schedule to the AP Act reads as follows THIRD SCHEDULE As amended upto 15th August 1987 Declared goods in respect of which a single point tax only is leviable under Section 6 Description of goods Points of levy Rate of Tax 1 2 3 4 1 2 Iron and steel that is do 4 do to say 3002 i pig iron and cast iron including ingot moulds bottom plates iron scrap cast iron scrap runner scrap and iron skill scrap ii steel sends ingots slabs blooms and billets of all qualities shapes and sizes iiiskelp bars tin bars sheet bars hoe bars and sleeper bars iv steel bars rounds rods squares flats octagons and hexagons plain and ribbed or twisted in coil form as well as straight length v steel structurals angles joints channels tees sheet pilling sections Z sections or any other rolled sections vi sheets hoops strips and skelp both black and galvanised hot and cold rolled plain and corrugated in all qualities in straight lengths and in coil form as rolled and in revitted condition viiplates both plain and chequered in all qualities viiidiscs rings forgoings and steel castings ix tool alloy and special steels of any of the above categories x steel melting scrap in all forms including steel skull turnings and borings xi steel tubes both welded and seamless of all diameters and lengthsincluding tube fittings xiitin plates both not dipped and electrolytic and tin free plates xiiifish plate bars bearing plate barscrossing sleeper bars fish plates bearing plates crossing sleepers and pressed steel sleepers rails heavy and light crane rails xivwheels tyres axles and wheel sets xv wire rods and wires rolled drawn galvanised aluminised tinned or coated such as by copper xvidefectives rejects cuttings or end pieces of any of the above categories Item 2 of the Third Schedule to the AP Act is an exact replica of item iv of section 14 of the According to section 15 of the Central Act declared goods cannot be taxed at a rate exceeding 4 or at more than one stage The pracise question that was considered in Deccan Engineering followed in the judgment under appeal was whether the cast iron castings manufactured by the petitioner in that case are cast iron within the meaning of item 2 i of the Third Schedule to the AP Act Item iv i of section 14 of the CST Act At this stage it is necessary to a certain precisely what does cast iron mean and how are the products of the appellant manufactured Cast iron is defined in the Concise Oxford Dictionary as a hard alloy of iron carbon and silicon cast in a mould According to New Lexicon Webster s dictionary of English language the word cast iron means an iron carbon alloy produced in a blast furnace It contains upto 4 carbon and is more brittle but more easily fused than steel According to Van Nostrand s Scientific encyclopedia cast iron is primarily the product of remelting and casting pig iron Interestingly the expression cast iron with a hyphen between cast and iron has been defined separately as meaning made of cast iron So far as item iv of section 14 is concerned the official publication spells the expression cast iron without a hyphen Though an authorised publication of the AP Act is not placed before us we presume that the printing of the said expression in the private publication placed before us represents the correct rendering it is without a hyphen That cast iron is different from cast iron 438 castings is brought out in the following extract from the Judgment in Deccan Engineering which is equally true in the case of the appellant as well LM15 The assessee manufacturers and sells various goods mentioned earlier made from cast iron which has suffered sales tax The controversy is whether these several goods sold by the petitioners continue to be the same declared goods covered by the aforesaid entry or are different commercial commodity liable to levy of State Sales Tax The case of the Revenue is that items sold by the petitioner are therefore exigible to tax as a distinct commercial commodity It is contended by the learned counsel for the assessee that the relevant entry in section 14 of the Central Act also IIIrd Schedule of the State Act speak of cast iron including ingots moulds and bottom plates iron scrap etc which indicates that any casting made out of cast iron also should be treated as included in the entry because of the word used including in the entry It is further contended that the Government of India in their letters have clarified that cast iron castings are covered by cast iron and the State Government has also issued the aforesaid GO subsequently under Section 422 of the State Act clarifying that the cast iron castings are covered within the term cast iron It is thus clear that cast iron is different from cast iron castings manufactured by the appellant Cast iron is purchased by the appellant and from that cast iron he manufactures several goods like manhole covers bends cast iron pipes etc In other words cast iron used in item iv of section 14 of the Central Act is the material out of which the petitioner s products are manufactured Position remains the same even if the appellant purchases iron and mixes it with carbon and silicon thereby deriving cast iron and then pours it into different moulds In sum 1 cast iron is different from the cast iron pipes manhole covers bends etc manufactured and sold by the appellant It cannot be denied in such a situation that the products manufactured by the appellant are in commercial parlance different and distinct goods from the cast iron Indeed this aspect is not seriously disputed by Shri Ganguli the learned counsel for the appellant His case is entirely based upon certain clarifications and circulars issued both by the Central and State Governments and in particular upon an order issued by the Andhra Pradesh Government under section 422 of the AP Act namely viz GO Ms No 383 dated 1741985 It is therefore necessary to refer to them The earliest clarification is the one contained in the latter dated 28th February 1977 from the Department of Revenue and Banking Revenue Wing 439 Government of India addressed to the FinanceRevenue Secretaries of all State Governments and Union Tarritories It reads thus SubjectClarification as to whether the term Cast Iron mentioned in section 14iv i of the would cover cast Iron casting In continuation of the marginally noted communications and with reference to this Department s letter No 243n3 ST 20111973 I am directed to say that the question whether the expression cast iron used in Section iv i of the will include Cast iron casting has been re examined in consultation with the Directorate General of Technical Development Chief Chemist and the Ministry of Law Justice Company Affairs This Department has been advised that the existing expression cast iron in the aforesaid section will cover cast iron casting also Yours faithfully Sd Deputy Secretaryto the Govt of India Pursuant to the above clarification by the Central Government the Commissioner of Commercial Taxes Government of Andhra Pradesh intimated all the Deputy commissioners of commercial Taxes of the State that Cast Iron Pipes and specials should be subjected to tax as falling under Cast Iron liable to tax 4 at the point of first sale in the State under entry 2 of the III Schedule of APGST Act To the same effect is another clarification issued by the Commissioner of Commercial Taxes Government of Andhra Pradesh to his subordinate officials on 1231982 The next clarification from the Government of India was on 3 1st January 1984 It appears that the Government of Haryana had written to the Central Government stating that cast iron castings cannot be treated as declared goods and requested the Ministry of Finance Government of India to examine the same It was in reply to the said query that the letter dated 3 1st January 1984 was written by the Government of India Ministry of Finance Department of Revenue to the Financial Commissioner and Secretary Government of Haryana Excise and Taxation Department The letter says that the matter has been considered carefully by the Department in consultation with the Ministry of Law and the Director 440 General of Technical Development It set out the opinion of the Ministry of Law as also the opinion of the Director General of technical Development The latter s opinion reads Cast iron is an alloy iron of Carbon silicon and other alloying elements if required ie Cast Iron Castings are covered under the term Cast Iron It may also be clarified that cast Iron include Gray Iron Chilled Malleable and Nodular Iron Ingot Moulds and Bottom Plates are nothing but Cast Iron Castings After setting out the said two opinions the Government of India expressed its opinion in the following words In accordance with the above advice cast iron castings are covered under the term Cast Iron State Government may kindly bring this position to the notice of Sales Tax authorities of the State If considered necessary this may be placed before the Committee of Commissioners of Sales Tax Commercial Tax set up under this Ministry s letter No Receipt of this letter may please be acknowledged Copies of this letter were communicated to all the State Governments and Admissions of Union Territories On 20th July 1984 the Government of Andhra Pradesh Revenue S Department issued a memorandum referring to the aforesaid letter of the Central Government dated 31st January 1984 and reaffirming that Cast Iron Castings are covered within the item Cast Iron including ingot in sub item i of item No 2 of the Third Schedule to the Andhra Pradesh General Sales Tax Act On the same day the Principal Secretaryto the Government Revenue Department addressed a letter to the Secretary Andhra Pradesh Small Scale Industries Association Vijayawada informing the Association that a clarification has been issued to the Commissioner of Commercial Taxes to the effect that cast iron castings are covered within the term cast iron including ingot in sub item i of item No 2 of the Third Schedule to the Andhra Pradesh General Sales Tax Act 1957 On 27th March 1984 however the Commissioner of commercial Taxes Government of Andhra Pradesh addressed a letter to all his subordinate officers stating that the question whether cast iron castings fall within the expression 441 cast iron is pending before the High Court of Andhra Pradesh and therefore the collection of arrears of tax due on raw castings is stayed for a period of one year At the end of one year he said the matter will be reexamined On 17th April 1985 the Government of Andhra Pradesh issued a clarification contained in GOMs No 383 under sub section 2 of section 42 of the AP Act It will be appropriate to set out the GO in full GOVERNMENT OF ANDHRA PRADESH ABSTRACT Andhra Pradesh General Sales Tax Act 1957 Levy of Sales Tat on Cast Iron Casting Clarification issued REVENUE S DEPARTMENT G O Ms No 383 Dated 17041985 Read the followings 1 2216SI83 4 20784 2 No 221683 4 dt 20784 addressed to Secretary AP Small Scale Industries Association Vijayawada 3 From the CCT s Ref DOFELr III 3 149084 dt 2471984 Government Memo 3166SI84 4 dt 13111984 From the CCTDO on CCT section Ref LIi 106382 6 Memo No 3166SI84 5 dt 2221985 From the commissioner of Commercial Taxes Ref A3LI109382 dt 1931983 ORDER The Andhra Pradesh Small Scale Industries Association Vijayawada requested the Government to clarify whether cast iron and cast iron castings are one and the same commercial commodity 442 2 This matter was examined at length by the Government of India in consultation with Ministry of Law Department of legal Affairs and Director General of Techinical Development The Ministry of Finance Department of Revenue Government of India clarified in their letter FNo 241080 ST dt 3111984 to the effect that cast iron castings are covered within the term cast iron Government have examined in detail the legal aspects of the issue and observe that the term cast iron including ingot moulds bottom plates as in sub item i of item 2 in the Third Schedule to the Andhra Pradesh Central Sales Tax covers cast iron casting and as such cast iron castings is not a different commercial commodity from the commodity cast iron including ingot moulds bottom plates Under sub section 2 of section 42 of the Andhra Pradesh General Seles Tax Act 1957 the Government hereby clarify that the cast castings are covered within the term cast iron including ingot moulds bottom plates occurred in sub item i of item 2 of this Third Schedule to the Andhra Pradesh General Sales Tax Act 1957 emphasis added BY ORDER IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH CR NAIR PRINCIPAL SECRETARY TO GOVERNMENT Section 42 of the AP Act confers upon the State Government the power to remove difficulties Sub section i confers the said power to meet the problems arising from transition from the previous Sales Tax Act to the present Sales Tax Act An order under sub section 1 is required to be published in the AP Gazette Sub section 2 is general in nature An order under sub section 2 is not required to be published in the AP Gazette Section 42 reads 42 Power to remove difficulties 1 If any difficulty arises in giving effect to the provisions of this Act in consequence of the transition to the said provisions from the 443 corresponding provisions of the Acts in force immediately before the commencement of this Act the State Government may by order in the Andhra Pradesh Gazettle make such provisions as appear to them to be neccessary or expedient for removing the difficulty 2 If any difficulty arises in giving effect to the provisions of this Act otherwise than in relation to the transition from the provisions of the corresponding Act in force before the commencement of this Act the State Government may by order make such provisions not inconsistent with the purposes of this Act as appear to them to be necessary or expedient for removing the difficulty An order issued under section 42 is undoubtedly statutory in character A word about the validity of section 42 of the APAct Section 37 of the Payment of Bonus Act conferred a similar power upon the Central Government it further declared that any such order would be final It was truck down by a Constitution Bench of this Court in Jalan Trading Co vs Mill Mazdoor Sabha as amounting to excessive delegation of legislative power However in a subsequent decision in Gammon India Limited etc vs Union of India Ors etc it has been explained by another Constitution Bench that the decision in Jalan Trading was influenced by the words occuring at the end of section 37 of the Payment of Bonus Act to the effect that the direction of the Government issued thereunder was final Inasmuch as the said words are not there in section 34 of the it was held section 34 cannot be said to suffer from the vice of excessive delegation of legislative power It is meant for giving effect to the provisions of the Act it was held Sub section 2 of section 42 of the AP Act does no doubt not contain the aforesaid offending words and can not therefore be characterised as invalid Yet it must be remembered that the said power can be exercised for giving effect to the provisions of the Act and not in derogation thereof As we shall presently indicate it is necessary to bear this limitation in mind while examining the effect of GOMs 383 So far as clarifications kirculars issued by the Central Government andor State Government are concerned they represent merely their understanding of the statutory provisions They are not binding upon the Courts IT is true that those clarifications and circulars were communicated to the concerned dealers but even so nothing prevents the State from recovering the tax if in truth such tax was leviable according to law There can be no estoppel against the statute the understanding of the Government whether in favour or against the assessee is 444 nothing more than its understanding and opinion It is doubtful whether such clarifications and circulars bind the quasi judicial functioning of the authorities under the Act While acting in quasi judicial capacity they are bound by law and not by any administrative instructions opinions clarifications or circulars Law is what is declared by this Court and the High Court to wit it is for this Court and the High Court to declare what does a particular provision of statute say and not for the executive of course the ParliamentLegislature never speaks or explains what does a provision enacted by it mean See Sanjeev Coke Manufacturing Company vs Mls Bharat Coking Coal Ltd and another Now coming to GO Ms 383 it is undoubtedly of a statutorily characterbut as explained hereinbefore the power under section 42 cannot be utilised for altering the provisions of the Act but only for giving effect to the provisions of the Act Since the goods manufactured by the appellant are different and distinct goods from cast iron their sale attracts the levy created by the Act In such a case the government can not say in exercise of its power under section 42 2 that the levy created by the Act shall not be effective or operative In other words the said power cannot be utilised for dispensing with the levy created by the Act over a class of goods or a class of persons as the case may be For doing that the power of exemption conferred by section 9 of the AP Act has to be exercised Though it is not argued before us we tried to see the possibility but we find it difficult to relate the order in GO Ms 383 to the power of the Government under section 9 apart from the fact that the nature and character of the power under section 42 is different from the one conferred by Section 9 As exemption under section 9 has to be granted not only by a notification it is also required to be published in the Andhra Pradesh Gazette It is not suggested nor is it brought to our notice that GO Ms 383 was published in the Andhra Pradesh Gazette This does not however preclude the Government of Andhra Pradesh from exercising the said power of exemption in accordance with law if it is so advised We need express no opinion on that score The learned counsel for the appellant brought to our notice that the very same Division Bench which rendered the decision in Deccan Engineers had rendered another decision in Tax Revision Case No 93 of 1990 The State of AP vs Pratap Steel applying GO Ms 383 and giving relief to the dealer It is argued that the Division Bench ought to have taken the same view in Deccan Engineers as well We have perused the decision in Pratap Steel It is a short judgment dismissing the Revision applying GOMs 383 It does not appear that the matter was argued in the manner it was in Deccan Engineers The said argument therefore cannot advance the case of the appellant 445 In this view of the matter in is not necessary for us to go into the question wether the word including in section 14 iv i of and item 2 i of the Third Schedule to the AP Act has the effect of making the said subclause exhaustive or otherwise Accordingly we bold that the cast iron castings manufactured by the appellants do not fall within the expression cast iron in Entry 2i of the Third Schedule of the Andhra Pradesh General Sales Tax Act or within Section 14 ivi of the The appeal accordingly fails and is dismissed No order as to costs W P No763 OF 1992 This writ petition preferred under Article 32 of the Constitution is directed against the notices issued by the assessing authority proposing to reopen the assessments of the petitionerappellant with respect to earlier assessment years and also seeking to apply the principle of Deccan Engineers to the pending assessments For the reasons stated hereinabove this writ petition fails and is accordingly dismissed No costs GSB Appeal and petition dismissed

In respect of an ancient temple situate in the State of Bihar disputes arose in I897 between the high priest and the pandas regarding the control of the temple which ultimately led to a suit being filed under section 539 now section 92 Of the Code of Civil Procedure in the Court of the District judge of Burdwan and a decree was passed by the Additional District judge under which a scheme was framed for the proper management of the temple The decree was confirmed by the Calcutta High Court and the scheme itself was later modified from time to time by the said High Court After the coming into force of the Bihar Hindu Religious Trusts Act 1950 the President of the Bihar State Board of Religious Trusts acting under section 59 of the Act served a notice on the respondent who had been appointed Sardar Panda for the temple under the scheme asking him to furnish a statement in respect of the temple and the properties appertaining thereto The respondent made an application under article 226 of the Constitution to the High Court of Patna challenging the validity of the action taken against him on the grounds 1 that the Bihar 625 Hindu Religious Trusts Act 1950 was ultra vires the Bihar Legislature 2 that the Bihar Legislature did not have legislative competence to deal with the temple in question as some of the properties appertaining to the temple were situate outside Bihar and 3 that in any case the Act did not apply to the temple by reason of the fact that the temple and its properties were administered under a scheme made by the Court of the District Judge of Burdwan and approved by the Calcutta High Court both of which were situate outside the territorial limits of Bihar as otherwise the Act by some of its provisions would seek to interfere with the jurisdiction of courts which are outside Bihar and thereby get extra territorial operation Held 1 that the Bihar Hindu Religious Trusts Act 1950 is intra vires the Bihar State Legislature Mahant Moti Das vs section P Sahi 1959 SUPP 2 SCR 563 followed 2 that it is competent to the Bihar Legislature to legislate in respect of religious trusts situate in Bihar though some of the properties belonging to the trust may be outside Bihar State of Bihay vs Charusila Dasi 1959 SUPP 2 SCR 601 followed 3 that the provision of law in sub section 5 of section 4 Of the Act by which section 92 Of the Code of Civil Procedure shall not apply to any religious trust in the State of Bihar is valid and 4 that as under section 45 Of the Act religious trusts in Bihar are taken out of the purview of section 92 Of the Code of Civil Procedure the jurisdiction of the District judge of Burdwan or the Calcutta High Court to deal with the temple in question under section 92 comes to an end consequently the Act and its several provisions do not suffer from the vice of extra territoriality and the Act applies to the temple in question and the properties appertaining thereto

l Appeal Nos 335 3421982 From the Judgment and Order dated 1881981 of the Punjab and Haryana High Court in Regular First Appeal Nos 2605 260426062610306308 10 and 11 of 1980 DV Sehgal LR Singh and Yunus Malik for the Appellants Ranjit Kumar and GK Bansal NP for the Respondents J By Notification published in the Haryana State Gazette on October 121976 under section41 of Land Acquisition Act 1 of 1894 for short the Act the respondent Union Territory of Chandigarh acquired a total extent of 7009 acres of land situated in Manimajra near Chandigarh for a public purpose namely to set up Brick Kilns therein The lands comprised in different Khasra numbers within HB No 375 out of which 6309 acres are Abi cultivated lands the rest are Barani rainfed land and ghair munkin waste land bouldars trenches etc By award dated January II 1977 the Collector fixed a sum of Rs 23600 as market value of Abi Rs 17000 per acre to Barani and Rs 12000 to Ghair Munkin lands On reference under section 18 the Civil Court enhanced the compensation to Rs 33600 per acre to Abi lands and no enhancement to other categories with solatium at 15 per cent and interest at 6 percent per annum on the 374 enhanced compensation from the date of taking possession till date of payment On appeal the learned Single Judge in RFA No 2605 of 1980 etc by judgment dated August 18 1981 confirmed the same Thus these appeals by special leave As common questions of law arise for decision they are disposed of by common judgment Appellants contentions is that the acquired lands possessed of potential value for residential and commercial purposes and there is no justification for classification of the lands and all the lands are entitled to parity to determine the market value By notification dated June 30 1976 in the same village under the same HB No 375 5437 acres were acquired for construction of Motor Market Complex The Collector and the Civil Court awarded the same market values as were fixed in these appeals but the learned Single judge denied parity of market value to these lands while enhancing the market value at Rs 75000 per acre to the similar lands in belting No 2 and awarded Rs 3 72200 to the lands abutting the main road upto a depth of 140 feet in other case Therein the Single Judge relied upon exhibit P28 of the year 1972 in which 17 marlas of land was sold Rs 75000 per acre Having relied upon the same and having enhanced the market value the same yardstick should have been applied in awarding market value to the lands under acquisition The learned counsel also placed strong reliance on 6 mutation entries which would show that the market value of the lands ranges between Rs 116000 to 160000 per acre and the appellants therefore are entitled to compensation at least Rs 75000 as claimed by them He also contended that having found that the lands are possessed of potential value being similar to the lands in other appeal the appellants are entitled to parity in determination of the market value as well The Haryana Govt acquired by notification dated January 81971 vast extent of lands in Judian Village for Mansa Housing and Commercial Complex and thereunder Abiirrigated lands were awarded at a sum of Rs 28800 per acre which was confirmed by the High Court After five years the notification was issued on October 12 1976 the Court should have taken note of steady rise in prices and have suitably enhanced the market value Since no one was appearing for the respondent we sent for Mr Ranjit Kumar the previous standing counsel for the Union Territory Chandigarh and requested him to assist the court Accordingly he has meticulously analysed the entire evidence and rendered valuable assistance He contended that the lands are situated beyond railway line on North West and 12 km to the motor market on the other side of the road The lands are nearer to Sukhna Choe lake at a distance of one furlong The mutation record is not admissible as none connected with the sale transactions were examined to prove the documents the grounds for sales comparative advantages and their respective situation The motor market is situated in a developed area on the Eastern side of the road and the lands in these cases are 375 located away from those lands Shri Ranjit also contended that lands in Judian Village for Mansa Housing and Commercial Complex were nearer to abadi possessing better amenities and they do not afford any comparable grounds He contended that the lands for canalisation of Sukhna Choe was acquired by notification dated March 21 1972 and the Reference Court upheld the award of the Collector at Rs 15525 for Abi lands which was confirmed by the High Court The location being very near to the lands under requisition they offer reasonable base to fix market value Notification was issued under s6 of the Punjab New Capital Perefery Control Act 1952 freezing development of the lands situated within a radious of 10 miles from Chandigarh boundary for any residential and commercial purposes Therefore they are not possessed of any potential value The learned Judge on the same day decided both the cases upholding the award of the Civil Court in these cases while enhancing the market value in motor market cases relied on by the appellants He was aware of the location and differential value between two types of land Therefore he was not inclined to enhance the market value of the land under acquisition The first question that arises for consideration is whether the High Court has committed any legal error in affirming the market value determined by the Reference Court The Dist Judge Chandigarh in LPJ No 10570 and batch found that the total extent of the land acquired is 7009 acres 560 Kanal 15 mawla out of which 6391 51 i Kanal 6 Marla are Abi land and 422 33 Kanal 15 Marla is Barani land and the rest are Ghair Munkin lands It is admitted by the witnesses that the acquired land is nearer to the railway track and also situated at a distance of 1 12 km from timber and motor market They are situated in wide area with the population of about 3000 3500 There are about 200 shops situated in Manimazra town The acquired land is towards north western side of Manimazra The railway line is 2 to 3 furlong from Manimaira on the northwestern side They are also situated near the boundary of Chandigarh and one furlong from Sukhna Choe It was also admitted that part of the land is situated in Sector 26 Thus it could be seen that the lands are situated very near to Chandigarh Neither the appellants nor the Land Acquisition Officer had examined witnesses in proof of the sale transactions referred in mutation entries exhibit P4 to P8 on behalf of the appellants and R1 and R2 on behalf of the respondent It is settled law that claimant is entitled to just and reasonable compensation and under section 23 to determine the market value of the lands the prevailing prices as on the date of the publication of the notification under section 41 the sale transaction of the same lands or sales of lands situated in the neighbourhood would furnish as evidence of comparable sales The price which a hypothetical willing vendor might reasonably expects to obtain from a willing purchaser would form the basis to fix the market 376 value It would be possible to have reliable evidence when sale transactions are proved by either the vendor or the vendee and if either of them was not available the attesting witness who had personal knowledge of the transaction is to be examined by producing either the original sale deed or certified copies thereof as evidence Under section 5 1A of the Act as amended in 1984 the certified copies have been permitted to be brought on record as evidence of sale transaction recorded therein The examination of the witnesses is to find that the sale transactions are bonafide and genuine transactions between willing vendor and willing vendee as reasonable prudent men and the price mentioned is not throw away price at arms length or depressed sales or brought into existence to inflate market value of the lands under acquisition and the sales are accommodating one Equally it must be brought on record the comparative nature of the lands covered under the sale deed and the acquired lands whether adjacent or actual distance or possessed of similar advantages and whether transactions themselves are genuine and bonafide trans actions This proposition of law since settled law in fairness has not been disputed across the bar The contention is that at the relevant time it was not being insisted upon Therefore none of the witnesses were called to prove the sale deeds or to prove the sale transactions Therefore when evidence of potential value is available the same could be considered We find merit in the contention At one time we thought of remanding the cases but we find that it would be needless prologation and the complexion on ground by now would have been completely changed In view of the above settled legal position and the circumstances the documentary evidence of sale transactions or in the mutation entries on either side are clearly not admissible and therefore they cannot be looked into and are accordingly excluded from consideration The only question therefore is whether the lands are possessed of potential value and whether the same treatment could be meted out to Abi and Barani lands Ghair Munkin land stands on a different footing and therefore they cannot be equated with the Abi and Barani lands The situation of the lands as extracted here in before clearly shows that the lands are situated very close to developed Chandigarh planned city and are very near to Sukhna Lake and are also nearer to railway track They are situated within the freezed zone for future potential development of the city Thereby it is clear that though the acquisition was for establishment of Brick Kilns by its very nature may not immediately be capable of being used for residential or commercial purposes but certainly possessed of potential value for future development as residential and commercial purposes Then what would be the reasonable market value prevailing as on the date of notification As rightly contended by Shri Ranjit Kumar that there is a distinction between the lands acquired for motor market or Mansa Housing Complex on one hand and the lands under acquisition on the other hand though the lands are Abi 377 lands The acquired lands are situated on the western side of Manimazra Panchkula road and the motor market was situated on the other side of the road Therefore the market value of the land acquired for motor market do not tender any assistance as comparable prices Obviously for that reason the same learned Single Judge while deciding both the appeals on the same day declined to enhance the market value to these lands while he awarded to lands in 2nd belt at Rs 75000 per acre We have no information whether any appeal was filed against that judgment But certainly the facts of these cases would assist us to assess a fair and reasonable compensation in fixing the market value though an amount of guess work is involved We are conscious of the fact that it should not be founded on feats of imagination hedged with undue emphasis of compulsory deprivation of the possession of the land of the appellants for the exercise of State s power of eminent domain statutory solatium is the premium the state pays Therefore the approach should be pragmatic to recompense the appellants to secure alternative lands or to invest in profitable business for rehabilitation It is seen that the Reference Court awarded a sum of Rs33600 per acre to Abi land There is a steady rise in prices as reflected in the judgment in the other appeals relied on by the learned counsel for appellants The High Court also recorded afinding in that behalf in those appeals The lands are situated in the same HB No 375 though at different places and distance having future potential development Considering the totality of the facts and circumstances we find that market value Rs 42000 per acre would be just and fair This value should be for Abi and for Barani lands at Rs 38000 per acre and the market value to ghair munkin land at Rs 12000 per acre awarded by the Civil Court is confirmed The appellants are entitle to Solatium and interest on the enhanced market value at 15 per cent and 6 per cent respectively from the date of taking possession till the date of payment as the award and the order of the Civil Court are prior to the periods mentioned in the Amendment Act 1984 came into force In the circumstances parties are directed to bear their own costs GN Appeals Partly allowed

The respondents appeared in the first year DHMS Diploma in Homeopathic Medicine and Surgery annual examination in june1988They had to re appear as they did not get the required percentage of pass marks in two or more subjects They were permitted to join the second year class after June 1988 Under the interim orders of the High Court they appeared in the second year annual examination Simultaneously the respondents appeared in the first year DHMS examination and cleared all the papers After re appearing in one or more subjects in the second year Supplementary examination in June 1990 they were declared passed in the 2nd year DHMS examination The respondents joined the third year DHMS course and completed the course of study When their examination forms were forwarded to the appellant Council they declined to permit the respondents to appear in the 3rd year DHMS annual examination because they did not complete one year course of study between passing the first DHMS examination and appearing in the second year course The respondents preferred a writ petition before the High Court to direct the appellants to permit them to appear in the third year DHMS examination commencing from 391991 Following the view taken in the decision of the Court in CWP No 2307 88 Gurinder pal Singh vs Punjabi University Ors which was followed in Harinder Kaur Chandok Minor v The Punjab School Education Board through its Secretary the High court allowed the writ petition of the respondents Against that order of the High Court the appeal CANo 210793 was filed by special leave The appellants submitted that the High Court was wrong in its construction on regulation 11 of the Homeopathy Diploma Course DHMS Regulations 1983 that if a candidate passed on supplementary examination he would have to wait till the next academic session that none of the Regulations indicated carry forward scheme of the subjects but on the contraryit was a case of detention every year The respondents urged that the interpretation placed by the High Courts on Regulations 8 to 10 was correct that four chances afforded to the 308 candidate could be rendered nugatory if the interpretation as stated by the appellants was accepted that the Regulations did not say that after First DHMS examination a student could not study for Second DHMS course and sit for examination provisionally that the declaration of result for the Second DHMS course took place only after a student cleared the First DHMS examination that if the Regulations were literally interpreted that would lead to absurdity and it would run counter to the object of providing a supplementary examination As the other appeals CANos 2108 1093 contained identical issue all the appeals were heard and decided together Allowing the appeals this Court HELD11 The Regulations 8 10 of the Homeopathy Diploma Course DHMS Regulations 1983 are plain enough and are susceptible only to literary interpretation MaxwellInterpretation of Statutes 12th Edition Page 29 referred to 12For admission to the First DHMS examination ia student must have regularly attended the courses of instruction theoretical and practical ii for a period of not less than 12 months iii to the satisfaction of the head of the College 317 B 13 Eligibility for admission to Second DHMS examination is based on two conditions i A student has passed his First DHMS examination at the end of one year previously This means one year must elapse between the passing of the First year examination and taking of Second Year Examination ii Subsequent to the passing the First year 309 a he must have regularly attended the courses both theoretical and practical b for a period of at least one year c to the satisfaction of the head of the College 317 F G Thus unless and until these two conditions are satisfied a student is ineligible for admission to the Second DHMS examination 317 H 318 A 14 The conditions for eligibility for admission to Third DHMS examination are i After passing the Second DHMS examination one and a half years must have elapsed before taking the Third DHMS examination ii Subsequent to the passing of the Second DHMS examination a he must have regularly attended the courses both theoretical an practical b for a period of 112 years c to the satisfaction of the college 318 F G 15 Mandatory requirements of Regulation 9 are i The lapse of one year period between the passing of First DHMS examination and taking the Second DHMS examination ii Subsequent to the passing of the First DHMS examination to undergo the course of study for one year 321 G 16 Therefore if a candidate passes in the supplementary examination the requirement of one year cannot be enforced Worse still is a case of a student who passes only at the next annual examination Could he he allowed to take the Second DHMS examination without even completing the First Should he by chance pass the Second DHMS and not complete the First since he has still one more chance to take this examination what is to happen 310 The situation is absurd The same principle should apply to Regulation 10 where the lapse is one and half years 321 H 322 A 17The pattern of the examination is 12 months for First DHMS examination 12 months for Second DHMS examination and 18 months for Third DHMS examination These put together with six months of compulsory internship make up the four years prescribed for the Course in Regulation 3 318 G 18When a candidate completes the subjects only in the supplementary examination then alone he passes the examination It is that pass which is declared If the doctrine of relation back is applied it would have the effect of deeming to have passed in the annual examination held at the end of 12 months which on the face of it is untrue 321 A 19Whatever it is a candidate has to complete all the subjects within four chances Should he fail to do so he will have to undergo the course in all subjects for one year unless of course he gets the exemption as stated in proviso to Clause vii In Regulation 11 there is no system of carry forward On the contrary it is detention every year Harmonious construction violates the mandatory requirements of Regulation 9 321 E F 110If a student were to sit idle at home after passing the supplementary examination that is his own making To avoid such a situation the Regulation cannot be construed causing violence to the language 323 H 324 A 111The candidates who as on the day of Judgment of these appeals have attended all the courses and have passed all the examinations might make an appropriate representation to the Council of Homeopathic System of Medicines The appellant to consider their cases The representation shall be filed within a period of four weeks The Council of Homiopathic System of Medicines the appellant will take appropriate decision 327 C 2 The adjective supplementary means an examination to make up the deficiencies Thus it stands to reason only when deficiencies are made up the whole becomes complete 322 D Oxford Dictionary Seventh Edition page 1072 referred to 322 B

Appeal No 2348 of 1993 From the Judgment and Order dated 1371992 of the Central Administrative Tribunal Guahati in OA No 3391 Ms K Amareswari BP Sarathy and CV Subba Rao for the Appellants PK Goswami Kailash Vasdev Ms Lira Goswami and Ms Alpana Poddar for the Respondent The Judgment of the Court was delivered by BP JEEVAN REDDY J Heard counsel for the parties Leave granted Respondent is a Garden Curator in the Office of the Scientist SE Botanical Survey of India Eastern Circle Shillong By order dated January 29 1991 he was transferred from Shillong to Pauri Uttar Pradesh by the Senior Administrative Officer office of the Director Botanical Survey of India Ministry of Environment and Forests Government of India As many as 19 persons were transferred under the said order including the respondent The respondent has been working in Shillong since the year 1979 The respondent approached the Gauhati Bench of the Central Administrative Tribunal Original Application No 33 of 1991 questioning the order of his transfer He submitted that his wife is also employed at Shillong in and off ice of the Central Government that his children are studying at Shillong and further that he himself had suffered back bone fracture injuries some time ago He submitted that the guidelines contained in Government of India OM dated 341986 have not been kept in mind while ordering his transfer tie complained that some other officials who have been serving at Shillong for a longer period have been allowed to continue at Shillong He attributed mischief to his Controller Officer Shri BM Wadhwa third respondent in the OM In the counter affidavit filed by the respondents they submitted that the transfer was ordered on administrative grounds and is unexceptionable The learned Single Member of the Central Administrative Tribunal quashed the order of transfer on the following reasoning the decisions of the Courts establish that the power of transfer is not an unfettered one but is circumscribed by various circularsguidelines contained in the administrative instructions issued 430 by the Government An order of transfer can be interdicted if it is discriminatory The said principles are applicable to the case of the respondent Further in the matter of considering transfer of an individual officer the Office Memorandum dated 341986 educational dislocation of the children and health ground if all present deserve special consideration not to pass the order Having said so the learned Member recorded the following finding In view of the above facts and circumstances and findings it is held unhesitatingly that the transfer order No BSI 80580 Estt dated 2911991 in respect of applicant SLAbbas was malafide and liable to be quashed The Union of India has preferred this appeal An order of transfer is an incident of Government Service Fundamental Rule 11 says that the whole time of a Government servant is at the disposal of the Government which pays him and he may be employed in any manner required by proper authority Fundemental Rule 15 says that the President may transfer a government servant from one post to another That the respondent is liable to transfer anywhere in India is not in dispute It is not the case of the respondent that order of his transfer is vitiated by mala fides on the part of the authority making the order though the Tribunal does say so merely because certain guidelines issued by the Central Government are not followed with which finding we shall deal later The respondent attributedmischiefto his immediate superior who had nothing to do with his transfer All he says is that he should not be transferred because his wife is working at shillong his children are studying there and also because his health had suffered a set back some time ago He relies upon certain executive instructions issued by the Government in that behalf Those instructions are in the nature of guidelines They do not have statutory force Who should be transferred where is a matter for the appropriate authority to decide Unless the order of transfer is vitiated by malafides or is made in violation of any statutory provisions the Court cannot interfere with it While ordering the transfer there is no doubt the authority must keep in mind the guidelines issued by the Government on the subject Similarly if a person makes any representation with respect to his transfer the appropriate authority must consider the same having regard to the exigencies of administration The guidelines say that as far as possible husband and wife must be posted at the same place The said guideline however does not confer upon the government employee a legally enforceable right The jurisdication of the Central Administrative Tribunal is akin to the jurisdiction of the High Court under Article 226 of the constitution of India in service matters This is evident from a persual of Article 323 A of the constitution The constraints and norms which the High Court observes while exercising the 431 said jurisdiction apply equally to the Tribunal created under Article 323 A We find it all the more surprising that the learned Single Member who passed the impugned order is a former Judge of the High Court and is thus aware of the norms and constraints of the writ jurisdiction The Administrative Tribunal is not an Appellate Authority sitting in judgment over the orders of transfer It cannot substitute its own judgment for that of the authority competent to transfer In this case the Tribunal has clearly exceeded its jurisdiction in interfering with the order of transfer The order of the Tribunal reads as if it were sitting in appeal over the order of transfer made by the Senior Administrative Officer competent authority Shri Goswami learned counsel for the respondent relies upon the decision of this Court in Bank of India vs Jagjit Singh Mehta 1992 1 SCC306 rendered by a Bench of which one of us JS VermaJ was a member On a perusal of the judgment we do not think it supports the respondent in any manner It is observed therein There can be no doubt that ordinarily and as far as practicable the husband and wife who are both employed should be posted at the same station even if their employers be different The desirability of such a course is obvious However this does not mean that their place of posting should invariably be one of their choice even though their preference may be taken into account while making the decision in accordance with the administrative needs In the case of all India services the hardship resulting from the two being posted at different stations may be unavoidable at times particularly when they belong to different services and one of them cannot be transferred to the place of the other s posting While choosing the career and a particular service the couple have to bear in mind this factor and be prepared to face such a hardship if the administrative needs and transfer policy do not permit the posting of both at one place without sacrifice of the requirements of the administration and needs of other employees In such a case the couple have to make their choice at the threshold between career prospects and family life After giving preference to the career prospects by accepting such a promotion or any appointment in an all India service with the incident of transfer to any place in India subordinating the need of the couple living together at one station they cannot as of right claim to be relieved of the ordinary incidents of all India service and avoid transfer to a different place on the ground that the spouses thereby would be posted at different places No doubt 432 the guidelines requires the two spouses to he posted at one pi as far as practicable but that does not enable any spouse to claim such a posting as of right if the departmental authorities do not consider it feasible The only thing required is that the departmental authorities should consider this aspect along with the exigencies of administration and enable the two spouses to live together at one station if it is possible without any detriment to the administrative needs and the claim of other employees emphasis added The said observations in fact tend to negative the respondent s contentions instead of supporting them The judgment also does not support the Respondents contention that if such an order is questioned in a Court or the Tribunal the authority is obliged to justify the transfer by adducing the reasons therefor It does not also say that the Court or the Tribunal can quash the order of transfer if any of the administrative instructionsguidelines are not followed much less can it be charactrised as malafide for that reason To reiterate the order of transfer can be questioned in a court or Tribunal only where it is passed malafide or where it is made in violation of the statutory provisions For the above reasons the appeal is allowed The judgment under appeal is set aside There shall be no order as to costs NPV Appeal Allowed

Section 6 of Andhra Pradesh General Sales Tax Act 1957 provides a single point tax 4 on declared goods mentioned in the Third Schedule to that Act Item 2 of the Third Schedule describes the articles made of Iron steel which fall in the category of declared goods sub item i of Item 2 pertains to pig iron and cast iron including ingot moulds bottom plates iron scrap cast iron scrap runner scrap and iron skill scrap Cast iron is defined in the Concise Oxford Dictionary as a hard alloy of iron carbon and silicon cast in a mould On February 281977 the Department of Revenue Banking Revenue Wing Government of India issued a letter to all Finance Revenue Secretaries of all State Governments and Union Territories explaining the term Cast Iron mentioned in section 14 iv i of the This letter said to have been issued in consultation with the Directorate General of Technical Development_Chief Chemist and the Ministry of Law Justice Company Affairs extended the scope of the expression cast iron to cover cast iron casting also Based on similar clarifications the Department of Revenue S Department of the Government of Andhra Pradesh issued a clarificatory order under section 422 of the Act vide GOMs No 383 dated April 171985 extending the scope of the expression cast iron to include cast iron castings This order was also published in the State s official Gazette Section 42 2 of AP General Sales Tax Act empowers the State Government to make by an order such provisions as appear to them necessary expedient to remove difficulty in the implementation of this Act provided that these are not inconsistent with the provisions of the Act The appellant manufactures and sells products like cast iron pipesman 434 hole covers etc He claims that read with the above clarificatory orders he is liable to pay only 4 sales Tax under Section 6 of the AP General Sales Tax ct But for the assessment year 1989 90 the Commercial Tax Officer CTO Narayanaguda Circle Hyderabad levied Sales Tax on the said products at the rate applicable to general goods The CTO having overruled the appellant s contentions the latter appealed to the Appellate Deputy Commissioner During the pendency of appeal a notice was issued to the appellant calling upon him to pay the tax assessed since no stay has been granted in appeal Against this notice the appellant filed a writ petition No 9315 of 1992 in the High Court of Andhra Pradesh The Division Bench of the High Court rejected the appellant s main contention that his products were covered by Item 2 iof the Third Schedule to the AP General Sales Tax Act and dismissed the writ petition Vide Civil Appeal No 4474 of 1992 with Writ PetitionCivil No 763 of 1992 The appellant questions before this Court the above view of the High Court Rejecting the appellant s contentions and upholding the judgment and order of the High Court this Court HELD Law is what is declared by this Court and the High Court An executive authority can at best only opine its own understanding of the statute such opinion is not binding upon the quasi judicial functioning of the authorities under the Act 444 B Sanjeev Coke Manufacturing Company vs Ms Bharat Cooking Coal lid and another referred to The Government cannot use the powers conferred by section 42 2 of the AP General Sales Tax Act to dispense with a levy created by the Act 444D The Van Nostrand s Scientific Encyclopaedia treats cast iron and cast iron with a hyphen as two different words The Act speaks of cast iron that is without a hyphen between the two words 437 G H Hence the expression castiron in Item 2 i of AP General Sales Tax Act does not include the products cast iron pipes man hole covers bends etc 437 F Deccan Engineers vs State of Andhra Pradesh 1991 Vo 12 AP Sales Tax Journal 138 referred to

Appeal No 2702 of 1984 From the Judgment and Order dated 2061984 of the Customs Excise and Gold Control Appellate Tribunal New Delhi in Appeal No ED SB 271483 C Harish N Salve Ashok H Desai Miss Meenakshi Grover Rajiv Dutta Ravinder Narain Miss Amrit and Miss Punita Singh for JBD Co for the Appellants AK Ganguli k Swami Dilip Tandon and P Parameshwaran for the Respondents J Common questions of law arose for decision in these 8 appeals need disposal by this judgment The question relates to classification of toilet soap in Excise item 15 of the First Schedule to the Central Excise and Salt Act 1 of 1944 as amended in 1964 for short the Act In addition in CA Nos 81 386 3632 3488 and 1 10289 sequal to its finding they claim refund of excess excise duty The facts in CA Nos 270284 and 278584 are sufficient for disposal The appellants laid before Assiatant Collect or classification list claiming toilet soaps Kalpa and Oasis in other appeals Jai OK Moti Rain drop Gold and Ria as bath soaps under Tariff item 15 1 of the First Schedule Household By notice dated August 31 1982 the Assistant Collector called upon the appellants to show cause as to why they cannot be classified under tariff item 152 other sorts and to levy excise duty at 15 per cent ad valorem as then stood The appellants after filing their reply thereto and having had personal hearing by proceeding dated November 27 1982 the Asstt Collector classified toilet soaps as other sorts under tariff item 152 of the Schedule On appeal the Collector by Order dated January 21 1983 classified them under tariff item No 151 household On second appeal the CEGAT by its order dated June 20 1984 reversed the appellate order and upheld the Asstt Collector s order Same is the case with regard to all other appeals except resultant claim for refund In 1954 tariff item No 15A was introduced in the First Schedule of the Act thus 15A Soap all varieties of the product known commercially as soap 1 Soap in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power or of steam for heating 1 Soap household and laundry a Plain bars of not less than Rupees one pound in weight fives annas four per cwt b ther sorts Rupees six annas 382 two per cwt 2 Soap toilet Rupees fourteen per cwt 3 Soap other then household Rupees and laundry or toilet fourteen per cwt This entry as amended in 1964 reads thus 15 Soap means all varieties of product known commercially as soap 1Soap household and 20 per cent Laundary ad valorem 2 Other sorts 20 per cent ad valorem Ad valorem rate of tarrif varies from time to time as per amendments Later it was amended in the year 1979 empowering the Govt to grant exemption under section 8 of the Act The details thereof are not material for the purpose of these cases It is seen that in 1954 in Tariff entry 15A soap means all varieties of the product known commercially as soap Item 1 provided that soap in relation to its manufacture with the aid of power or of steam for heating they were classified as Plain bars other sorts toilet soaps and soap other then husehold or laundry or toilet While amending the entry in 1964 the language couched therein as seen earliar is thus soap means all varities of products known commercially as soap 1 Soap household and Laundry 2 Other sorts and graded ad valorem tariff has been prescribed It is seen that household and laundry soap was subjected to levy of tariff at a lesser rate than other sorts ad valorem The contention of Sri Ganguli the learned Senior counsel for the union is that statute always kept distinction between soap household and laundry and other sorts Toilet soap was kept in the packet of other sorts Household and laundry soaps are being used for cleaning household articles and utensils and washing the clothes while toilet soaps are for bathing purpose The latter compose of diverse varieties based on personal liking and 383 taste are being used They are commercially known as other sorts but not household The legislative history furnishes unimpeachable evidence that soaps used for household and laundry are compendiously treated as a class and are subjected to imposition of lesser tariff They receive their colour from each other as compendiously known in the commercial parlance that the former are meant for use for household purposes while toilet soap are for use for bath and are subject to higher rate of tariff at par with soap for commercial and industrial purposes They bear higher rate of tariff The explanatory note appended to the Finance Bill 1964 would furnish the legislative intendment to amend the tariff item and the treatment meted out to toilet soap for tariff purpose It is accordingly understood by the department and also by the trade circles The appellants too intially treated toilet soap as other sorts but later on legal opinion they claimed them as household soaps The construction adopted by the tribunal is consistent with the standard works on soaps Ms Harish Salve and Ashok Desai contended that in 1954 toilet soap was treated as an independent tariff sub item and household and laundry soaps were treated as separate entity and separately subjected to varied rates of tariff On amendment in 1964 toilet soap was omitted as a separate entity and brought toilet soap as part of genus namely soap house hold as a toilet soap is always a household soap Therefore the reliance by revenue on varied rates of duty or departmental contemporenia expositio have no bearing The object of classification does not show that toilet soap is not part of the genus soap household unless it is established otherwise The question therefore emerges whether toilet soap would be household soap within the meaning of Tariff item 151 of the Schedule Undoubtedly true as contended by Sri Ganguli that preceding amendment toilet soap was classified separately under sub item 2 and assessed to duty accordingly But by amendment the distinction was wiped out and toilet soap was brought into common hotchpoch So the contention that the variety of products known commercially as soaps have been enumerated or included compendiously retaining their original colour even after the amendment made in the Finance Act 1964 and falls into other sorts same genus prima facie though attractive on consideration from proper perspective and in its setting in common commercial parlance soap toilet appears to fall in household in sub item 1 of tariff item 15 of the Schedule It is true that the heading soaps are commercially known to be of diverse variety The provisions of the Tariff do not determine the relevant entity ofthe goods They deal whether and under what entry the indentified entity attracts duty The goods are to be identified and then to find the appropriate heading sub heading under which the identified goodsproducts would be classified To find the appropriate classification description employed in the tariff nomenclature should 384 be appreciated having regard to the terms of the headings read with the relevant provisions or statutory rules or interpretation put up thereon For exigibility to excise duty the entity must be specified in positive terms under a particular tariff entry In its absence be deduced from a proper construction of the tariff entry There is neither intendment nor equity in a taxing statute Nothing is implied Neither can we insert nor anything can we delete but it should be interpreted and construed as per the words the legislature has chosen to employ in the Act or Rules There is no room for assumption or presumptions The object of the parliament has to be gathered from the language used in the statute The contention that toilet soap is commercially different from household and laundry soaps as could be seen from the opening words of entry 15 needs careful analysis It is well at the outset to guard against confusion between the meaning and the legal effect of an expression used in a statute Where the words of the statute are plain and clear there is no room for applying any of the principles of interpretation which are merely presumption in cases of ambiguity in the statute The court would interpret them as they stand The object and purpose has to be gathered from such word themselves Words should not be regarded as being surplus nor be rendered Otiose Strictly speaking there is no place in such cases for interpretation or construction except where the words of statute admit of two meanings The safer and more correct course to deal with a question of construction of statute is to take the words themselves and arrive if possible at their meaning without in the first place reference to cases for theories of construction Let us therefore consider the meaning of the word soap household The word household signifies a family living together In the simplistic language toilet soap being used by the family as household soap is too simplification to reach a conclusion Therefore one has to gather its meaning in the legal setting to discover the object which the Act seeks to serve and the purpose of the amendment brought about The task of interpretation of the statute is not a mechanical one It is more than mere reading of mathametical formula It is an attempt to discover the intention of the legislature from the language used by it keeping always in mind that the language is at best an imperfect instrument for the expression of actual human thoughts it is also idle to expect that the draftman drafted it with divine prescience and perfect and unequivocal clarity Therefore court would endeavour to eschew literal construction if it produces manifest absurdity or unjust result In Manmohad Das vs Vishnu Das a Constitution bench held as follows The ordinary rule of construction is the provision of a statute must be construed in accordance with the language used therein unless there are compelling reasons such as where a leteral construction would reduce the provision to absurdity or prevent manifest intention of the legislature from being carried out 385 In Ramavatar Budhaiprasad etc vs Assit Sales Tax Officer Akola and Anr another Constitution Bench was to consider whether betal leaves are vegetable within the meaning of item 6 of the 11 Schedule to the MP Sales Tax Act It was contended that betal leaves are vegetable and therefore they are exempted from the payment of sales tax While construing item 6 this court held that the words must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning that sense which people conversant with the subject matter with which the statute is dealing would attribute to it It is to be construed as understood in common language Therefore betal leaves were held to be not vegetable The term vegetables is to be understood as commonly understood denoting those classes of vegetable matter which are grown in kitchen gardens and are used for the table The same view was reiterated in Motipur Zamindari Co Pvt Ltd vs State of Bihar 1962 Supp 1 SCR 498 and State of West Bengal and Ors vs Washi Alumed etc 19773 SCR 149 In Washi Ahmed s case green ginger was held to be vegetable within the meaning of the word used in common parlance In Motipur Zaminadari s case it was held that sugarcane was not vegetable In Porritts Spencer Asia Lid vs State of Haryana this Court held that Dryer felts are not textiles In that context the principle of understanding the meaning of the word in common parlance was adopted In Indo International Industries vs Commissioner of Sales Tax U P at 297C this Court held that it is well settled that in interpreating items in statutes like the Excise Tax Acts or Sales Tax Acts whose primary object is to raise revenue and for which purpose they classify diverse products articles and substances resort should be had not to the scientific anti technical meaning of the terms or expression used but to their popular meaning that is to say the meaning attached to them by those dealing in them If any term or expression has been defined in the emphasis supplied enactment then it must he understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted In that case the clinical syringes manufactured and sold by the assessee were not considered as glassware falling within entry 39 of the First Schedule of the Act In commercial sense Glassware would never comprise of articles like clinical syringes etc or specialised significance and utility Same view was reiterated in PA Chillai Chidambara Nadar vs Addl Appellate Asst Commissioner Madurai and Anr that coconut is neither a fresh fruit nor a vegetable In khandelwal Metal Works vs Union of India 1985 Supp 1 SCR 750 at 774 B C this Court held that court cannot decide classification 386 of goods under Import Tariff by implication If rules of interpretation are made in the Act they should be applied and interpretation would be made with their aid for classification The court held that brass scrap is not metal alloy Craises on Statute Law 7th Edition at pace 164 specified one of the Rules of Interpretation of Statutes as extracted below The second Rule is that if the statute is passed with reference to a particular trade business or transaction and words are used therein which everybody conversent with that trade business or transaction knows and understands to have a particular meaning in it then the words are to be construed as having that particular meaning In Shri Bharuch Coconut Trading Co and Ors vs Municipal Corporation of the city of Ahemdabad and Ors 1992 Suppl 1 SCC 298 this Court applied the test as would a householder when asked to bring some fresh fruits or some vegetable for the evening meal bring Coconut too as vegetable Obviously the answer is in the negative Again when a person goes to a commercial market ask for coconuts no one will consider brown coconut to be vegetable or fresh fruit no householder would purchase it as a fruit Therefore the meaning of the word brown coconut whether it is a green fruit has to be understood in its ordinary commercial parlance Accordingly it was held that brown coconut was not green fruit In interpreting the statute the individual appraisal of the wisdom or unwisdom of a particular course consciously selected by the Legislature is to be put aisde In Hansraj Gordhan Das vs HH Dave Collector of Central Excise Customs and Ors 3 this court held that the operation of the statutory notification had to be judged not by the object which authority had in mind but by the words it had employed to effectuate the legislative interest The question whether the cotton textiles manufactured by handlooms are entitled to exemption this court held to be positive It may be noted that marketability of the product is an essential facet to attract dutiability of the goods under the Act The general purpose or common use of the product though may not be conclusive but may be relevant to classify it in a tariff entry when it was not specifically enumerated in a particular entry or sub entry The construction of the word must yield in favour of promoting and effectuating the object and purpose of the Act In Dunlop India Ltd vs Union of India Ors this Court found the entry not in residuary but placed in the parentage and relieved it from orphanage in Anant B Timbodia vs Union of India this Court was to consider whether imported cloves fell with item 169 in List 8 of Appendix 6 or para 167 of chapter 8 of import and export policy 1990 93 Para 167 of Chapter 8 of import policy clearly provided the heading Import of Spices includes cloves cinnamon cassia nupneg and Mace Therefore it was held that import permit is necessary The doctrine of popular sense or trade or its use in making medicine as crude drug 387 was not accepted Dictionary meaning or meaning given in Indian Pharmaceutical Codex was not accepted as given in in view of specific enumeration In Superintendent of central Excise Surat vs Vac Metal Corporaion Ltd AIR 1986 SC 1167 when the revenue contended that metalised yarn fell within general Tariff entry 18 yarn and synthetic fibres this court held that entry 15A 2 first schedule of Central Excise Salt Act s specific entry relating to articles made of plastics of all sorts and metalised yam wax exigible to lessor tariff duty In Spaco Carburettors India Ltd vs Collector of Customs Bombay whether special purpose complex machine tool fell in entry 84 89 or 844548 this court held after taking into account the purpose and use of it that it is a multipurpose machine tool and fell in item 84 4548 of 1st Schedule The contention of the Revenue which finds favour with the tribunal that the legislative history and memorandum appended to the Finance Bill would furnish aid to the construction of the word household soap is not apposite to the fact situation When there is ambiguity in the word statement and objects the legislative history the memorandum appended to the Bill and the speech of the mover of the Bill are relevant material to discover the intention intention of the legislature In Shashikant Laxman Kale and Anr vs Union of India and Anr at 376 para 17 this Court held that for determining the purpose or object of the legislation it is permissible to look into the circumstances which prevailed at the time when _the law was made the Statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing malady can be used for the limited purpose of appreciating the background and the antecedent state of affairs leading to the legislation The memorandum explaining the provisions in the Finance Bill which were not part of the Notes on Clauses appended to the Statement of Objects and Reasons of the Bill cannot be used to draw support therefrom as it is not an accurate guide of the final Act In that behalf this Court relied on the statement of law profounded by Francis Bennion in his Statuitory Interpretation Second Edition 1984 at p 529 relied on by the appellants in this case too In Ajoy Kumar Bannerjee and Ors vs Union of India and ors relied on by Sri Ganguli in this behalf renders no assistance to the Revenue Therein the question was the object of delegated legislation Therein the memorandum appended to the Bill incorporating section 16 of the was considered in the context of fixation of the pay scales of the employees The doctrine of reading down placing reliance on Utkal contranctors and Joinery Pvt and Ors vs State of Orissa and Ors also is of no assistance to the Revenue The doctrine of reading down has been applied only to sustain the constitutionality of the statute which question is not before us There is no quarrel with the proposition that in ascertaining the meaning of the word or a clause or 388 sentence in the statute in its interpretation everything which is logically relevant should be admissible It is no doubt true that the doctrine of Noscitur A Sociis meaning thereby that it is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them ie when two or more words which are susceptible of analogous meaning are clubbed together they are understood to be used in their cognate sense They take as it were their colour from each other the meaning of the more general is restricted to a sense analogous to a less general The philosophy behind it is that the meaning of doubtful words may be ascertained by reference to the meaning of words associated with it This doctrine is broader than the doctrine of ejusdem generis This doctrine was accepted by this Court in catina of cases but its application is to be made to be context and the setting in which the words came to be used or associated in the statute or the statutory rule Equally the doctrine of contemporanea erpositio is also being invoked to cull out the intendment by removing ambiguity in its understanding of the statute by the executive This Court in a latest case Indian metals Ferro Alloys Lid vs Collector of central Excise cited all the decisions upto date and applied the doctrine to the understanding by the revenue of the provisions in income tax Act In Desh Bandhu Gupta and Ors vs Delhi Stock Exchange this Court held that this principle can be invoked though the same will not always be decisive on the question of construction But the contemporaneous construction placed by administrative or executive officers charged with executing the statute although not controlling is nevertheless entitled to considerable weight as highly persuasive We may also add that if the interpretation is erroneous court would without hesitation refuse to follow such construction This Court also equally expressed the view that its application was in restricted sense to ancient legislation in J K Cotton Spinning and Weaving Mills Ltd and Anr vs Union of India and Ors 1987 Supp SCC 350 and in Doypack Systems Pvt case at 1000 F to H In State of Madhya Pradesh vs Ms GS Dall and Flour Mills 1992 Supp 1 SCC 150 at 153 para 18 this Court doubted the application of the doctrine of contemporanea exposito as given to the construction or its applicability to a recent statute that too in the first few years of its enforcement In this case also the question whether toilet soap is a household soap had arisen within a short period after the Amendment Act 1964 came into force Therefore the understanding by the executive and its interpretation in bringing toilet soap in sub item 2 other sorts instead of item 1 household being of formative period of statutory operation the doctrine became inapplicable The ratio in Indo Metal case therefore is inapplicable As rightly contended by Sri Ganguli that the doctrine of placement of a particular goods in a particular tariff item or residuary ie parentage or orphanage ie in placement of toilet soaps 389 in either sub items is not attracted to the facts as it is not a case of residuary items but of sub classification within the same item Thus considered in the legal setting and commercial parlance we are of the considered view that toilet soap being of everyday household use for the purpose of the bath and having removed its separate identity which it enjoyed preceding amendment and having been not specifically included in other sorts it took its shelter in commercial parlance under household As stated if any body goes to the market and asks for toilet soap he must ask only for household bathing purpose and not for industrial or other sorts Even the people dealing with it would supply it only for houshold purpose It may be true that Household consists of soap used for cleaning utensils laundry used for cleaning soiled clothes and soap toilet is used for bathing but household is compendiously used toilet soap is used only by the family for bathing purpose Individual preference or choice or teste of a particular soap for bath is not relevant The soap toilet would therefore fall within the meaning the word of household in sub item 1 of item 15 of the Schedule The classification shall accordingly be adopted The appeals are accordingly allowed the cases are remitted to the primary authority to deal with the matters accordingly We do not propose to go into the question of refund as it is a matter to be dealt with by the authorities concerned in accordance with the law The appellants shall have to apply for refund and the authorities shall be required to deal with it in accordance with law It is for the authority therefore to decide the question as per law In the circumstances parties are directed to bear their own costs VM Appeal allowed

The Respondents acquired some lands for setting up Brick Kilns The lands consisted of Abi cultivated land Barani rainfed land and ghair munkin waste land and the Collector fixed the compensation at Rs 23600 Rs 17000 and Rs 12000 per acre of the respective lands On a reference the Civil Court enhanced the compensation to Rs33600 per acre for Abi lands No enhancement was allowed in respect of the other categories of land It however allowed solatium at 15 and interest at 6 pa on the enhanced compensation On appeal a Single Judge of the High Court confirmed the same These appeals were filed against the said Judgment of the High Court The appellants contended that the acquired lands had the potential value for residential and commercial purposes and there was no justification for classification of the lands and all the lands shall be treated at party in determination of market value that in a similar case the market value was enhanced to Rs 75000 per acre and in view of the fact that certain mutation entries showed a market value of similar lands ranging from Rs 116000 to Rs 160000 per acre the appellants claimed for compensation of at least at Rs 75000 per acre On behalf of the Respondents it was contended that the mutation record was not admissible as no one connected with the sale transactions was examined to prove the documents the ground for sales comparative advantages and their respective situation that the lands possessed comparable or better amenities and whether the lands are very near to the lands under 372 acquisition The compensation awarded by the Collector at the rate of Rs 15525 per acre was upheld by the Reference Court and this offered a reasonable base to fix the market value of the lands under acquisition Partly allowing the appeals this Court HELD 1 Neither the appellants nor the Land Acquisition Officer had examined witnesses in proof of the sale transactions referred in the mutation entries It is settled law that a claimant is entitled to just and reasonable compensation under section 23 To determine the market value of the lands it is necessary to examine witnesses to prove the prevailing prices as on the date of publication of the notification under section 41 The sale transaction of the same Lands or sales of lands situated in the neighbourhood possessed of same or similar advantages would furnish as evidence of comparable sales It would be possible to have reliable evidence when sale transactions are proved by either the vendor or the vendee and if either of them was not available the attesting witness who had personal knowledge of the transactions is to be examined by producing either the original sale deed or certified copies thereof as evidence Since at the relevant time it was not being insisted upon none of the witnesses were called to prove the sale deeds or to prove the sale transactions Thus the documentary evidence of sale transactions or the mutation entries on either side are clearly not admissible and therefore they cannot be looked into and are accordingly excluded from consideration 375 GH 376 H E 2 The situation of the lands dearly shows that the lands are situated very dose to developed Chandigarh planned city and are very near to Sukha Lake and the railway track They are situated within the freezed zone for future potential development of the city Though the acquisition was for establishment of Brick Kilns by its very nature the lands may not immediately be capable of being used for residential or commercial purposes but certainly possessed of potential value for future development as residential and commercial purposes There is a distinction between the lands acquired for Motor Market or Mansa Housing Complex on the one hand and the lands under acquisition on the other hand though the lands are Abi lands going by the situation of the lands the market value of the land acquired for motor market do not render any assistance as a comparable price This would be of assistance to assess a fair and reasonable compensation in fixing the market value though an amount of guess work is involved This Court is conscious of the fact that it should not be founded on feats of imagination hedged with 373 undue emphasis of compulsory deprivation of the possession of the lands of the appellant For the exercise of State s power of eminent domain statutory solatium is the premium the State pays Therefore the approach should he pragmatic to recompense the appellants to secure alternative lands or to invest in profitable business for rehabilitation It is seen that the Reference Court awarded a sum of Rs 33600 per acre to Abi land No doubt there is a steady rise in prices of lands Considering the totality of the facts and circumstances the market value Rs 42000 per acre would be just and fair for Abi lands and at Rs 38000 per acre for Barani lands The market value of ghair munkin land at Rs 12000 per acre awarded by the Civil Court is confirmed The appellants are entitled to solatium and interest on the inhanced market value at 15 per cent and 6 per cent respectively from the date of taking possession till the date of payment as the award and the order of the Civil Court are prior to the periods mentioned in the Amendment Act 1984 came into force 376GH 371 A F

Appeal Nos 218293 with 218193 From the Judgment and Order dated 3041992 of the Gauhati High Court in Civil Rule No 166 of 1984 AM Mazumdar Attorney General Arunachal KK Venugopal Shahid Rizvi and Ms Manjula Gupta Appellant in CA No 2182 of 93 and for the Respondent in CA No 218193 Govind Mukhoty and SK Bhattacharya for the respondent in CA No 218293 and for the Appellant in CA No 218193 The Judgment of the Court was delivered by MOHANJ Leave granted Both these civil appeals arise out of the judgment of the Gauhati High Court dated 30th April 1992 rendered in CR No 166 of 1984 The short facts are as under The parties will be referred to as the appellant and the State of Arunachal Pradesh The appellant alongwith his family members and other 56 families migrated to India on 30th March 1964 from erstwhile East Pakistan now Bangladesh due to disturbances prevailing at that time They took shelter in a government camp at Abhayapur Block in Tirap District The appellant and other 56 families are known as Chakmas of the erstwhile East Pakistan They being the refugees were given shelter in government camp at Ledo in the District of Dibrugarh Assam Later on in 1966 they were shifted to the Camp at Miao within the State of Arunachal Pradesh Arunachal Pradesh was called NEFA North East Frontier Agency prior to 1972 On 21st January 1972 it was given the status of Union Territory of 406 Arunachal Pradesh It became a full fledged State on 20th February 1987 Geooraphically it is situated on the north east of India and has a long international border with Bhutan China and Burma Burma presently called Myanmar It is the largest State areawise in the north east region even larger than Assam which is the most populous State The population of Arunachal Pradesh according to the 1981 census is 632 lakhs It is scattered over 12 towns and 3257 villages There are 26 Major tribes Broadly speaking the people in the State can be divided into three cultural groups on the basis of their socio regional affirmities i The monpas and Sherdukpens of Tawang and West Kemeng District iiKhamptis and Singhphos inhabiting the entire easternpart of the State and iiiThe Neotes and Wanchos adjoining Negal and in the Tirup District In the year 1966 the State Government drew the Scheme known as Chakma Resettlement Scheme for these refugees Areas were earmarked for their settlement at different parts of the State and accordingly they were asked to move to the areas earmaked for them In all 5 Schemes were sanctioned for their settlement comprising of about 3100 families of refugees at the cost of more than Rs 2 crores The appellants along with 56 families were allotted lands in the villages of Gautampur and Maitripur There were already a good number of Chakma refugee families who were allotted lands and were living there peacefully The appellants instead of residing in the said allotted areas under the Resettlement Scheme drawn by the Government strayed away from it and negotiated with the Local Raja namely Nigrumong Singpho of Damba for an area of one sq mile of his private land and got the same from the said Singpho through an unregistered deed dated 20th November 1972 The State would contend that the said transfer is illegal because as per section 7 of the BEFR 1873 Regulation 5 of 1873 no person who is not a native of the District would acquire any interest in the land or the produce of the land beyond the inner line without the sanction of the State Government or such officer as the State Government may appoint in this behalf On the contrary the stand of the appellant is that since the date of donation they have been residing and cultivating 407 the said land and they have developed the area for habitation purposes It is further alleged on behalf of the appellant that in 1975 a village panchayat of Joypur village was formed after election of the members The appellant was appointed as the Gaon Bura of the village This was with the approval of the Government in token of which a sanad dated 201175 was issued in his name The Deputt Commissioner at kenosa approved the transfer and the Extra Assistant Commissioner Miao by his memorandum No MR S A n58648 51 dated 26470 issued instructions against any attempt to allot the land to other and generally against any eviction of the appellants from the said land Some Deori families who were allotted lands in the adjacant area of Joypur village attempted to encroach upon the lands of the appellant and on a complaint lodged the authorities concerned ie Executive Magistrate at Miao by his letter dated 30577 issued instructions to Ningronong Singpho Rajkumar to turn out the extra families from the appellant s village with a direction to the Circle Officer Diyun to report compliance It was after such intervention that such outsiders in due course were expelled After obtaining the donation from the Raja by dint of hard labour they developed the jungle area which was a hillly uneven tract of land In view of the tremendous agricultural success the Tirup District authorities granted two Rice Hullar Units in the name of the appellant The Chakmas transformed the land into a truly self sufficient village In view of prosperity and growth of land the nearby villagers sought to dislodge the appellant and families by raising various disputes one of which was that the place cannot be utilised as refuge settlement and that they should be shifted to another place Circle Officer Diyun issued an order dated 15284 directing the appellant to shift to the vacant land at Gautampur and Maitripur villages latest by 24th of February 1984 The representation requesting the Chief Minister of Arunachal Pradesh to interfere was of no avail The appellant after settling in this unauthorised land started committing criminal and illegal activities There were several complaints to the effect that the appellant is encroaching upon the private lands illegally in connivance with the local people particularly Singphos In order to investigate the matter fully the Government vide its letter dated 441979 directed an enquiry into the whole matter through a Committee compris 408 ing of 9 persons with the Deputy Commissioner of the area as the Chairman The said committee after the investigation submitted its report on 11679 stating therein that about 788 families of Refugees Chakmas Deori and Bhufia have illegally encroached upon about 872 Hectares in Miao Sub Division alone The said Committee observed that 7 The fear of the local people regarding heavy growth of population among the Chaknias has already been stated above and it is also well known to the Government But such fear maybe true in the case of Deoris and Ahoms too because it has been seen that in their case too the irpopulation is increasing by leaps and bounds for instance it is learnt that when they were inducted there were only 6 Ahom families and 32 Deoria where as this has now increased to 23 and 106 respectively We should therefore watch by one method or the other that flow of Chakmas Deoris and Ahoms does not at all take place For this purpose formal allotment of land to each family is very necessary and further in order to guard against new entrents the DCs office is said to be taking up the issue of identity cards 92 Land is still available in Innano Dumba and Modoi especially after the eviction of four Chakma villages during March last Singphos have been known to induct outsiders not only without Govt s approval but also by various undesirable mathods this has to be properly watched and if found necessary we may have to give exemplary punishment to those who indulge in such practice Already there is some sign of dissension among the local people due to the activities of one Nirunong of Kumchai village who was mainly responsible for inducting Chaknias in Jaipur village 10 Deori families and some other from outside It has also been seen that in Innano village there are six tea garden tribals who have been living and working since the last 10 years with Inner Line passes renewed from time to time but obviously with the understanding that the local people would subseqently give them land for permanent resettlement The State received complaints that Chakma people were indulging in illegal activities such as commission of offences under various lands collection of arms and anununitions establishing conteracts with the Extremist groups encroachment of adjoining areas The State therefore found it necessary to shift them to 409 a site where other Chakma families were already residing It was in these circumstances by order dated 15284 the State directed the appellant and the other Chakmas to shift The said order is to the following effect In connection to this office memoranodum No LS 48384 2478 79 dated 6284 the Chakma of Joypur village are hereby directed to shift to the vacant land allotted at Gautampur and Maitripur village latest by 2521984 This may be treated as final notice failing whichlegal action will be taken against the defaulters Questioning the correctness of the order CR No 166 of 1984 was filed before the High Court of Gauhati It was urged i The petitioners are citizens of India ii Their fundamental rights have been infringed iii The impugned notice dated 15th of February 1984 is illegal arbitrary and had been issued in violation of the principles of natural justice The High Court of Gauhati formulated three questions for determination 1 Whether the writ petitioner and the 56 chakma familes now settled in Joypur village Miao subdivision Arunachal Pradesh are citizens of India or foreigners 2 If they are not citizens of India whether the authorities concerned have right to give direction to these Chakma people to move to another place Whether the impugned order dated 1521984 is arbitrary devoid of reason and violative of the provisions of the Constitution While urging the first question it was contended that the petitioner and the other Chakma families came to Assam in 1964 and stayed there for some time They were shifted to Miao Sub Division in Arunachal Pradesh In 1964 the territory of Arunachal Pradesh was included in Assam Since they stayed in Assam 410 they must be deemed to be citizens of India within the meaning of Section 6 A of the as amended in 1985 They also contended that proviso to Section 2 of Immigrants Expulsion from Assam Act 1950 would also protect them The High Court on an elaborate consideration of the provisions of came to the conclusion that language of Section 6 A of the is very clear It states that person who have come into Assam before January 1966 from the specified territory and who have been ordinarily resident in Assam since the date of their entry shall be deemed to be citizens Admittedly the petitioners therein would not fell under this category as they stayed in Assam for a short while in 1964 Accordingly they will not be citizens of India On the second question the High Court referred to Section 7 of the Bengal Eastern Frontier Regulation 1873 That section specifically prohibits the acquisition of interest in land by other than the natives of the district without the sanction of the State Government Admittedly there was no sanction of the State Government in favour of the petitioners under the said Regulation which is applicable to Arunachal Pradesh Besides clause 9 2 a of the Foreigners Order 1948 prohibits acquisition of land or any interest thoreon or within the prohibited area by any foreigner Clause 9 2 b states that the local authority may impose conditions regarding acquisition of land or any interest thereof or any other matter deemed necessary in the interest of public safety There was no controversy that the place where chakmas were staying is within the inner line which is protected area notified by the State Government In view of the facts the High Court came to the conclusion that the petitioners had no right to seek a permanent place of abode in that area The authority had every right requiring them to shift On the third question after going through the various files produced by the State Government in the court the High Court found various complaints against these chakmas They were indulging in procuring arms and ammunation and were actively associating with anti social elements Accordingly it was concluded that the impugned order is not devoid of any reason Lastly the High Court on humanitarian grounds directed the State Government to give adequate compensation in the event of these chakmas being evicted from the place The State of Arunachal Pradesh has preferred SLP C No 12429 of 1992 while Khudiram Chakma has filed SLP C No 13767 of 1992 411 Mr Govind Mukhoty learned counsel for the appellant urges that in 1947 the appellants were Indian citizens Because of the partition of the country they went over to the then East Pakistan presently Bangladesh But when they returned in 1964 to the erstwhile Assam State they stayed there for some time and shifted to Arunachal Pradesh To deprive them of the citizenship would be violative of Article 14 of the Constitution of India By mere accident of their going over to Arunachal Pradesh they cannot lose their citizenship The learned counsel referred us to the various provisions of the He urges that there is evidence in this case of donation of lands in favour of these appellants by Raja Nirunong Singpho of Dumba That was approved by the Deputy Commissioner as seen from memorandum dated 26th of April 1976 The appellant was appointed Gaon Bura of Joypur village In proof of that Sanad was issued by the Deputy Commissioner Again the Executive Magistrate had directed the Raja to turn out the extra families occupying lands at Joypur in the area allotted to the appellants and other Chakmas There is also evidence on record to show that chakmas have been paying taxes including house tax When that be the position there is no justification at all calling upon the appellants and the other 56 families to shift There was no notice before calling upon the appellants to shift This Court in Scheduled Caste and Weaker Section Walfare Association vs State of Karnataka a case arising under karnataka Slum Areas Improvement and Clearance Act 1973 held that before eviction a slum dweller does have a right to say Therefore it is submitted that the principle of natural justice applies to noncitizens also In Louis De Raedt vs Union of India this Court took the view that the fundamental rights are available to foreigners as well including Article 21 of the Constitution Mr KK Venugopal learned senior counsel appearing for the State of Assam contends in opposition The appellants cannot claim to be citizens of India by invoking Section 6 A of the as amended and incorporated on 71285 in pursuance of the Assam Accord In order to get the benefit of Section 6 A two conditions mentioned in sub section 2 of the said Section must be satisifed simultaneously i The persons who are of Indian origin viz undivided India came before 1166 to Assam from the specified territory and 412 ii have been ordinarily resident in Assam as it existed in 1985 since the date of their entry into Assam In so far as the appellants were residing in Miao sub division of Tirup District Arunachal Pradesh since 1968 they did not satisfy these conditions As to what exactly is the meaning of ordinarily resident could be seen from Shanno Devi vs Mangal Saini at 590 It is true that this Court in Louis De Raedt supra took the view that even foreigner has a fundamental right but that fundemental right is confined only to Article 21 and does not include the right to move freely throughout and to reside and stay in any part of the territory of India as conferred under Article 191 d and e Such a right is available only to the citizens The appellants being foreigners cannot invoke Article 14 of the Constitution to get the same right denied to them under Article 19 since Article 14 cannot operate in regard to a right specifically withheld from non citizens In support of this submission reliance is placed on Indo China Steam Navigation Co vs Jasjit Singh 94 at 621 to 622 and Louis De Readt supra The land donated in favour of the appellants by Raja Nirunong Singpho of Dumba by donation deed dated 201172 is illegal Section 7 of the Bengal Eastern Frontier Regulation 1873 and clause 9 of the Foreigners under 1948 which are applicable to Arunachal Pradesh specifically prohibit such transfer without prior permission of State Government No such permission in this case was obtained The tribals of North eastern States are historically protected races Part x of the Constitution of India contains provisions and laws goveming them The decision re arding settlement of foreigners is a matter of policy It is well settled in law that the Court does not interfere in a matter of governmental policy since it is for the Government to decide On the quesion of natural justice before passing the impugned order dated 15284 the learned counsel producing the relevant material from the file would urge that it is not correct to state that the order came to be issued all of a sudden There is abundant material to show that the question of eviction was an ongoing process right from 1978 Many notices were issued over a period of years to shift to villages Maitripur and Gautampur There were protests from chakmas From the file it is seen that the appellant was aware of the shift order dated 26983 There was also an oral hearing of the same It was because of the complaints filed by the residents of the locality against the appellant and in view of the report that they were induling in procuring arms and ammunition and were in close contact with anti social elements Taking an overall view of the matter the impugned order 413 came to be passed On ground realities natural justice is fully satisfied In support of the above submissions the learned counsel relied on the following cases p 331 A to 332 H 334 A to J Rv Secretary of State for the Home Department ex party Cheblak Lord Bridge of Harwich p 723 F to 724G Lord Templeman p 725 J 726 A to C Lord Ackner p 73 1 H 732G H 735 F J Lord Lowry p 737 D J Brind vs Secretary of State Council of Civil Service Unions vs Minister for the Civil Service D p 219 223 A J 229 McInnes vs onslow Farne Anr at p 722 723 para 12 13 JR Vohra vs India Export House Pvt Ltd at p 738 para 20 22 Maharashtra State Board of Secondary Higher Education vs KS Gandhi at p 263 Satya Vir Singh vs Union of India However the learned counsel fairly conceded that the Chief Minister was willing to hear the appellants or any representative of their group additionally as a post decisional hearing even though they had full opportunities over a period of four years It is his submission that it must be a post decisional hearing as otherwise if the decisions were against the appellants a further round of litigation would be embarked upon We will proceed to consider the correctness of the above submissions 414 providing the necessary background and the factual matrix The history of the mountainous and multitribal north east frontier region which is now known as Arunachal Pradesh ascends for hundreds of years into the mists of tradition and mythology According to Puranic legend Rukmini the daughter of king Bhishmak was carried away on the eve of her marriage by Lord Krishna himself the ruins of the fort at Bhalukpung are claimed by the Akas as the original home of their ancestor Bhaluka the grandson of Banna Raja who was defeated by Lord Krishnaat Tezpur Assam A Kalita Kinu Ramachandra driven from his kingdom in the plains of Assam fled to the Dafla now Nishan foothills and established there his capital of Mayapore which is identified with the ruins on the It a hill A place of great sanctity in the beautiful lower reaches of the Lohit River the Brahmakund where Parasuram opened a passage through the hills with a single blow of his mighty axe still attracts the Hindu pilgrims from all over the counrty In the year 1838 when the British took over the administrative control of Assam from the last Ahom king Shri Purander Singh it was thought necessary to extend elementary regular administration to the adjoining north east frontier region The first import and step in this direction was as such initiated with adoption of Regulation V of 1873 empowering the then Lieutenant Governor of Assam to prescribe a Line called Inner Line with a view 1 to bring the commercial relations of the hills with the plains under more stringent control 2 to prevent of operation of speculators in caoutchouc raw rubber 3 to prevent the spread of tea gardens and 4 to lay down rules for the possession of land and property beyond the Inner Line without special permit A Notification bearing No 1486 dated June 21 1876 was issued by the Government of India foreign Department to the effect that the Governor General was pleased to prohibit all British Subjects from going beyond the inner line without a pass under the hand and seal of Deputy Commissioner After covering the hilly areas administratively the whole of tribal region was divided into two Frontier Tracts in 1915 By 1937 the administrative status of North East Frontier Tract could be effected to under the Govemment of India s Excluded and Partially Excluded Area Order of 1936 Under the effective provision of the Section 91 i of the governmentoflndia Act 1935 the above Frontier Tract came to be known as Excluded Area of Assam Again the 1942 administrative change took place as a consequence of which Tirap Frontier Tract was carved out of the Sadiya Frountier Tract In 1943 an adviser was appointed as the administrative head with a purpose to develop the region 415 through gradual penetration of the administrative machinery Another change was effected in the administrative set up on the 26th of January 1950 when the Government of Assam was relieved of its responsibility for looking after the administration of the Excluded Area However the discretionary power was vested in the Governor of Assam under the provision of the paragraph 18 of the Sixth Schedule to the Constitution and Part 8 of the Table 20 of the Schedule who served as the agent of the President of the Union of the Republic of India In the course of administrative and political events Arunachal Pradesh has travelled from the Tract to the Union Territory Under the provision of Central Act 81 of 1971 the present status of Union Territory was granted to the erstwhile North East Frontier Agency and renamed as Arunachal Pradesh on January 211972 The Union Territory of Arunachal Pradesh was placed under the charge of Chief Commissioner during that year The year of 1975 also proved eventful for Arunachal Pradesh On 15 August 1975 then existing Pradesh Council was constituted into the Union Territory legislature The panel of then existing five counsellors was constituted into provisional Council of Ministers Consequent upon the above change the post of Chief Commissioner was further elevated to the position of Leutenant Governor on 15 August 1975 The first general election to Arunachal Legislature was held in the month of February 1978 The Arunachal Pradesh Legislative Assembly has 33 members in total out of which 3 members are nominated Earlier Arunachal Pradesh had nominated a representative in the Parliament By an Act of the Government of India in 1971 the Union Territory was provided with one seat each in Lok Sabha and Rajya Sabha but these representatives were nominated by the President of India But at present Arunachal Pradesh enjoys two elective seats in the Lok Sabha based on the Universal franchise On 20th of February 1987 Arunachal Pradesh was made a full fledged State Thus it will be seen that at no time Arunachal Pradesh was part of the Territory of the State of the Assam though it was being administered by the Governor of Assam or the President of India as the case may be The following Charonological Statment of changes in the pattern of Administration in NEFA occuring in PN Luthra s constitutional and Administrative Growth of the North East Frontier Agency is useful 416 1 2 3 4 5 6 1914 1919 1937 1947 1950 1965 Adminis Administ Adminis Adminis Admin Admini tered by ered by tered by tered by tered by tered the Gove the Gov the Gov the Gov the Pre as be rnment of ernment ernor of ernor of sident fore by Assam of Assam Assam Assam through theGov with acting in acting on the Gover erner special his disc the nor of as agent safe retion advice of Assam as of the guards indepen the Pro his agent Presi dently of vincial acting in dentbut the provi Ministry his disc under ncial Minis retion the try underthe general general supervi super sion and visionand control control of the of Mini Minis try of try of External Home Affairs Affairs Arunachal Pradesh is situate in the North East of India skirted by Bhutan in West Tibet and China in North and North East Burma Myanmar in East and Assam in South It consists of the sub mountains and mountainous ranges sloping to the plains of Asswn It s capital is Itanagar It is the largest state areas wise 33743 sq kms in the North East region even larger than Assam which is the most populous Arunachal Pradesh is the most thinly populated state in India According to 1991 census the population of Arunachal Pradesh is 632 lakh and is scattered over 12 towns and 3257 villages There ate 26 major tribes in Arunachal Pradesh Broadly speaking the people in the state may be divided into three cultural groups on the basis of their socio regional affinities i The Monpas and Sherdukpens of Tawang and West Kemeng District ii Khamptis and Singphos inhabiting the entire eastern part of the State and 417 iii The Noetes and Wanchos adjoining Negaland in the Tirap District This is the history of Arunachal Pradesh a rich land and poor people It was in the year 1964 thousands of chakma families migrated from the then East Pakistan to India The appellant along with other 56 families also migrated to India Being refugees they were given shelter in government camps at Ledo within the district of Dibrugarh Assam Later on they were shifted to the camp at Miao subdivision in Tirap District now within the State of Arunachal Pradesh which was then known as North East Frontier Agency NEFA In the years 1966 68 the then Government drew up the Chakma resettlement schemes Altogether 5 schemes were sancitioned for settlement of 3100 families at a cost of more than rupees two crores The appellants were allotted lands in the villages of Gautampur and Maitripur The other Chakmas were also staying there As stated earlier on 2 1st January 1972 NEFA was given the status of Union Territory and was renamed as Arunachal Pradesh The appellants strayed away from the original settlement area allotted to them by the Government under the schemes They got donation from the local Raja namely Ningrunong Singpho of Dumba an area of 1 sq mile at Joypur village which is inside the Inner Line Earlier we were referred to Bengal Eastern Frontier Regulation 1873 Clause 2 of the said Regulation states thus It shall be lawful for the State Government to prescribe and from time to time to alter by notificaton in the Official Gazette line to be called The inner Line in each or any of the above named districts The State Government may by notification in the Arunachal Pradesh Gazette prohibit all citizens of India or any class of such citizens or any persons residing in or passing through such districts from going beyond such line without a pass under the hand and seal of the Chief Executive Officer of such district or of such other officer as he may authorise to grant such pass and the State Government may from time to time cancel or very such prohibition Clause 7 is important That reads as follows It shall not be lawful for any person not being a Native of the district comprised in the preamble of this Regulation to acquire any interest in land or the product of land beyond the said Inner Line without the sanction of the State Government or such officer as the 418 State Government shall appoint in this behalf Any interest so acquired may be dealt with as the State Government or its said officer shall direct The State Government may also by notification in the Arunachal Pradesh Gazette extend the prohibition contained in this section to any class of persons natives of the said districts and may from time to time in like manner cancel or very such extensions Under Section 3 of the of 1946 the central Government may by order make provision for prohibiting regulating or restricting the entrt of foreioners into India In exercise of power conferred under Section 3 of the said Act Foreigners Order of 1948 dated 10248 was issued Under clause 9 of tile said Order the Central Government or with prior sanction a civil authority may by order declareany area to be a protected area for the purposes of this order On such declaration the civil authority may as to any protected area prohibit any forging or any class of foreigners from entering or remaining in the area impose on any foreigner or class of foreigners entering or being entered in the area such conditions as may be mentioned under clause 9 Clause 9 of the Foreigers Order of 1948 in sub clause 2 prohibits the acquisition of any land or anv interest thereon within the prohibited area by any foreigner Under Clause 9 the authorities concerned by an order may prohibit any foreigner from remaining in any part of the protected area as stated in the Foreigners Protected Area 0rder of 1958 which includes the territory of arunachal Pradesh Examined in this light the donation by Raja is clearly invalid However the memorandum dated 26th of April 1976 issued by the Extra Assistant Commissioner Miao states that the agreement between the appellant Khudiram Chakma and the local Raja dated 201172 has been approved by the Deputy Commissioner That is again mentioned in the direction given by the Executive Magistrate Miao on 30th of May 1977 The effect of approval by the Deputy Commissioner will be considered later In this factual background the question arises whether the appellants could claim citizenship under Section 6 A of of 1955 We will now extract the said Section 419 6 A Special Provisions as to the citizenship of persons covered by the Assam Accord 1 For the purposes of this section a Assam means the territories included in the State of Assam immediately before the commencement of the citizenship Amendment Act 1985 b detected to be a foreigner means detected to be a foreigner in accordance with the provisions of the 31 of 1946 and the Foreigners Tribunals Order 1964 by a Tribunal constituted under the said Order c specified territory means the territorises included in Bangladesh immediately before the commencement of the Citizenship Amendment Act 1985 d a person shall be deemed to be of Indian origin if he or either of his parents or any of his grandparents was born in undivided India e a person shall be deemed to have been detected to be a foreigner on the date on which a Tribunal constituted under the Foreigners Tribunals Order 1964 submits its opnion to the effect that he is a foreigner to the officer or authority concerned 2 Subject to the provisions of sub sections 6 and 7 all persons of Indian origin who came before the 1st day of January 1966 to Assam from the specified territory including such of those whose names were included in the electoral rolls used for the purposes of the General Election to the House of the People held in 1967 and who have been ordinarily resident in Assam since the dates of their entry into Assam shall be deemed to be citizens of India as from the 1st day of January 1966 3to8 unnecessary As rightly urged by Mr KK Venugopal learned counsel for the State of Assam two conditions are required to be satisfied under sub section 2 They are i Persons who are of Indian origin undivided India came before 1166 to 420 Assam from the specified territory and ii have been ordinarily resident in assam as it existed in 1985 since their date of entry in Assam The appellants were no doubt persons of Indian origin They came to Assam prior to 1 166 namely 3 1364 from the then East Pakistan presently Bangladesh which is undoubtedly one of the specified territories under Section 6 1 c Assam as seen from 6A a means the territories included in the State of Assam immediately before the commencement of the Citizenship Amendment Act 1985 It is the common case that chama people entered into Assam and stayed their for some time in Ledo within Dibrugarh District Thereafter they shifted to Miao Arunachal Pradesh According to the appellant since the territory of Arunachal Pradesh in 1964 was included in the State of Assam they would be entitled to the benefit of Section 6A This contention overlooks the fact the Immigrants Expulsion from Assam Act 1950 Act X of 1950 applied to the territories presently forming part of Meghalaya Nagaland and Arunachal Pradesh However by the 197 1 the territories of Arunachal Pradesh were excluded from the purview of the Immigrants Expulsion from Assam Act of 1950 Turning to Condition No 2 the requirement is ordinarily resident in Assam from the date of entry till the incorporation of Section 6A namely 71285 As to the meaning of ordinarily resident we may refer to Smt Shanno Devi vs Mangal Saini We find the following observations at page 590 apposite It is not necessary that for every day of this period he should have resided in India In the absence of the definition of the words ordinarily resident in the constitution it is reasonable to take the words to mean resident during this period without any serious break In so far as the appellants and the chakmas were residing in Miao subdivision of Tirap District in Arunachal Pradesh long before 1985 they cannot be regarded as citizens of India We find it difficult to appreciate the argument of Mr Govind Mukhoty learned counsel that the accident of the appellants living in Arunachal Pradesh should not deprive them of citizenship In this connection it 421 is worthwhile to note that Secion 6A of the came to be incorporated by Amending Act as a result of Assam Accord If law lays down certain conditions for acquiring citizenship we cannot disregard the law As laid down in Kennedy vs Mendoza Martinez 159 1963 Citizenship is a most precious right Aristotle Politics III 5 States thus From earliest times it has been such status alone that has enabled the individual to share fully in the benafits of the community in which he resides Compare Homer s words like some dishonored stranger he who is excluded from the honors of the state is no better than an alien That is the position of appellant and the other 56 families If they are aliens the donation deed dated 20th November 1972 is illegal The Raja did not obtain any permission for sale from the Government From the records it is also clear that the Rajs had been donating the lands and wag indulging in anti social activities for which he was warned We do not know how the Deputy Commissioner or the Extra Assistant Commissioner ever approve of this donation without there being an express authorisation by the State It is an admitted fact that the place where the chakma families are residing is within the inner line notified by the State Government Therefore the argument that they have cleared the forest and reclaimed the land and as such would be entitled to a permanent abode cannot be accepted Now we come to the validity of the impugned order Mr KK Venugopal learned counsel has filed various notings and the orders from the relevant files From the files it is clear that there have been complaints against chakmas that they were procuring arms and ammunition and indulging in anti social activities The Deputy Commissioner Tirap District on 19881 wrote to the Extra Assistant Commissioner Miao as follows Please refer to your report under reference wherein it is indicated that a large number of arms and ammunitions seized from the possession of the Chakmas and are still kept in Quarterguard It is therefore requested to send us a detailed report indicating datails of arms and ammunitions seized 422 2It is further seen from your report regarding judicial cases submitted to this office that there are altogether 76 cases registered upto November 1979 against the Chakmas and most of them were related to theft assault and offences under Forest Act It is also therefore requested that more details on specific offences and results thereof may be furnished urgently 3The above two informations are urgently required by the Govt A list of cases including ones under Section 302 IPC and other offences under Section 25A of the Arms Act is enclosed to the letter quoted above The chakmas also encroached Upon the neighbouring area by unfair means and created trouble to the local people An appeal was made to the Chief Minister in 1980 itself that because of these criminal activities they should be removed It is not correct to state that the impugned notice came to be issued like a bolt from the blue The following letter of the appellant addressed to the Deputy Commissioner speaks eloquently With reference to the subject quoted above 1 on behalf of the villagers of Joypur Village have the honour to draw your kind attention to the following few lines for favour of your needful action That being landless in Abhoypur Village a few Villagers consisting of fifty six families have been settled in Joypur Village in the year 1968 with the mutual help of Sri Ningronong Rajkumar Singphoo and the same was approved by the then Deputy Commissioner Khonsa in accordance with the agreement adopted by Sri Rajkumar Singphoo dated 20th Novn2 Now the most regretful matter is that in spite of our permanent cultivation on the area for long sixteen years keeping all conformities with the Govt as well as the neighbouring local people we are being harassed by notice after notice to shift from the area On the contrary I am to state that the land where we have been directed to shift is quite short and extremely unfit for cultivation due to which those vacant lands are not yet accupied by anybody in spite of lying considerable landless families in the said villages 423 All documents created in regard to this matter are attached herewith for favour of your kind perusal necessary action Under the circumstances stated here I earnestly pray and request you afresh to look into the matter and thereby revoke the shifting order at an early date I shall remain greteful to you thereor From the endorsement it is also seen that two representatives met the Deputy Commissioner on 13th Februaty 1984 Therefore there was an oral hearing The above letter mentions notice after notice to shift It was alleged by a petition to the Chief Minister that the Extra Assistant Commissioner had been paid handsomely to allow chakma families to stay on illegally On 16th of November 1982 the Extra Assisstant Commissioner called upon the Circle Officer Diyum to issue notices to the chakms families staying at Joypur village to return to their original place of settlement within 311282 The survey Reports for resettlement of these chakmas dated 27483 inter alia states Survey had been done in Maitripur and Gautampur areas where they have found 110 acres and 245 acres respectively which are liable for settlement of Chakma settlers Thus it will be clear that the reason for shifting these chakma families are 1 They are in illegal occupation of the protected area ii They are indulging in procurement of arms and ammunition iii They are indulging in criminal activities and associating with anti social elements iv They have been source of constanttrouble to the other tribals As regards notice it is seen from the above that the very appellant had notice after notice proposing to evict which was resisted Therefore as rightly urged by Mr KK Venugopal learned counsel on ground realities the plea of natural justice is fully satisfied 424 Ruling in Scheduled Caste and Weaker Section Welfare Association vs State of Karnataka affording a hearing to slum dwellers under the Karnataka Slum Areas Improvement and Clearance Act 1973 relied on by Mr Govind Mukhoty learned counsel has no application in the above circumstances Even then what is that is sought to be done to the appellants They are asked to settle in Maitripur and Gautampur villages from Miao Cartainly settling the chakmas in a particular place is a matter of policy This Court cannot enter into the wisdom of such a policy in view of what has been stated above Arunachal Pradesh is strategically important with Bhutan in the West Tibet and China in the North and North East Burma Myanmar in the East It is true that fundamental right is available to a foreigner as held in Louis De Raedt vs Union of India at 562 The next point taken on behalf of petitioners that the foreigners also enjoy some fundamental rights under the Constitution of this country is also of not much help to them The fundamental right of the foreigner is confined to Article 21 for life and liberty and does not include the right to reside and settle in this country as mentioned in Article 19 1 e which is applicable only to the citizens of this country As such Articles 19 1 d and e are unavailable to foreigners because those rights are conferred only on the citizens Certainly the machinery of Article 14 cannot be invoked to obtain that fundamental right Rights under Article 19 1 d and e are expressly withheld to foreigners Now we come to the humanitarian grounds which prompted the High Court of Gauhati to direct compensation to the appellants in the event of their being evicted Blackburn and Taylor speaking on the right enjoy asylum in Human Rights for the 1990 s state at page 51 as under The most urgent need of a fugitive is a place of refuge His or her most fundamental right is to be granted asylum The Universal Declaration of Human Rights addressed this issue in deceptive language To the inexpert reader there is great comfort in Article 14 1 of that Declaration which provides that Everyone has the right 425 to seek and enjoy in other cuntries asylum from persecution it seems tolerably clear however that the right to enjoy asylum means no more than the right to enjoy it if is granted Again at page 52 it is stated thus Article 14 of the Universal Declaration of Human Rights which speaks of the right to enjoy asylum has to be interpreted in the light of the instrument as a whole and must be taken to mean something It implies that although an asylum seeker has no right to be granted admission to a foreign state equally a state which has granted him asylum must not later return him to the country whence he came Moreover the Article carries considerable moral authority and embodies the legal prerequisite of regional declarations and instruments Warwick Mckean dealing with the equality in the treatment of aliens states in Equality and Discrimination under International Law at pace 194 as under It has long been recognized that persons who reside on the territory of countries of which they are not nationals possess a special status under international law States have traditionally reserved the right to expel them from their territory and to refuse to grant them certain rights which are enjoyed by their own nationals eg the right to vote hold public office or to engage in political activities Aliens may be prohibited from joining the civil service or certain professions or from owning some categories of property and states may place them under restrictions in the interests of nations security or public order Nevertheless once lawfully admitted to a territory they are entitled to certain minimum rights necessary to the enjoyment of ordinary private life At pages 195 196 it is stated thus General international law provides that aliens should not be discriminated against in their enjoyment of property rights once they have been acquired If alien property is nationalized whereas the property of nationals remains unaffected then that act is dis criminatory and prohibited under international law As Fitzmaurice points out it has long been recognized that in certain matters eg 426 the general treatment of foreigeners in a country or compensation for property which may be expropriated or nationalized non discrimination as between persons of different nationality or against foreigners as compared with persons of local nationality amounts to a rule of international law the breach of which gives rise to a valid claim on the part of the foreign government whose national is involved Certainly if the acquisition had been legal compensation could have been awarded But in view of the Bengal Eastern Frontier Regulation 1873 and clause 9 2 of the Foreigners Order 1948 we do not think this is a case for award of compenstion Though we have held that the principles of natural justice have been fully complied with in this case we record the statement made by learned counsel for the State that the Chief Minister is ready to hear the Respondents appellants herein or any representative of their group Accordingly we direct that an opportunity be afforded to the appellants by the Chief Minister and grant such relief as he deems fit We make it clear that it will be a post decisional hearing Accordingly we dismiss civil appeal arising out of SLP C No 13767 of 1992 filed by Khudiram Chakma while civil appeal arising out of SLPC No12429 of 1992 filed by State of Arunachal Pradesh is allowed Howeverthere shall be no order as to costs RP SLP C No 1376792 dismissed SLP C No 1242992 allowed

The respondent a Central Government employee who was transferred from one place to another challenged the order of transfer on the grounds that his wife was also employed at the same place in a Central Government office his children were also studying there he himself had suffered backbone fracture injuries some time ago the guidelines contained in Government of India OM dated 341986 had not been kept in mind while ordering his transfer some other officials who had been serving at the same place for a longer period than the respondent had been allowed to continue and his transfer was due to the mischief of his Controlling Officer In the counter affidavit filed by the appellants it was submitted that the transfer was ordered on administrative grounds and was unexceptionable A Single Member of the Central Administrative Tribunal quashed the order of transfer on the ground that the power of transfer was not an unfettered one but was circumscribed by various circulars guidelines contained in the administrative instructions issued by the Government and an order of transfer could be interdicted if it was discriminatory that in the matter of considering transfer of an individual officer the Office Memorandum dated 341986 educational dislocation of the children and health groundif present deserved special consideration and that in view of the facts and circumstances of the case the transfer order in question in respect of the respondent was mala fide 428 Allowing the appeal preferred by the Union of India and others this Court HELD 11 An order of transfer is an incidence of Government servie Who should be transferred where is a matter for the appropriate authority to decide Unless the order of transfer is vitiated by malafides or is made in violation of statutory provisions the Court cannot interfere with it There is no doubt that while ordering the transfer the authority must keep in mind the guidelines issued by the Government on the subject Similarly if a person makes any representation with respect to his transfer the appropriate authority must consider the same having regard to the exigencies of administration The guidelines say that as far as possible the husband and the wife must be posted at the same place The said guideline however does not confer upon the government employee a legally enforceable right Executive instructions issued by the Government are in the nature of guidelines They do not have statutory force 430 C E 12 There is no dispute that the respondent is liable to transfer anywhere in India It is not the case of the respondent that the order of his transfer was vitiated by mala fides on the part of the authority making the order though the Tribunal says so merely because certain guidelines issued by the Central Government were not followed The immediate superior of unit against whom mischief had been attributed by the respondent has nothing to do with his transfer 430 F 21 The jurisdiction of the Central Administrative Tribunal is akin to the jurisdiction of the High Court under Article 226 of the Constitution of India in service matters as is evident from Article 323 A of the Constitution The constraints and norms which the High Court observes while exercising the said jurisdiction apply equally to the Tribunal created under Article 323A The Administrative Tribunal is not an Appellate Authority sitting in judgment over the order of transfer It cannot substitute its own judgment for that of the authority competent to transfer 430 H431 A 22 In the instant case the Tribunal has dearly exceeded its jurisdiction in interfering with the order of transfer The order of the Tribunal reads as if it were sifting in appeal over the order of transfer made by the Senior Administrative Officer competent authority 431 B Bank of India vs Jagjit Singh Mehta explained

Appeal No 4851 NT of 1990 From the Judgment and Order dated 31189 of the Madras High Court in Tax Case No 900 of 1979 KN Shukla R Satish for Ms A Subhashini for the Appellant TA Ramachandran and Mrs Janaki Ramachandran for the Respondent The Judgment of the Court was delivered by BP JEEVAN REDDYJ This appeal is preferred by the assessee against the judgment of the Madras High Court answering the question referred to it under section 256 1 of the Income tax Act in favour of the Revenue and against the assessee The question stated at the instance of the High Court reads Whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that the assessable capital gain would be only Rs 181671 computed in the manner set out in paragraph 14 of the order of the tribunal The assessee is a registered firm The assessment year concerned is 1973 74 the relevant previous year being the financial year 1972 73 During the said previous year the assessee sold shares held by him in several companies From the sale of shares in three companies it secured a gross long term capital gain of Rs 561508 However in the sale of shares in six other companies it sustained a long term capital loss in a sum of Rs 96583 The assessee computed the capital gains on the aforesaid transaction of sale of shares in the following manner Gross long term capital gains Rs 56150800 LESS Deduction under Rs 500000 Section 80 T b Rs 56550800 LESSDeduction under section 80 T b ii at 50 Rs 27825400 449 LESS Loss on sale Rs 27625400 of shares Rs 9658300 Profits Rs 18167100 The Income tax Officer did not agree with said mode of computation He set off the long term capital loss against the long term capital gain in the first instance and then applied the deductions provided by section 80 T to the balance figure of Rs 464925 His computation was in the following terms Gross long term capital gain Rs 561508 LESS Long term capital loss of the same year Rs 96583 Balance of long term capital gains of the year Rs 464925 LESS Deduction under section 80 Tb ii at 50 Rs 229962 Capital gains included in the total income Rs 229963 Aggrieved by the order of assessment the assessee preferred an appeal which was dismissed by the Appellate Assistant Commissioner On further appeal however the Tribunal agreed with his mode of computation Thereupon the Revenue asked for and obtained the said reference The High Court answered the said question in the negative ie in favour of the Revenue on the following reasoning the income from capital gains constitutes a separate head of income under the Act Capital gains are bifurcated into long term capital gains and shurt term capital gains In this case the Court is concerned only with long term capital gains Section 70 2 ii prescribes the manner in which the loss from sale of longterm capital asset is to be set off According to the said provision the assessee shall be entitled to have the amount of such loss set off against the income if any as arrived at under the similar computation made for the assessment year in respect of any other capital asset not being a short term capital asset Support for the said proposition was derived from the decision in Commissioner of Income Tax vs 450 Sigappi Achi The correctness of the view taken by the High Court is questioned in this appeal Shri TA Ramachandran learned counsel for the appellant submitted that according to the provisions and scheme of the Act capital gains have to be computed in respect of each asset separately Section 80 T prescribes different percentages of deduction for different types of capital assets If the capital asset sold consists of buildings or land or any rights in buildings or lands the deduction provided is 35 in addition to the standard deduction of Rs 5000 Whereas in the case of any other capital asset the percentage of deduction provided is 50 in addition to the standard deduction of Rs 5000 The deductions have to be worked out separately where the capital assets transferred during a previous year fall in both the categories Even the proviso to section 80T shows that the gains arising from the transfer of these two types of capital assets must be treated as separate and distrinct If the capital gains arising from the transfer of both the types of capital assets are clubbed together it would not be possible to work out the provisions of section 80 T The correct method therefore is to compute the capital gains with respect to each asset transferred separately in accordance with section 80 T before setting off the losses We are afraid the arguments advanced by Mr Ramachandran travel far beyond the controversy involved herein This is not a case where the assets transferred by the assessee during the relevant previous year consisted both the types of capital assets They were of only one type namely shares From the sale of certain shares the assessee derived profit and from the sale of certain other shares he suffered loss The simple question is how to work out and apply the deductions provided by section 80 T in such a case For answering this question it is necessary to notice the provisions of section 80 T and section 70 as they stood during the relevant previous year 80 T Where the gross total income of an assessee not being a company includes any income chargeable under the head Capital gains relating to capital assets other than short term capital assets such income being hereinafter referred to as long term capital gains there shall be allowed in computing the total income of the assessee a deduction from such income of an amount equal to ain a case where the gross total income does not exceed ten thousand rupees or where the long term capital gains do not exceed five thousand rupees the whole of such long term capital gains 451 bin any other case five thousand rupees as increased by a sum equal to ithirty five percent of the amount by which the long term capital gains relating to capital assets being buildings or lands or any rights in buildings or lands exceed five thousand rupees iififty per cent of the amount by which the long term capital gains relating to any other capital assets exceed five thousand rupees Provided that in a case where the long term capital gains relate to buildings or lands or any rights in buildings or lands as well as to other assets the sum referred to in sub clause ii of clause b shall be taken to be Awhere the amount of the long term capital gains relating to the capital assets mentioned in sub clause i is less than five thousend rupees fifty percent of the amount by which the long term capital gains relating to any other capital assets exceed the difference between five thousand rupees and the amount of the long term capital gains relating to the capital assets mentioned in sub clause i and Bwhere the amount of the long term capital gains relating to the capital assets mentioned in sub clause i is equal to or more than five thousand rupees fifty percent of the long term capital gains relating to any other capital assets 701 Save as otherwise provided in this Act where the net result for any assessment year in respect of any source falling under any head of income other than Capital gains is a loss the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same head 2i Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any short term capital asset is a loss the assessee shall be entitled to have the amount of such loss set off against the income if any as arrived at under a similar computation made for the assessment year in respect of any other capital asset 452 iiWhere the result of the computation made for any assessment year under sections 48 to 55 in respect of any capital asset other than a short term capital asset is a loss the assessee shall be entitled to have the amount of such loss set off against the income if any as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short term capital asset The opening words of section 80 T are relevant If the gross total income of an assessee not being a company includes any income chargeable under the head capital gains relating to capital assets referred to as long term capital gains there shall be allowed in computing the total income of the assessee a deduction from such income of an amount equal to In our Judgment delivered on April 13 1993 in Civil Appeal No 3044 of 1983 Commissioner of Income Tax vs V Venkatachalam we have held that the deductions provided by section 80 T have to be applied to the capital gains arising from sale of long term capital assets In other words the deductions provided by the said section have to be applied to the amount representing the capital gains during the relevant previous year The amount of capital gains during the relevant previous year means the profits derived minus the losses suffered This is precisely the opinion of the High Court with which view we agree It is not possible to treat the transfer of each asset separately and apply the deductions separately If the argument of the learned counsel for the appellant is logically extended it would mean that even the deduction of Rs 5000 should be applied in each case separately Learned counsel however did not take that stand He agreed that the standard deduction of Rs 5000 must be applied to the totality of the capital gains At the same time he says the deductions provided in clause b should be applied separately to each asset We have not been able to appreciate the logic behind the contention of the learned counsel This is not a case where the capital assets transferred consist of two types mentioned in sub clauses i and ii of clause b of section 80 T They are only of one type namely those falling under sub clause ii We need not therefore deal with or answer the hypothetical contention raised by the learned counsel Further as pointed out by the High Court the provision contained in clause ii of subsection 2 of section 70 as it stood at the relevant time supports the conclusion arrived at by us The learned counsel for the appellant relied upon the decision of this Court in Commissioner of Income Tar Central Madras vs Canara Workshops Private 453 Limited That was a case arising under section 80 E of the Act as it stood during the assessment years 1966 67 and 1967 68 On the language of section 80 E it was held that in computing the profits for the purpose of deduction under the said section each priority industry must be treated separately We do not see how the principle of the said decision has any application to the facts of this case which has to be decided on the language of a different provision namely section 80 T read with section 70 2 ii For the above reasons we agree with the opinion expressed by the High Court and dismiss this appeal No order as to costs NVK Appeal dismissed

The appellant Mills claimed that the toilet soaps produced by them were bath soaps failing under tariff item 15 1 of the First Schedule Household to the but the Assistant Collector classified the same as other sorts under tariff item 152 of the schedule attracting higher levy of excise duty On appeal the Collector held that they fell under tariff item No 15 1 household On second appeal the Tribunal reversed the appellate order against which the appellant Mills preferred the instant appeals The appellants contended that in 1954 toilet soap was treated as an independent tariff sub item and household and laundry soaps were treated as separate entity and separately subjected to varied rates of tariff that on amendment in 1964 toilet soap was omitted as a separate entity and brought toilet soap as part of genus namely soap household as toilet soap has always been a household soap The respondents contended that statute always kept distinction between soap household and laundry and other sorts and that toilet soap was kept in the packet of other sorts that household and laundry soaps were being used for cleaning household articles and utensils and washing the clothes while toilet soaps are for bathing purpose The latter composed of diverse varieties based on personal liking and taste are being used and that they are commercially known as other sorts but not household 379 Allowing the appeals and remitting the matter to primary authority this Court HELD11 The provisions of the Tariff do not determine the relevant entity of the goods They deal whether and under what entry the identified entity attracts duty The goods are to be identified and then to find the appropriate heading sub heading under which the identified goodsprod ucts would be classified To find the appropriate classification the description employed in the tariff nomenclature should he appreciated having regard to the terms of the headings read with the relevant provisions or statutory rules or interpretation put up thereon For exigibility to excise duty the entity must he specified in positive terms under a particular tariff entry In its absence it has to be deducted from a proper construction of the tariff entry There is neither intendment nor equity in a taxing statute Nothing is implied It should be interpreted and construed as per the words the legislature has chosen to employ in the Act or Rules There is no room for assumptions or presumptions The object of Parliament has to be gathered from the language used in the statute 383 H 384 A B 12toilet soap being of everyday household use for the purpose of the bath and having removed its sperate identity which it enjoyed preceding amendment and having been not specifically included in other sorts it took its shelter In commercial parlance under household If any body goes to the market and asked for toilet soap he must asked any for household bathing purpose and not for industrial or other sorts Even the people dealing with it would supply it only for household purpose It may be true that household consists of soap used for cleaning utensils laundry used for cleaning soiled clothes and soap toilet is used for bathing but house hold is compendiously used toilet soap is used only by the family for bathing purpose Individual preference or choice or taste of a particular soap for bath is not relevant The soap toilet would therefore fall within the meaning the word of household in sub item 1 of item 15 of the Schedule 384 B C Ajoy kumar Bannerjee and Ors vs Union of India and Ors and Urkal Contractors and Joinery Pvt Ltd and Ors vs State of Orissa and Ors distinguished Manmohan Das v Vishnu Das Ramavatar Budhaipasad etc vs Asstt Sales Tax Officer Akola and Anr Motipur Zamindari Co Pvt Ltd vs State of Bihar 380 1962 Supp 1 SCR 498 State of West Bengal and Ors vs Washi Ahmed etc Porritts Spencer Asia Ltd vs State of Haryana Indo International Industries vs Commissioner of Sales Tax UP at 297 C PA Chillai Chidambara Nadar vs Addl Appellate Asstt Commissioner Madurai and Anr Khandelwal Metal Works vs Union of India 1985 Supp 1 SCR 750 at 774 B C Shri Bharuch Coconut Trading Co and Ors vs Municipal Corporation of the city of Ahmedabad and Ors 1992 Supp 1 SCC 298 Hansraj Gordhan Das vs HH Dave Assti Collector of Central Excise Customs and Ors Dunlop India Ltd vs Union of India Ors Anant B Timbodia vs Union of India Superintendent of Central Excise Surat vs Vac Metal Corporation Ltd AIR 1986 SC 1167 Spaco Carburettors India Ltd vs Collector of Customs Bombay Shashikant Laxman Kale and Anr vs Union of India and Anr at 376 Para 17 Mitra Prakashan Pvt Ltd vs Collector of Customs para 15 Desh Bandhu Gupta and Ors vs Delhi Stock Exchange JK Coton Spinning and Weaving Mills Ltd and Anr vs Union of India and Ors 1987 Supp SCC 350 Dovack Systems Pvt Ltd etc vs Union of India Ors etc1988 2 SCR 2 at 1000 F to H and State of Madhya Pradesh vs Ms G section Dall and Flour Mills 1992 Supp 1 SCC 150 at 153 para 18 referred to Craises on Statute Law 7th Edition at Page 164 referred to

l Leave Petition Civil No 4460 of 1993 From the Judgment and Order dated 1511993 of the Himachal Pradesh High Court in Civil Writ Petition No 566 of 1990 Arun Jaitley and Maninder Singh for the Petitioner The following Order of the Court was delivered How statutory bodies waste public money in fruitless litigation to satisfy 479 misplaced ego is demonstrated by this petition The opposite party was appointed as Sales Girl by the petitioner a cooperative society registered under Cooperative Societies Act running a Super Bazar in Shimla When one of the managers came there on transfer her trouble started Apart from insult humiliaton and harassment thrust on her that manager terminated her services illegally without being authorised to do so and without obtaining permission of the Administrator and without giving any notice or hearing her The opposite party who had been apprising her superiors of that manager s misbehaviour and of her apprehensions that he was out to get rid of her although was assured not only of his good behaviour and security of her services immediately took recourse to legal action To her misfortune the Assistant Registrar decided her case after seven years It was held by him that the order of termination was illegal arbitrary and was passed without obtaining approval of the Administrator He directed the petitioner to reinstate her but did not grant any back wages Even with this order which was prejudicial to her the opposite party was satisfied but the ego of petitioner was hurt For eight months the order was not implemented by the petitioner as it was contemplating to file the appeal And when the petitioner succeeded in obtaining the order it informed the opposite party that her Joining Report could not be entertained Since then the opposite party has been knocking at the door of the petitioner but she was made to approach the appellate authority the revising authority the High Court the Labour Court and finally the High Court again as the petitioner did not succeed anywhere but went on filing appeal and revision forcing the opposite party to file cross appeal or revision or even writ for her back wages and other benefits Not one authority even in the cooperative department found in favour of petitioner Yet the petitioner had the obstinacy not only to approach this Court but to place the blame of inordinate delay on adjudicatory process Such obstinacy without the least regard of the financial implications could only be indulged by a public body like the petitioner as those entrusted to look after public bodies affairs do not have any personal involvement and the money that they squander in such litigation is not their own Sri Arun Jaitley the learned senior counsel attempted to assail the finding recorded by the High Court and the Labour Court Suffice it to say that the conclusions arrived at are not only well reasoned but are based on material on record and could not be demonstrated to be vitiated by any error of Law Having failed to persuade us on merits the Learned counsel attempted to highlight the financial difficulty of the petitioner and placed reliance on Surendra Kumar Verma Ors vs Central Government Industrial Tribunal cum Labour Court New Delhi Another 19804 SCC 443 in support of the submission that 480 the Courts while directing payment of back wages should exercise discretion considering the financial viability of the employer It was urged that the respondent has been pursuing her remedy for 16 years therefore the petitioner whose profit margin is very low and the overhead expenses are very high resulting in accumulation of losses for which financial assistance has been granted by State as well as the Central Government for rehabilitation subject to the condition that the amount shall not be utilised towards past debts shall be rendered in serious predicament brought upon it by the respondent for which it is not responsible Nothing is farther than truth It was other way round In fact it was the petitioner who had disputed the finding of the Registrar directing reinstatment without back wages and made respondent to run from court to court When the petitioner did not reinstate her and filed an appeal she too filed a cross appeal for back wages It is more than apparent that it was the petitioner who was not complying with the orders passed by the authorities from time to time and was leaving no stone unturned to see that an illegal order passed by its officer was upheld We therefore do not see any justification for exercising discretion in favour of such a litigant Public money has been wasted due to adamant behaviour not only of the officer who terminated the services but also due to cantankerous attitude adoped by those responsible for pursuing the litigation before the one or the other authority They have literally persecuted her Despite unequal strenght the opposite party has managed to survive We are informed that the opposite party has been reinstated This was put forward as bonafide conduct of petitioner to persuade us to modify the order in respect of back wages Facts speak otherwise Working life of opposite party has been lost in this tortuous and painful litigation of more than twenty years For such thoughtless acts of its officers the petitioner society has to suffer and pay an amount exceeding three lakhs is indeed pitiable But considering the agony and suffering of the opposite party that amount cannot be a proper recompense We therefore dismiss this petition as devoid of any merit and direct the petitioner to comply with the directions of the High Court within the time granted by it We however leave it open to the society to replenish itself and recover the amount of back wages paid by it to the opposite party from the personal salary of the officers of the society who have been responsible for this endless litigation including the officer who was responsible for terminating the services of the opposite patty We may clarify that the permission given shall have nothing to do with the direction to pay the respondent her back wages Step if any to recover the amount shall be taken only after payment is made to the opposite party as directed by the High Court SLP dismissed

The appellant in Civil Appeal No481 of 1983 and thousands of other families known as Chakmas migrated from the erstwhile East Pakistan to Assam where they were given shelter as refugees in 1964 In the year 1966 the Government drew up the Chakma resettlement Schemes whereunder they were allotted lands within the North East Frontier Agency which later became State of Arunachal Pradesh The appellant and 56 other Chakma families strayed away from the original settlement area and negotiated with the local Raja who through an unregistered deed donated land to them inside the inner line which was a protected area under the Foreigners Protection Area Order 1958 Later the State Govenment received complaints that the 402 Chakmas were making encroachment on lands of local people indulging in illegal collection of arms and ammunition and establishing contacts with the extremist groups An inquiry into the matter was directed The Government found it necessary to shift them and by order dated 1521984 directed the appellant and the other Chakma families to vacate the land and to shift to the original settlementarea where other Chakma families were already residing The appellant challenged the order before the High Court by filing a writ petition which was dismissed However the High Court on humanitarian grounds directed the State Government to give adequate compensation to the Chakmas Both the appellant and the State Government filed the appeals by special leave It was contended on behalf of the appellant that the appellant and the other Chakmas being of Indian origin and having returned to Assam State in 1964 would be entitled to citizenship under Section 6A of the and by mere accident of their going to Arunachal Pradesh they cannot lose their citizenship and that the order dated 1521984 besides being against the principles of natunal justice was violative of Article 14 of the Constitution as it infringed the rights of the appellant and other Chakmas under Articles 191 d and e of the Constitution Dismissing the appeal on behalf of the Chakmas and allowing that of the State this Court HELD 11 The appellant and other Chakmas residing in Arunachal Pradesh long before 1985 cannot be regarded as citizens of India 420 H 12 Under Section 6 A of the which was incorporated by the Amending Act 1985 as a result of Assam Accord two conditions are required to be satisfied 1 Persons of Indian origin undivided India who came before 111966 to Assam from the specified territory and 2 they have been ordinarily resident in Assam as it existed in 1985 since their date of entry in Assam 411 G H 412 A 13 Though the appellant and other Chakmas were of Indian origin and came to Assam prior to 111966 from the then East Pakistan one of the specified territories but in 1966 they shifted to the area within North East Frontier Agency which later became State of Arunachal Pradesh and at no time was part of the Territory of the State of Assam though was being administered by the Governors of Assam or the President of India as the case 403 may be Besides bt the the territories of Arunachal Pradesh were excluded from the purview of the Immigrants Explusion from Assam Act 1950 The appellant and the other Chakmas were residing in Arunachal Pradesh long before 1985 and as such cannot be said to be ordinarly resident in Assam as it existed in 1985 since their date of en try in Assam 420 A F Smt Shanno Devi vs Mangal Saini relied on 14 If the law lays down certain conditions for acquiring citizenship the same cannot be disregarded 421 A Kennedy vs Mendoza Martinez 159 1963 referred to Arstotle Politics III 5 referred to 2The place where the Chakma families are residing is within the inner line notified by the State Government The place is the protected one under the Foreigners Protection Area Order 1958 wherein acquisition of any land or any interest thereon by any foreigner is prohibited as envisaged by clause section 7 of the Bengal Eastern Frontier Regulation 1873 and Clause 92 of the Foreigners Order 1948 issued under Section 3 of the 410 DE 22Accordingly the donation deed through which the Raja gave land to the appellant and the other Chakmas is illegal421 D 23Unlike article 21 rights under Articles 191 d and e of the Constitution are unavailable to foreigners because these rights are conferred only on the citizens and are expressly withheld to foreigners The machinery of Article 14 cannot be invoked to obtain that fundamental right424 E Indo China Steam Navigation Co vs Jasjit Singh 19646 SCR 594 at 621 to 622 followed Louis De Raedt vs Union of Indian referredto412 CD 404 31 Settling the Chakmas in a particular place is a matter of policy This Court cannot enter into the wisdom of such a policy Besides the reasons for shifting the Chakma families are they are in illegal occupation of the protected are they are indulging in procurement of arms and anununitions and other criminal activities they are associating with anti social elements and have been source of constant trouble to the local tribals Arunachal Pradesh being a Border State is stategically important 424B 423EFG 4 In the instant case the principles of natural justice were fully complied with It cannot he said that the order dated 1521984 for shifting the Chakmas came to be issued like a bolt from the blue The record mentions that before passing of the shifting order notice after notice were issued to chakma families to return to their original place of settlement Survey Reports for their settlement were submitted and representation were made to the authorities concerned who gave oral hearing to the representatives of Chakmas 412 GH Scheduled Caste and Weaker Section Welfare Association vs State of Karnataka 19912 SCC 604 inapplicable R vs Secretary of Stale for the Home Department Brind vs Secretary of State Council of Civil Service Unions vs Minister for the Civil Service McInnes vs onslow Farme Anr D p 219 JR Vohra vs India Export House pvt Ltd Maharashtra State Board of Secondary Higher Education vs KS Gandhi and Satya Vir Singh vs Union of India referred to 51 In view of the Bengal Eastern Frontier Regulation 1873 and Clause 92 of the Foreigners Order 1948 the acquisition of the land being illegal the instant one is not a case for award of compensation 426 C 52 However having regard to the statement made on bahalf of the State that the Chief Minister is ready to hear the Chakmas an opportunity be afforded to them by the Chief Minister who may grant such relief as may be deemed fit It is made clear that it will be a post decisional hearing 426 D 405 Blackburn and Taylor on the right to enjoy asyum in Hussan Rightsior the 1990s Equality and Discrimination under International Law by Warwick Mckean referred to

on c Nos 9835 38 of 1983 Under Article 32 of the Constitution of India WITH WPCNos7468 7469813838 398353988554358538684 1489 86 1269185 489 9083 8183 6886 106587 Lakshmi Chandra Goyal BB Sahni and Serve Mitter for the Petitioners DP Gupta Solicitor General Ms Indu Malhotra Ms Aysha Khatri Ms V Mohana and Ms Nisha Bagchi for the Respondents The Judgment of the Court was delivered by BP JEEVAN REDDY J A common question arises in this batch of writ petitions We may take the facts in writ petition C No 9835 of 1983 filed by Ms K B Handicrafts Emporium Ors as representative of the facts in all the cases The petitioners are firms engaged in the manufacture and sale of handicrafts items They are registered Sales Tax Dealers in the State of Haryana They purchased raw material within the State against declaration forms ST 15 prescribed under Rule 21 of the Haryana General Sales Tax Rules read with Section 24 of the Act By issuing Form ST 15 the petitioners undertook that the goods manufactured by them out of the said raw material would be sold by them either within the State or in the course of inter state trade and commerce or in the course of export within the meaning of Section 51 of the Central Sales Tax Act A dealer issuing the said Form need not pay the purchase tax on such raw material After manufacturing the items of handicrafts the petitioners say they sold them to dealers in Delhi who in turn exported them out of India At the time of sale of handicrafts to Delhi dealers the Delhi dealers issued Form H prescribed under the Central Sales Tax Rules which means that the goods purchased were meant for export Neither party paid tax on the said salepurchase 457 For the assessment years in question the Sales Tax Authorities of Haryana levied purchase tax on the purchase of raw material made by the petitioner following the decision of the Punjab and Haryana High Court in Ms Murli Manohar and Company Panipat Ors V State of Haryana 0rs Civil Writ Petition No 1227 of 1980 under section 9 of the Haryana General Sales Tax Act 1973 However the assessing authority computed the tax with reference to the purchase value of the goods exported against Form H The petitioners did not choose to file an appeal but directly approached this Court by way of this writ petition on the ground that in view of the decision of the Punjab and Haryana Hig h Court in Murli Manohar there was no point in their pursuing the remedies under the Act in that State Appeals were preferred in this court against the decision of the Punjab and Haryana High Court in Murli manohar which have been disposed of by this Court on October 25 1990 reported in This Court allowed the appeal and set aside the judgment of the High Court When these writ petitions came up for hearing it was urged by the learned counsel for the petitioners that in view of the decision of this Court in Murli Manohar the writ petitions must be allowed stria ghtway This was demurred to by the learned Solicitor General appearing for the respondent State We are of the opinion that the decision of this Court in Murli Manohardoes cover the point raised in these appeals but it is necesary to add a clarification Before we do that it is necessary to state a little background Earlier to the rendering of the decision in Murli Manohar a Bench of this Court comparising Sabyasachi Mukharji and Ranganathan JJ held in Good year India Ltd and Ors vs State ofHaryana and Anr 1990 2 SCC71 that where the goods manufactured are taken out of Haryana without effecting a sale to the branch office or depot of the Manufacturer or to the office or depot of his agent no purchase tax can be levied under section 9 of the Act on the raw material purchased within the State and used in the manufacture of such goods It was held that imposing such ta would amount to levying tax on consignment which the State Legislature was not competent to do Section 9 as it then stood stated expressly that no such purchase tax on raw material was leviable if the goods manufactured out of such raw material were sold either within the State or were sold in the course of inter state Trade and Commerce or were sold in the course of export within the meaning of Section 51 of the Central Sales Tax Act MurliManohar was decided in the light of the law declaredin Goodyear Later However a Bench of three Judges comprising SRan anathan vs Ramaswami JJ and one of usBPJeevan Reddy J held that Goodyear does not lay down the correct law vide Hotel Balaji and 458 Ors vs State of Andhra Pradesh Ors etc JT It was held in Hotel Balaji that having regard to the scheme of and the objective underlying section 9 it was competent for the State Legislature to levy purchase tax on raw material purchased within the State where the goods manufactured out of such raw material are taken out of the State without effecting a sale within the State or otherwise than by way of aninter state sale or by way of an export sale within the meaning of Section 51 of the Central Sales Tax Act It was held that such a tax does not amount to consignment tax It is this decision in Balaji that calls for a certain clarification of the principles enunciated in Murli Manohar The facts in Murli Manohar Were substantially similar to the facts herein The dealers within the State of Haryana purchased raw material without paying tax manufactured goods out of the same and sold the manufactured goods to dealers who in turn exported those goods out of India On these facts it was held by the Punjab and Haryana High Court that inasmuch as the sale to exporters was a penultimate sale falling under section 53 of the Central Sales Tax Act and further inasmuch as Section 9 of the State Act exempted only export sales within the meaning of section 51 of the Central Sales Tax Act but not the penultimate sale falling under Section 53 tax under Section 9 was leviable On appeal this court affirmed that Section 9 of the Haryana Act before it was amended by Haryana Act 1 of 1988 did not exempt as sale falling under Section 53 but exempted only a sale failing under section 51 Even so the appeal was allowed on the following reasoning the sales made by the assesses can only fall within one of the three categories They are either local sales or inter state sales or export sales We are unable to conceive of a fourth category of sale which could be neither a local sale nor an interstate sale nor an export sale In other words the decision says that there can be only three types of sales namely intrastate sales inter state salesand export sales and no other A sale to an exporter would be either an intrastate sale or an inter state sale in either case it does not attract the purchase tax on raw material under Section 9 of the Haryana Act says the decision It is on this reasoning that the appeals were allowed inspite of the clear enunciation that the sales failing under Section 53 of the Central Sales Tax Act were not exempt under Section 9 of the Haryana Act as it then stood The above holding is evidently influenced by the decision in Goodyear which was good law at the time Murli Manohar was decided However in the light of the decision of Hotel Balaji it must be held that there is one more category in addition to the three categories mentioned above The fourth category is where a dealer in Haryana takes his goods out of the Haryana without effecting a sale An illustration would serve to highlight what we say a Haryana manufacturer takes his goods to Delhi without effecting a sale In Delhi if he finds it more profitable 459 he will sell it to a dealer in Delhi Or if he finds it more profitable to sell it to an exporter in Delhi he will sell the same to such exporter These two sales are neither intrastate sales nor inter state sales nor export sales within the meaning of Section 51 of the Central Sales Tax Act In one Case it is a sale in Delhi and the other it is a punultimate sale within the meaning of Section 53 of the Central Sales Tax Act According to Section 9 of the Haryapa Act as explained in Hotel Balaji and Murli Manohar purchase tax can be levied and collected on the raw material purchased by the manufacturer within Haryana which was utlised for manufacturing the goods so sold in these two situations We must make it clear that in a petition under Article 32 of the Constitution it is not our province to go into facts As repeatedlly emphasised by this court the question whether a particular sale is an intra state salean inter state sale an export sale within the meaning of section 51 or a penultimate sale within the meaning of section 53 or otherwise is always a question of fact to be decided by the apporiate authority in the light of the principles enunciated by Courts In these circumstances we content ourselves by declaring the law and leave it to be applied by the appropriate authorities Counsel for the petitioners says that all the sales effected by all the petitioners are inter State sales May beor may not be We leave the matters to be disposed of by the authorities under the Act in the light of the law declared by Is Court in Murli Manohar Hotel Balaji and in this judgment The writ petitions are disposed of with the aforementioned clarification and observations No costs VPR Petitions disposed of

The appellant assessee was a Registered Firm The assessment year concerned was 1973 74 During the relevant previous year being the financial year 1972 73 the assessee sold shares it held in several companies from the sale in three companies it secured a gross long terms capital gain of Rs561508 However in the sale of shares in six other companies it sustained a long term capital loss in a sum of Rs 96583 The assessee computed the capital gains on these transactions of sale of shares less the deductions under Section 80 Tb and Section 80T b ii 1 and showed a profit of Rs 18167100 The Income Tax Officer did not agree with the mode of computation indicated by the asssessee and set off the long term capital loss against the long term capital gain in the first instance and then applied the deductions provided by Section 80 T to the balance figure and ultimately computed the capital gains included in the total income at Rs 229963 The assessee aggrieved by the aforesaid assessment preferred an appeal which was dismissed by the Appellate Assistant Commissioner In further appeal by the assessee the Tribunal agreed with the assessee s computation Revenue asked for and obtained a reference which the High Court answered in the negative ie in favour of the Revenue The High Court held that the income from capital gains constituted a separate head of income under the Income Tax Act and that capital gains are bifurcated into long term capital gains and short term capital gains and 446 447 relying on the decision in Commissioner of income Tax vs Sigappi Achi held that in the instant case it was concerned only with long term capital gains and that Section 70 2 ii prescribes the manner in which the loss from sale of long term capital asset is to be set off In the appeal to this Court it was submitted on behalf of the appellant assessee that according to the provisions and scheme of the Income Tax Act capital gains had to be computed in respect of each asset separately and that Section 80 T prescribes different percentages of deduction for different types of capital assets and that the correct method therefore is to compute the capital gains with respect to each asset transferred saparately in accordance with Section 80 T before setting off the losses Dismissing the appeal this Court HELD 1 This is not a case where the assets transferred by the assessee during the relevant previous year consisted of both the types of capital assets mentioned in sub clauses i and ii of clause b of Section 80 T They were of only one type namely those failing under sub clause ii viz shares From the sale of certain shares the assessee derived profit and from the sale of certain other shares he suffered loss 450 E 2 The deductions provided by Section 80 T have to be applied to the capital gains arising from sale of long term capital assets In other words the deductions provided by the said section have to be applied to the amount representing the capital gains during the relevant previous year The amount of capital gains during the relevant previous year means the profits derived minus the losses suffered 452 D 3 It is not possible to treat the transfer of each asset separately and apply the deductions separately 452 E Commissioner of Income Tax vs V Venkarachalam Civil Appeal No 3044 of 1993 dated April 131993 relied on Commissioner of Income Tax Central Madras v Canara Workshops Private Limited distinguished

Appeal No 2476 of 1993 From the Judgment and Order dated 2121992 of the Orissa High Court in OJS No 4866 of 1991 476 R K Mehta for the Appellants HL Aggarwal SK Patri Abhijat P Medh Ms Kirti Mishra and AK Panda for the Respondents The following Order of the Court was delivered Service of the appellants employed in the school established in the year 1981 recognised in 1983 brought on grants in aid in 1988 were terminated in 1986 Their termination was not approved by the Inspector of Schools Since the order not approving termination was not given effect to by the Institution the appellants approached the High Court by way of a writ petition for a mandamus to reinstate them and grant them their salaries from the date the school became an aided institution The High Court did not find any merit in the claim for various reasons Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector Use of the word aided institution is clear indication that the provisions of approval apply only to the aided schools Since on the date the services of the appellants were terminated the institution was recognised only and not aided the Inspector could not have exercised the power of disapproval Consequently no right vested in the appellant which he could get enforced in a court of law The submission that the principle of Section 10 A being benevolent in nature should be extended to teachers of the institution once it has been granted recognition to avoid exploitation and undue harassment of those who are unequal in the bargain cannot be accepted Recognition of an institution for purpose of imparting education is different than bringing it on grants in aid To the former the regulatory provisions of the Education Act or the rules do not apply The Education Departments has no control either on admission of students or members of staff The High Court therefore did not commit any error of law in dismissing the writ petition The appeal accordingly fails and is dismissed But there shall be no order as Appeal dismissed

The private respondent was appointed as sales girl with the petitioner The new manager not only insulted humiliated and he her he also terminated her services On ber plea the Assistant Registrar who decided the case after seven years held the Impugned order as Illegal arbitrary and passed without obtaining the requisite approval He ordered reinstatement of the private respondent but did am grant back wages The petitioner Informed the private respondent that her joining report could not be entertained The letter was forced to approach the appellate and revising authorities the labour court and finally the High Court for back wages and other benefits The petitioner approached this court to assail well reasoned finding recorded by the High Court without the least regard of the financial implications Meanwhile as the petitioner was unable to persuade this courtes of the case the petitioner made attempt to highlight the financial difficulties in payment of back wages Surendra Kumar Varma and others vs Central Government Industrial Tribunal Cum Labour Court New Delhi Anr referred to The petitioner urged that the private respondent had been pursuing the 478 remedy for 16 years And the profit margin of the petitioner being very low and the overhead expenses high The State and the Centre who granted financial assistance for rehabilitation subject to the condition that the amount be not paid towards past debts would be rendered in serious predicament On facts this court found that it was the petitioner who was not complying with the orders passed by the authorities from time to time so there was no justification for exercising discretion in favour of the petitioner Dismissing the SLP and upholding the order of the High Court this Court HELD Public money has been wasted due to adamant behaviour not only of the Officer who terminated the services of the private respondent but also due to cantankerous attitude adopted by those who were responsible for pursuing the litigation and literally persecuted her Working life of the private respondent has been lost for more than twenty years While considering the agony and suffering the amount of back wages exceeding three lakhs could not be a proper recompense And the reinstatement of the private respondent could not be considered as bonafide conduct for modification of the order of back wages 480 D Leaving it open to the petitioner to replenish itself and recover the amount of back wages from personal salary of its officers who were responsible for the endless litigation and for terminating the services of the private respondents this Court clarified that this permission shall have nothing to do with the direction and the step for recovery be taken only after payment of back wages to the private respondent 480 G

Civil Appeals Nos 85 389 of 1957 Appeal from the judgment and order dated August 26 1955 of the Calcutta High Court in Income tax References Nos 44 of 1954 and 17 of 1953 section Mitra and P K Mukherjee for the appellant in C A No 8557 N C Chatterjee and P K Ghosh for the appellant in C A No 38957 R Ganapathy Iyer R H Dhebar and D Gupta for the respondent April 15 The judgment of Sinha and Kapur JJ was delivered by Sinha J Hidayatullah J delivered a separate judgment SINHA J The common question of law arising in these two appeals on certificates of fitness granted by the High Court of Calcutta under section 66A2 of the Indian Income tax Act 1922 is the effect and scope of the words constituted under an instrument of partnership in section 26A of the Income tax Act which in the course of this judgment will be referred to as the Act 644 The facts of the two cases leading upto these appeals though not dissimilar are not identical They are therefore set out separately In Civil Appeal No 85 of 1957 Messrs R C Mitter and Sons 54 Rani Kanto Bose Street Calcutta claim to be a firm said to have been constituted in April 1948 with four persons whose names and shares in the nett profits of the partnership business are stated to be as under a Ramesh Chandra Mitter 40 per cent of the nett profits b Sudhir Chandra Mitter 30 per cent of the nett profits c Sukumar Mitter 20 per cent of the nett profits dSushil Chandra Mitter 10 per cent of the nett profits The firm intimated its bank the Bengal Central Bank Limited as it then was of the constitution of the firm as set out above by its letter dated April 15 1948 The letter also stated that a partnership deed Was going to be drawn up and executed by the partners aforesaid and that the deed so drawn up will be forwarded to the bank in due course Though the firm is said to have come into existence in April 1948 the deed of partnership which is set out as annexure A at P 5 of the paper book was drawn up only on September 27 1949 This deed of partnership appears to have been registered under the provisions of the Indian Partnership Act on October 12 1949 It was also forwarded to the Bengal Central Bank Ltd Head Office at Calcutta as it appears from the seal of the bank and the signature dated December 7 1949 An application to register the firm under section 26A for the assessment year 1949 50 was made to the Income tax Authorities The date of the said application does not appear from the record before us The application was rejected by the Income tax Authorities The firm preferred an appeal to the Income tax Appellate Tribunal which was also dismissed by the Tribunal by its order dated September 7 1953 The ground of the order of the Tribunal was that as the firm admittedly 645 was formed by a verbal agreement in April 1948 and not by or under an instrument in writing dated September 27 1949 and as the assessment was for the year 1949 50 for which registration of the firm was sought the registration could not be ordered The Tribunal also referred to the letter aforesaid to the Bengal Central Bank and observed that the letter merely contained information as to the formation of the partnership and of the personnel thereof but it did not contain the terms on which the partnership had been formed It also showed that a partnership had been created but not by deed Hence the Tribunal further observed the letter might be useful for consideration on the question of the genuineness of the firm but it could not fulfil the requirements of section 26A namely that the firm should be constituted under an instrument of partnership Therefore the Tribunal held that assuming the firm to be genuine it was not entitled to be registered under section 26A of the Act Thereupon the assessee moved the Tribunal under section 661 of the Act That application was granted by the order dated February 2 1954 and the case stated to the High Court for its decision on the following question Whether the assessee firm which is alleged to have come into existence by a verbal agreement in April 1948 is entitled to be registered under section 26A for the purpose of assessment for 1949 50 where the Instrument of Partnership was drawn up only in September 1949 after the expiry of the relevant previous year The High Court Bench presided over by Chakravarti C J by its judgment dated August 26 1955 answered the question in the negative The learned Chief Justice considered the matter from all possible view points including grammatical etymological and textual matters and came to the conclusion that constituted meant created He also considered that the preposition under is obviously inappropriate after having convinced himself that constituted could be equated with created He also found no difficulty in observing that some of the 646 paragraphs of the Form appear to be ill adjusted to the provisions of the Act and the Rules In the end therefore he concluded with the remarks It appears to me to be desirable that the language of the section as also that of the Rules should receive legislative attention In Civil Appeal No 389 of 1957 Messrs D C Auddy Brothers Calcutta claim to be a partnership consisting of Dulal Chand Auddy Prem Chand Auddy Gora Chand Auddy and Kalipada Nandy The partnership business is said to have begun in June 1944 An application was made on August 241949 for the registration of the partnership The Income tax Officer and the Appellate Assistant Commissioner were of the opinion that the partnership was not a genuine one and could not be registered Another reason for not ordering registration was that the partnership deed having been executed on June 2 1948 could not be operative during the two years under consideration namely 1945 46 and 1946 47 On appeal the Income tax Appellate Tribunal rested its decision on the finding that the alleged partnership had not been constituted under an instrument of partnership within the meaning of those words in section 26A of the Act At the instance of the assessee the Tribunal framed the fol lowing question for determination by the High Court Whether the assessee firm constituted orally in June 1944 can validly be registered in the assessment years 1945 46 and 1946 47 under Section 26A of the Indian Income Tax Act on the basis of a Memorandum of Partnership executed in June 1948 The other parts of the statement of the case by the Tribunal refer to the merits of the assessment with which we are not concerned in this appeal Hence it is not necessary to set out those facts On this part of the statement of the case the High Court gave the same answer as in the other appeal In this case also the High Court granted the necessary certificate under section 66A2 read with article 135 of the Constitution As both the cases raise the same question of law they have been heard together and will be governed by this judgment 647 It is convenient at this stage to set out the relevant provisions of the Act Section 26A is in these terms 26A Procedure in registration of firms I Application may be made to the Income tax Officer on behalf of any firm constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax 2 The application shall be made by such person or persons and at such times and shall contain such particulars and shall be in such form and be verified in such manner as may be prescribed and it shall be dealt with by the Income tax Officer in such manner as may be prescribed The section contemplates the framing of rules laying down the details of the Form in which the application has to be made and the particulars which should be stated in the application and other cognate matters Section 59 of the Act authorizes the Central Board of Revenue subject to the control of the Central Government to make rules for carrying out the purposes of the Act and sub section 5 of section 59 provides that rules made under the section shall be published in the Official Gazette and shall thereupon have effect as if enacted in this Act Income tax Rules 2 to 6B lay down the details of the procedure for making an application for the registration of a firm as contemplated under section 26A quoted above These rules have been amended extensively in 1952 but we are concerned in this case with the rules before those amendments Rule 2 requires such an application to be signed by all the partners personally and to be made before the income of the firm is assessed for the year under section 23 of the Act Rule 3 requires that the application be made in the Form annexed to the rule and that the application shall be accompanied by the original Instrument of Partnership under which the firm is constituted The Form appearing in r 3 requires the assessment year to be specified Thus the registration is for a particular year of assessment and not for future years also and therefore the application for registration has 648 to be made every year which in fact means an application for renewal of the registration Paragraph 3 of the Form requires a certificate to be signed by the applicants for registration to the effect that the profits or loss if any of the previous year were divided or credited as shown in Section B of the Schedule The Form contains the Schedule in 7 columns which require the names of the partners their addresses the date of admittance to partnership their shares in the profits or loss etc to be filled in Under the Schedule there are Section A and Section B Section A has to contain particulars of the firm as constituted at the date of the application and Section B has to contain the particulars of the apportionment of the income profits or gains or loss of the business in the previous year between the partners who in that previous year were entitled to share therein Rule 4 provides that if the Income tax Officer is satisfied that there is or was a firm in existence constituted as shown in the instrument of partnership and that the application has been properly made he has to enter a certificate at the foot of the Instrument of Partnership that the firm has been registered under section 26A of the Act and that the certificate of registration shall have effect for the assessment for the year specified therein Rule 5 is as follows 5 The certificate of registration granted under Rule 4 shall have effect only for the assessment to be made for the year mentioned therein And Rule 6 makes provision for the certificate of registration to be renewed for a subsequent year on an application being made in that behalf in accordance with the preceding Rules It is manifest that for a true and proper construction of the relevant provisions of the Act relating to registration of firms sections 26 26A and 28 and the Rules summarized above have to be read together So read it is reasonably clear that the following essential conditions must be fulfilled in order that a firm may be held entitled to registration 1 That the firm should be constituted under an Instrument of Partnership specifying the individual shares of the partners 649 2 That an application on behalf of and signed by all the partners containing all the particulars as set out in the Rules has been made 3 That the application has been made before the assessment of the income of the firm made under section 23 of the Act omitting the words not necessary for our present purpose for that particular year 4 That the profits or loss if any of the business relating to the previous year that is to say the relevant accounting year should have been divided or credited as the case may be in accordance with the terms of the Instrument and lastly 5 That the partnership must have been genuine and must actually have existed in conformity with the terms and conditions of the Instrument It is clear from what has been said above with reference to the relevant provisions of the Act that the certificate of registration has reference to a particular assessment year and has effect for the assessment to be made for that particular year In other words the terms of the partnership should appear in the Instrument of Partnership in respect of the relevant accounting year It is equally clear that the firm to be registered should have been in existence during the accounting year constituted as shown in the Instrument of Partnership The Rules thus contemplate a document operative during the accounting year We are not here concerned with the further question whether the document should be in existence at the very inception of the accounting year or before the year is out The provisions of the Act set out above do not present any serious difficulty except for the words it constituted under an Instrument of Partnership occurring in section 26A and the relevant Rules On the interpretation of these words there has been a conflict of judicial opinion as will presently appear On behalf of the assessee appellants it has been contended that so long as the assessment has not been made the assessees are entitled to have their firms registered in accordance with the terms of the Instrument of 82 650 Partnership irrespective of the year in which the Instrument may have come into existence Strong reliance was placed upon the decision of the Bombay High Court Chagla C J and Tendolkar J in the case of Dwarkadas Khetan Co vs Commissioner of Income tax Bombay City Bombay1 wherein the following observations have been made Any firm can make an application under section 26A for registration and the two conditions that it has got to comply with are that it must be constituted under an instrument of partnership and the second condition is that the instrument of partnership must specify the individual shares of the partners If these two conditions are satisfied it would be entitled to registration The section does not say that the firm must be constituted by the instrument of partnership It does not require that the firm must come into existence by reason of the instrument of partnership or that the firm should be the creature of the instrument of partnership or that the firm must not exist prior to the instrument of partnership being executed In the case decided by the Bombay High Court the Instrument of Partnership had been executed on March 27 1946 with effect from January 1 1946 On an application made to the Department to register the firm the matter was determined by the Income tax Appellate Tribunal against the assessee on the ground that the partnership was in existence before the deed was executed and that therefore it could not be registered Before the Bombay High Court reliance had been placed on behalf of the Department on the decision of the Calcutta High Court now before us in appeal as also on a decision of the Punjab High Court The decision of the Calcutta High Court now under examination in the case of R C Mitter Sons vs Commissioner of Income tax 2 takes the view that section 26A of the Act contemplates a firm created or brought into existence by an Instrument of Partnership which governs the distribution of shares in the relevant accounting period Such a deed should have 1 1956 907 2 704 705 651 come into existence on or before the commencement of the relevant accounting period The other decision relied upon in the Bombay High Court had been given by a Division Bench of the Punjab High Court reported in Padam Parshad Rattan Chand vs Commissioner of Income tax Delhi 1 On the other hand it has been contended on behalf of the Revenue that in order to entitle a firm to be registered the firm should have been created by an Instrument of Partnership or at any rate such an Instrument should be in existence during the relevant accounting year that is the year previous to the year of assessment in respect of which the application for registration has been made For the first part of the submission on behalf of the respondent there is ample authority in the decision under appeal which bad been relied upon before the Bombay High Court In that case R C Mitter Sons vs Commissioner of Income tax supra 2 Chakravarti C J who delivered the opinion of the Court under section 661 of the Act after a very elaborate discussion came to the conclusion which may best be expressed in his own words as follows If by the expression I constituted under an instrument of partnership is meant a firm which originated in a verbal agreement but with respect to which a formal deed was subsequently executed there would be no room in the section for partnerships actually created by an instrument and such partnerships although most obviously entitled to registration would be excluded from the purview of the section Even etymologically or textually I do Dot think that the word constituted when used in relation to a firm or such other body can mean anything but I created when the reference is to some deed or instrument to which the inception of the firm or other body is to be traced After having thus held that section 26A contemplated firms created or brought into existence by a deed in writing he had no difficulty in substituting by for under thus making the crucial words constituted I 2 704 705 652 by instead of constituted under In our opinion the learned Chief Justice fell into the error of re constructing the provisions of the statute instead of construing them The word by could be substituted for the word under in section 26A only if the words as they stand in the section were not capable of making sense and it would thus have been necessary to amend the wording of the section Turning his attention from the wording of the section to that of the Rules and the Form appearing under the Rules he again came to the conclusion that some of the paragraphs of the Form appear to be ill adjusted to the provisions of the Act Referring to other parts of the Rules he was constrained to observe that they would lend strong support to the view that what is meant by any firm constituted under an instrument of partnership in section 26A is no more than a fir of which the constitution appears from an instrument in writing It is obvious that if such be the meaning of the expression constituted under an instrument of partnership the instrument need not be one by which the partnership was created But then he attempted to get over that difficulty by observing that the language of the Rules and the Form could not supersede a provision contained in the Act itself He further opined that the language in para 41 is un doubtedly unsatisfactory In our opinion any attempt to reconstruct the provisions of the relevant section and the Rules on the assumption that the intention of the legislature was to limit the registration of firms to only those which have been created by an Instrument of Partnership is with all respect erroneous The proper way to construe the provisions of the statute is to give full effect to all the words of the relevant provisions to try to read them harmoniously and then to give them a sensible meaning Hence we have to consider at the threshold the question whether the words constituted under an Instrument of Partnership have some meaning which can be attributed to them harmoniously with the rest of the relevant provisions A partnership may be created or set up by a contract in writing 653 setting out all the terms and conditions of the partnership but there may be many cases and perhaps such cases are more numerous than the other class where a partnership has been brought into existence by an oral agreement between the parties on certain terms and conditions which may subsequently be reduced to writing which will answer the description of an Instrument of Partnership Such an instrument would naturally record all the terms and conditions of the contract between the parties which at the initial stages had not been reduced to writing In such a case though the partnership had been brought into existence by an oral agreement amongst the partners if the terms and conditions of the partnership have been reduced to the form of a document it would be right to say that the partnership has been constituted under that instrument The word constituted does not necessarily mean created or set up though it may mean that also It also includes the idea of clothing the agreement in a legal form In the Oxford English Dictionary Vol II at pp 875 876 the word constitute is said to mean inter alia to set up establish found an institution etc and also to give legal or official form or shape to an assembly etc Thus the word in its wider significance would include both the idea of creating or establishing and the idea of giving a legal form to a partnership The Bench of the Calcutta High Court in the case of R C Mitter and Sons vs Commissioner of Income tax1 under examination now was not therefore right in restricting the word constitute to mean only to create when clearly it could also mean putting a thing in a legal shape The Bombay High Court therefore in the case of Dwarkadas Khetan and Co vs Commissioner of Income tax Bombay City Bombay 2 was right in holding that the section could not be restricted in its application only to a firm which had been created by an instrument of partnership and that it could reasonably and in conformity with commercial practice be held to apply to a firm which may have come into existence earlier by an 1 704 705 2 907 654 oral agreement but the terms and conditions of the partnership have subsequently been reduced to the form of a document If we construe the word constitute in the larger sense as indicated above the difficulty in which the learned Chief Justice of the Calcutta High Court found himself would be obviated inasmuch as the section would take in cases both of firms coming into existence by virtue of written documents as also those which may have initially come into existence by oral agreements but which had sub sequently been constituted under written deeds The purpose of the provision of the Income tax Acts 26A is not to compel the firms which had been brought into existence by oral agreements to dissolve themselves and to go through the formality of constituting themselves by Instruments of Partnership If we construe the words constituted under in that wider sense we give effect to the intention of the legislature of compelling a firm which bad existed as a result of an oral agreement to enter into a document defining the terms and conditions of the partnership so as to bind the partners to those terms before they could get the benefit of the provisions of section 23 5 a Section 23 5 a confers a privilege upon partners who may find it more worth their while to be assessed upon their individual total income than upon the total income of the partnership It is therefore very important from the point of view of the Revenue that the Department should be apprised in time of the true constitution of the partnership the names of the true partners and the precise share of each of them in the partnership profits or loss if any The very object of this provision will be defeated if the alleged partner ship is not genuine or if the true constitution of the partnership and the respective shares of the partners are not fully and correctly placed on record as soon as possible for the purpose of assessment In this connection the provisions of section 282 of the Act are also worth noticing That sub section provides that if the Income tax Officer or the Appellate Authorities under the Act are satisfied that the profits of a registered firm have been distributed otherwise than 655 in accordance with the shares of the partners as shown in the Instrument of Partnership registered under the Act and governing such distribution and that any partner has concealed any part of his profits the penalty prescribed therein may be imposed upon such a partner Unless the Instrument of Partnership has been registered in respect of the accounting year and before the assessment has been done the penal provisions aforesaid cannot be enforced It is therefore essential in the interest of proper administration and enforcement of the relevant provisions relating to the registration of firms that the firms should strictly comply with the requirements of the law and it is incumbent upon the Income tax Authorities to insist upon full compliance with the requirements of the law But in our opinion there is no warrant in the words of the relevant provisions of the statute for restricting registration under section 26A of the Act to those firms only which have been created or brought into existence by an Instrument of Partnership In our opinion it is more in consonance with the terms of the relevant provisions of the Act referred to above to hold that the words constituted under an instrument of partnership include not only firms which have been created by an Instrument of Partnership but also those which may have been created by word of mouth but have been subsequently clothed in legal form by reducing the terms and conditions of the partnership to writing We have already indicated that there has been a conflict of judicial opinion in the different High Courts in India on the question now before us But on a consideration of the facts in each case it will be found that the decision arrived at in most of the cases was correct though the reasons given appear to have gone beyond the requirements of the case The decision of the Bombay High Court in Dwarkadas Khetan Co vs Commissioner of Income tax Bombay City Bombay 1 discloses that the partnership then in question had come into existence with effect from the beginning of 1946 though the Instrument of Partnership 1 1956 907 656 was executed on March 27 1946 Thus the Instrument of Partnership came into existence during the accounting year whatever that year may have been because the year 1946 was the starting year of the partner Ship Hence even the earliest assessment year presumably the year 1947 48 would be governed by the terms and conditions of the written Instrument of Partnership aforesaid The decision of the Bombay High Court was followed by the same Bench of that Court in the case of Commissioner of Income tax Bombay North vs Shantilal Vrajlal Chandulal Dayalal Co 1 In the second case the learned Judges ruled that the second partnership deed of September 12 1951 which set out the names and shares of all the partners who constituted the partnership could be registered in respect of the accounting year November 1948 to October 1949 This conclusion was arrived at without even a mention far less a discussion of the relevant provisions of the Act Apparently the matter was not critically placed before the learned Judges when they decided the second case The con clusion in this case is with all respect apparently wrong in view of our conclusion that the Instrument of Partnership should have been in existence in the accounting year In the High Court of Punjab the question was fully discussed in a judgment of a Division Bench given by one of us Kapur J as he then was in the case of Kalsi Mechanical Works Nandpur vs Commissioner of Income tax Simla 2 In that case the firm had come into existence by a verbal agreement in June 1944 The deed of partnership was drawn up as late as May 9 1949 The application for registration of the firm under section 26A for the assessment year 1949 50 was dismissed by the lncome tax Authorities as also by the Tribunal The High Court after an elaborate examination of the relevant provisions of the Act including the Rules and the Forms upheld the orders of the Department The conclusion of the Bench was in these terms The sections of the Income tax Act show that 1 2 361 657 for the purpose of registration it is necessary that the firm should be constituted by an instrument of partnership and in my opinion the Rules read with Sections 26 and 28 of the Act indicate that such a firm as is constituted under an instrument of partnership should have been in existence during the account period and should not come into existence during the assessment year and if it was not in existence during the account period it cannot be registered so as to affect the liabilities of the partners for income tax accruing during the account period The conclusion reached is correct except with all respect for the observation that under section 26A it is necessary that the firm should be constituted by an instrument of partnership That is the leading judgment in the High Court of Punjab It was followed by another Division Bench of that Court in the case of Padam ParshadRattan Chand vs Commissioner of Income tax Delhito the effect that constituted under an instrument in section 26A meant created or formed by a formal deed In this case the business of the firm had started from April 1 1947 but the Instrument of Partnership was executed on April 10 1950 The application for registration was made in respect of the assessment year 1948 49 It is clear with reference to these dates that the Instrument of Partnership was not in existence either during the accounting year or even during the assessment year and the Court therefore rightly held that the partnership could not be registered in respect of the assessment year but they proceeded further to observe that there was no objection to the firm being treated as having been constituted under the Instrument as from the date of the Instrument itself The answer of the Court to the question posed was that the firm could be registered not in respect of the assessment year for which the application had been made but with effect from the date of the Instrument Apparently the attention of the Court was not drawn to the Rules aforesaid particularly Rules 2 and 3 which require 1 83 658 that the application has to be made before the assessment is completed and for a particular assessment year More or less to the same effect are two other Division Bench rulings Of that High Court in Bery Engineering Co Delhi vs Commissioner of Income tax Delhi 1 and Income tax Commissioner Delhi vs Messrs Birdhi Chand Girdhari Lal 2 In all these cases in the Punjab High Court the deeds came into existence later than the accounting year or the assessment year and therefore could not have been registered The actual decisions in these cases were correct though there are orbiter dicta to the effect that section 26A requires that the firm should have been created or set up by an Instrument of Partnership In the Patna High Court the very same question was discussed at great length by a Division Bench of that Court presided over by Ramaswami C J in the case of Khimji Walji Co vs Commissioner of Income tax Bihar and Orissa 3 The learned Chief Justice after an elaborate examination of the relevant provisions of the Act came to the conclusion in these terms It is necessary for the purpose of registration under Section 26A that the partnership should be constituted by an instrument of partnership and that such a partnership as is constituted under an instrument of partnership should have been in existence during the accounting year It is on the same lines as the leading judgment of the Punjab High Court supra With reference to the dates given in the judgment the decision is right though in this case also the words constituted under have been construed as constituted by without discussing the necessity for so amending the words of the statute even as in the Punjab High Court decisions As a result of the above discussion the conclusion is reasonably clear that unless the partnership business was carried on in accordance with the terms of an Instrument of Partnership which was operative during 1 2 3 470 659 the accounting year it cannot be registered in respect of the following assessment year As in these cases the partnership did not admittedly function under such a deed of partnership the Department and the High Court were right in refusing registration We would therefore dismiss these appeals but for different reasons to those given below The respondent is entitled to his costs one set of hearing fees to be paid half and half by the appellants HIDAYATULLAH J I have had the advantage of reading the judgment just delivered by my brother Sinha J I agree that section 26A of the Indian Income tax Act must be read as it is The words of the section as they stand are not meaningless and in view of the decision in Commissioners for special Purpose of the Income tax vs Pemsel 1 it is not possible to read for the expression constituted under the words constituted by I entertain however some doubt as to whether the instrument sought to be registered should be in existence in the accounting year before registration can be claimed There is nothing in the Act which says this specifically My brother has reasoned from the contents of the Act and the Rules that such a condition is implied While I entertain some doubts I am not prepared to record a dissent more so as the Board of Revenue has issued instructions that all firms should be registered whether the documents under which they were constituted existed in the accounting year or not provided the Income tax Officer was satisfied about the genuineness of the firms In the result I agree that the appeals should be dis missed with costs Appeals dismissed 1 542

Petitioners firms were registered sales tax dealers They manufactured and sold handicraft items As they purchased raw material within the State against declaration forms ST 15 prescribed under Rule 21 of the Haryana general Sales Tax Rules read with Section 24 of the Haryana General Sales tax Act purchase tax was not paid The petitioners sold the items of handicrafts to dealers in Delhi who exported the same out of India As the Delhi dealers issued Form H prescribed under the Cectral Sales Tax Rules they did not pay tax on the said salepurchase Following the High court decision in Ms Murli Manohar and company Panipat ors vs State of Haryana Ors CW P No 1227 of 1980 The Sales Tax Authorities levied purchase tax us 9 of the Haryana General Sales Tax Act for the assessment years in question on the purchase of raw material made by the petitioners computing the tax with reference to the purchase value of the goods exported against Form H Hence the present writ petition before this Court was filed challenging 454 155 the impugned order of levying purchase tax Meanwhile this court allowed the appeals preferred against the decision of the High Court in Murli Manohar and Company s case setting aside the judgment of the High Court As a common question arose in this batch of writ petitions all petitions heard together The petitioners contended that in view of the decision of this Court in Murli Manohar 1991 1 SCC 377 the writ petitions were to be allowed Disposing of the writ petitions this Court section HELD 11 The decision in Murli Manohar says that there can be only three types of sales namely intra state sales inter state sales and export sales a nd no other A sale to an exporter would be either at intrastate sale or an inter state sale in either case the decision says it does not attract the purchase taxon raw material under Section 9 of the Haryana General Sales Tax Act However in the light of the decision in Hotel Balaji it must be held that there is one more category in addition to the three categories mentioned above The fourth category is where a dealer in Haryana takes his goods out of Haryana without effecting a sale within the State and effects the sale in the other State According to Section 9 of the Haryana Act as explained in Hotel Balaji purchase tax can be levied and collected on the raw material purchased by the manufacture within Haryana which was utilised for manufacturing the goods so sold in the other State 458 D F Murli Manohar case followed Good year India Lid and Ors vs State of Haryana and Anr referred to Hotel Balaji and Ors vs State of Andhra Pradesh ors JT explained 21 In a petition under article 32 of the Constitution it is not the province of the Supreme Court to go into facts As repeatedly emphasised by this Court the question whether a particular sale is an intra state sale an inter state sale an export sale within the meaning of Section 51 or a 456 penultimate sale within the meaning of section 53 or otherwise is always a question of fact to be decided by the appropriate authority in the light of the principles enunciated by Courts 459 C 22 In these circumstances it is directed that the matters be disposed of by the authorities under the Act in the light of the law declared by this Court in Murli Manohar Hotel Balaji and in this judgment 459 D

minal Appeal No 398 of 1993 From the Judgment and Order dated 1231992 of the IVth Metropolitan Megistrate Hyderabad in Crl MP No 9292 in CC No 234 of 1985 WITH Writ Petition No 623 of 1993 Under Article 32 of the Constitution of India KK Venugopal LK Pandey and section Anand for the Petitioner DP Gupta Solicitor General and Ms A Subhashni for the Respondents The Judgment of the Court was delivered by AHMADI J Special leave granted The brief facts leading to this appeal are that the appellant s daughter Geetha married respondent No 1 original accused No 1 sometime in October 1976 according to Hindu rites and thereafter left for Ireland A daughter was born to the couple on July 27 1978 in Ireland She was named Nivedita In April 1979 the couple along with the child moved to the United States of America the Child travelling on an Irish passport In October 1979 Geetha wrote to her mother the appellant expressing her desire that Nivedita should be brought up under her care in India On the appellant expressing her willingness to look after the child Nivedita was sent to India via Bombay where the appellant received her The child then remained in the custody of the appellant In March 1980 Geetha returned to 470 India presumbly because her husband had developer intimacy with an American girl and had started to ill treat her Within a week after her arrival in India she committed suicide by setting herself on fire Nivedita continued to remain in the care and custody of the appellant The first respondent married the American girl with whom he had developed intimacy sometime in the year 1983 84 and embraced Christianity Thereupon the appellant filed an application in the Court of the Chief judge City Civil Court Hyderabad being OP No 203 of 1984 for appointing her as the guardian of the person of the minor child under the provisions of Respondent No 1 entered an appearance in the said proceedings through his Advocate and sought time to file a counter Leter he returned to India on December 14 1984 After reaching India he obtained a duplicate passportfor Nivedita and thereafter with the help of his associates picked up Nivedita fromher school ignoring the protests of the Head Mistress of the School The HeadMistress immediately filed a complaint with the commissioner of police and informed the appellant about the same who in turn lodged a First Information Report in that behalf On enquiry the appellant s son traced respon dent No 1 and his three companions who had assisted him in procuring the child at the Madras Airport Despite his entreaties respondent No 1 forcibly took the child to USA via Singapore Since then Nivedita is in the custody of respondent No 1 and his newly married wife Maureen After thus removing the child from the lawful custody of the appellant respondent No 1 s Advocate withdrew from the guardianship proceedings The Court however appointed the appellant as the guardian of the person of Nivedita The appellant also filed a complaint alleging kidnapping against respondent No 1 and his three companions who had aided and abetted him in the Court of the IVth Metropolitan Magistrate Hyderabad which came to be numbered as CCNo 234 of 1985 Process was issued in the said proceedings land the accused persons were duly served The respondents thereafter moved an application under Section 482 of the Code of Criminal Procedure 1973 hereinafter called the Code for quashing the process on the plea that in law a father is entitled to his daughter s custody and hence cannot be liable under section 363 PC In that application the High Court directed that the child be produced before it However the child was not produced before the Court and the Court ultimately dismissed the application against which a Special Leave Petition was filed in this Court This Court also rejected the Special Leave Petition On the other hand while the application under Section 482 of the Code was pending in the High Court the father of respondent No 1 filed an application for rescinding the order appointing the appellant as the guardian of the person of Nivedita In the meantime the Supreme Court in New Jersey USA was moved which court passed an order permitting respondent No1 to retain No 1 to retain the custody of the child on the ground that the Indian Courts had violated the due process clause The Chief Judge City Civil Court Hyderabad ultimately dismissed the father s application for rescinding the 471 earlier order by which the appellant was appointed the guardian of the person of the child As staed earlier the Superior Court New Jersey having permitted respondent No 1 to retain the custody of Nivedita the child s step mother Maureen applied for permission to adopt Nivedita who had by then been converted to Christianty On that permission being granted the adopted mother and respondent No 1 sent the Child to a Christian school In the complaint lodged against respondent No 1 and his associates respondent No 1 applied for exemption from personal attendance which was granted on condition that he will appear whenever called upon to do so by the court Respondent No 1 was thus represented in the said complaint through his Advocate In the said criminal complaint after framing the charge for kidnapping evidence of the prosecution witnesses was recorded in the presence of the Advocate for respondent No 1 and the other respondents and on completion of the evidence respondent No 1 s Advocate sought permission to be examined in place of respondent No 1 under section 313 of the Code This permission was granted and he was examined under section 313 of the Code On completion of the examination the appellant not being satisfied with some of the replies given by the Advocate filed an application prayino that respondent No 1 should be directed to personally appear in Court and be examined under section 3 13 of the Code The learned Magistrate dismissed the said application whereupon the present appeal has been filed on the plea that no appeal or revision lay against the order impugned herein These are the averments on which the present appeal is founded The question then is whether the learned Magistrate was right in examining the Advocate of respondent No 1 in place of respondent No 1 himself under section 313 of the Code Sub section 1 of section 313 reads as under Power to examine the accused 1 In every inquiry or trial for the purpose of enabling the accused personally to explain any circumstances appearing in the evidence against him the Court aMay at any stage without previously warning the accused put such questions to him as the Court considers necessary bshall after the witnesses for the prosecution have been examined and before he is called on for his defence question him generally on the case 472 Provided that in a summons case where the Court has dispensed with the personal attendance of the accused it may also dispense with his examination under clause b This sub section was introduced in its present form pursuant to the recommendations made in the 41st Report of the Law Commission It now begins with the words in every inquiry or trial to set at rest any doubt in regard to its application to summons cases the old sub section 1 of section 342 has now been divided into two clauses a b Clause a uses the expression 1 may to indicate that the matter is left to the discretion of the Court to put questions to the accused at any stage of the inquiry or trial whereas clause b uses the expression shall to convey that it is mandatory for the Court to examine the accused after the witnesses for the prosecution have been examined before he is called on for his defence The proviso is a new provision Which came to be added to sub section 1 with a view to enabling the Court to dispense with the examination of the accused under clause b in a summons case if the Court has already dispensed with his personal attendance at an earlier point of time Therefore if the Court on completion of the prosecution evidence finds that there are certain circumstances appearing in the evidence against the accused the Court is obliged by clause b to question the accused before he is called on for his defence This provision is general in nature and applies to all inquiries and trials under the Code The purpose of the said provision is to give the accused an opportunity to explain the circumstances appearing against him in evidence tendered by the prosecution so that the said explanation can be weighed vis a vis the prosecution evidence before the Court reaches its conclusion in that behalf It is thus clear on a plain reading of section 313 1 of the Code that the Court is empowered by clause a to question the accused at any stage of the inquiry or trial while clause b obligate the Court to question the accused before he enters of his defence on any circumstance appearing in the prosecution evidence against him The section incorporates a rule of audi alteram partem and is actually intended for the benefit of the accused person The newly added proviso is in the nature of an exception to clause b of subsection 1 of section 313 of the Code It applies to a summons case it states in no uncertain terms that in a summons case where the court has dispensed with the personal attendance of the accused it would be open to the court to dispense with the examination of the accused under clause b of section 313 1 of the Cods Even in cases where the personal presence of the accused has been dispensed with under section 2051 or section 317 of the Code the Magistrate can dispense with the mandatory requirement of clause b only in a summons case ie a case other than a warrant case This is clear on plain reading of the definitions of a summons 473 case in Section 2wand a warrant case in section 2xof the Code A warrant case is defined as one relating to an offence punishable with death imprisonment for life or imprisonment for a term exceeding two years Since an offence under section 363 IPC is punishable with imprisonment for a term exceeding two years it is a warrant case and not a summons case Therefore even in cases where the court has dispensed with the personal attendance of the accused under section 2051 or section 317 of the Code the court cannot dispense with the examination of the accused under clause b of section 313 of the Code because such examination is mandatory If the accused is a company or a juridical person it may be open to examine the person conversant with the facts of the case It would thus appear that the mandate of section 313 1 b demands that the accused person if not a company or other juridical person most be personally examined to explain the incriminating circumstances appearing against him in the prosecution evi dence and the examination of his lawyer would not be sufficient compliance with the mandate of said provision A similar question arose for consideration in Bibhuti Bhushan Das Gupta Anr vs State of West Bengal under the provisions of the old Code In that case this Court noticed that the accused was not personally examined under section 342 of the Code It was submitted that the trial was vitiated as the accused was not personally examined as required by section 342 of the old Code The said argument was sought to be repelled on the ground that the examination of the pleader was sufficient compliance with the said provision since the pleader was authorised to appear on behalf of the accused and do all acts which the accused could personally do Dealing with this submission this court on a reading of Section 342 pointed out that the privilege of making a statement under that section is personal to the accused and the requirement cannot be satisfied by examining his pleader in his place The right of the pleader to represent the accused does not extend to the pleader answering questions under section 342 in place of the accused person The submission that such a view will cause inconvenience and harassment to the accused was also repelled in the following words We are not impressed with the argument that an accused person will suffer inconvenience and harassment if the Court cannot dispense with his attendance for purposes of section 342 The examination under the section becomes necessary when at the close of the prosecution evidence the magistrate finds that there are incriminating circumstances requiring an explanation by the accused 474 Proceeding further this Court observed as under There are exceptional cases when an examination of the accused personally under section 342 is not necessary or possible Where the accused is a company or other juridical person it cannot be examined personally It may be that the Court may then examine a director or some other agent on its behalf It is another matter that in that case this Court did not interfere with the conviction and sentence on the ground that the non examination of the accused had not caused any prejudice and in the absence of material showing prejudice the conviction and sentence could be sustained by virtue of old section 537 section 465 of the new Code In the result the order impugned in the present appealwrit petition of the learned Magistrate cannot be allowed to stand more so in the instant case for the reason that the accused may raise the plea of violation of the due process clause if the order is sought to be executed in the foreign court We therefore set aside the order of the learned Magistrate and direct him to pass appropriate orders in the light of this judgment in regard to the examination of the accused under section 3131 b of the Code As the prosecution is pending since long the learned Magistrate will take it up immediately SPS Appeal disposed of

The services of the appellants were terminated by the Management of a recognised school The termination was not approved by the Inspector of Schools The appellants filed a writ petition before the High Court for reinstatement and salaries from the date the school became an aided institution The High Court having dismissed the writ petition appellants preferred the present appeal Dismissing the appeal this Court HELD Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector of Schools Use of the word aided institution is dear indication that the provisions of approval apply only to the aided schools Since on the date the services of the appellants were terminated the institution was recognised only and not aided the Inspector could not have exercised the power of disapproval Recognition of a institution for purposes of imparting education is different than bringing It on grants in aid To the former the regulatory provisions of the Education Act or the rules do not apply The Education Department has no control either on admission of students or members of staff 476 D F

Appeal No 4233 of 1984 From the Judgment and Order dated 2531983 of the Bombay High Court in WP No 25 of 1982 SB Bhasme and AS Bhasme for the Appellant Umesh Bhagwat and VB Joshi for the Respondent The Judgment of the Court was delivered by RM SAHAI J Can a statutory tenant create a licence If the answer is in affirmative then can such licensee claim immunity from eviction in execution proceedings in view of Section 15A of this Bombay Rent Hotel and Loging House Rates Control Act 57 of 1947 hereinafter referred to as the Act These are questions which arise for consideration in this appeal directed against the judgment and order of the Bombay High Court 462 What happened was that the landlord determined the tenancy of the contractual tenant in October 1966 and filed a suit for his eviction in 1967 which was decreed ex parte on 5th October 1973 In execution of the decree the licensee obstructed and claimed to be protected licensee under Section 15A of the Act The objection was rejected by the executing and the appellate court The appellate court found that even though the first licence was created in 1966 before determination of the tenancy for a period of six years but the second licence having been created in 1972 it was not necessary to examine the validity of the first as second was created when contractual tenant had become statutory tenant therefore he was incapable of transferring any right or interest in favour of the licensee The High Court did not disturb the finding that the licence was created in 1972 but it held that creation of licence by a statutory tenant was valid Consequently the licensee was in occupation of the premises as licensee on the date the Bombay Rent Act was amended and was entitled to the benefit of Section 15A of the Act For this reliance was placed on certain observations made by a Division Bench of that Court in Vasant Tatoba Hargude and Others vs Dikkava Mutta Pujari to the following effect On this point of initial presumption as to the subsisting incidence of the tenancy we shall have to follow the ratio of Damadilal s case in preference to the decision in Anand Nivas case and shall have to proceed on the assumption that statutory tenant does ordinarily possess transferable interest in his tenancy Who is a statutory tenant what right or interest he can assign or transfer have been dealt by this Court in more that one decisions In Anand Nivas Private Lid vs Anandji Kalyanji s Pedhi others AIR 1965 SC 414 a decision rendered under Bombay Rent Act the majority held A person remaining in occupation of the premises let to him after the determination of or expiry of the period of the tenancy is commonly though in law not accurately called a statutory tenant Such a person is not a tenant at all he has no estate or interest in the premises occupied by him He has merely the protection of the statute in that he cannot be turned out so long as he pays the standard rent and permitted increases if any and performs the other conditions of the tenancy His right to remain in possession after the determination of the contractual tenancy is personal it is not capable of being transferred or assigned and devolves on his death 463 only in the manner provided by the statute The right of a lessee from a landlord on the other hand is an estate or interest in the premises and in the absence of a contrant to the contrary is transferable and the premisses may be sublet by him But with the determination of the lease unless the tenant acquires the right of a tenant holding over by acceptance of rent or by assent to his continuing in possession by the landlord the terms and conditions of the lease are extinguished and the rights of such a person remaining in possession are governed by the statute alone Section 12 1 of the Act merely recognises his right to remain in possession so long as he pays or is ready and willing to pay the standard rent and permitted increases and performs the other conditions of the tenancy but not the right to enforce the terms and conditions of the original tenancy after it is determined In Jai Singh Morarji and others vs Ms Sovani P Ltd yet another decision from Bombay the ratio in Anand Nivas was reiterated and It was held that tenant in Section 15 of the Bombay Rent Actmeant the contractual tenant and not the statutory tenant Then came another decision Damadilal and others vs Parashram and others on MP Accommodation Control Act It in the Court traced the genesis of the concept of statutory tenant derived from the English Rent Act but carved out an exception where the sanctity of the contract was touched by legislation It was held that where the statute itself provided continuance in possession of the tenant after determination of the tenancy in some right the tenant was at par with contractual tenant Reason was the definition of tenant under Section 2 i of the Act It read as under a person by whom or on whose account or behalf for the rent of any accommodation is or but for a contract express or implied would be payable for any accommodation and includes any person occupying the accommodation as a sub tenant and also any person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act but shall not include any person against whom any order or decree for eviction has been made This section was construed thus The definition makes a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him 464 thus putting him on par with a person whose contractual tenancy still subsists The incidents of such tenancy and a contractual tenancy must therefore be the same unless any provision of the Act conveyed a contrary intention That under this Act such a tenant retains an interest in the premises not merely a personal right of occupation will also appear from Section 14 which contains provisions restricting the tenant s power of subletting Section 148 is in these terms No such provision existed in the Bombay Rent Act The ratio in Damadilal s case therefore could not apply to right or interest created by a statutory tenant under the Bombay Act The decisions in Damadilal s case did not in any way deviate from the decisions given earlier by this Court in Anand Nivas case All these cases however were of sub tenants In 1981 this Court had an occasion to deal with the case of a licensee under the Bombay Rent Act and his rights under Section 15A of the Act The Bench was of the opinion that the licensee was not entitled to obstruct the eviction proceedings which had become final against the tenant as a statutory tenant could not assign or create any interest after termination of his tenancy It was observed in Ludhichem Agencies vs Ahmed R vs Peer Mohamed and Anr 1 An agreement for licence can subsist and continue to take effect only so long as the licensor continues to enjoy a right title or interest in the premises On the termination of his right title or interest in the premises the agreement for licence comes to an end If the licensor is a tenant the agreement for licence terminates with the tenancy No tenant is ordinarily competent to grant a licence enduring beyond his tenancy On the termination of the licensor s tenancy the licensee ceases to be a licensee On facts however since the statutory tenancy too cam to an end before Section 15A was amended due to passing of the decree by the trial court the High Court distinguished this decision ignoring the material difference between the two enactments What was lost sight of was that the observation made by this Court in Damadilas s case at page 2234 to the following effect We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute has no right of property but only a personal right to remain in occupation without ascertaining what his rights 465 are under the statute It is not possible to claim that the sanctity of contract cannot be touched by legislation Were on the language of the Section as it stood under that Act Therefore in absence of any legislation touching the contract it appears to be settled that contractual tenant is left with no transferable right after determination of his tenancy In our opinion the learned judge in drawing an inference from Ludhichem Agencies supra that a licence by a statutory tenant would continue to subsist lawfully till it was terminated and therefore if on the facts of that case the decree of ejectment against Saraswatibai had been made after 121973 then the licence in favour of the petitioners could have been considered to the subsisting on 121973 committed an error of law Section 15A reads as under 15A 1Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force or in any con tract where any person is on the lst day of February 1973 in occupation of any premises or any part thereof which is not less that a room as a licensee thereof he shall on that date he deemed to have become for the purposes of this Act the tenant of the landlord in respect of the premises or part thereof in his occupation 2The provisions of sub section 1 shall not affect in any manner the operation of sub section 1 of Section 15 after the date aforesaid The section brought into force with effect from 1st February 1973 undoubtedly protected a licensee form eviction But it could operate in his favour only if he was in occupation of the premises on the date the Act came into force as a licensee It is thus not mere occupation but occupation as licensee which has been statutorily protected In other words the law would operate in favour of a person who held the premises under valid licence A valid licence could be created as explained earlier by a contractual tenant or by a statutory tenant if he continued at par with contractual tenant by operation of legislation In absence of any such provision in the Bombay Rent Act the licence created in favour of licensee by the statutory tenant could riot render the respondent a licensee within the meaning of Section 15A of the Act 466 Even a valid licence stands revoked in circumstances mentioned in Section 62 of the Indian Easements Act Its clause a reads as under 62 A license is deemed to be revoked awhen from a cause preceding the grant of it the grantor ceases to have any interest in the property affected by the license The licence was granted by the contractual tenant in 1972 But his tenancy had been determined by the landlord in 1966 He thus had become statutory tenant He did not in law had any assignable interest on the date he created the licence The grantor therefore from a cause preceding the grant had ceased to have any interest and was incapable of creating any valid licence unless he could be deemed to be at par with the contractual tenant by any provision in the statute In absence of any such provision in the Bombay Rent Act the licence was invalid and stood revoked The occupation of the respondent thus was not as licensee within the meaning of Section 15A of the Act In the result this appeal succeeds and is allowed The order passed by the High Court in the Writ Petition is set aside and it shall stand dismissed In the circumstances of the case however there shall be no order as to costs VM Pretition dismissed

The question for determination in these two appeals was whether the appellant firms were entitled to registration under section 26A of the Indian Income tax Act and the common point of law involved was the interpretation of the words constituted under an instrument of partnership occurring in that section In Appeal No 85 the assessee firm was said to have been constituted by a verbal agreement in April 1948 and the deed of partnership was drawn up in September 1949 The application for registration under section 26A of the Act for the assessment year 1949 1950 was made thereafter to the Income tax Officer In Appeal NO 389 the assessee firm was verbally constituted in 81 642 June 1944 and a memorandum of partnership was executed in June 1948 The application for registration under section 26A for the assessment years 1945 46 and 1946 47 was made on August 24 1949 The applications were rejected by the Income tax Officer and the appeals preferred by the assessees were also dismissed by the Income tax Appellate Tribunal The High Court took the view that section 26A of the Indian Income tax Act contemplated a firm created or brought into existence by an instrument of partnership and answered the questions against the assessees It was contended on their behalf that solong as the assessment was not made they were entitled to registration irrespective of the year in which the instrument of partnership came into existence This was controverted on behalf of the Revenue and their case was that a firm seeking registration under section 26A of the Act should be created by an instrument of partnership or at any rate such instrument should be in existence during the relevant accounting year i e the year previous to the year of assessment in respect of which the application for registration was made Held that the words Constituted under an instrument of partnership occurring in section 26A of the Indian Income tax Act included not only firms that were created by instruments of partnership but also those that were subsequent to their creation clothed in legal form by reducing the terms and conditions of the partnership in writing Dwarkadas Khetan Co vs Commissioner of Income tax Bombay City Bombay approved Kalsi Mechanical Woyks Nandpur vs Commissioner of Income tax Simla Padam Parshad Rattan Chand vs Commissioner of Income tax Delhi Bery Engineering Co Delhi vs Commissioner of Income tax Delhi Income tax Commissioner Delhi vs Messrs Birdhi Chand Girdhari Lal and Khimji Walji Co vs Commissioner of Income tax Bihar and Orissa dissented from Section 26A read with SS 26 28 and Rules 2 to 6B laid down the following essential conditions that a firm must fulfil before it could claim registration under section 26A of the Act 1 that it must be constituted under an Instrument of Partnership specifying the individual shares of the partners 2 that an application on behalf of and signed by all the partners containing all the particulars as set out in the Rules must be made 3 that the application must be made before the assessment of the income of the firm was made under section 23 Of the Act for that particular year 4 that the profits or loss if any of the business relating 643 to the previous year i e the relevant accounting year must be divided or credited as the case may be in accordance with the terms of the Instrument and lastly 5 that the partnership must be genuine and in actual existence in conformity with the terms and conditions of the Instrument Where therefore as in the instant cases the partnership did not admittedly function in terms of an instrument of partnership which was operative during the accounting year it could not be registered during the following assessment year Commissioner of Income tax Bombay North vs Shantilal Vrajlal Chandulal Dayalal CO dis approved Per M HIDAYATULLAH J While it was clearly not possible to read constituted by for the words constituted under occurring in section 26A of the Act it was doubtful whether the instrument of partnership sought to be registered must be in existence in the accounting year in order to entitle it to registration Dwarkadas Khetan Co vs Commissioner of Income tax Bombay City Bombay referred to

Appeal No 2485 of 1992 From the Judgment and Order dated 8101991 of the Calcutta High Court in FMAT No 2532 of 1991 PS Poti and Rathin Das for the Appellants Dr Shankar Ghosh Raj Kumar Gupta and PC Kapur for the Respondents J Special leave granted 487 This appeal arises against the judgment dated October 8 1991 of the Division Bench of the Calcutta High Court made in FMAT No 2532 of 1991 The first respondent a limited Company filed under article 226 of the constitution of India Civil Order No 16339 W of 1988 for a mandamus to refrain the appellants from giving effect to the vesting of the lands in Dag No 1 Khatian No 10 Tauzi No 56 JL No 26 Mouza Chowkgaria within PS Kasba admeasuring 12840 acres and to take possession of tank fisheries lying therein pursuant to the provisions of West Bengal Estate Acquisition Act of 1954 for short the Act The learned Single Judge directed an action under Sec 102 of the Act after giving an opportunity to the respondents and to take possession of the said lands pursuant thereto On appeal the Division Bench in the impugned judgment held that the appellants should take action under the West Bengal Land Reforms Act 1955 within a period of two months from the date of the said judgment and on its failure the respondents would be at liberty to deal with and dispose of the lands in its own manner Until then the appellants were restrained to take possession of the land Feeling aggrieved against the said direction the above appeal under article 136 has been filed The Revenue Officer found from finally published record of rights that the lands in question were classified as Beel marshy land and tank fisheries would he classified as Beel Mash Khas The learned Single Judge and the Division Bench of the High Court found that when the Revenue Officer initiated proceedings to revise the old Jama Rs 1230 9 Anas in three Jamas of Rs 1188 and odd in khata No 102 Rs 396 and odd in khata No 128 and Rs 3024 and odd in khata No 131 the respondent succeeded in his appeal under Sec 443 of the Act holding the lands to be Tank fisheries and that therefore old Jama was to be maintained So the Division Bench directed to take action under the Land Reforms Act Shri PS Poti learned Senior Counsel for the appellants contended that by operation of Secs 4 and 5 of the Act fisheries being one of the interests that stood extinguished and vested in the State Govt Free of all incumbrances with effect from June 1 1956 the respondents have lost right title and interest therein Section 6 only enables an intermediary to retain possession of certain enumerated lands which includes tank fisheries provided he makes an application in form B within the specified time expressing his intention to retain the lands Since the respondent had failed to do so the entire lands including tank fisheries stood vested in the state As per the entries in the record of rights the lands are only Beel Marshy lands and not tank fisheries and therefore even the exercise of the option to retain possession is not available Even assuming that the lands are tank fisheries what was saved from the operation of the Act is the entitlement of the respondent to hold 488 the land as a tenant without any interest therein except the right to remain in khas physical possession subject to such terms and conditions as may be prescribed by the Govt and payment of rent Since the respondent raised a dispute the learned single Judge rightly directed an enquiry under Sec 10 2 in this behalf and to take action pursuant to its result under Sec 101 The Division Bench committed gravest error in treating that the decision of the Tribunal under Sec 443 relating to Jama to be final and the lands to be tank fisheries and that the respondent is entitled to retain khas possession with all right title and interest therein as an owner The direction given to initiate the action under the Land Reforms Act 1955 within the specified period and on failure thereto liberty given to the respondent to alienate the lands is beyond the relief sought in the writ petition Therefore the Division Bench committed manifest error of law warranting interference Dr Ghosh learned senior counsel for the respondents contended that initially Devendra Nath Dey Sarkar purchased the lands from Harkishan Mondal the original Zamindar in 1911 and from him the respondents had purchased the leasehold rights in 1937 and ever since they have been using the lands as tank fisheries When notification under Sec 4 was issued the lands were being used as tank fisheries Despite its vesting by operation of Sec 62 the respondent has right to retain possession as an owner In support thereof he placed reliance on State of UP vs Krishna Gopal Anr 1988 Suppl 2 SCR 391 State of West BengaI vs Atul Krishna Shaw Anr 1990 Supp 1 SCR 91 and Sasanka Sekhar Maity Ors vs Union of India He further contended that the liability of dispossession of the respondent from the lands would arise only if the possession is found to be unlawful But by operation of Sees 62 and 105 the possession is lawful The order of the Appellate Tribunal passed in 1957 under section 443 having been allowed to become final and the civil suit for declaration that it is Beel and not tank fisheries having filed by the State and got dismissed concludes that the lands in question are only tank fisheries By operation of Subsec 2 for Sec 6 of the Act the respondent is entitled to retain possession and the action for dispossession under Sec 10 1 is illegal The Division Bench therefore rightly directed to initiate proceedings under the Land Reforms Act and to take action thereunder Admittedly the Act came into force on February 121954 Notification under Secs 41 and 3 was published in the prescribed manner specifying the date of vesting of the estate and had come into effect from June 1 1956 By operation of sub sec 1 of Sec 5 the estate and all the rights of intermediaries including fisheries in the estate shall stand determined and ceased and stood vested in the State free from all incumbrances Incumbrance defined under Sec 2h of the Act means in relation to estates and rights of intermediaries therein does not 489 include the rights of a raiyat or of an under raiyat or of a non agricultural tenant but shall except in the case of land allowed to be retained by an intermediary under the provisions of sec 6 include all rights or interests of whatever nature belonging to intermediaries or other persons which relates to lands comprised in estates or to the produce thereof Therefore title to rights or interests in lands which include fisheries held by an intermediary shall stand extinguished and ceased and stood vested in the state free of all incumbrances The respondents being purchasers of lease hold interest in tank fisheries as per their own case it also stood extin guished But however since the appellant treated the respondent as an intermediary we proceed on that footing The exceptions engrafted in the incumbrance and exempted from the operation of Sections 4 and 5 are only the rights of a raiyat or of an under raiyat or of a non agricultural tenant and the right of retention of possession allowed to an intermediary under Sec6 of the Act All other rights interest of whatever nature or little belonging to the intermediaries or other persons who hold the lands under lease from intermediary should also stood extinguished All grants and confirmation of title to estates and rights therein to which the declaration of vesting applies and which were made in favour of intermediaries shall stand dismissed and ceased by operation of Sec 51 b of the Act Section 6 postulates by a non obstanti clause that notwithstanding anything contained in secs 4 and 5 an intermediary shall except in the cases mentioned in the proviso to sub sec 2 but subject to the other provisions of that sub sec be intitled to retain with effect from the date of vesting various kinds of lands like homestead etc enumerated therein including tank fisheries covered by clause e thereto The explanation of tank fisheries means a reservior or place for the storage of the water whether formed naturally of by excavation or by construction of embankments which is being used for pisciculture or for fishing together with the sub soil and the banks of such reservoir or place except such portion of the banks as are included in a homestead or in a garden or orchard and includes any right or pisciculture or fishing in such reservoir or place Therefore if lands comprised of tank fisheries whether naturally formed or by excavation or by construction of embankments being used for pisciculture or fishing the intermediaries became entitled to retain possession despite the intermediaries having been divested of right title and interest therein This is made manifest by Sec 105 of the Act which postulates that nothing in this section shall authorise the Collector to take khas possession of any estate or of any right of an intermediary therein which may be retained under sec6 Sub sec 2 of Sec 6 declares that An intermediary who is entitled to retain possession of any land under sub sec1 shall be deemed to hold such land directly under the State from the date of vesting as a tenant subject to such terms and conditions as may be prescribed and subject to payment of such rent as may be determined under the provisions of this 490 Act and as entered in the record of rights finally published under Chapter V except that no rent shall be payable for land referred to in clause h or i provided that if any tank fishery or any land comprised in a tea garden orchard mill factory or workshop was held immediately before the date of vesting under lease such lease shall be deemed to have been given by the State Govt On the same terms and conditions as immediately before such date subject to such modification therein as the State Govt may think fit to make On the issue of notification under Sec49 Sec 52 prescribed procedure to deal with raiyats and under raiyats covered in Chapter 11 etc It says that the provisions in Chapter II shall with such modification as may be necessary apply mutatis mutandis to raiyats or under raiyats as if such raiyats or non raiyats were intermediaries and the land held by them were estates and such a person holding under a raiyat or an under raiyat were a raiyat for the purpose of clauses c and d of Sec5 provided that where a raiyat or an under raiyat retains under sec6 any land comprised in a holding then notwithstanding anything to the contrary contained in sub sec 2 of sec6 then he shall pay the rent as prescribed in clauses a to d thereto Under Sec5c every raiyat holding any land under an intermediary shall hold the same directly under the state as if the state had been the intermediary and on the same terms and conditions as immediately before the date of vesting Thus the right title and interest of a raiyat or under raiyat in the lands in his possession and enjoyment are saved By operation of law they became full owners thereof subject to the terms and conditions that maybe imposed under Sec 52 and payment of Jama existing on the date of notification or revised from time to time and finally entered in Record of Rights The pre existing rights of the intermediaries in the estate to which the declaration applied shall stand vested in the State free from all incumbrances Section 6 does not have the effect of divesting the state of the vested right title and interest of the intermediary One of the rights ie possession held by the intermediaries is the only interest saved by Sec6 from the operation of Secs 4 and 5 The fishery rights also stood vested The pre existing rights title and interest therein also shall stand determined as against the state and ceased The Collector had symbolic possession under Sec 10 But by use of non obstanti clause in Sec6 1 the respondent became entitled to retain khas possession of tank fisheries and he shall hold tank fisheries directly under the state on such prescribed terms and conditions and subject to payment of such rent as may be determined under the Act from time to time as finally entered in Record of Rights If any lease by the intermediary of any tank fisheries granted prior to the date of vesting by operation of the proviso to sub sec 2 of Sec 6 the lease shall be deemed to have been given by the State Govt On the same terms and conditions and subject to such modification 491 therein as the State Govt may think fit Such holding of the land by the intermediary of the tank fishery shall be as a tenant The word retain has been defined in Black s Law Dictionary 6th Edition page 1316 to mean to continue to hold have use recognise etc and to keep In Collings English Dictionary at page 1244 retain has been defined as to keep in one s possession to be able to hold or contain to hold in position to keep for one s future use as by paying a retainer or nominal charges In Webster Comprehensive Dictionary International Edition Volume II at page 1075 the word retain has been defined to keep or continue to keep in one s possession Section 102 of the Act empowers the Collector after his taking charge of the estate and the interest of the intermediaries under Sec 101 to issue a written order serving in the prescribed manner requiring the intermediary or any person in possession khas or symbolic of any such estate or any interest to give up such possession by a date to be specified in the order which shall not be earlier than 60 days from the date of service of the order etc Sub section 5 of Sec 10 prohibits him to take khas possession of any right of intermediary in the estate retained under Sec6 The conjoint operational conspectus assists us to conclude that the preexisting right title and interest in the lands situated in an eatate stood extinguished and ceased to have effect on and from notified date ie June 1 1956 and stood vested in the state free from all incumbrances The non obstanti clause under Sec6 excluded from the operation of sees 4 and 5 only of the interest of the respondent to retain physical possession of the lands covered by Sec6 subject to Sec 6 2 The intermediary by operation of Sec 102 shall be required to submit in form B within 60 days from the date of issuing notice under Sec 10 1 of his intention to retain possession of the tank fisheries On such submission of Form B the Collector without dispossessing himit shall be entitled to prescribe such terms and conditions to which the intermediary or the lessee shall be bound and hold the tank fishery and shall remain in possession using the tank fisheries for pisciculture or for fishing and subject to payment of such rent as may be determined under the Act and finally entered in the Records of Rights Under Sec 39 in Chapter V the State Govt has to carry out the purpose of the Act It shall prepare the Records of Rights in respect of the lands in an estate in any district or a part of a district in the manner prescribed therein Section 44 provides the procedure for publication of the draft and final Record of Rights prepared or revised Sub section 1 thereof postulates that when a Record of Rights has been prepared or revised the Revenue Officer was enjoined to have it published in the prescribed manner On receipt of objections if any made 492 regarding any entry therein or any ommission thereof he shall consider the same and is enjoined to pass an order under Sec5A of the Act By operation of the proviso to sub sec 1 of Sec 44 the order so passed under Sec 5A shall be final subject to the order of the appellate Tribunal under Sec 44 3 and during the continuance of that order it is not liable to be reopened The respondent is not right in its contention as found favour with the High Court that entries once made shall be final and can never be revised The word revised under sub sec 1 of Sec 44 indicates that the State Govt or its officers shall be entitled to revise from time to time the Record of Rights and to make necessary entries or corrections in the relevant columns of Record of Rights in its settlement operations or as per exigency envisaged under the Act and the rules made there the order under Sec 443 becomes final so long as there is no revision effected The question of res judicate therefore does not arise and the previous appellate order does not preclude the authorities to revise the Record of Rights The Division Bench of the High Court therefore is not right in its conclusion that the order passed by the appellate authority under Sec 443 is final and the authorities have no jurisdiction to revise the Record of Rights After the act was amended by Act 33 of 1973 Sec 57B was brought on statute which had barred the jurisdiction of the civil courts and exclusive jurisdiction has been conferred on the revenue authorities to deal with the matters arising under the Act So the dismissal of the suit as having been abated is of little consequence The appellants contend that even on the date of vesting the lands in question are Beel lands and that it is not tank fisheries The entries in the record of the rights disclose that the lands in question are being used as homestead or for agricultural purpose and that therefore it is not tank fishery The respondents disputed the Govt s stand and so it is a disputed question of fact We do not propose to go into nor decide the same It is true as rightly contended by Dr Ghosh that the lands once retained under Sec6 by the intermediary and accepted by the authorities pursuant to form B declaration the intermediary is entitled to retain possession and is not liable to dispossession so long as he complies with the terms and conditions if any imposed and the rent imposed is being paid The avowed object of Act is to divest the pre existing right title and interest of the intermediary in the lands situated in an estate in a district or part of the district and shall stand divested from the Zamindar or intermediary except of a raiyat or under raiyat or non agricultural tenant Notwithstanding such divestment thereof the intermediary has been empowered to hold and retain possession directly under the state and hold it as a tenant subject to such terms and conditions and subject to payment of rent as may be determined under the Act Therefore the entitlement to retain possession of the land ie tank fisheries in this case is not absolute but hedged with the conditions precedent of expressing his intention to retain 493 possession by filing form B within 60 days and abiding to comply with such terms and conditions as may be imposed and also payment of rent By operation of the explanation to Sec 61 e tank fisheries not only it must be a tank fishery at the date of vesting but it must also continue to be used for pisciculture or for fishing The emphasis on being used obviously is that the tank fisheries should be continued to be used for public purpose namely the fish seedling or fish must be made available for public consumption Dr Ghosh is right that the crucial date is the date of vesting with regard to tank fishery also Not only that the intermediary shall hold the tank fishery on the date of vesting as tank fishery but continue to hold and use the same thereafter for pisciculture or fishing as explained in explanation 61 e of the Act Subsequent conversion of the land as tank fisheries is not material Whether as a fact it was used as a tank fishery on the date of vesting ie June 1 1956 and being continued to be used as such or converted later on is a question of fact to be adjudicated after giving reasonable opportunity to the respondents Equally whether the respondents exercised the option to retain possession of tank fishery within 60 days from the date of publication of notification under section 4 or the notice under Sec 101 etc is also a question of fact to be determined In Saroj Kumar Bose vs Kanailal Mondal Ors the facts were that the predecessor in interest of the respondents took permanent lease of fishery right without sub soil rights under a registered lease deed prior to the Act came into force and they continued to remain in possession and was using the lands as tank fishery The lassor filed a suit for recovery of rent together with interest The appellant lessee resisted the suit liability contending that the tank fishery stood vested in the State and that therefore he was absolved of his liability to pay rent to the lessors The trial court decreed the suit On appeal it was confirmed Dismissing the appeal this court held that by operation of sec6 of the act the right to retain possession of tank fishery by an intermediary was saved and that therefore the lessor continued as an intermediary to remain in khas possession In spite of the estate vested in the State the tank fishery continued to remain in possession of the lessor In that context it was held as relied on by Dr Ghosh that khas possession is not a necessary condition for retaining the property by intermediary State had recognised the plaintiffs as tenant by accepting rent from them Therefore it was held that interest of the plaintiff did not vest in the State either In State of West Bengal vs Atul Krishna Shaw Anr 1990 Supp 1 SCR page 90 by a bench of this court to which one of us K RamaswamyJ was a member the facts were that after the estate vested in the state the tank fisheries continued to remain in possessions of the respondent intermediaries Suo moto 494 proceedings were taken for correction of the classification of lands on the grounds that the plots were wrongly recorded as fishery plots The respondents objected to the re classification contending that they were continuing to cultivate pisciculture in the lands The claim of the respondents was negatived by the Settlement Officer On appeal the Tribunal reversed the order of the Settlement Officer and confirmed the original classification as tank fishery On a writ petition filed in the High Court by the State it was dismissed in limine While allowing the appeal this court held that the crucial date for consideration whether the lands were being used as tank fishery was the date of the vesting and subsequent conversion was not material and that by operation of Sec 6 2 of the Act the tank fishery stood excluded from the operation of Sec 4 and Sec 5 of the Act Placing reliance on the findings at p 101A B namely Therefore when by means of reservoir or a place for storage of water whether formed naturally or by excavation or by construction of embankment is being used for pisciculture or for fishing is obviously a continous process as a source of livelihood would be tank fisheries within the meaning of Sec6 1 e Such tanks stand excluded from the operation of Sections 4 and 5 and the crucial date is the date of vesting As seen earlier the effect of the operation of Secs4 and 5 is divesting the intermediaries of his pre existing right title and interest in the estate except those which were exempted from the operation of the Act One of the exemptions is retention of the possession of the lands covered by Sec 6 of the Act See 61 e tand fisheries is one such Sub section 2 amplifies its effect Sub section 2 transposes the pre existing possessory right of the retained lands of an intermediary of tank fisheries into holder of it as a tenant without any interest therein By fiction of law the respondent was transposed as holder of the possession directly under the State as tenant subject to such terms and conditions as may be specified and subject to payment of rent as may be determined from time to time Therefore what was saved by non obstenti clause of Sec61 2 of the Act is the right of retention of the Physical Khas Possession of tank fisheries What was intended in Atul Kishan Shaw s case was that Sec 62saved the retention of possession of tank fisheries and not divesting the state of the vested rights etc in the estate In South Indian States of AP and Tamil Nadu etc of the Madras Province Madras Estate Abolition and Conversion into Raiyatvari Act 26 of 1948 is in operation After the states reorganisation in Tamil Nadu it is called Tamil Nadu Act and in Andhra Pradesh it is called Andhra Pradesh Andhra Area Act Thereunder Sec II provides procedure to grant raiyatvari patta to a raiyat in occupation Section 32 d proviso gives statutory protection to a raiyat from dispossession till raiytavari patta has been granted Sees 12 to 14 give right to landholder to obtain patta and see 15 empowers the settlement officer to grant 495 patta to the landholders Section 19 provides that where any raiyat or non raiyat land has been sold by any landholder for non agricultural purpose before first day of July 1945 the buyers shall be entitled to keep the land subject to payment by him to the Govt of the raiyatvari assessment or ground rent which may be imposed upon the land and under the proviso it was declared that sale was not void or illegal under any law in force at that time The object of those provisions is to confer raiyatvari rights on person in occupation be it raiyat or landholder absolutely with no further conditions Thereafter he is entitled to use the raiyati land as if he is the owner thereof and the liability is to pay only land assessment or cist There is no limitation on the nature of user of the land But the language in the Act appears to be different As regards the raiyat or under raiyat they are treated differently from intermediary As regards the raiyat and non raiyat is concerned his pre existing right title and interest in the land was not abolished and he is entitled to retain all his boundle of rights as intermediary directly under the state subject to the orders passed as per the procedure prescribed under Sec52 and the relevant rules and payment of rent But in the case of an intermediary he has been given only right to retain possession under Sec 6 of the homestead lands or land comprised in or appertaining to buildings and structures 25 acres of agricultural lands in khas possession factories workshops tank fisheries or other enumerated properties etc without any interest therein and subject to the terms and conditions that may be imposed and payment of rent excising or revised as per the provisions relevant thereto Sub section 2 of Sec 6 expressly postulates that if he holds the tank fisheries should be for continued for use as tank fisheries and it would be subject to such terms and conditions and subject to payment of rent as may be fixed The holding of the land is as a tenant the emphasis is that his possession is without any interest in the land Under TP Act a tenant has leasehold interest in the land But in Sec 6 2 as a tenant for the purpose of payment of the rent and retention of possession and appears to be nothing more As regards tank fishery is concerned though exemption has been granted it is subject to the condition of continued user for pisciculture of fishing From the scheme of the Act it would appear that the intermediary or the lessee gets no absolute right in the tank fisheries which were already divested but to remain in khas possession and to enjoy the usufruct thereof ie for pisciculture or fishing without any interest or sub soil rights and subject to such terms and conditions and subjects to payment of rent as prescribed under the Act but not as owner thereof The direction therefore by the High Court that the respondents are entitled to dispose of the land is contrary to and in negation of the scheme of the Act and Rules Therefore it is manifestly illegal The appeal is accordingly allowed The order of the Division Bench of the High Court is set aside The direction of the Single Judge is restored The appellant 496 is free to issue notice to the respondent under Sec 102 of the Act and conduct an enquiry into and find 1 on the date of the vesting whether the lands were being used for pisciculture or fishing ie tank fisheries 2 whether the respondent had submitted form B within the prescribed time exercising the option to retain possession of the lands in question as tank fisheries and 3 whether the respondent is continuing to use the lands in question as tank fisheries Reasonable opportunities shall be given to the respondents to prove itstheir case On the enquiry if it is found that the lands are not tank fisheries as on the date of the vesting or that the respondent had not submitted option in Form B to retain possession of the lands as tank fisheries within the prescribed period then the lands stood vested in the state free from all incumbrances and authorities are entitled to take possession of the land under Sec 101 read with Sec 103 In case if it finds that the lands were being used as tank fisheries as on the date of vesting and that the respondents exercised the option within the time to retain possession and is continuing to use the tank fishery for pisciculture or for fishing and if it has been continuing in possession of tank fishery it is free to impose if not already impossed such terms and conditions as may be necessary to ensure continued use of tank fishery for pisciculture or for fishing subject to payment of such rent as may be fixed or revised and ultimately entered in the Record of Rights In case the respondent commits contravention thereof it is open to the state to resume possession In case the respondent is not using the tank fishery for pisciculture or for fishing or alienated the lands it is open to the appellants to take possession of the lands and all sales if made by the respondents do not bind the state The appeal is accordingly allowed with the above modification and the rule absolute issued by the learned single Judge of the High Court will stand modified to the above extent and the writ petition is disposed of accordingly In the circumstances parties are directed to bear their own costs throughout Appeal allowed

The daughter of the appellant was married to the respondent and a girt child was born out of the wed lock The couple went to the USA alongwith the child but the latter was sent back on her mother s behests While the child was in the custody of the appellant the mother also came back and committed suicide leaving the child in the custody of the appellant Meanwhile the first respondent married an American girl and embraced christianity Thereupon the appellant applied to the local court for appointment as guardian of the child The respondent appeared in court but took the child to USA forcibly and entrusted her to the custody of his newly wedded wife On being appointed as guardian of the child the appellant filed a complaint of kidnapping against the respondent and three others The respondent applied for exemption from personal appearance in the proceedings in criminal court The permission was granted subject to the condition that he will appear whenever called upon to do so On the completion of the evidence the advocate of the respondent sought permission for examination under section 313 Cr PC in place of the respondent Thereupon the appellant sought direction for personal appearance of the respondent for being examined under Section 313 Cr The Magistrate dismissed the application of the appellant This Court examined the provision of Sub Section 1 of Section 313 Cr PC and HELDIntroduced in its present form pursuant to the recommendations made in the 41st Report of the La Commission sub section 1 of 468 Section 313 begins with the words In every inquiry or trial 472 B The old sub section 1 of Section 342 has been divided Into two a b Clause a us the expression may to indicate dot the matter is left to the discretion of the court to put questions to the accused at any stage of the inquiry or trial whereas clause b uses the expression shall to convey that it is mandatory for the court to examine the accused after the witnesses for the prosecution have been examined 472 C The proviso was added to sub section 1 with a view to enabling the court to dispense with the examination of the under clause b in a summons case in the court has already dispensed with this personal attandence if the court on completion of the prosection evidence finds that there are certain circumstances appearing in the evidence against the accused the court is obliged by clause b to question the accused before be Ls called upon to enter his defence 472 D Section 313 1 applies to all inquiries and trials under the co to give the accused an opportunity to explain the circumstances appearing against him The trial court is empowered by clause a to question the at any stage of inquiry or trial while clause b obligates it to question the accused before he enters his defence The rule of audi alterm partem incorporated therein is intended for the benefit of the accused 472 F The proviso is in the nature of an exception to dawn b of sub section 1 of section 313 Cr PC and applies to a sommons case Where the personal presence of the accused has been dispensed with the magistrate can dispense with the mandatory requirement of clauseb 472 G Since the offence under section 363 PC is punishable with imprisonment for a term exceeding two years it is a warrant cm so even if the court has dispensed with the personal attendence of the accused the examination of the accused us 313 Cr PC is mandatory The examination of a lawyer would not be sufficient complaince with the ate of the mid provision 473 B BibhWi Bhushen Dat GWM Aar vs State of West BeW AIR 19 SC 381 119 2 SCR 104 referred to 469 In that case this court pointed out that the privilege of making a statement under Section 342 of the old code is personal to the accused This requirement cannot be satisfied by examining his pleader in his place as the right of the pleader to represent the accused does not extend to the pleader answering questions under section 342 now 313 Cr PC 473 E This court set aside the impugned order and directed the trial magistrate to pass appropriate orders in regard to the examination of the respondent under section 313 1 b Cr P C 474 D

minal Appeal Nos 420 22 of 1993 From the Judgment and Order dated 3181992 of the Kerala High Court in Crl RP Nos 66591 and 66691 and Crl MC 832 of 1992 AND Criminal Appeal No 423 of 1993 From the Judgment and Order dated 15121992 of the Kerala High Court in Crl MC No 1192 of 1992 TS Krishna Murthy Iyer and MT George for the Petitioner in CA Nos 420 2293 and for the Respondents in CA No 42393 G Ramaswamy John Joseph PS Nayar KV Sree Kumar K Raghunath and TGN Nair for the Appellant in CA No 42393 and for the Respondents in CA Nos 420 42293 J Special Leave granted Untramelled by questions of fact the learned Senior counsel on both sides neatly presented question of law whether sandlewood oil is forest produce within the meaning of Section 2 f 1 of the Kerala Forest Act 1961 for short the Act When proceedings were laid under section 51 1 of the Act against the respondents in Special Leave Petition Crl Nos 27 29 of 1992 they questioned the jurisdiction of the court in CC Nos 145 and 148 of 1988 Eschewing delineation of intermediary proceedings went on from the start of prosecution the High Court in exercise of its power under section 482 of the Code of Criminal Procedure 1973 for short the Code by order dated August 31 1992 reported in Mohammed Aliv Forest Range Officer quashed the complaint holding that Sandal Wood Oil is not wood oil as defined in s2 f i of the Act So it is not a forest produce Thus these appeals by Special leave When same question subsequently arose other learned Single Judge doubting the correctness of aforesaid judgment referred the matter to the division bench which by order dated December 15 1992 reported in Khushboo Enterprises vs Forest Range officer held that Sandalwool Oil is a forest produce within the meaning of S2 f 1 of the Act Thus the appeal in the other case The Forest Conservation Act 1980 aims to prevent depleting forests conservation thereof and protection of wild life in the country to maintain ecological balance The State Acts regulate preservation of forest and forest produce to supplement the Central Act The Act prescribes procedure for preservation of the forest and regulates possession of the forest produce failing of trees in the forest area and removal from the forest or reserved forest area by transit permits etc When Sandalwood Oil either was found in transit or in possession of the manufacturers it was seized in the respective cases and laid the complaints under section 5 1 1 or contravention thereof As said earlier the jurisdictional question was raised on the premise that Sandal Wood Oil is not a wood oil as defined under section 2f 1 of the Act The question therefore emerges whether Sandalwood Oil is a wood oil S2f defines forest produce thus Section 2f forest produce includes ithe following whether found in or brought from a forest or not 502 that is to say timber charcoal wood oil gum resin natural varnish bark lac fibres and roots of sandalwood and rosewood and iithe following when found in or brought from aforest that is to say atrees and leaves flowers and fruits and all other parts or produce not here in before mentioned of trees bplants not being trees including grass creapers reeds and moss and all parts or produce of such plants c silk cocoons honey and wax and d peat surface soil rock and minerals including lime stone laterite mineral oils and all products of mines or quarries A reading thereof do indicate that the forest produce whether found in or brought from a forest or not is a forest produce which include that is to say the enumerated items in Clauses 1 and 11 wood oil is one of the enumerate items as well as roots of sandalwood and rosewood The contention of Sri G Ramaswami the learned Senior counsel for the accused is that technical Dictiontries Botanical Tax Books and expert opinion would bring out a demonstrable distinction between wood oil and sandalwood oil The wood oil is a natural produce of the forest directly derived as an exudation from living trees in the forest belonging to the family of the Dipterocarpucoae trees while sandal wood oil is a bye product from sandalwood Santalum Album by industrial process Wood oil is produced by making a hole on the trunk of the living tree commonly known as oil trees or wood oil trees This family of trees are variously known in different parts of South India but they relate to Dipterocarpucoae family Wood oil is gathered by heating the hole in the trunk to induce exudation of the olec resin from the tree and commercially dealt with as wood oil which is a cheap substance in the commercial world used solely for the purpose of painting planks of wood or wooden vessels floating in the sea The physio chemical properties of wood oil are distinct and different from other oil Sandal wood oil would be produced only at factory level and that too by mechanised process utilising the heart wood and roots of sandal wood trees removed from the forest as a raw material Sandal wood oil is having very high commercial value and it is mainly used in manufacturing perfumery and 503 cosmetic items of different types and grades The production of sandal wood oil is being carried out as industry either by licence by the individuals or the state government as its monopoly like Karnataka State in a larger scale or as a small scale business It is further contended that the meaning of the word wood oil defined in section 2 f 1 must receive its colour from its context and connotation When the legislature used the word that is to say the wood oil and other natural growth referred to in the definition it would only mean natural bye product directly drawn from the trees The Learned Single Judge had rightly construed the meaning of the word wood oil and held that sandal wood oil being the bye product derived commercially manufacturing process is not wood oil The division bench committed manifest error in its construction of the word wood oil to include sandal wood oil Sri Krishna Murthy Iyer the learned Senior counsel for the respondents on the other hand refuted the contention arguing that inclusive definition of forest produce must receive extended meaning It must also be construed in the context in which it is used and the purpose the Act seeks to serve and the family to which sandal wool oil belongs being an essential oil would include wood oil The expression wood oil being a technical and part of inclusive definition has to be construed in its technical sense and in an exhaustive manner It cannot be restricted in a narrow circumference as was done by the learned Single Judge so as to defeat the object and purpose of the Act Extraction of sandal wood oil even by mechanised process would nonetheless be a wood oil He laid emphasis on the word timber defined in section 2k which include Sandal wood being a forest produce the oil extracted therefrom would also be within the meaning of the word wood oil The restricted meaning canvassed by the counsel would defeat the purpose of the Act and the literal interpretation giving narrow meaning to the word wood oil should be excluded Ex facie the argument of Sri Ramaswami backed by material though is alluring deeper probe denied its acceptance Undoubtedly the Karnataka Forest Act 1963 incorporated in its definition of forest produce Sandalwood oil after the word wood oil and the legislature in Andhra Pradesh and Tamilnadu like the Act do not specifically incorporate Sandalwood oil in the definition of forest produce From this could it be concluded if it be otherwise interpretable that wood oil would not include Sandalwood oil as well Undoubtedly Stedman s Medical Dictionary 23rd Edition defined at page 1576 wood oil as gurjan balsam and gurjan balsam defined at p 156 to mean wood oil oleo resin from Dipterocarpus alatus family Dipterocarpuceae a tree of India and other regions of Southern Asia Similar meaning was given in Concise Chemical and Technical Dictionary edited by H Bennett Fourth Edition at page 1217 Scientific Treatises on the subject by Ernest Guenther in volume 6 Edward Balfour in his Cryclopaedia of India and of Eastern and Southern Asia RN Khori in his Materia Medica of 504 India and their Therapeutics and Pharmacographia Indica by Willim Dymock defined wood oil in the same strain All these technical literatures were concerned in finding out physio chemical properties contained in wood oil and the source from which they are drawn for use in industrial purposes The literal interpretation given therein if given acceptance would lead to manifest frustration of the purpose of the Act In its interpretation we have to keep at the back of our mind the purpose which the Act and the Parent Act Forest Conservation Act seek to subserve JF Dastru equally in his Medical Plants of India and Pakistan tread into the same path and given construction to wood oil in the context of its exudation obtained from the trunk of the trees belonging to the family of Dipterocarpaceae as an oleoresin or gurjan balsam There would be no quarrel on that behalf It must be noted in this context that there are several types of essential oils in India the important being Sandalwood oil agar wood oil deodar oil and pine oil apart from oleo resin and wood oil derived from exudation from living trees in the forest area These essential oils are obtained from any of forest wood Sandalwood as observed by the High Court is forest produce Even its roots thereof are also included as forest produce They are also timber within the meaning of Section 2k of the Act The purpose of the Act is to conserve forest wealth which is very dear for preservation to maintain ecology Forest produce defined under section 2f is an inclusive definition It is settled law that the word include is generally used as a word of extension When used in an interpretation clause it seeks to enlarge the meaning of the words or pharases occuring in the body of the Statute Craies on Statute Law Seventh Edition at p 64 stated the construction to be adopted to the meanings of the words and pharases that The cardinal rule for the construction of Acts of Parliament is that they should be construed according to the intention expressed in the Acts themselves If the words of the statute are themselves precise and unambiguous then no more can be necessary than to expound those words in their ordinary and natural sense The words themselves alone do in such a case best declare the intention of the law giver At p 214 it is stated that an interpretation clause which extends the meaning of a word does not take away its ordinary meaning An interpretation clause of the inclusive definition is not meant to prevent the word receiving its ordinary popular and natural sense whenever that word that would be properly applicable but to enable the word as used in the Act when there is nothing in the context or the subject matter to the contrary to be applied to some things to which it would not ordinarily be applicable An interpretation clause should be used for the purpose of interpreting word which are ambiguous or equivocal and not so as to disturb the meaning of such as are plain At p 216 it is stated that another important rule with regard to the effect of an interpretation clause is that an interpretation clause is not to be taken as substituting one set of words for another or as strictly defining what the meaning 505 of the term must be under all circumstances but rather as declaring what may be comprehended within the term where the circumstances require that it should be so construed This Court in Babu Manmohan Das Shah Ors vs Bishun Das adopting the ordinary rule of construction stated that the provisions of a statute must be construed in accordance with the language used therein unless there are compelling reasons such as where the literal construction would reduce the Act to absurdity or prevent manifest legislative purpose from being carried out The question therein was the interpretation of the phrase materially altered the accommodation or is likely substantially to diminish its value in the construction to a shop In that context this court laid that cardinal principle of statutory construction referred to hereinbefore would apply In State of Madhya Pradesh vs M V Narasimhan the definition of public servant in S21 IPC was amended and clause 12 thereof was brought on statute The Prevention of Corruption Act 1947 created its own provisions as specific offences of criminal misconduct which is different from the offence of bribery defined in the Indian Penal Code When similar definition was not given under the PC Act 1947 the contention was raised that the respondent cannot be prosecuted not being a public servant under the PC Act This court while holding that definition of public servant was incorporated in PC Act by necessary implication of public servant defined in Cl 12 of S21 IPC and held that PC Act is supplemental to IPC and that therefore both would deal with the same offence Accordingly the respondent was held to be public servant coming within the definition of PC Act This court adopted the doctrine of purposive interpretation to prevent corruption a penal offence In Municipal Corporation of Greater Bombay vs Indian Oil Corporation this Court adopted purposive construction in the definition of the word building for the purpose of levy of property tax under the Bombay Municipal Corporation Act to include oil storage tanks to be building and held that the language of a statutory provision is not static vehicle of ideas and concepts and as ideas and concepts change as they are bound to do in any country like ours with the establishment of a democratic structure based on agalitarian values the meaning and content of the statutory provision undergo a change The law does not operate in a vaccum It cannot be interpreted without taking into account the social economic and political setting in which it is intended to operate The Judge has to inject flesh and blood in the dry skeleton provided by the legislature and invest it with a meaning which will harmonise the law with the prevailing concepts and values and make it an effective instrument for delivering justice The word include in the definition under section 2f would show that it did 506 not intened to exclude what was ordinarily and in common parlance be spoken of wood oil The expression being technical and being part of an inclusive definition has to be construed in its technical sense but in an exhaustive manner it cannot be restricted in such a manner so as to defeat the principle object and purpose of the Act The process by which the oil is extracted is not decisive as oil may be extracted by natural process of exudation or it may be extracted by subjecting to chemical or mechanical process and Sandalwood Santalum Album are cut into pieces Its heart wood and roots of Sandalwood trees removed from the forest are used as a raw material at a factory level that too by mechanised process to extract sandalwood oil The purpose for which the oil is used is not decisive Therefore the word wood oil used in the Act will require purposive interpretation drawing the context in which the words are used and its meaning will have to be discovered having regard to the intention and object which legislature seeks to subserve The restricted meaning sought to put up by the accused would frustrate the object and the literal interpretation would defeat the meaning The Legislature does not intend to restrict the word wood oil nor we find any compelling circumstances in the Act to olive restricted meaning that only oil derived from Dipterocarpus trees to be wood oil as contended for the accused and found acceptance to the learned single Judge The purposive interpretation would aid conservation of sandle wood a valuable forest wealth prevent illicit failing and transportation of them and makes the manufacturers of sandlewood oil accountable to the possession of sandlewood trees or chips or roots etc Incorporation of sandlewood oil abundentecatela in Karnataka Act and absence thereof in sister Acts operating in South India does not detract from giving its due meaning The expert opinion is only an opinion evidence on either side and does not aid us in interpretation This court in Adity Mills vs Union of India did not adopt the dictionary meaning as it may be to some extent delussive guide to interpret entries in Central Excise and Salt Act In Kishan Lal vs State of Rajasthan to which one of us Sahai J was member this court was to consider the word Sugar whether under Rajasthan Agricultrual Produce Marketing Act 1961 an agricultural produce It was contended that the Khandsari Sugar was not an agricultural produce Repelling that contention this Court held that the word agricultural produce include all produce whether agricultural horticultural animal husbandary or otherwise as specified in the schedule The legislative power to add or include and define a word even artificially apart the definition which is not exhaustive but inclusive neither exclude any item produced in mills or factories nor it confines its width to produce from soil If that be the construction then all items of animal husbandry shall stand excluded It further overlooks the expression or otherwise as specified in the Schedule Accordingly it was held that Khandsari Sugar is an agricultural produce under that Act In State of Bombay Ors vs The Hospital Mazdoor Sabha Ors this court adopted purposive approach 507 in interpreting the word industry in section 2j of the Industrial Disputes Act and held that the Legislature in defining the word industry in s2 j of the Act deliberately used term of wide import in its first clause and referring to several other industries in the second in an inclusive way obviously denoting extention The conventional meaning attributed to trade or business was eschewed even in the absence of profit motive It was held that hospital was an industry Therefore the ratio far from helping the accused is consistent with the view we have expressed above In South Gujarat Roofing Tiles Manufacturers Association and Anr vs State of Gujarat and Anr the inclusive definition was construed in the context of the explanation given to Entry 22 It was held therefore that the word pottery does not include tiles industry for the purpose of Minimum Wages Act The ratio therein renders little assistance to the accused In Rathi Khandsari Udyog and Ors vs State of UP and Ors this court held that the words not defined may be construed in the popular sense in which it is being commonly used in commercial parlance The ratio is not apposite to the fact situation Similarly the construction placing reliance on the passage at p 164 of Craies on Statute Law that the word is to be construed in the sense in which it is being understood in trade business or transaction known to the trade is also inapplicable to the factual context In Fatesang Gimba Vasava and Ors vs State of Gujarat and ors the division bench construed whether bamboo would include in its ambit cut pieces in the context and the purpose the Act sought to serve the tribals in the forest area Privilege was granted to the tribals to remove certain forest produce from forest area for sale to supplement their livelihood When toplas supdas and palas made out of bamboo chips were being taken out for sale they were sought to be prosecuted It was challenged by the tribals In that context the division bench held that though bamboo is a forest produce the Bamboo chips of the specified description do not fall within the definition of forest produce Accordingly it was interpreted from the context and purposive approach of the word forest produce Accordingly the ratio therein does not assist the accused The Andhra Pradesh High Court relied for the accused had not correctly laid the law in Kangundi Industrial works Kuppam vs The Govt of AP Accordingly we hold that Sandalwood oil is wood oil within the meaning of section 2 f i of the Act Therefore it is a forest produce Necessary conclusion is that the Trial Court has jurisdiction to proceed with the trial It is for the Trial Court to find whether the offence as imputed to the accused has been made out the trial We need express no opinion at this stage The appeals of the State are allowed and the appeal of the accused is dismissed RP Appeals dismissedallowed

The appellant landlord determined the tenancy of the contractual tenant in 1966 and filed a suit for his eviction The suit was decreed ex parte In execution proceedings the licensee obstructed and claimed to be protected licensee under Section 15A of the Bombay Rent Hotel and Lodging House Rates Control Act 1947 The objection was rejected by the executing Court The appellate Court confirmed the same holding that even though the first licence was created in 1966 before determination of the tenancy for a period of six years and the second licence having been created in 1972 it was not necessary to examine the validity of the first as the second one was created when contractual tenant had become statutory tenant and therefore he was incapable of transferring any right or interest in favour of the licensee On appeal the High Court upheld the finding of the appellate court that the licence was created in 1972 It also held that creation of licence by a statutory tenant was valid Being aggrieved by the judgment of the High Court the appellant landlord preferred an appeal before the Court Allowing the appeal this Court HELD 11 In the absence of any legislation touching the contract a contractual tenant is left with no transferable right after determination of his tenancy 465 B 12 The law would operate in favour of a person who held the premises under valid licence A valid licence could be created by a contractual tenant or by a statutory tenant if he continued at par with contractual tenant by 461 operation of legislation 465 G 13In the instant case the licence was granted by the contractual tenant in 1972 But his tenancy had been determined by the landlord in 1966 He thus had become statutory tenant He did not in law had any assignable interest on the date he created the licence The grantor therefore from a cause preceding the grant had ceased to have any interest and was incapable of creating any valid licence unless he could be deemed to be at par with the contractual tenant by any provision in the Statute In absence of any such provision in the Bombay Rent Act the licence was invalid and stood revoked The occupation of the respondent thus was not as licensee within the meaning of Section 15A of the Act 466 B C Vasant Tatoba Hargude and Ors vs Dikkaya Muttaya Pujari approved Anand Nivas Private Ltd vs Anandji Kalyanji s Pedhi Others AIR 1965 SC 414 Jai Singh Morarji and others vs Ms Sovani P Ltd Damadilal and others vs Parashram and Others and Luadhichem Agencies vs Ahmed R vs Peer Mohamed and Anr 1 referred to

minal Appeal Nos 402 to 419 of 1993 From the Judgment and Order dated 331992 of the Karnataka High Court in Crl Petitions Nos 1574 to 1584 of 1991 and 1588 to 1594 of 1991 MS Nesargi RC Mishra and Dr Mrs Meera Aggarwal For Aggarwal Mishra Co for the Appellant VGauri Shankar Anil Srivastava and Mrs Anil Katiyar NP for the Respondent The Judgments of the Court were delivered by K RAMASWAMYJ Special Leave granted Since common question of law arises in these 18 appeals for decision they are disposed of by a common judgment The appellant is one of the Directors of Ms Ideal Jawa India Ltd Yadavagiri Mysore a Private Ltd Company estab lished under the Companies Act It was also registered under the Its object is to manufacture Motor Cycles and its accessories It has its Managing Director Joint Managing Director and Directors including the appellant to manage the establishment The respondent laid 18 complaints against six accused including the appellantA 6 and the Companyemployerfor their failure to deposit the contribution for the periods of October to December 1990 to the Provident Fund Account No NK 2260 under the Employees Provident Funds and Miscellaneous Provisions Act 1952 for short the Act Employees Provident Funds Scheme 1952Employees Family Pension Scheme 1971 and Employees Deposit Linked Insurance Scheme 1976 for short the Schemes punishable under section 14A of the Act read with para 76 of 1952 scheme On the Magistrate s taking cognizance thereof the appellant laid Crl in the High Court to quash the complaints as they do not contain the relevant averments constituting the offences against the appellant It is his case that he is a mere Director of the 514 Company He was neither Incharge of the Company nor is responsible to comply with the provisions of the Act and the Scheme In support thereof he placed reliance on the definition employer and the liability has been fastened on the Managing Director or the Manager or occupier of the establishment to abide by the Act and the Schemes The High Court by its order dated March 31992 dismissed the applications Thus these appeals Sri Nesargi learned Sr counsel for the appellant contended that a reading of the definition employer in s2e read with sections 30 14 1 A and paras 30 and 38 of the Schemes demonstrates that the employer in relation to an establishment means the owner or occupier of the factory which includes the Agent or the Manager of the Factory under the One Sri NK Khudamurad was recorded as occupier and one Sri DK Darashawas recorded as the Manager They are Incharge of and were responsible to comply with the Act and the Schemes No specific averments were made in the complaint making the appellant responsible for the management of the factory or the liability to comply with the Act and the Schemes The complaint therefore laid against him is illegal and the cognizance taken by the Magistrate is vitiated by manifest error of law In support thereof he placed reliance on the decisions of this court in Municipal Corpn of Delhi vs Ram Kishan Rohtagi Ors and Employees State Insurance Corpnv Gurdial Singh Ors 1991 Supp 1 SCC 204 The Act and the Schemes are self contained code for deduction from the salary of the employees and the responsibility to contribute in equi proportion the employer s share and deposit thereof in the account within the specific time under Act and the Schemes into the account It is a welfare legislation to provide benefits to the employees as per the schemes They need mandatory compliance and violation thereof visits with penal action Section 2e of the Act defines 1 employer which means in relation to an establishment which is a factory the owner or occupier of the factory including the Agent of such owner or occupier the legal representative of deceased owner or occupier and where a person has been named as a Manager of the factory under clause f of sub section 1 of s7 of the the person so named The definition is an inclusive definition bringing within its ambit the owner or occupier as well its Manager Section 2k defines occupier which means the person who has ultimate control over the affairs of the factory and where the said affairs are entrusted to a Managing Agent such Agent shall be deemed to be the occupier of the factory Therefore by its extended definition its sweep is enlarged bringing within its scope the person who is incharge or responsible for in management or ultimate control over the affairs of the factory or establishment 515 In the event of entrustment to a Managing Agent such Managing Agent shall also be deemed to be the occupier of the factory Section 6 fastens the obligation on the employer in this behalf It postulates that the contribution shall be made by the employer to the Fund and shall be 8 13 of the basic wages dearness allowances and retaining allowances if any for the payment being payable to each of the employees whether employed by him directly or through a Contractor The employee s contribution shall be equal to the contribution payable by the employer in respect of him etc in its application to any establishment or class of establishments Other provisions are not relevant hence they are omitted Under para 30 of the Employees Provident Fund Scheme 1952 and the other Schemes the employer shall deposit the contribution to the Fund Under para 36A of the Scheme the employer is enjoined to furnish particulars of the ownership of the factory which provides thus 36 A Employer to furnish particulars of ownership Every employer in relation to a factory or other establishment to which the Act applies on the date of coming into force of the Employees Provident Funds Scheme 1961 or is applied after that date shall furnish in duplicate to the Regional Commissioner in Form No 5A annexed hereto particulars of all the branches and departments owners occupiers directors partners manager or any other person or persons who have the ultimate control over the affairs of such factory or establishment and also sent intimation of any change in such particulars within fifteen days of such change to the Regional Commissioner by registered post and in such other manner as may be specified by the Regional Commissioner Provided that in the case of any employer of a factory or other establishment to which the Act and the Family Pension Scheme 197 1 shall apply the aforesaid Form may be deemed to satisfy the requirements of the Employees Family Pension Scheme 197 1 for the purpose specified above The employer shall in the first instance pay both the contributions payable by himself in the Scheme referred to as employer s contribution and also on behalf of the members employed by him directly or through a Contractor the contribution payable by such member in the Scheme referred to as member s contribution Para 38 provides that the employer shall send to the Commissioner within 15 days of the close of every month pay the same to the Fund by separate Bank Drafts or cheques and the administrative charges Within 25 days of close 516 of the month the employer shall submit a monthly consolidated statement as per form 5 with particulars mentioned therein Form 5 A envisages to give particulars in Columns 1 to 7 thereof ie particulars of owner etc The appellant s establishment stated the name of the establishment as Ideal Jawa India Ltd Code No of the establishment its address nature of business period of its commencement and manufacturing status have been given In Column 8 the establishment is to furnish the names of the owner company Directors It was mentioned therein as Mr NK Irani as Managing Director the appellant as one of the Directors and others In column 10 the names of occupier and Manager as registered under the were given In Column 11 which specifies particulars thus particulars of the persons mentioned above who are Incharge of and responsible for the conduct of the business of the establishment Therein it was stated that as per the details mentioned in item 8 As stated earlier in column 8 the names of the Managing Director the Joint Managing Director and two Directors including the appellant have been mentioned Section 14A which is penal states thus 14A Offences by Companies 1If the person committing an Offence under this Act the Scheme or the Family Pension Scheme or the Insurance Scheme in a company every person who at the time the offence was committed was Incharge of and was responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offences and shall be liable to be proceeded against and punished accordingly Provided that nothing contained in this sub section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence 2Notwithstanding anything contained in sub section 1 where an offence under this Act the scheme or the Family Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of any 517 director or manager secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly ExplanationFor the purposes of this Section a Company means any body corporate and includes a firm and other association of individuals and b director in relation to a firm means a partner in the firm Para 76 also fastens criminal offence for non compliance of the provisions of the schemes on the persons incharge of and responsible for the management or control of the establishment It could thus be seen that every person who at the time of the offence was committed was Incharge of and was responsible to the establishment for conduct of its business as well as the company shall be liable to be proceeded against and punished accordingly It is seen that Form 5 A read with para 36A give an option to the employer to furnish particulars of ownership and the branches of the department owners occupiers directors partners manager or other person or persons who have ultimate control over the affairs of such factory or establishment incharge of and responsible for the conduct of the business of the company and compliance of the statutory obligation fastened under the Act and the relevant schemes Particulars in column 8 as regards owners and column 10 relates to Manager or occupier and their names addresses etc and column 11 refers to the persons Incharge of and are responsible to the management of the establishment or factory are specified In form 5 A as seen earlier in columns 8 and 1 1 it was specifically stated that the Managing Director Joint Managing Director and Directors including the appellant as not only owners of the factory but are Incharge of and responsible for the management of the factory and the establishment In paragraph 3 of the complaint It was specifically stated that accused 2 to 6 appellant are the persons Incharge of the said establishment and are responsible for conduct of its business They are thus required to comply with all the provisions of the Act and the Schemes in respect of the said establishment It is made mandatory to the employer to abide by the same and non compliance thereof is liable for prosecution under section 14A of the Act Section 141 A relied on by Sri Nesargi relates to only liability for punishment for contravention or making default to comply with section 6 or section 17 3 A in so far as it relates to the payment of inspection charges and para 38 of the Scheme in so far as it relates to payment of administrative charges That has no application as regards the offence covered under section 14A by the companies are concerned Accordingly we hold that the 518 appellant having been declared himself as one of the person Incharge of and responsible for conduct of the business of the establishment or the factory the complaint and non compliance thereof having been enumerated in subsequent paras of the complaint it was validly made against the appellant along with other accused for the alleged contravention Necessary allegations bringing out the ingredient of offence have been made out in the complaint Therefore the learned Magistrate has rightly been taken cognizance of the offence alleged against the appellant Employees State Insurance Corporation vs Gurdial Singh Ors 1991 Supp 1 SCC 204 is the case relating to an admission made by the prosecution that the Directors were not Incharge nor are responsible for compliance of the provisions of the Admittedly the company had a factory and it is not in dispute that the occupier of the factory had been duly named It is also not in dispute that it has a Manager too In view of this admission the Directors were held not responsible for non compliance with the provisions of the The ratio therein therefore does not assist the appellant Equally in Municipal Corporation of Delhi vs Ram Kishan Rohtagi Ors for an offence under Prevention of Food Adulteration Act specific provision of Food Adulteration Rules provide to nominate occupier or Manager responsible for the production or manufacture of articles of food etc by the company and were nominated Under those circum stances this court upheld the quashing of the proceedings against the Directors as the complaint did not contain necessary allegations constituting the offence against the Directors The appeals are thus dismissed RM SAHAI J Can a director of a private company who is neither an occupier nor a manager be prosecuted under Section 14A of the Employees Provident Fund and Miscellaneous Provisions Act 1952 in brief the Act for violation of the Provident Fund Scheme That depends obviously on the scheme of the Act the liability it fastens on the director of the Company and applicability of the penal provisions to the statutory violation or breach of the scheme framed under it But before doing so it may not be out of place to mention that the Act is a welfare legislation enacted for the benefit of the employees engaged in the factories and establishments The entire Act is directed towards achieving this objective by enacting provisions requiring the employer to contribute towards Provident Fund Family Pension and Insurance and keep the Commissioner informed of it by filing regular returns and submitting details in forms prescribed for that purpose Paragraph 36A of the 519 Provident Fund Scheme framed by Central Government under Section 5 of the Act requires the employer in relation to a factory or other establishment to furnish Form 5A mentioning details of its branches and departments owners occupiers directors partners managers or any other person or persons who have ultimate control over the affairs of the factory or establishment The purpose of giving details of the owners occupiers and directors etc is not ail empty formality but a deliberate intent to widen the net of responsibility on any and every one for any act or omission It is necessary as well as in absence of such responsibility the entire benevolent scheme may stand frustrated The anxiety of the Legislature to ensure that the employees are not put to any hardship in respect of Provident Fund is manifest from Sections 10 and 11 of the Act The former grants immunity to provident fund from being attached for any debt outstanding against the employee And the latter provides for priority of provident fund contribution over other debts if the employer is adjudged insolvent or the company is winded up Such being the nature of provident fund any violation or breach in this regard as to be construed strictly and against the employer Reverting to the statutory provision Sections 14 and 14A provide for penalities The one applies to whosoever is guilty of avoiding payment of Provident fund and to employer if he commits breach of provisions mentioned in its various clauses where as Section 14A fastens liability on certain persons if the person committing the offence is a company The scope of the two sections is same Latter is wider in its sweep and reach The former applies to anyone who is an employer or owner or is himself responsible for making payment whereas latter fastens the liability on all those who are responsible or are in charge of the company for the offence committed by it Section 14A reads as under 14 A Offences by companies 1 If the person committing an offence under this Act the Scheme or the Family Pension Scheme or the Insurance Scheme is a company every person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly Provided that nothing contained in this sub section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence 520 2 Notwithstanding anything contained in sub section 1 where an offence under this Act the Scheme or the Family Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of any director or manager secretary or other officer of the company such director manager secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly Explanation For the purposes of this section i company means any body corporate and includes a firm and other association of individuals and ii director in relation to a firm means a partner in the firm Sub sections 1 and 2 extend the liability for any offence by any person including a partner by virtue of explanation if he was incharge or was responsible to the company at the time of committing the offence The expression was in charge of and was responsible to the company for the conduct of the business are very wide in their import It could not therefore be confined to employer only The employer is defined by Section 2e to mean 2 e employer means iin relation to an establishment which is a factory the owner or occupier of the factory including the agent of such owner or occupier the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under clause f of sub section 1 of Section 7 of the the person so named and iiin relation to any other establishment the person who or the authority which has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager managing director or managing agent such manager managing director or managing agent Both clauses i and ii again are wide in their sweep In clause i are 521 included not only owner or occupier but even the agent or manager When it comes to establishments other than factory it is not confined to owner or occupier but to all those who have control or are responsible for the affairs of the company It includes even director Therefore every such person who has the ultimate control over the affairs of company becomes employer To say therefore that since paragraph 36 A requires an employer to do certain acts the responsibility for any violation of the provision should be confined to such employer or owner would be ignoring the purpose and objective of the Act and the extended meaning of employer in relation to establishments other than the factory The declaration therefore in Form 5A including appellant as one of the persons in charge and responsible for affairs of the company was in accordance with law therefore his prosecution for violation of the scheme does not suffer from any error of jurisdiction or law ORDER For reasons given by us in our concurring but separate orders the appeals fail and are dismissed Appeals dismissed

Respondent Company filed a writ application in the High Court to refrain the appellants from giving effect to the vesting of the lands in question and to take possession of tank fisheries lying therein The Single Judge directed an action under section 102 of the West Bengal Estate Acquisition Act 1953 and to take possession of the lands pursuant thereto giving an opportunity to the respondents The Division Bench on appeal held that appellants should take action under the West Bengal Land Reforms Act 1955 within a period of two months of its judgment failing which the respondents would he at liberty to deal with and dispose of the lands and until then the appellants were restrained to take possession of the lands The Single Judge and the Division Bench found that the Revenue Officer initiated proceedings to revise the old Jama of lands as he found from record of rights that lands were classified as Beel marshy land and the appeal of the respondent under Section 443 of the Act was allowed holding that the lands being tank fisheries old Jama was to be maintained 481 482 The present appeal by special leave was filed against the judgment of the Division Bench of the High Court contending that by operation of sections 4 and 5 of the West Bengal Estate Acquisition Act fisheries being one of the interests that stood extinguished and vested in the State Govt free of all incumbrances with effect from 161956 the respondents lost right title and interest therein that since the respondent failed to make an application in form B within the specified time expressing his intention to retain the lands the entire lands including tank fisheries stood vested in the State that as per the entries in the record of rights the lands were only Beel Marshy landsand not tank fisheries and therefore even the exercise of the option to retain possession was not available that since the respondent raised a dispute the Single Judge rightly directed an enquiry under section 102 and to take action pursuant to its result under section 101 that the Division Bench committed manifest error in treating that the decision of the Tribunal under section 443 relating to jama to be final and the lands to be tank fisheries and that the respondent was entitled to retain khas possession with all right tide and interest therein as an owner and that the direction given to initiate the action under the West Bengal Land Reforms Act 1955 within the specified period and on failure thereto liberty given to the respondent to alienate the lands was beyond the relief sought in the writ petition The respondents submitted that they purchased the leasehold rights in 1937 from the earliest purchaser of the lands who purchased the same from the original Zamindar and since then the respondents were using the lands as tank fisheries that when notification under section 4 was issued the lands were being used as tank fisheries that despite its vesting by operation of section 62 the respondent had right to retain possession as an owner and the action for dispossession under section 101 was illegal that the liability of dispossession of the respondent from the lands would arise only if the possession was found to be unlawful and that the Division Bench therefore rightly directed to initiate proceedings under the West Bengal Land Reforms Act and to take action thereunder Allowing the appeal this Court HELD11 By operation of sub sec 1 of Sec 5 the estate and all the rights of intermediaries including fisheries in the estate shall stand determined and ceased and stood vested in the State free from all incumbrances 488 G 483 12Incumbrance defined under Sec 2hof the Act means in relation to estates and rights of intermediaries therein does not include the rights of a raiyat or of an under raiyat or of a non agricultural tenant but shall except in the case of land allowed to be retained by an intermediary under the provisions of sec 6 include all rights or interests of whatever nature belonging to intermediaries or other persons which relates to lands com prised in estates or to the produce there of Therefore tide to rights or interests in lands which include fisheries held by an intermediary shall stand extinguished and ceased and stood vested in the state free of all incumbrances 488 H 489 A 13The exceptions engrafted in the incumbrance and exempted from the operation of Sections 4 and 5 are only the rights of a raiyat or of an underraiyat or of a non agricultural tenant and the right of retention of possession allowed to an intermediary under Sec 6 of the Act All other rights interest of whatever nature or tide belonging to the intermediaries or other persons who hold the lands under lease from intermediary should also stood extinguished 489 C 14All grants and confirmation of title to estates and rights therein to which the declaration of vesting applies and which were made in favour of intermediaries shall stand determined and ceased by operation of Sec 51 b of the Act 489 D 15The respondents being purchasers of lease hold interest in tank fisheries it also stood extinguished 16The pre existing right tide and interest in the lands situated in an estate stood extinguished and ceased to have effect on and from notified date ie June 1 1956 and stood vested in the State free from all incumbrances The non obstanti clause under Sec 6 excluded from the operation of secs 4 and 5 only of the interest of the respondent to retain physical possession of the lands covered by Sec 6 subject to sec The intermediary by operation of Sec 102 shall be required to submit in form B within 60 days from the date of issuing notice under Sec 101 of his intention to retain possession of the tank fisheries On such submission of Form B the Collector without dispossessing himit shall be entitled to prescribe such terms and conditions to which the intermediary or the leasee shall be bound and hold the tank fishery and shall remain in possession using the tank fisheries for pisciculture or for fishing and subject to payment of such rent as may be determined under the Act and 484 finally entered in the Records of Rights 491 E F 17 The lands once retained under Sec by the intermediary and accepted by the authorities pursuant to form B declaration the intermediary is entitled to retain possession and is not liable to dispossession so long as he complies with the terms and conditions if any imposed and the rent imposed is being paid 492 E 18 The avowed object of Act is to divest the pre existing right tide and interest of the intermediary in the lands situated in an estate in a district or part of the district and shall stand divested from the Zamindar or intermediary except of a raiyat or under raiyat or non agricultural tenant Notwithstanding such divestment thereof the intermediary has been empowered to hold and retain possession directly under the State and hold it as a tenant subject to such terms and conditions and subject to payment of rent as may be determined under the Act Therefore the entitlement to retain possession of the land ie tank fisheries in this case is not absolute but hedged with the conditions precedent of expressing his intention to retain possession by filing form B within 60 days and abiding to comply with such terms and conditions as may be imposed and also payment of rent 492 GH 443 A 19 By operation of the explanation to Sec 61 e tank fisheries not only it must be a tank fishery at the date of vesting but it must also continue to be used for pisciculture or for fishing The emphasis on being used obviously is that the tank fisheries should be continued to be used for public purpose namely the fish seedling or fish must be made available for public consumption 493 B 110 The intermediary shall hold the tank fishery on the date of vesting as tank fishery but continue to hold and use the same thereafter for pisciculture or fishing as explained in explanation 61 e of the Act Subsequent conversion of the land as tank fisheries is not material 493 D State of UP vs Krishna Gopal Anr 1988 Supp 2SCR 391 and Sasanka Sekhar Maity Ors v Union of India cited Saroj Kumar Bose v Kanailal Mondal Ors 19852 SCR 393 and State of West Bengal v Atul Krishna Shaw Anr 1990 Supp 1 SCR 901 explained 485 111 The word revised under sub sec 1 of Sec 44 indicates that the State Govt or its officers shall be entitled to revise from time to time the Record of Rights and to make necessary entries or corrections in the relevant columns of Record of Rights in its settlement operations or as per exigency envisaged under the Act and the rules made therein The order under Sec 443 becomes final so long as there is no revision effected The question of res judicata therefore does not arise and the previous appellate order does not preclude the authorities to revise the Record of Rights 492 B 112 The Division Bench of the High Court is not right in its conclusion that the order passed by the appellate authority under Sec 44 3 is final and the authorities have no jurisdiction to revise the Record of Rights 492 C 113 Sub section2 of Sec 6 expressly postulates that if he holds the tank fisheries should be for continued for use as tank fisheries and it would be subject to such terms and conditions and subject to payment of rent as may be fixed The holding of the land is as a tenant the emphasis is that his possession is without any interest in the land Under TP Act a tenant has lease hold interest in the land But in Sec62 as a tenant for the purpose of payment of the rent and retention of possession and appears to he nothing more As regards tank fishery is concerned though exemption has been granted it is subject to the condition of continued user for pisciculture or fishing 495 E 114 From the scheme of the Act it would appear that the intermediary or the lessee gets no absolute right in the tank fisheries which were already divested but to remain in khas possession and to enjoy the usufruct thereof ie for pisciculture or fishing without any interest or sub soil rights and subject to such terms and conditions and subject to payment of rent as prescribed under the Act but not as owner thereof The direction thereforeby the High Court that the respondents are entitled to dispose of the land is contrary to and in negation of the scheme of the Act and Rules Therefore it is manifestly illegal 495 G 115 The appellant is free to issue notice to the respondent under Sec 10 2 of the Act and conduct an enquiry into and rind 1 on the date of the vesting whether the lands were being used for pisciculture or fishing ie tank fisheries 2 whether the respondent had submitted form B within the prescribed time exercising the option 486 to retain possession of the lands in question as tank fisheries and 3 whether the respondent is continuing to use the lands in question as tank fisheries Reasonable opportunities shall be given to the respondents to prove itstheir case 496 A B 116On the enquiry if it is found that the lands are not tank L116On the enquiry if it is found that the lands are not tank L116On the enquiry if it is found that the lands are not tank fisheries as on the date of vesting or that the respondent had not submitted option in Form B to retain possession of the lands as tank fisheries within the prescribed period then the lands stood vested in the State free from all incumbrances and authorities are entitled to take possession of the land under Sec 101 read with Sec 103 In case if it rinds that the lands were being used as tank fisheries as on the date of vesting and that the respondents exercised the option within the time to retain possession and is continuing to use the tank fishery for pisciculture or for fishing and if it has been continuing in possession of tank fishery It is free to impose if not already imposed such terms and conditions as may be necessary to ensure continued use of tank fishery for pisciculture or for fishing subject to payment of such rent as may be fixed or revised and ultimately entered in the Record of Rights In case the respondent commits contravention thereof it is open to the State to resume possession In case the respondent is not using the tank fishery for pisciculture or for fishing or alienated the lands it is open to the appellants to take possession of the lands and all sales if made by the respondents do not bind the State 496 C E

Appeal Nos 2531 33 of 1993 From the Judgment and Order dated 1921991 of the Delhi High Court in CWP No 3499 of 1989 RM Bagai V Shekhar Ms Bina Gupta and Ms Monika Mohil for the Appellants Kapil Sibal Ranjit Kumar and RP Sharma for the Respondents J Special leave granted These appeals have been filed against an order passed by the Delhi High Court directing the Municipal Corporation of Delhi hereinafter referred to as the Corporation to issue appropriate notices to the ownersoccupiersbuilders of the building where illegal constructions have been made A liberty has been given to 528 the ownersoccupiersbuilders to file fresh buildings plans with the Corporation in conformity with the existing bye laws The building plans as filed are to be examined in accordance with the law The Corporation has been directed that if it finds that the constructions are beyond the compoundable limits then to seal the same and to demolish thereafter The appellants have no grievance so far as the aforesaid part of the order is concerned They have sought interference of this Court with the other part of the order where it has been said that no civil suit will be entertained by any court in Delhi in respect of any action taken or proposed to be taken by the Corporation with regard to the sealing andor demolition of any building or any part thereof Any person aggrieved by an order of sealing or demolition which is passed shall however have the right of filing an appeal to the Appellate Tribunal under the Municipal Act The Appellate Tribunal is the only forum which has the jurisdiction to grant interim relief The other part of the order in respect of which objection has been taken is where the Court has directed the Corporation to approach those courts which have already issued injunction for variation and vacation of the injunction orders in the light of the said order Initially a writ application was filed in respect of some private dispute between two neighbours In due course on the material produced by one party or the other it was treated as a Public Interest Litigation and by the impugned order the High Court has purported to find out a solution in respect of unauthorised constructions alleged to have been made by different owners occupiersbuilders in the different parts of the city without sanctioned plans or by making deviations from the plans which had been sanctioned The Court has also purported to ensure that such unauthorised constructions are not perpetuated on the basis of interim orders of injunction passed by Civil Courts It cannot be disputed that by the impugned order the jurisdiction of any Court in Delhi to entertain any suit in connection with demolition of any part of any building which according to the Corporation is unauthorised and illegal has been ousted The Delhi Municipal Corporation Act 1957 hereinafter referred to as the Corporation Act has made provisions for the constitution of the Corporation and has prescribed the procedure for election of the councillors levy of taxes sanitation and public health Chapter XVI contains provisions regarding erection of buildings within the Corporation area Section 331 defines the expression to erect a building Section 332 says that no person shall erect or commence to erect 529 any building or execute any of the works specified in section 334 except with the previous sanction of the Commissioner The relevant part of section 343 is as follows 343 Order of demolition and stoppage of buildings and works in certain cases and appeal 2Any person aggrieved by an order of the Commissioner made under sub section 1 may prefer an appeal against the order to the Appellate Tribunal within the period specified in the order for the demolition of the erection or work to which it relates 3Where an appeal is preferred under sub section2against an order of demolition the Appellate Tribunal may subject of the provisions of sub section 3 of section 347 C stay the enforcement of that order on such terms if any and for such period as it may think fit Provided that where the erection of any building or execution of any work has not been completed at the time of the making of the order of demolition no order staying the enforcement of the order of demolition shall be made by the Appellate Tribunal unless security sufficient in the opinion of the said Tribunal has been given by the appellant for not proceeding with such erection or work pending the disposal of the appeal 4No Court shall entertain any suit application or order proceeding for injunction or other relief against the Commissioner to restrain him from taking any action or making any order in pursuance of the provisions of this section 5Subject to an order made by the Administrator on appeal under section 347 D every order made by the Appellate Tribunal on appeal under this section and subject to the orders of the Administrator and the Appellate Tribunal on appeal the order of demolition nude by the Commissioner shall be final and conclusive Section 344 vests power in the Commissioner to stop the construction of the 530 building where the erection of such building or execution of any work has been commenced or is being carried on either without sanction or contrary to sanction so granted or in contravention of any condition subject to which sanction has been accorded Under section 345A the Commissioner at any time before or after making an order of demolition under section 343 or of the stoppage of the erection of any building or execution of any work under section 343 can make an order directing the sealing of such erection or work or of the premises in which such erection or work is being carried or has been completed A further appeal has been provided under section 347D to the Administrator against the order of the Appellate Tribunal Section 347E says 347E Bar of jurisdiction of courts 1 After the commencement of section 7 of the Delhi Municipal Corporation Amendment Act 1984 no court shall entertain any suit application or other proceedings in respect of any order or notice appealable under section 343 or section 347B and no such order or notice shall be called in question otherwise then by preferring an appeal under these sections 2Notwithstanding anything contained in sub section 1 every suit application or other proceeding pending in any court immediately before the commencement of section 7 of the Delhi Municipal Corporation Amendment Act 1984 in respect of any order or notice appealable under section 343 or section 347B shall continue to be dealt with and disposed of by that court as if the said section had not been brought into force Because of sub sections 4 and 5 of section 343 and section 347E aforesaid the stand of the Corporation is that the Courts have been debarred from entertaining suits applications or proceedings for injunction against any order or notice for demolition and the order of demolition passed by the Commissioner subject to appeals before the Appellate Tribunal and Administrator shall be deemed to be final and conclusive In spite of several pronouncements of this Court during the last four decades the question as to whether the jurisdiction of the Court has been statutorily barred in respect of suits in connection with the orders passed or proceedings initiated for demolition of constructions which have been made without sanction or by deviating from the sanctioned plans has to be answered 531 Section 9 of the Code of Civil Procedure hereinafter referred to as the Code says that Courts shall have jurisdiction to try all suits of civil nature except suits of which their cognizance is either express Iyor impliedly barred According to the Corporation once the jurisdiction of the Court to try a suit in which the validity of any order passed under the provisions of the Corporation Act or the notice issued thereunder has been specifically barred and an internal remedy has been provided for redressal of the grievances of the persons concerned there is no scope for Court to entertain a suit In the olden days the source of most of the rights and liabilities could be traced to the common law Then statutory enactments were few Even such enactments only created rights or liabilities but seldom provided forums for remedies The result was that any person having a grievance that he had been wronged or his fight was being affected could approach the ordinary Civil Court on the principle of law that where there is a right there is a remedy ubi jus ibi remedium As no internal remedy had been provided in the different statutes creating rights or liabilities the ordinary Civil Courts had to examine the grievances in the light of different statutes With the concept of the Welfare State it was realised that enactments creating liabilities in respect of payment of taxes obligations after vesting of estates and conferring rights on a class of citizens should be complete codes by themselves With that object in view forums were created under the Acts themselves where grievances could be entertained on behalf of the persons aggrieved Provisions were also made for appeals and revision to higher authorities Then a question arose as to where a particular Act had created a right or liability and had also provided a forum for enforcement of such right or for protection from enforcement of a liability without any authority in law whether a citizen could approach a Court It may be pointed out that many statutes have created certain rights or liabilities and have also provided the remedial measures in respect thereof But such statutes have not touched the common law rights of the citizen But there are some statutes which in public interest affect even the common law rights or liabilities of toe citizen which were in the nature of existing rights The distinction between the two types of rights or liabilities is subtle in nature but at the same time very vital In one of the earliest case of Volverhampton New Waterworks Co vs Hawkesford Willes J said There are three classes of cases in which a liability may be 532 established founded upon a statute One is where there was a liability existing at common law and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law there unless the statute contains words which expressly or by necessary implication exclude the common law remedy and the party suing has his election to pursue either that or the statutory remedy The second class of cases is where the statute gives the right to sue merely but provides no particular form of remedy there the party can only proceed by action at common law But there is a third class viz where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it The present case falls within this latter class if any liability at all exists The remedy provided by the statute must be followed and it is not competent to the party to pursue the course applicable to cases of the second class The same view was reiterated by the House of Lords in Neville vs London Express Newspaper Limited 1919 Appeal Cases 368 In Barraclough vs Brown it was said I do not think the appellant can claim to recover by virtue of the statute and at the same time insist upon doing so by means other than those prescribed by the statute which alone confers the right It was further pointed out The right and the remedy are given uno flatu and the one cannot be dissociated from the other In the well known case of Secretary of State vs Mask Co AIR 1940 Privy Council 105 this question was considered in connection with Sea Customs Act 1878 It was said It is settled law that the exclusion of the jurisdiction of the Civil Courts is not to be readily inferred but that such exclusion must either be explicitly expressed or clearly implied It is also well settled that even if jurisdiction is so excluded the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principle of judicial procedure 533 But having enunciated the general principle in respect of ouster of the jurisdiction of the Civil Court it was said But in their Lordships opinion neither Sec 32 nor the principle involved in the decision in 401 A 48 affect the validity of an Act of the Indian Legislature which creates an obligation and provides an exclusive Code for its determination such an obligation is not covered by sub section 2 of Section 32 In connection with the imposition of Terminal Tax on salt under the Punjab Municipal Act In Firm Seth Radha Kishan vs Administrator Municipal committee Ludhiana it was said that where a statute created a liability and provided a remedy party aggrieved should pursue the remedy provided under the Act A Constitution Bench of this Court in Firm of Illuri Subbaya Chetty and Sons vs State of Andhra Pradesh considered the provisions of Madras General Sales Tax Act and the exclusion of the jurisdiction of the Civil Court It was pointed out that there was an express and unambiguous prohibition and no suit could be entertained by a Civil Court In connection with the Bombay Sales Tax Act the same view was reiterated by a Constitution Bench of this Court in Ms Kamala Mills Ltd vs State of Bombay In Ram Swarup and ors vs Shikar chand a Constitution Bench examined the bar on the jurisdiction of the Civil Court in connection with the House and TenantsUP Temporary control of Rent and Eviction Act and came to the conclusion that a special statute had excluded the jurisdiction in clear and unambiguous words and it had provided an adequate and satisfactory alternative remedy to a party That may be aggrieved by the relevant order and as such the jurisdiction of the Civil Court had been ousted This very question was examined in State of Kerala vs MI s N Ramaswami Iyer and sons in connection with the Travancore Cochin General Sales Tax Act and it was held that the jurisdiction of the Civil Court would be deemed to have been excluded because the legislature had set up a special tribunal to determine the question relating to rights or liabilities which had been created by the statute Again in connection with the provisions of the Evacuee Property Act in Ram Gopal Redd vs Additional Custodian Evacuee Property Hyderabad and Custodian of Evacuee Property Punjab Ors vs Jafran Begum it was held that complete machinery for adjudication of all claims had been provided under the Act and there being a bar on the jurisdiction of any court the Act over rides other laws including Section 9 of the Code of Civil Procedure and there was no scope for the Civil Court to entertain any suit The Constitution Bench in Dhuilabhai vs State of Madya Pradesh AIR 1969 534 SC 78 said Where there is an express bar of the jurisdiction of the court an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted and whether remedies normally associated with actions in civil courts are prescribed by the said statute or not In connection with the Industrial Disputes Act in The Premier Automobiles Ltd vs Kamlakar Shantaram Wadke it was pointed out that the Civil Court will have no jurisdiction to try and adjudicate upon an industrial dispute if it concerned enforcement of certain right or liability created only under the Act The jurisdiction of the Civil Court in connection with the levy of octroi duty under the CP and Barar Municipalities Act 1922 was examined by this Court in Bata Shoe Co Ltd vs Jabalpur Corporation 1 9771 2 SCC 472 and held it was barred Whether the Court can hear and determine suits relating to levy of professional tax under the Punjab Municipal Act 1971 was examined in the case of Munshi Ram vs Municipal Committee Chheharta AIR 1979 SC 1250 and it was held Where a Revenue Statute provides for a person aggrieved by an assessment thereunder a particular remedy to be sought in a particular forum in a particular way it must be sought in that forum and in that manner and all other forums and modes of seeking it are excludes It was pointed out in Ram Singh vs Gram Panchayat MehalKalan that when by a special statute rights have been created and jurisdiction of the Court has been barred then the jurisdiction of the 535 Court to try such suits has been taken away In the case of Raja Ram Kumar Bhargava vs Union of India 1 it was said Wherever a right not preexisting in common law is created by a statute and that statute itself provided a machinery for the enforcement of the right both the right and the remedy having been created uno flatu and a finality is intended to the result of the statutory proceedings then even in the absence of an exclusionary provision the civil courts jurisdiction is impliedly barred The jurisdiction of Civil Court to entertain a suit for ejectment was examined in Sushil Kumar Mehta vs GobindRam Bohra and it was held that the Rent Control Act was a complete Code and the jurisdiction to try a case for ejectment was exclusive under that Act With the increase in the number of taxing statutes welfare legislations and enactments to protect a class of citizens a trend can be noticed that most of such legislations confer decision making powers on various authorities and they seeks to limit or exclude Court s power to review those decisions The result is that the power of the Court under section 9 of the Code is being denuded and curtailed by such special enactments in respect of liabilities created or rights conferred This Court in the judgments referred to above has upheld the ouster of the jurisdiction of the Court on examination of two questions 1 Whether the right or liability in respect whereof grievance has been made had been created under an enactment and it did not relate to a pre existing common law right 2 Whether the machinery provided for redressal of the grievance in respect of infringement of such right or imposition of a liability under such enactment was adequate and complete The ouster of the jurisdiction of the Court was upheld on the finding that the rights or liabilities in question had been created by the Act in question and remedy provided therein was adequate But the situation will be different where a statute purports to curb and curtail a pre existing common law right and purports to oust the jurisdiction of the Court so far remedy against the orders passed under such statute are concerned In such cases the courts have to be more vigilant while examining the question as to whether an adequate redressal machinery has been provided before which the person aggrieved may agitate his grievance In the case of katikara Chintamani Dora vs Guatreddi Annamanaidu this Court after referring to the case of Desika Charyulu vs State of Andhra Pradesh AIR 1964 SC 807 observed 536 It was pertinently added that this exclusion of the jurisdiction of the Civil Court would be subject to two limitations First the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure The second is as regards the exact extent to which the powers of statutory tribunals are exclusive The question as to whether any particular case falls under the first or the second of the above categories would depend on the purpose of the statute and its general scheme taken in conjunction with the scope of the enquiry entrusted to the tribunal set up and other relevant factors It was held that a suit for declaration that the decision of the Settlement OfficerTribunal holding certain properties to be an estate under section 32 d of the 1908 Act was void was maintainable on the ground that the suit property was not an inam village In Pyx Granite Co Ltd vs Ministry of Housing and Local Government the appellants sought a declaration of their common law right to quarry their land without the need to obtain planning permission under the Town and Country Planning Act 1947 In that connection it was said The appellant company are given no new right of quarrying by the Act of 1947 Their right is a common law right and the only question is how far it has been taken away They do not uno flatu claim under the Act and seek a remedy elsewhere On the contrary they deny that they come within its purview and seek a declaration to that effect In spite of the bar placed on the power of the Court orders passed under such statutes can be examined on jurisdictional question To illustrate a special machinery has been provided for removal of the encroachments from public land under different enactments in different states and the jurisdiction of the Court has been barred in respect of the orders passed by such special tribunals or authorities constituted under such Acts Still a suit will be maintainable before a Court on a plea that the land in question shall not be deemed to be public land within the meaning of the definition of public land given in the Act in question and as such provisions thereof shall not be applicable In the case of Anisminic Lid vs Foreign Compensation Commission a wide interpretation has been given to the word jurisdiction by the House of Lords It was pointed out that in many cases where although the Tribunal 537 has jurisdiction to enter upon an enquiry it has done or failed to do something in the course of such enquiry which is of such a nature that its decision becomes a nullity By mere reference to different provisions of the Corporation Act it shall appear that the Act does not create any right or liability Chapter XVI of the Act only purports to regulate the erection of the buildings within the Corporation area so that erections of the buildings within the Corporation area are systematic planned and do not adopt the character of mushroom growth In view of the Provisions of the Act whenever it is discovered that erection of any building or execution of any work has been commenced or is being carried or has been completed either without sanction or contrary to the sanction or in contravention of any condition subject to which such sanction had been accorded the Commissioner can make an order directing that such erection or work shall be demolished Any person aggrieved by an order has been given a right to prefer an appeal before the Appellate Tribunai and thereafter to the Administrator Subject to any order passed by the Appellate Tribunal and the Administrator the order for demolition shall be deemed to be final and conclusive According to us it cannot be urged that the provisions of the Act have created any right or liability and for enforcement thereof remedy has been provided under the Act itself The Act purports to regulate the common law right of the citizens to erect or construct buildings of their choice This right existed since time immorial But with the urbanisation and development of the concept of planned city regulations restrictions on such common law right have been imposed But as the provisions of the Act intend to regulate and restrict a common law right and not any right liability created under the Act itself it cannot be said that the right and the remedy have become given uno flatu eg in the same breath Most of the cases of this Court referred to above related to statutes creating rights or liabilities and providing remedies at the same time As such the principles enunciated therein shall not be fully applicable in the present case In spite of the bar prescribed under sub sections 4 and 5 of section 343 and section 347E of the Corporation Act over the power of the Courts under certain special circumstances the Court can examine whether the dispute falls within the ambit of the Act But once the Court is satisfied that either the provisions of the Act are not applicable to the building in question or the basic procedural requirements which are vital in nature have not been followed it shall have jurisdiction to enquire and investigate while protecting the common law rights of the citizens Can a Court hold a suit to be not maintainable although along with the plaint materials are produced to show that the building in question is not within the Corporation limits or that the constructions were made prior to coming into force of the relevant provisions of 538 the Act We are conscious of the fact that persons who make unauthorised constructions by contravening and violating the building bye laws or regulations often run to Courts with pleas mentioned above specially that no notice was issued or served on them before the Corporation has ordered the demolition of the construction It is well known that in most of the cities building regulations and bye laws have been framed still it has been discovered that constructions have been made without any sanction or in contravention of the sanctioned plan and such constructions have continued without any intervention There cannot be two opinions that the regulations and bye laws in respect of buildings are meant to serve the public interest But at the same time it cannot be held that in all circumstances the authorities entrusted with the demolition of unauthorised constructions have exclusive power to the absolute exclusion of the power of the Court In some special cases where jurisdictional error on the part of the Corporation is established a suit shall be maintainable According to us 1The Court should not ordinarily entertain a suit in connection with the proceedings initiated for demolition by the Commissioner in terms of section 343 1 of the Corporation Act The Court should direct the persons aggrieved to pursue the remedy before the Appellate Tribunal and then before the Administrator in accordance with the provisions of the said Act 2The Court should entertain a suit questioning the validity of an order passed under section 343 of the Act only if the Court is of Prima facie opinion that the order is nullity in the eyes of law because of any jurisdictional error in exercise of the power by the commissioner or that the order is outside the Act TEMPORARY INJUNCTION It need not be said that primary object of filing a suit challenging the validity of the order of demolition is to restrain such demolition with the intervention of the Court In such a suit the plaintiff is more interested in getting an order of interim injunction It has been pointed out repeatedly that a party is not entitled to an order of injunction as a matter of right or course Grant of injunction is within the discretion of the Court and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the Court that unless the defendant is restrained by an order of injunction an irreparable loss or damage will be caused 539 to the plaintiff during the pendency of the suit The purpose of temporary injunction is thus to maintain the status quo The Court grants such relief according to the legal principles ex debite justitiae Before any such order is passed the Court must be satisfied that a strong primafacie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him Under the changed circumstance with so many cases pending in Courts once an interim order of injunction is passed in many cases such interim orders continue for months if not for years At final hearing while vacating such interim orders of injunction in many cases it has been discovered that while protecting the plaintiffs from suffering the alleged injury more serious injury has been caused to the defendants due to continuance of interim orders of injunction without final hearing It is a matter of common knowledge that on many occasions even public interest also suffers in view of such interim orders of injunction because persons in whose favour such orders are passed are interested in perpetuating the contraventions made by them by delaying the final disposal of such applications The court should be always willing to extent its hand to protect a citizen who is being wronged or is being deprived of a property without any authority in law or without following the procedure which are fundamental and vital in nature But at the same time the judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the Court Power to grant injunction is an extraordinary power vested in the Court to be exercised taking into consideration the facts and circumstances of a particular case The Courts have to be more cautious when the said power is being exercised without notice or hearing the party who is to be affected by the order so passed That is why Rule 3 of Order 39 of the Code requires that in ail cases the Court shall before grant of an injunction direct notice of the application to be given to the opposite party except where it appears that object of granting injunction itself would be defeated by delay By the Civil Procedure Code Amendment Act 1976 a proviso has been added to the said rule saying that where it is proposed to grant an injunction without giving notice of the application to the opposite party the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay It has come to our notice that in spite of the aforesaid statutory requirement the Courts have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders It is said that if the reasons for grant of injunction 540 are mentioned a grievance can be made by the other side that Court has prejudged the issues involved in the suit According to us this is a misconception about the nature and the scope of interim orders It need not be pointed out that any opinion expressed in connection with an interlocutory application has no bearing and shall not affect any party at the stage of the final adjudication Apart from that now in view of the proviso to Rule 3 aforesaid there is no scope for any argument When the statute itself requires reasons to be recorded the Court cannot ignore that requirement by saying that if reasons are recorded it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant The imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 of the Code Before the Proviso aforesaid was introduced Rule 3 said the Court shall in all cases except where it appears that the object of granting the injunction would be defeated by the delay before granting an injunction direct notice of the application for the same to be given to the opposite party The proviso was introduced to provide a condition where Court proposes to grant an injunction without giving notice of the application to the opposite party being of the opinion that the object of granting injunction itself shall be defeated by delay The condition so introduced is that the Court shall record the reasons why an ex parte order of injunction was being passed in the facts and circumstances of a particular case In this background the requirement for recording the reasons for grant of ex parte injunction cannot be held to be a mere formality This requirement is consistent with the principle that a party to a suit who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law must be informed why instead of following the requirement of Rule 3 the procedure prescribed under the proviso has been followed The party who invokes the jurisdiction of the Court for grant of an order of restraint against a party without affording an opportunity to him of being heard must satisfy the Court about the gravity of the situation and Court has to consider briefly these factors in the ex parts order We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the Court or the authority concerned to record reasons before exercising power vested in them In respect of some of such provisions it has been held that they are required to be complied with but non compliance there of will not vitiate the order so passed But same cannot be said in respect of the proviso to Rule 3 of Order 39 The Parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side under exceptional circumstances Such ex parte orders have far reaching effect as such a conditions has been imposed that Court must record reasons before passing such order If it is held that the compliance of the proviso aforesaid is optional and not obligatory then the introduction of the proviso by the Parliament shall be a futile exercise and that part of Rule 3 will be 541 a surplusage for all practical purpose Proviso to Rule 3 of Order 39 of the Code attracts the principle that if a statute requires a thing to be done in a particular manner it should be done in that manner or not all This principle was approved and accepted in well known cases of Taylor vs Taylor Nazir Ahmed vs Emperor AIR 1936 PC 253 This Court has also expressed the same view in respect of procedural requirement of the Bombay Tenancy and Agricultural Lands Act in the case of Ramachandra Keshav Adke vs Govind Joti Chavare As such whenever a Court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side It must record the reasons for doing so and should take into consideration while passing an order of injunction all relevant factors including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed But any such ex parte order should be in force upto a particular date before which the plaintiff should be required to serve the notice on the defendant concerned In the Supreme Court Practice 1993 Vol 1 at page 514 reference has been made to the views of the English Courts saying Exparte injunctions are for cases of real urgency where there has been a true impossibility of giving notice of motion An ex parte injunction should generally be until a certain day usually the next motion day Accordingly we direct that the application for interim injunction should be considered and disposed of in the following manner iThe Court should first direct the plaintiff to serve a copy of the application with a copy of the plaint along with relevant documents on the counsel for the Corporation or any competent authority of the Corporation and the order should be passed only after hearing the parties iiIf the circumstances of a case so warrant and where the Court is of the opinion that the object of granting the injunction would be defeated by delay the Court should record reasons for its opinion as required by proviso to Rule 3 of order 39 of the Code before passing an order for injunction The Court must direct that such order shall operate only for a period of two weeks during which notice along 542 with copy of the application plaint and relevant documents should be served on the competent authority or the counsel for the Corporation Affidavit of service of notice should be filed as provided by proviso to Rule 3 of order 39 aforesaid If the Corporation has entered appearance any such exparte order of injunction should be extended only after hearing the counsel for the Corporation iiiWhile passing an ex parte order of injunction the Court shall direct the plaintiff to give an undertaking that he will not make any further construction upon the premises till the application for injunction is finally heard and disposed of In the result the appeals are allowed to the extent indicated above In the circumstances of these cases there shall be no order as to costs Appeals allowed

The Kerala Forest Act 1961 regulates preservation of forests and forest produce Section 2f i defines forest produce which includes wood oil The respondents in Crl Appeals Nos 420422 of 1993 were found manufacturingin possession of sandalwood oil Proceedings under section 52 1 of the Act were initiated against them They filed applications under section 482 Cr PC before the High Court challenging the jurisdiction of the trial court on the premise that sandalwood oil was not wood oil as defined under section 2f i of the Act The High Court allowed the case of the respondents and quashed the complaint Subsequently in another case involving the same controversy a Division Bench of the High Court held that sandalwood oil was a forest produce within the meaning of section 2f i of the Act The State and tile accused challenged the respective judgments in the appeals by special leave It was contended on behalf of the accused that sandalwood oil is not a forest produce inasmuch as there is a distinction between wood oil and sandalwood oil wood oil is a natural produce of forest directly derived as an exudation from living trees in the forest whereas sandalwood oil is a bye product from sandalwood by industrial process utilising the heart wood and 497 498 roots of sandalwood trees removed from the forest as a raw material The State contended that extraction of sandalwood oil even by mechanical process would nonetheless be a wood oil and that since the word timber defined under section 2 k of the Act includes sandalwood being a forest produce the oil extracted therefrom would also he within the meaning of the word wood oil On the question whether sandalwood oil is a forest produce within the meaning of section 2f i of the Kerala Forest Act 1961 Allowing the appeals of the State and dismissing the other appeal this Court HELD 11 Sandalwood oil is wood oil within the meaning of s2f i of the Kerala Forest Act 1961 Therefore it is a forest produce 507 G Mohammed Ali vs Forest Range Officer overruled Khushboo Enterprises vs Forest Range Officer approved Kangundi Industrial Works Kuppam vs The Govt of AP disapproved 12 Sandalwood is forest produce Even its roots are also included as forest produce They are also timber within the meaning of section 2k of the Act 504 D 13 Forest produce as defined in s2 f of the Act whether found in or brought from a forest or not is a forest produce which include that is to say the enumerated items in clauses 1 and ii Wood oil is one of the enumerated items as are roots of sandalwood and rose wood 502 E 21 The word wood oil used in the Act will require purposive interpretation drawing the context in which the words are used and its meaning will have to be discovered having regard to the intention and object which legislature seeks to subserve The purposive interpretation would aid conservation of sandal wood a valuable forest wealth prevent illicit felling and transportation of them and makes the manufacturers of sandalwood oil 499 accountable to the possession of sandalwood trees or chips or roots etc 506C D Municipal Corporation of Greater Bombay vs Indian Oil Corporation State of Bombay Ors vs The Hospital Mazdoor Sabha Ors and State of Madhya Pradesh vs M V Narasimhan 1197512 SCC relied on 22 The Legislature does not intend to restrict the word wood oil nor are there any compelling circumstances in the Act to give restricted meaning that only oil derived from Dipterocarpus trees would be wood oil The literal interpretation if given acceptance would lead to manifest frustration of the purpose of the Act 506 D Aditya Mills vs Union of India 1988 4SCC315 and Babu Manmohan Das Shah Ors vs Bishun Das referred to Rathi Khandsari Udyog and Ors vs State of UP Ors 19852SCC 485 inapplicable Craies on Statute law Seventh Edition referred to Stedman s Medical Dictionan 23rd Edition Concise Chemical and Technical Dictionary Fourth edition Scientific Treatises Vol 6 by Ernest Guenther Cyclopaedia of India and of Eastern and Southern Asia by Edward Balfour Materia Medica of India and their Therapeutics by RN Khori Pharma cographia Indica by William Dymock and Medical Plants of India and Pakistan by JF Dastru referred to 23 The expert opinion is only an opinion evidence on either side and does not aid in interpretation 506 E 31 Forest produce defined under section 2f of the Act is an inclusive definition It is settled law that the word include is generally used as a word of extension When used in an interpretation clause it seeks to enlarge the meaning of the words or phrases occurring in the body of the statute 504 D 32 The word include in the definition under section 2f would show that it did not intend to exclude what was ordinarily and in common parlance to be spoken of wood oil The expression being technical and being part of an 500 inclusive definition has to be construed in its technical sense but in an exhaustive manner it cannot be restricted in such a manner so as to defeat the principal object and purpose of the Act 505 H 506 A Kishan Lal vs State of Rajasthan and South Gujarat Roofing Tiles Manufacturers Assn Anr vs State of Gujarat and Anr referred to Fatesang Gimba Vasava Ors vs State of Gujarat Ors distinguished The process by which the oil is extracted is not decisive as oil may be extracted by natural process of exudation or it may be extracted by subjecting to chemical or mechanical process The purpose for which the oil is used is also not decisive 506 B 5 The trial court has jurisdiction to proceed with the trial It is for the trial court to find whether the offence as amputed to the accused has been made out at the trial 507 G

Appeal No 2198 of 1986 From the Judgment and order dated 17121985 of the Punjab and Haryana High Court in RSA No 1155 of 1977 SM Ashri for the Appellant Ms Kawaljit Kochar for JD Jain for the Respondents The Judgment of the Court was delivered by BHARUCHAJ This appeal by special leave challenges the judgment and 591 order of the Punjab Harvana High Court dismissing the appeal filed before it by the appellant The suit relates to 9 Kanals 13 Marlas of land at village Qayampur The said land was owned by Rajinder Singh and Baldev Singh the respondents and was sold while they were still minors by their mother Gurkirpal acting as their guardian to the appellant under a registered sale deed dated 30th July 1964 Upon attaining majority the respondents sued the appellant for possession of the said land on the ground that the sale thereof having been made without the permission of the court was void The appellant in his written statement and at the time of hearing of the suit relied heavily upon the fact that the sale deed had been attested by the father of the respondents and that the sale should therefore be deemed to have been a sale by the legal guardian of the respondents It was also contended that the sale had been for legal necessity and the benefit of the respondents The suit it was also alleged was barred by limitation because the sale being voidable and not void it had not been brought within three years of each of the respondents attaining majority The trial court framed appropriate issues and came to the conclusion that it had not been proved that the sale was for legal necessity or for the benefit of the respondents that the sale by the respondent s mother without the permission of the court was void and that the sale was void and not voidable and the suit was therefore in time The appeals filed by the appellant before the Additional District Judge Ambala and the High Court failed Learned counsel for the appellant placed great reliance upon the fact that the sale deed had been attested by the father of the respondents and submitted that the sale deed should therefore be taken to have been entered into by the natural guardian of the respondents for legal necessity and their benefit Section 8 of the Hindu Minority and Guardianship Act sets out the powers of the natural guardian of a Hindu minor The natural guardian of a Hindu Minor has power subject to the provisions of section 8 to do all acts which are necessary or reasonable and proper for the benefit of the minor or his estate The natural guardian however may not without the previous permission of the court sell any part of the immovable property of the minor Any disposal of immovable property which is not necessary or reasonable and proper for the benefit of the minor or is without the previous permission of the court is voidable at the instance of the minor In the instant case there is as found by the trial court and affirmed in appeal no evidence beyond the bare word of the appellant that the sale deed had been made for the benefit of the minor respondents and his evidence had been eroded in cross 592 examination so that there was no reliable evidence on record to show that the alienation in dispute had been made for the legal necessity or for the benefit of the plaintiffs That the sale was effected without the permission of the court is not dispute The sale is therefore in any event voidable The question is whether in the circumstances of the case it may be said that the sale was effected by the father and natural guardian of the respondents because he had attested the sale deed executed by the mother of the respondents In this behalf our attention was invited to this Court s judgment in Jijabai Vithalrao Gajre vs Pathankhan and ors This was a case in which it was held that the position in Hindu law was that when the father was alive he was the natural guardian and it was only after him that the mother became the natural guardian Where the father was alive but had fallen out with the mother of the minor child and was living separately for several years without taking any interest in the affairs of the minor who was in the keeping and care of the mother it was held that in the peculiar circumstances the father should be treated as if nonexistent and therefore the mother could be considered as the natural guardian of the minor s person as well as property having power to bind the minor by dealing with her immovable property In the present case there is no evidence to show that the father of the respondents was not taking any interest in their affairs or that they were in keeping and care of the mother to the exclusion of the father In fact his attestation of the sale deed shows that he was very much existent and in the picture If he was then the sale by the mother notwith standing the fact that the father attested it cannot be held to be a sale by the father and natural guardian satisfying the requirements of section 8 The Provisions of section 8 are devised to fully protect the property of a minor even from the depredations of his parents Section 8 empowers only the legal guardian to alienate a minor s immovable property provided it is for the necessity or benefit of the minor or his estate and it further requires that such alienation shall be effected after the permission of the court has been obtained It is difficult therefore to hold that the sale was voidable not void by reason of the fact that the mother of the minor respondents signed the sale deed and the father attested it In the result the appeal is dismissed with no order as to costs GS Appeal dismissed

The appellant was one of the Directors of a Company registered under the Companies Act This company was also registered under the Factories Act and its object was to manufacture Motorcycles and its accessories It had a Managing Director Joint Managing Director and Directors including the appellant for managing the establishment The respondent an Enforcement Officer Regional Provident Fund Commissioner s Office laid 18 complaints against six accused including the appellant A 6 and the Company employer for the failure to deposit the contribution for the period October to December 1990 to the Provident Fund Account under the Employees Provident Fund and Miscellaneous Provisions Act 1952 Employees Provident Fund Scheme 1952 Employees Family Pension Scheme 1971 and Employees Deposit Linked Insurance Scheme 1976 offences punishable under Section 14A of the 1952 Act read with para 76 of the 1952 Scheme On the Magistrate taking cognizance of the complaint the appellant filed Criminal Miscellaneous Petitions in the High Court for quashing the complaint as they did not contain the relevant averments constituting offences against the appellant It was contended that the appellant was a mere Director of the Company that he was neither incharge of the company nor was 509 responsible to comply with the provisions of the aforesaid Act and the Schemes thereunder Reliance was placed on the definition of employer in Section 2 e of the Act and the liability that had been fastened on the Managing Director or the Manager or occupier of the establishment to abide by the Act and the Schemes The High Court dismissed the applications The appellant appealed to this Court and contended that the reading the definition of employer in section 2e of the Act with Sections 30141a and para 31 of the Scheme demonstrate that the employer in relation to the establishment means the owner or occupier of the factory which includes the Agent or the Manager of the factory under the Factories Act that there was an occupier and Manager recorded for the instant company and that they were Incharge of and were solely responsible to comply with the Act and the Schemes thereunder and that no specific averments have been made in the complaint making the appellant responsible for the management of the factory or the liability to comply with the Act and the Schemes The complaint laid against the appellant was therefore illegal and the cognizance taken by the Magistrate was vitiated by manifest error of law On the question whether a Director of a Private Company who is neither an occupier nor a manager can be prosecuted under Section 14A of the Employees Provident Fund and Miscellaneous Provisions Act 1952 for violation of the Provident Fund Scheme Dismissing the appeals this Court HELD By the Court K Ramaswamy RM Sahai JJ 1 The Employees Provident Fund and Miscellaneous Provisions Act 1952 by Section 2e defines employer It is an inclusive definition and consists of two clauses which are vide in their sweep In Clause i are included not only owner or occupier but even the agent or manager When it comes to establishments other than factory it is not confined to owner or occupier but to all these who have central or are responsible for the affairs of the company It includes even director Therefore every such person who has the ultimate control of the affairs of the company becomes employer Section 2k defines occupier which means the person who has the ultimate control of the factory and where the said affairs are entrusted to a Managing Agent such agent shall be deemed to be the occupier of the factory Therefore by its extended definition its sweep is enlarged bringing within its scope the person who is incharge of or responsible forthe management or 1 510 ultimate control over the affairs of the factory or establishment In the event of entrustment to a Managing Agent such Managing Agent shall also be deemed to be the occupier of the factory 514 GH 2 In the instant case the appellant having been declared himself as one of the person Incharge of and was responsible for conduct of the business of the establishment or the factory in Form 5A the complaint and non compliance thereof having been enumerated in para 3 of the complaint it was validly made against the appellant along with other accused for the alleged Contravention Necessary allegations bringing out the ingredient of offence have been made out in the complaint Therefore the Magistrate has rightly taken cognizance of the offence alleged against the appellant 518 A B Per K Ramaswamy J 1 The Act and the Schemes are self contained code for deduction from the salary of the employees and the responsibility to contribute in equiproportion of the employer s share and deposit thereof in the account within the specified time under the Act and the Schemes into the account It is a welfare legislation to provide benefits to the employees as per the schemes They need mandatory compliance and violation thereof visits with penal action 514 E 2 Section 6 fastens the obligation on the employer It postulates that the contribution to the fund shall be made by the employer 515 A 3 Under para 30 of the Employees Provident Fund Scheme 1952 and the other Schemes the employer shall deposit the contribution to the Fund 515 B 4 The employer shall in the first instance pay both the contributions payable by himselfin the Scheme referred to as employer s contribution and also on behalf of the members employed by him directly or through a Contractor the contribution payable by such member in the Scheme re ferred to as member s contribution 515 G 5 Para 38 provides that the employer shall send to the Commissioner within 15 days of the close of every month pay the same to the Fund by separate Bank Drafts or cheques and the administrative charges within 25 days of close of the month the employer shall submit a monthly consolidated 511 statement as per form 5 with particulars mentioned therein 515 H 516 A 6 Para 76 also fastens criminal offence for non compliance of the provisions of the schemes on the persons incharge of and responsible for the management or control of the establishment Every person who at the time the offence was committed was Incharge of and was responsible to the establishment for conduct of its business as well as the company shall be liable to be proceeded against and punished accordingly 517 C 8 Form 5 A read with para 36A give an option to the employer to furnish particulars of ownership and the branches of the department owners occupiers directors partners manager or other person or persons who have ultimate control over the affairs of such factory or establishment incharge of and responsible for the conduct of the business of the company and compliance of the statutory obligation fastened under the Act and the relevant schemes It is made mandatory to the employer to abide by the same and noncompliance thereof is liable for prosecution under Section 14A of the Act 517 D Municipal Corpn of Delhi vs Ram Kishan Rohtagi Ors and Employees State Insurance Corpn vs Gurdial Singh Ors 1991 Supp 1 SCC 204 referred to Employees State Insurance Corporation vs Gurdial Singh Ors 1991 Supp 1 SCC 204 and Municipal Corporation of Delhi vs Ram Kishan Rohtagi Ors distinguished Per RM Sahai J 1 The Act is a welfare legislation enacted for the benefit of he employees engaged in the factories and establishments and is directed towards achieving this objective by enacting provisions requiring the employer to contribute towards Provident Fund Family Pension and Insurance and keep the Commissioner informed of it by riling regular returns and submitting details in forms prescribed for that purpose 518 G 512 2 Paragraph 36A of the Provident Fund Scheme framed by Central Government under Section 5 of the Act requires the employer in relation to a factory or other establishment to furnish Form 5A mentioning details of its branches and departments owners occupiers directors partners managers or any other person or persons who have ultimate control over the affairs of the factory or establishment The purpose of giving details of the owners occupiers and directors etc is not an empty formality but a deliberate intent to widen the net of responsibility on any and every one for any act or omission It is necessary as well as in absence of such responsibility the entire benevolent scheme may stand frustrated 519 A B 3 The anxiety of the Legislature to ensure that the employees are not put to any hardship in respect of Provident Fund is manifest from sections 10 and 11 of the Act The farmer grants immunity to provident fund from being attached for any debt outstanding against the employee And the latter provides for priority of provident fund contribution over other debts if the employer is adjudged insolvent or the company is winded up Such being the nature of provident fund any violation or breach in this regard has to be construed strictly and against the employer 519 C 4 Sections 14 and 14A provides for penalties The one applies to whosoever is guilty of avoiding payment of provident fund and to employer if he commits breach of provisions mentioned in its various clauses where as Section 14A fastens liability on certain person if the persons committing the offence is company The scope of the two sections is same Latter is wider in its sweep and reach The former applies to anyone who is an employer or owner or is himself responsible for making payment whereas latter fastens the liability on all those who are responsible or are in charge of the company for the offence committed by it 519 D E 5 Sub sections 1 and 2 of Section 14A extend the liability for any offence by any person including a partner by virtue of explanation if he was incharge or was responsible to the company at the time of committing the offence The expression was in charge of and was responsible to the company for the conduct of the business are very wide in their import It could not therefore be confined to employer only 520 D 6 To say therefore that since paragraph 36A requires an employer to do certain acts the responsibility for any violation of the provision should be confined to such employer or owner would be ignoring the purpose and 513 objective of the Act and the extended meaning of employer in relation to establishments other than the factory The declaration therefore in Form 5A in the instant case including appellant as one of the persons in charge and responsible for affairs of the company was in accordance with law therefore his prosecution for violation of the scheme does not suffer from any error of jurisdiction or law 521 B C

minal Appeal No 618 of 1985 From the Judgment and Order dated 1751984 of the Allahabad High Court in Criminal Appeal No 564 of 1977 RL Kohli and CP Lal for the Appellant SP Pandey and AS Pundir for the Respondent The Judgment of the Court was delivered by 584 NP SINGH J The appellant along with Radhey Shayam and Munni Lal was put on trial for an offence under Section 302 read with Section 34 of the Penal Code for having committed the murder of Gokaran Prasad on 24111975 at about 500 PM It is the case of the prosecution that the deceased along with his brother Parbhu Dayal PW 1 on 24111975 had one to the Court of Tehsildar at Sitapur to attend their case which had been fixed for hearing The case was however postponed In the evening they were returning to village On Sitapur Lucknow Road at about 500 PM the three accused persons all armed with Bankas emerged from the field of Rani Saheba and ran towards to deceased PW 1 started shouting for help The deceased fell down on the brick stack It is said that the appellant Ram Asrey pressed down the deceased while Radhey Shyam and Munni Lal gave the blows with Bankas The occurrence was witnessed by Parbhu Dayal PW 1 Jagannath PW 5 and Narain PW 6 In respect of the motive for the commission of the offence it is said that two years prior to the occurrence aforesaid accused Radhey Shyam had erected a wall in front of the house of the deceased who resisted and did not allow the wall to be constructed For that Radhey Shyam was prosecuted and because of that he bore a grudge against the deceased The First Information Report was lodged by PW 1 at about 645 PM in which he gave the details of the occurrence and named PW 5 and PW 6 as the eyewitnesses of the occurrence The Investigating Officer visited the spot made the inquest and sent the body for post mortem which was held the next day During post mortem examination the following injuries were found 1 Incised wound 7 cms x 1 cm x bone deep on the right side of head 6 cms above the right eye brow Lacerated wound 4 cms x 15 cms x scalp deep in the mid line of head 6 cms above the root of nose Lacerated wound 4 cms x 15 cms x bone deep on the left side of head 3 cms above left eye brow Lacerated wound 45 cms x 1 cm x bone deep on the outer part of left eye brow extending down on the outer side of the outer angle of left eye and below its level 585 5 Incised wound 8 cms x 3 cms x scalp deep on the back of head on the left side of middle line 5 cms behind the left ear Incised wound 11 cms x 3 cms x vertebrae bone deep 4 cms below the right ear and 25 cms below left angle of left lower jaw at the level of the body of third cervical vertebrae underneath of injury oecsophagus Thyroid cartilage and neck vessels of both the sides out Incised wound 25 cms x5 cm x muscle deep over the front of 1st Pharyanx region of right thumb Incised wound 9 cms x 2 cms x muscle deep over the palmar aspect of left hand starting from the web of left thumb and index finger going inner and upper side towards the wrist According to the doctor who held the post mortem examination the incised wound might have been caused by weapon like Banka He however pointed out that Banka had a sharp edge on one side and blunt on the other He stated Injury No 2 3 4 might be caused by some blunt weapon Injury No 4 might be caused by some blunt side of the banka As in my opinion blunt part of the banka is about 1 cm in width injury No 2 and 3 might be caused by sharp fall on the heap of Bajri Injury No 2 and 3 might be caused by blunt part of bank a if its width was 14 cms In cross examination he states Injuries No 2 3 and 4 are likely to be caused by lathi There was a fraction of fractured bone below injury No 2 The injury No 2 is likely to occur if heavy weight weapon is struck with considerable force The injury No 3 might occur by fall on the Bajri If anyone fall with face side in addition to injury Nos 2 and 3 other abrasions are likely to occur on the face Again in cross examination about injuries Nos 2 3 and 4 he has stated that they are likely to be caused with lathi portion 586 The Trial Court on consideration of the evidence came to the conclusion that prosecution had failed to prove the case beyond reasonable doubt On that finding the accused persons were acquitted The State Government filed an appeal against the judgment of acquittal During the pendency of the appeal the main accused Radhey Shyam died The High Court however after referring to the different facts and circumstances of the case recorded a finding that the charge levelled against the two accused persons namely the appellant and Munni Lal had been proved beyond reasonable doubt On that finding the High Court convicted the appellant along with Munni Lal for an offence under Section 302 read with Section 34 of the Penal Code and sentenced each of them to undergo rigorous imprisonment for life This appeal under Section 379 of the Criminal Procedure ode has been filed on behalf of Ram Asrey the appellant We are informed that Munni Lal has not preferred any appeal to this Court On behalf of the appellant it was urged that the Trial Court had rightly disbelieved the evidence of the three eye witnesses PW 1 PW 5 and PW 6 because of the inherent improbabilities in their deposition and lack of consistency and there was no occasion for the High Court while hearing the appeal against acquittal to reverse the finding recorded about their credibility It was also pointed out that so far Jaoannath PW 5 is concerned he has been disbelieved not only by the Trial Court but even by the High Court saying that he has changed his statement from stage to stage to make it consistent with the statement of PW 1 The High Court has observed in respect of PW 5 We may therefore exclude his testimony from consideration not so much because he might not have been present at the spot but because there are elements in his testimony which make it unsafe to place reliatice on it having been once disbelieved by the Trial Court That is the true angle in which the evidence must be considered by this Court when dealing with an appeal against acquittal It was urged that the same approach should have been adopted in respect of Narain PW 6 who claimed to have accompanied PW 5 PW 6 has stated that he had clone that day to the market of khairabad to get Salim Mistry for repairing his Chakki but Salim Mistry was not available and when he was returning to village he met PW 5 in the market of Khairabad and both of them started for their village 587 He has further stated that at about 5 PM he saw the deceased and PW Ion Sitapur Lucknow Road Then he claimed to have seen the accused persons coming out from the field of Rani Saheba According to him this appellant held down the deceased while the other two accused persons Radhey Shyam and Munni Lal struck the deceased with Bankas and caused his death The High Court has observed that if the testimony of PW 6 is examined in the light of surrounding circumstances then it is consistent with the version of PW 1 and as such the evidence of PW 1 receives adequate corroboration The High Court has rightly pointed out that PW 6 was not connected with the prosecution party in any manner and there was no reason for him to depose falsely claiming to be an eye witness of the occurrence As such his evidence can be taken into consideration to corroborate the evidence of the informant PW 1 On behalf of the appellant it was said about PW 1 that on his own statement he lodged the First Information Report on the basis of a report written by Lallu Ram PW 8 at the spot which he took to Police Station Khairabad This aspect of the matter has been dealt with in the judgment under appeal We are in complete agreement That merely because PW 1 lodged the First Information Report on basis of a report prepared by PW 8 by itself shall not affect the prosecution version The matter would have been different if the accused persons had shown some oblique motive on the part of PW 8 who is said to have prepared the report The occurrence took place at about 500 PM and the First lnformation Report was lodged at 645 PM with in two hours the police station being at the distance of four miles from the place of occurrence In the First Information Report the same version of the occurrence was disclosed which has been stated in Court Apart from naming himself PW 1 also named PW 5 and PW 6 as eye witnesses of the occurrence The Investigating Officer reached the place of occurrence at 900 PM the same evening In such a situation there does not appear to be any scope for concoction of a false case to implicate the accused persons leaving out the real culprits PW 1 being the brother of the deceased his going to the Court of Tehsildar at Sitapur and returning to village with the deceased is most natural His evidence cannot be rejected merely on the ground that he happened to be the brother of the victim It has been repeatedly pointed out by this Court that near relations will be the last persons to leave out the real culprits and to implicate those who have not participated in the crime Taking all facts and circumstances into consideration we are of the view that prosecution has been able to prove the case as disclosed in the First Information Report against the accused persons and there is no reason to reject the same The next question which has to be examined is as to whether so far the 588 appellant is concerned who according to the prosecution case itself has not given any Banka blow to the victim but is said to have pressed down the deceased before the other two accused persons Radhey Shyam and Munni Lal had given the blows should have been held guilty for an offence under Section 302 read with Section 34 of the Penal Code It was pointed out that the appellant was a school student and there was no reason on his part to share the common intention of committing the murder of the victim In this connection reference was made to the injuries found on the person of the victim during the post mortem examination It was pointed out that the injuries were not consistent with the prosecution case that the other two accused persons caused those injuries with Bankas About injuries Nos 2 3 and 4 the Doctor who held the post mortem examination has clearly stated that they must have been caused by some blunt weapon In respect of injury No 4 he has said that it might have been caused by the blunt side of the Banka This itself shows that amongst the two participants in tile occurrence They had different intentions One out of the two assailants ie Radhey Shyam and Munni Lal had used the back side of the Banka If one of the two assailants had used the back side of the Banka then from this conduct it can be reasonably inferred that such assailant had not the intention to cause the death of the victim otherwise there was no reason to use the back side of the Banka instead of sharp side which in normal course could have caused the death of the victim However so far the present appeal is concerned we are not concerned with either of the two other accused persons But this circumstance can be taken into consideration for judging the role played by the appellant According to us by merely pressing down the victim before the other two accused persons assaulted him it cannot be held that appellant had shared the common intention of causing the death of the victim In the facts and circum stances of the case of course it has to be held that he shared only the common intention of culpable homicide not amounting to murder He can be attributed with the intention that the injuries which were being caused by the other two accused persons were likely to cause the death of the victim Accordingly we set aside the conviction of the appellant under Section 302 read with Section 34 as well as his sentence to imprisonment for life He is convicted under Section 304 Part 1 read with Section 34 of the Penal Code and sentenced to undergo rigorous imprisonment for ten years The appeal is accordingly allowed in part to the extent indicated above SK Appeal Partly allowed

In respect of some private dispute between two neighbors a writ application was filed in the High Court On the material produced in the case it was treated as a Public Interest Litigation and the High Court was to rind out a solution in respect if unauthorised constructions alleged to have been made by different ownersoccupiersbuilders without sanctioned plans or by making deviations from the sanctioned plans The High Court wanted to ensure that such unauthorised constructions were not perpetuated on the basis of interim orders of injunction passed by the Civil Courts The High Court disposed of the petition holding that the owners occupiersbuilders were to be given liberty to file fresh building plans and that the Municipal Corporation was to examine such building plans in accordance with law and that the Corporation was to seal and to demolish those constructions which were beyond the compoundable limits The High Court also directed that no civil suit would be entertained by any Court in Delhi in respect of any action taken or proposed to be taken by the Corporation with regard to the sealing andor demolition of any building or any part thereof The High Court directed further that person aggrieved by an order of sealing or demolition had the right to file an appeal to the Appellate Tribunal under the Delhi Municipal Corporation Act 1957 522 523 Against the High Court s order the present appeals were filed by special leave On the question whether the jurisdiction of the Court has been statutorily barred in respect of suits in connection with the orders passed or proceedings initiated for demolition of constructions which have been made without sanction or by deviating from the sanctioned plans allowing the appeals this Court HELD11 With the increase in the number of taxing statutes welfare legislations and enactments to protect a class of citizensa trend can be noticed that most of such legislations confer decision making powers on various authorities and they seek to limit or exclude Court s power to review those decisions The result is that the power of the Court under section 9 of the Code is being denuded and curtailed by such special enactments in respect of liabilities created or rights conferred The ouster of the jurisdiction of the Court is upheld on the finding that the rights or liabilities in question had been created by the Act in question and remedy provided therein Was adequate 535 D F 12The situation will be different where a statute purports to curb and curtail a pre existing common law right and purports to oust the jurisdiction of the Court so far remedy against the orders passed under such statute are concerned In such casesthe courts have to be more vigilant while examining the question as to whether an adequate redressal machinery has been provided before which the person aggrieved may agitate his grievance 535 G 13In spite of the bar placed on the power of the Court orders passed under such statutes can be examined on jurisdictional question A suit will be maintainable 536 F Katikara Chiniamani Dora vs Guatreddi Annamanaidu Desika Charyutttu vs State of Andhra Pradesh AIR 1964 SC 807 PYX Granite Co Ltd vs Ministry of Housing and Local and Government and Anisminic Ltd vs Foreign Compensation Commission relied on Wolverhampton New Waterworks Co vs Hawkesford 1859 6 Neville vs London Express Newspaper Limited 1919 Appeal Cases 368 Baraclough vs Brown 1897 Appeal Cases 615 Secretary of State vs Mask Co AIR 1940 PC 105 Firm Seth Radha Kishan vs Administrator Municipal committee Ludhiana Finn of Illuri Subbayya Chetty and Sons vs State of Andhra Pradesh Ms Kamala Mills Ltd vs State of Bombay Ram Swarup and Ors vs Shikar Chand State of Kerala vs Ms N Ramaswami Iyer and sons Rain Gopal Reddy vs Additional Custodian Evacuee Property Hyderabad 19663 SCR 214 Custodian of Evacuee Property Punjab Ors vs Jafran Begum 19673 SCR 736 Dhulabhai vs Stale of Madhya Pradesh The Premier Automobiles Ltd vs Kamlaker Shantarm Wadke 1 SCC 496 Bata Shoe Co Ltd vs Jabalpur Corporation Munshi Ram vs Municipal Commitee Chheharta AIR 1979 SC 1250 19793 SCC 83 Rain Singh vs Grain Panchayat Mehal Kalan SCC 364 Raja Ram Kumar Bhargava vs Union of India and Sushil Kumar Mehta vs GobindRam Bohra referred to The Delhi Municipal Corporation Act purports to regulate the common law right of the citizens to erector construct buildings of their choice This right existed since time immemorial But with the urbanisation and development of the concept of planned city regulations restrictions on such common law right have been imposed But as the provisions of the Act intend to regulate and restrict a common law right and not any right or liability created under the Act itself it cannot be said that the right and the remedy have been given unoflatu eg in the same breath 537 E 15 In spite of the bar prescribed under sub sections 4 and 5 of section 343 and section 347E of the Corporation Act over the power of the Courts under certain special circumstancesthe Court can examine whether the dispute falls within the ambit of the Act But once the Court is satisfied that either the provisions of the Act are not applicable to the building in question or the basic procedural requirements which are vital in nature have not been followed it shall have jurisdiction to enquire and investigate while protecting the common law rights of the citizens 537 C 16 The regulations and bye laws in respect of buildings are meant to 525 serve the public interest But at the same time it cannot be held that in all circumstances the authorities entrusted with the demolition of unauthorised constructions have exclusive power to the absolute exclusion of the power of the Court In some special cases where jurisdictional error on the part of the Corporation is established a suit shall be maintainable 538 C 17 The Court should not ordinarily entertain a suit in connection with the proceedings initiated for demolition by the Commissioner in terms of section 343 1 of the Corporation Act The Court should direct the persons aggrieved to pursue the remedy before the Appellate Tribunal and then before the Administrator in accordance with the provisions of the said Act 538 D 18 The Court should entertain a suit questioning the validity of an order passed under section 343 of the Act only if the Court is of prima facie opinion that the order is nullity in the eyes of law because of any jurisdictional error in exercise of the power by the Commissioner or that the order is outside the Act 538 E 21 A party is not entitled to an order of injunction as a matter of right or course Grant of injunction is within the discretion of the Court and such discretion is to he exercised in favour of the plaintiff only if it is proved to the satisfaction of the Court that unless the defendant is restrained by an order of injunction an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit 538 H 22The purpose of temporary injunction is to maintain the status quo The Court grants such relief according to the legal principles ex debite justitiae Before any such order is passed the Court must be satisfied that a strong prima facie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him 539B 23 The Court should be always willing to extend its hand to protect a citizen who is being wronged or is being deprived of a property without any authority in law or without following the procedure which are fundamental and vital in nature But at the same time the judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the Court 539 1 526 24 Power to grant injunction is an extra ordinary power vested in the Court to he exercised taking into consideration the facts and circumstances of a particular case The Courts have to be more cautious when the said power is being exercised without notice or hearing the party who is to he affected by the order so passed 539 E 25 In spite of the statutory requirement in order 39 Rule 3 the Courts have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders It is said that if the reasons for grant of injunction are mentioned a grievance can be made by the other side that Court has prejudged the issues involved in the suit This is a misconception about the nature and the scope of interim orders Any opinion expressed in connection with an interlocutory application has no bearing and shall not affect any party at the stage of the final adjudication Apart from that now in view of the proviso to Rule 3 of Order 39 there is no scope for any argument When the statute itself requires reasons to he recorded the Court cannot ignore that requirement by saying that if reasons are recorded it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant 539 H 540 H 26 Proviso to Rule 3 of Order39 of the Code attracts the principle that if a statute requires a thing to he done in a particular manner it should be done in that manner or not all Taylor vs Taylor 18751 Ch D 426 Nazir Ahmed vs Emperor AIR 1936 PC 253 and Ramachandra Keshar Adke vs Gavind Joti Chavare relied on Whenever a Court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side it must record the reasons for doing so and should take into consideration while passing an order of injunction all relevant factors including as to how the object of granting injunction itself shall be defeated if an exparty order is not passed But any such exparty order should be in force up to a particular date before which the plaintiff should be required to serve the notice on the defendant concerned 541 C Supreme Court Practice 1993 Vol 1 at page 514 referred to 527 28The Court should first direct the plaintiff to serve a copy of the application with a copy of the plaint along with relevant documents on the counsel for the Corporation or any competent authority of the Corporation and the order should be passed only after hearing the parties 541 F 29If the circumstances of a case so warrant and where the Court is of the opinion that the object of granting the injunction would be defeated by delay the Court should record reasons for its opinion as required by proviso to Rule 3 of Order 39 of the Code before passing an order for injunction The Court must direct that such order shall operate only for a period of two weeks during which notice along with copy of the application plaint and relevant documents should be served on the competent authority or the counsel for the Corporation Affidavit of service of notice should be filed as provided by proviso to Rule 3 of Order 39 aforesaid If the Corporation has entered appearance any such ex parte order of injunction should be extended only after hearing the counsel for the Corporation 541 H 542 A 210While passing an exparte order of injunction the Court shall direct the plaintiff to give an undertaking that he will not make any further construction upon the premises till the application for injunction is finally heard and disposed of 512 C

iminal Appeal No397 of 1993 From the Judgment and Order dated 11790 of the Calcutta High Court in Crl Revision No 1453 of 1987 DN Mukherjee D Sinha and JR Das for the Appellant Sukumar Guha and AK Sengupta for the Respondents The Judgment of the Court was delivered by AHMADI J Special leave granted In this appeal by special leave two questions arise for our consideration namely i whether a Special Court constituted under Section 12A of the hereinafter called the Act is empowered to exercise powers under sub section 5 of Section 167 of Code of Criminal Procedure 1973 the Code for short in relation to an accused person forwarded to it under clause b of sub section 1 of section 12AA of the Act and ii whether a Special Court can notwithstanding the fact that the charge sheet has been filed after the expiry of the period of six months from the date of arrest of the accused person or the extended period take cognizance of the offence and proceed to try and punish the accused person These two questions arise in the backdrop of the following facts A police party headed by an Inspector of Police raided the business premise 574 and godown of the respondents on March 16 1984 and in the presence of respondent Faguni Dutta seized certain essential commodities stored in contravention of certain orders issued under section 3 read with section 5 of the Act The accused Falguni Dutta was arrested on the same day for the commission of an offence punishable under section 71 a ii of the Act but the charge sheet was submitted after the expiry of the period of six months from the date of arrest on September 30 1986 The learned Judge presiding over the Special Court Constitute of under section 12A of the Act took cognizance of the offence on March 13 1987 on the basis of the charge sheet submitted under section 173 of the Code Thereupon the accused persons moved an application before the learned Special Judge for quashing the proceedings on the ground that since the case was triable as a summons case in view of section 12AA1 f of the Act clause 5 of section 167 of the Code was attracted which enjoined that the proceedings be dropped The learned Special Judge relying on a decision of a learned Single Judge of the High Court in Kanta Dev vs The State of West Bengal 1986 Calcutta Criminal Law Reporter 158 1986 1 CHN 267 rejected the application on July 24 1987 holding that the provision of section 167 5 of the Code had no application to a case initiated for the commission of an offence punishable under section 7 1 a ii of the Act We may incidentally point out that the same view was expressed in Babulal Agarwal vs State 1987 1 CHN 218 Being aggrieved by the rejection of the application the accused preferred a Revision Application to the High Court challenging the legality of the said order A learned single Judge of the High Court placing reliance on a Division Bench decision of the High Court of Andhra Pradesh in the case of Public Prosecutor High Court of Hyderabad etc vs Anjaneyulu and etc held that sub section 5 of section 167 of the Code stood attracted and the learned Special Judge ought to have stopped the further investigation on the expiry of six months and ought to have discharged the accused He therefore set aside the order of the learned Special Judge and also quashed the prosecution and discharged the accused It is against this order of the High Court that the present appeal is preferred We may incidently mention that when the learned Single Judge was disinclined to follow the earlier two decisions of other learned single Judges of the High Court the proper course was to refer the matter to a Division Bench for decision however has now lost significance in view of the subsequent decision of the Division Bench in Jnan Prakash Agarwala vs State of WestBengal 1992 1 CHN 213 taking a contrary view In the said case the Division Bench has taken the view which the learned Single Judge has taken in the present case We will deal with these decisions in some detail hereafter At the outset we deem it appropriate to notice the relevant provisions of the 575 concerned statutes The Act was enacted to provide in the interest of the general public for the control of production supply and distribution of and trade and commerce in certain commodities Section 3 inter alia lays down that if the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices it may by order provide for regulating and prohibiting the production supply and distribution thereof and trade and commerce therein By section 4 it is provided that an order made under section 3 may confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central Government or State Government and may contain directions any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such duties The Central Government is empowered by section 5 to direct that the power to make orders or issue notifications under section 3 shall in relation to such matters and subject to such conditions if any as may be specified in the direction be exercisable inter alia by such State Government as may be specified in the direction In exercise of the power so conferred certain orders were issued by the State Government in regard to certain essential commodities from time to time Section 7 prescribes the penalties for the contravention of any order made under section 3 The relevant portion of section 7 with which we are concerned reads as under 7 1 If any person contravenes any order made under section 3 a he shall be punishable i in the case of an order made with reference to clause i of subsection 2 of that section with imprisonment for a term which may extend to one year and shall also be liable to fine and iiin the case of any other order with imprisonment for a term which shall not be less than three months but which may extend to seven years and shall also be liable to fine In the present case the accused came to be charged under section 7 1 a ii of the Act Having regard to the fact that the punishment prescribed for the said offence extends to seven years and fine the case would fall within the definition of warrant case under section 2x of the Code This becomes evident if we read the definitions of summons case and warrant case together They are as under 576 2 w Summons case means a case relating to an offence and not being a warrant case 2x Warrant case means a case relating to an offence punishable with death imprisonment for life or imprisonment for a term exceeding two years However by Amending Act 18 of 1981 the Legislature for dealing more effectively with persons indulging in antisocial activities like hoarding and blackmarketing and for combating the evil of inflationary prices considered it necessary to make special provisions for a temporary period of five years extended by another five yearsnamely to provide i for the control in a summary way of all offences under the Act and iifor the constitution for the purposes of such trial of Special Courts consisting of a Single Judge To achieve this objective section 12A was amended with a view to empowering the State Government for the purpose of providing speedy trial of the offences under the Act to constitute as many Special Courts as may be necessary for such area or areas to be to be specified in the notification Section 12AA which too was inserted by the said Amending Act begins with a non obstance clause and provides that all offences under the Act shall be triable only by the Special Court constituted for the area in which the offence was committed or where there are more Special Courts than one in such area by one of them as may be specified in this behalf by the High Court Clause b of sub section 1 of section 12AA next provides that where a person accused of or suspected of the commission of an offence under this Act is forwarded to a Magistrate under sub section 2 or subsection 2A of Section 167 of the Code such Magistrate may authorise the detention of such person such custody as he thinks fit for a period not exceeding 15 days in the whole where such Magistrate is a Judicial Magistrate and 7 days in the whole where such Magistrate is an Executive Magistrate unless his detention for such period is unnecessary Clause c of that sub section is relevant for our purpose and may be extracted c The Special Court may subject to the provisions of clause d of this Section exercise in relation to person forwarded to it under clause b the said power which a Magistrate having jurisdic 577 tion to try a case may exercise under section 167 of the Code in relation to an accused person in such case who has been forwarded to him under this section Sub clause dprovides that no court other than the Special Court or the High Court shall release an accused on bail Sub clause f of this sub section is also relevant and reads as under f All offences under this Act shall be tried in a summary way and the provisions of sections 262 to 265 both inclusive of the Code shall as far as may be apply to such trioal Provided that in the case of any conviction in a summary trial under this section it shall be lawful for the Special Court to pass such sentence of imprisonment for a term not exceeding two years It will thus be seen that while the penalty provided for an offence under section 71 a ii extends to seven years and fine by virtue of clause f of subsection 1 of section 12AA if the offence is tried in a summary way applying the provisions of sections 262 to 265 of the Code the penalty would be restricted by the proviso to a maximum of two years which would it is argued bring the case within the meaning of a summons case as defined in section 2w of the Code thereby attracting sub section 5 of section 167 of the Code It would be advantageous to reproduce sub section 5 of section 167 of the Code It reads as under If in any case triable by a Magistrate as a summons case the investigation is not concluded within a period of six months from the date on which the accused was arrested the Magistrate shall make an order stopping further investigation into the offence unless the officer making the investigation satisfies the Magistrate that for special reasons and in the interest of justice the continuation of the investigation beyond the period of six months is necessary To complete reference to the provisions of the Act we may also state that section 10A posits that notwithstanding anything contained in the Code every offence punishable under the Act shall be cognizable and non bailable Section 11 provides that cognizance of an offence under the Act shall be taken only on a written report Section 12AC makes the provisions of the Code applicable to proceedings be fore a Special Court unless otherwise provided These in brief are 578 the relevant provisions of the Act and the Code with which we are concerned It may here be mentioned that section 12A was first inserted by Amendment Act of 1964 It then empowered the Central Government to specify any order under section 3 to be a special order the contravention whereof may be tried summarily to which the provisions of sections 262 to 265 of the Code were made applicable The proviso stipulated that in the case of conviction in a summary trial it shall be lawful for the Magistrate to pass a sentence of imprisonment not exceeding one year Subsequently by Amendment Act 18 of 198 1 section 12A was substituted by the present provisions and new sections 12AA to 12AC were inserted The avowed object of these legislative changes was expeditious disposal of offences under the Act by Special Courts employing summary procedure and applying the provisions of the Code to such trials save as otherwise provided This enabled the Special Courts to take cognizance of the offences under the Act without a formal order of commitment It thus becomes clear from the plain language of the provisions introduced by Act 18 of 1981 that the legislature desired to ensure that all offences under the Act were tried by the Special Court Constituted under Section 12A in a summary manner applying the provisions of sections 262 to 265 of the Code and further provided that in case of conviction the sentence shall not exceed two years bringing the offence within the definition of a summons case under the Code But for the insertion of section 12A in its present form and section 12AA the offence under section 7 1 a ii of the Act would have attracted the definition of a warrant case It is therefore obvious that the Amending Act 18 of 1981 has brought about a substantial change The position in law as emerging after the amendment of the Act by Act 18 of 1981 is crystal clear namely that on the constitution of special Courts all offences under the Act are triable only by the Special Court for the Area in which the offence has been committed Section 12AA 1 b provides that where a person accused of an offence under the Act is forwarded to a Magistrate under subsection 2 or sub section 2A of section 167 of the Code such Magistrate is empowered to authorise the detention of such person in such custody as he thinks fit for a period not exceeding 15 days in the whole where such Magistrate is a Judicial Magistrate and 7 days in the whole where he is Executive Magistrate Clause c of that sub section provides that the Special Court may exercise in relation to the person forwarded to it under clause b the same power which a Magistrate having jurisdiction to try a case may exercise under section 167 of the Code in relation to an accused person in such case who has been forwarded to him under that section Section 12AC says that the provisions of the Code shall apply to proceedings before a Special Court save as otherwise provided in the Act A conjoint reading of these provisions makes it clear that after the constitution of 579 Special Courts all offences under the Act have to be tried by that court in a summary way by applying the provisions of sections 262 to 265 both inclusive of the Code The proviso places a fetter on the power of the Court in the matter of passing a sentence on conviction namely that notwithstanding the fact that section 7 1 a ii prescribes a punishment extending upto seven years and fine Special Court shall not pass a sentence of imprisonment for a term exceeding two years It is this proviso which attracts the definition of a summons case the trial whereof must be undertaken in accordance with the procedure out lined in Chapter XX of the Code Chapter XXI of the Code deals with Summary Trials Section 262 of the Code which outlines the procedure for summary trials in terms states that the procedure specified in the Code for the trial of summons case shall be followed except otherwise provided Section 167 5 says that if in any case triable as a summons case the investigation is not concluded within a period of six months from the date on which the accused came to be arrested the Magistrate shall make an order stopping further investigation into the offence unless the Magistrate for special reasons and in the interests of justice considers it necessary to permit continuation of the investigation The prosecution in question being a summons case triable in a summary manner as per procedure outlined in sections 262 to 265 of the Code which in turn attracts the procedure meant for summons case it is obvious that the power conferred by sub section 5 of section 167 can be invoked by the Special Court by virtue of clause c of section 12AA 1 of the Act which in terms states that the Special Court may exercise the same powers which a Magistrate may exercise under section 167 of the Code Thus a special Court is expressly empowered by clause c of section 12AA 1 to exercise the same powers which a Magistrate having jurisdiction to try a case may exercise under section 167 of the Code in relation to an accused person who has been forwarded to him under that provision We have therefore no manner of doubt that the High Court was right in concluding that section 167 5 of the Code was attracted in the present case and the Special Court was entitled to exercise the power conferred by that sub section That being so the view taken by the Division Bench of the Calcutta High Court in the case of Jnan Prakash supra insofar as it relates to the application of section 167 5 to an offence under section 7 1 a ii of the Act triable by the Special Court constituted under section 12A of the Act cannot be doubted That is also the view of the High Court of Andhra Pradesh in the case of Public Prosecutor High Court of Hyderabad supra Therefore the Special Court can stop further investigation into the offence if the investigation is not concluded within a period of six month from the day of arrest of the accused person unless for special reasons and in the interest of justice the continuation of the investigation beyond that period is necessary In the present case the officer making the investigation had not sought the permission of the Special Court to continue with the investigation even after the expiry of six months The object of 580 this sub section clearly is to ensure prompt investigation into an offence triable as summons case to avoid hardship and harassment to the accused person Both the High Courts of Calcutta and Andhra Pradesh have taken the view that after the amendment of the Act by Act 18 of 1981 and the introduction of section 12AA the power conferred on the Magistrate under section 167 5 of the code is exercisable by the Special Court constituted under section 12A of the Act We also concur with the High Court of Calcutta that the two decisions rendered by the learned Single Judges of that Court earlier in point of time did not lay down the correct law Similarly the Division Bench of the High Court of Andhra Pradesh was also right in holding that sub section 5 of section 167 of the Code would be applicable to prosecutions under the Act triable by the Special Court The taxes us to the question whether the Special Court canbeside directing stoppage of investigation entertain and act on a charge sheet or a police report submitted under section 173 2 of the Code in such cases The expression 1 police report has been defined under the Code to mean a report forwarded by a police officer to a Magistrate under sub section 2 of section 173 section 21 Section 173 lays down that every investigation under Chapter XII shall be completed without unnecessary delay and as soon as it is completed the officer incharge of the police station shall forward to a Magistrate empowered to take cognizance of the offence on a police report a report in the form prescribed by the State Government It will thus be seen that the police report under section 1732 has to be submitted as soon as the investigation is completed Now if the investigation has been stopped on the expiry of six months or the extended period if any by the Magistrate in exercise of power conferred by sub section 5 of section 167 of the Code the investigation comes to an end and therefore on the completion of the investigation section 1732 enjoins upon the officer in charge of the police station to forward a report in the prescribed form There is nothing in sub section 5 of section 167 to suggest that if the investigation has not been completed within the period allowed by that sub section the officer in charge of the police station will be absolved from the responsibility of filing the police report under section 1732 of the Code on the stoppage of the investigation The High Court of Andhra Pradesh rightly observed in paragraph 13 of the Judgment as under Under the new Code in addition to definition for investigation in section 2h a separate definition for police report is given by section 2r This coupled with the newly introduced sub section 5 of section 167 brings out the distinction between investigation by the police and the police report on which a court is to take cognizance The report cannot now be said to be an integral part of 581 investigation The introduction of section 167 5 in the Code cannot have the effect of invalidating the investigation done within the period of six months or enabling the court to stopping the filing of police report under section 173 2 If the investigation done during the period of six months discloses an offence a police report may be founded on it and the court can take cognizance of the same in Hussainara Khantoon Ors vs Home Secretary State of Bihar Patna 1 9791 3 SCR 760 this Court held that the investigation done within the period of six months is not rendered invalid merely because the investigation is not completed and further investigation is stopped The exact words used are in such a case the Magistrate is bound to make an order stopping furthe r investigation in that event only two courses would be open either the police must immediately proceed to file a chargesheet if the in vestigation conducted till then warrants such a course or if no case for proceeding against the under trial prisoner is disclosed by the investigation the undertrial must be released forthwith from detention We therefore concur with the view taken by the Andhra Pradesh High Court in this regard In the result we partly allow this appeal While we agree with the view taken by the High Court of Calcutta that in the case of an offence punishable under section 71 a ii of the Act which is tried by a Special Court constituted under section 12A the provision of sub section 5 of section 167 of the Code gets attracted if the investigation has not been completed within the period allowed by that sub section but we find it difficult to sustain that part of the order of the High Court by which the order of the Special Court taking cognizance of the offence on the police report ie charge sheet submitted under section 173 2 of the Code came to be quashed We set aside that latter part of the order and hold that the Special Court was competent to entertain the police report restricted to six months investigation and take cognizance on the basis thereof We therefore direct that the Special Court will proceed with the trial from that stage onwards and complete the same as early as possible in accordance with law Appeal partly allowed

The mother of the respondent minors acting as their guardian sold their land while they were still minors to the appellant under a registered sale deed dated July 301964 The respondents upon attaining majority sued the appellant for possession of the said land on the ground that the sale thereof having been made without the permission of the court was void The appellant in his written statement and at the time of hearing of the suit contended that the sale deed had been attested by the father of the respondents and the ale should therefore he deemed to have been a sale by the legal guardian of the respondents It was also pleaded that the sale had been for legal necessity and the benefit of the respondents It was also alleged that the suit was barred by limitation because the sale was voidable and not void and the suit had not been brought within three years of each of the respondents attaining majority The trial court framed appropriate issues and came to the conclusion that it had not been proved that the sale was for legal necessity or for the benefit of the respondents that the sale by the respondent s mother without the permission of the court was void and the sale was void and not voidable and the suit was therefore in time and was decreed 590 The appeal filed by the appellant before the Additional Distt Judge and the High Court failed The appellant therefore preferred this appeal by special leave Dismissing the appeal this court HELD 1 The provisions of section 8 of the Hindu Minority and Guardianship Act 1956 are devised to fully protect the property if a minor even from the depredations of his parents Section 8 empowers only the legal guardian to alienate a minor s immovable property provided it is for the necessity or benefit of the minor or his estate and it further requires that such alienation shall be effected after the permission of the Court has been obtained It was difficult therefore to hold that the sale by reason of the fact that the mother of the minor respondents signed the sale deed and the father attested it was voidable not void 592 G 3 The attestation of the sale deed by the father showed that he was very much existent and in the picture If he was then the sale by the mother notwithstanding the fact that the father attested it cannot he held to be sale by the father and natural guardian satisfying the requirements of section 8 592 E Jijabai Vithalrao Gajre vs Pathankhan Ors distinguished 662 A

Appeal No 166 NL of 1983 the Award dated 1941982 of the Labour Court Haryana at Faridabad in Reference No 227 of 198 1 RK Jain RP Singh Aseem Malhotra Ashish Verma Manoj Goel RK Khanna and Ms Abha R Sharma for the Appellant Dr Anand Prakash Ghosh for Ms Fox Mandal Co and Som Mandal for the Respondent The Judgment of the Court was delivered by K RAMASWAMY J This appeal by special leave is against the award of the Labour Court Haryana at Faridabad dated April 19 1982 which was published in the State Gazette on August 10 1982It upheld the termination of the appellant s service as legal and valid The respondent by its letter dated December 12 1980 which was received by the appellant on December 19 1980 intimated that the appellant wilfully absented from duty continuously for more than 8 days from December 3 1980 without leave or prior information or intimation or previous permission from the management and therefore deemed to have left the service of the company on your own account and lost your lien and the appointment with effect from December 3 1980 In support thereof reliance was placed on clause 13 2 iv of its Certified Standing Order The appellant averred that despite his reporting to duty on December 3 1980 and everyday continuously thereafter he was prevented entry at the gate and he was not allowed to sign the attendance register He pleaded that he was not permitted to join duty without assigning any reasons His letter of December 3 1980 was marked herein as Annexure A wherein he explained the circumstances in which he was prevented to join duty The Tribunal found that the appellant had failed to prove his case The action of the respondent is in accordance with the standing Orders and it is not a termination nor retrenchment under the for short the Act The appellant in terms of standing orders lost his lien on his appointment and so is not entitled to reinstatement Clause 13 2 iv standing order reads thus If a workman remains absent without sanctioned leave or beyond the period of leave originally granted or subsequently extended he shall lose his lien on his 936 appointment unless a he returns within 3 calander days of the commencement of the absence of the expiry of leave originally granted or subsequently extended as the case may be and b explains to the satisfaction of the managermanagement the reason of his absence o r his inability to return on the expiry of the leave as the case may The workman not reporting for duty within 8 calander days as mentioned above shall be deemed to have automatically abandoned the services and lost his lien on his appointment His name shall be struck off from the Muster Rolls in such an eventuality A reading thereof does indicate that if a workman remains absent without sanction of leave or beyond the period of the leave originally granted or subsequently extended the employee loses his lien on employment unless he returns to duty within eight calander days of the commencement of the absence or the expiry of leave either originally granted or subsequently extended He has to give a satisfactory explanation to the ManagerManagement of his reasons for absence or inability to return to the duty on the expiry of the leave On completion of eight calander days absence from duty he shall be deemed to have abandoned the services and lost his lien on his appointment Thereafter the management has been empowered to strike off the name from the Muster Rolls Section 2oo of the Act defines Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action but does not include a voluntary retirement of the workman or b retirement of the workman on reaching the age of superannuation of the contract of employment between the employer and the workman concerned contains a stipulation in that behalf or c termination of the service of a workman on the ground of continued ill health Section 25F prescribes mandatory procedure to be followed before the retrenchment becomes valid and legal and violation thereof visits with invalida 937 tion of the action with consequential results In Punjab Land Development and Reclamation Corporation Ltd Chandigarh vs Presiding Officer Labour Court Chandigarh and Ors the Constitution Bench considered the scope of the word retrenchment defined by s2oo and held in para 71 at page 716 that analysing the definition of retrenchment in Section 2oo we find that termination by the employer of the service of a workman would not otherwise have covered the cases excluded in Clauses a and b namely voluntary retirement and retirement on reaching the stipulated age of retirement or on the grounds of continued ill health There would be no violational element of the employer Their express exclusion implies that those would otherwise have been included In para 77 at page 719 it was further held that right of the employer and the contract of employment has been effected by introducing Section 2oo The contention of the management to terminate the service of an employee under the certified standing Orders and under the contracts of employment was negatived holding that the right of the management has been effected by introduction of section 2oo and section 25F of the Act The second view was that the right as such has not been effected or taken away but only an additional social obligation has been imposed on the employer to abide by the mandate of section 25F of the Act to tide over the financial difficulty which subserves the social policy This court relied on the maxim Stat pro ratione valuntas populi the will of the people stands in place of a reason In paragraph 82 at page 722 this court concluded that the definition in s2oo of the Act of retrenchment means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section Same view was taken by three benches of three Judges of this Court in State Bank of India vs Sri N Sundara Mani Delhi Cloth General Mills Lid vs Shambhu Nath Mukherjee Ors and Hindustan Steel Ltd vs The Presiding Officer Labour Court and two benches of two judges in Robert D Souza vs Executive Engineer Southern Railway and Anr and H D Singh vs Reserve Bank of India and Ors 1985 4 SCC 201 took the same view Therefore we find force in the contention of Sri R K lain the learned Senior counsel for the appellant that the definition retrenchment in S2oo is a comprehensive one intended to cover any action of the management to put an end to the employment of an employee for any reason whatsoever We need not however rest our conclusion on this point as in our considered view it could be decided on the other contention raised by Sri Jain that the order is violative of the principles of natural justice We are impressed with that argument Before dealing with it it is necessary to dispose of inter related contentions raised by Dr Anand Prakash 938 The contention of Dr Anand Prakash that since this appeal was deleted from the constitution bench to be dealt with separately the finding of the constitution bench deprived the respondent of putting forth the contention based on Cl 13 of the certified standing order to support impugned action and the respondent is entitled to canvass afresh the correctness of the view of the constitution bench is devoid of force It is settled law that an authoritative law laid after considering all the relevant provisions and the previous precedents it is no longer open to be recanvassed the same on new grounds or reasons that may be put forth in its support unless the court deemed appropriate to refer to a larger bench in the larger public interest to advance the cause of justice The constitution bench in fact went into the self same question vis a vis the right of the employer to fall back upon the relevant provision of the certified standing Orders to terminate the service of the workmanemployee By operation of section 2oo the right of the employer under Cl132 iv and the contract of employment has been effected Moreover in Ambika Prasad Mishra vs State of UP and Ors at 72 23 para 5 6 A constitution bench held that every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent It does not lose its authority merely because it was badly argued inadequately considered and fallaciously reasoned In that case the ratio of this court on article 31A decided by 13 Judges bench in Keshwanand Bharti vs Union of India 1973 Suppl SCR was sought to be reopened but this court negatived the same His contention that expiry of eight days absence from duty brings about automatic loss of lien on the post and nothing more need be done by the management to pass an order terminating the service and per force termination is automatic bears no substance The constitution bench specifically held that the right of the employer given under the standing Orders gets effected by statutory operation In Robert D Souza s case supra in para 7 this court rejected the contention that on expiry of leave the termination of service is automatic and nothing further could be done It was further held that striking of the name from the rolls for unauthorised absence from duty amounted to termination of service and absence from duty for 8 consequitive days amounts to misconduct and termination of service on such grounds without complying with minimum prin ciples of natural justice would not be justified In Shambhunath s case three Judges bench held that striking of the name of the workman for absence of leave itself amounted to retrenchment In HD Singh vs Reserve Bank of India Ors supra this court held that striking of the name from the rolls amounts to an arbitrary action In State Bank of India vs Workmen of State Bank of India and Anr1991 1 SCC 13 a two judge bench of this court to which one of us KRSJ was a member was to consider the effect of discharge on one month s notice or pay in 939 lieu thereof It was held that it was not a discharge simplicitor or a simple termination of service but one camouflaged for serious misconduct This court lifted the veil and looked beyond the apparent tenor of the order and its effect It was held that the action was not valid in law The principle question is whether the impugned action is violative of principles of natural justice In AK Kriapak and Ors vs Union of India Ors a Constitution bench of this court held that the distinction between quasi judicial and administrative order has gradually become thin Now it is totally clipsed and obliterated The aim of the rule of the natural justice is to secure justice or to put it negatively to prevent miscarriage of justice These rules operate in the area not covered by law validly made or expressly excluded as held in Col JN Sinha vs Union of India Anr 1971 1 SCR 791 It is settled law that certified standing orders have statutory force which do not expressly exclude the application of the principles of natural justice Conversely the Act made exceptions for the application of principles of natural justice necessary implication from specific provisions in the Act like Ss25F 25FF 25FFF etc the need for temporary hands to cope with sudden and temporary spurt of work demands appointment temporarily to a service of such temporary workmen to meet such exigencies and as soon as the work or service are completed the need to dispense with the services may arise In that situation on compliance of the provisions of section 25F resort could be had to retrench the employees in conformity therewith particular statute or statutory rules or orders having statutory flavour may also exclude the application of the principles of natural justice expressly or by necessary implication In other respects the principles of natural justice would apply unless the employer should justify its exclusion on given special and exceptional exigencies The cardinal point that has to be borne in mind in every case is whether the person concerned should have a reasonable opportunity of presenting his case and the authority should act fairly justly reasonably and impartially It is not so much to act judicially but is to act fairly namely the procedure adopted must be just fair and reasonable in the particular circumstances of the case In other words application of the principles of natural justice that no man should be condemned unheard intends to prevent the authority to act arbitrarily effecting the rights of the concerned person 940 It is a fundamental rule of law that no decision must be taken which will affect the right of any person without first being informed of the case and be given him her an opportunity of putting forward hisher case An order involving civil consequences must be made consistently with the rules of natural justice In Mohinder Singh Gill Anr vs The Chief Election Commissioner Ors at 308F the Constitution Bench held that civil consequence covers infraction of not merely property or personal right but of civil liberties material deprivations and non pecuniary damages In its comprehensive connotion every thing that affects a citizen in his civil life inflicts a civil consequence Black s Law Dictionary 4th Edition page 1487 defined civil rights are such as belong to every citizen of the state or country they include rights capable of being enforced or redressed in a civil action In State of Orissa vs Dr Miss Binapani Dei Ors this court held that even an administrative order which involves civil consequences must be made consistently with the rules of natural justice The person concerned must be informed of the case the evidence in support thereof supplied and must be given a fair opportunity to meet the case before an adverse decision is taken Since no such opportunity was given it was held that superannuation was in violation of principles of natural justice In State of West Bengal vs Anwar Ali Sarkar per majority a seven Judge bench held that the rule of procedure laid down by law comes as much within the purview of article 14 of the Constitution as any rule of substantive law In Maneka Gandhi vs Union of India 1 another bench of seven judges held that the substantive and procedural laws and action taken under them will have to pass the test under Art 14 The test of reason and justice cannot be abstract They cannot be divorced from the needs of the nation The tests have to be pragmatic otherwise they would cease to he reasonable The procedure prescribed must be just fair and reasonable even though there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual which affects the right of that individual The duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action Even executive authorities which take administrative action involving any deprivation of or restriction on inherent fundamental rights of citizens must take care to see that justice is not only done but manifestly appears to be done They have a duty to proceed in a way which is free from even the appearance of arbitrariness unreasonableness or unfairness They have to act in a manner which is patently impartial and meets the requirements of natural justice The law must therefore be now taken to be well settled that procedure prescribed for depriving a person of livelihood must meet the challenge of article 14 941 and such law would be liable to be tested on the anvil of article 14 and the procedure prescribed by a statute or statutory rule or rules or orders effecting the civil rights or result in civil consequences would have to answer the requirement of article 14 So it must be rightjust and fair and not arbitrary fanciful or oppressive There can be no distinction between a quasi judicial function and an administrative function for the purpose of principles of natural justice The aim of both administrative inquiry as well as the quasi judicial enquiry is to arrive at a just decision and if a rule of natural justice is calculated to secure justice or to put it negatively to prevent miscarriage of justice it is difficult to see why it should be applicable only to quasi judicial enquiry and not to administrative enquiry It must logically apply to both Therefore fair play in action requires that the procedure adopted must be just fair and reasonable The manner of exercise of the power and its impact on the rights of the person affected would be in conformity with the principles of natural justice article 21 clubs life with liberty dignity of person with means of livelihood without which the glorious content of dignity of person would be reduced to animal existence When it is interpreted that the colour and content of procedure established by law must be in conformity with the minimum fairness and processual justice it would relieve legislative callousness despising opportu nity of being heard and fair opportunities of defence article 14 has a pervasive processual potency and versatile quality equalitarian in its soul and allergic to discriminatory dictates Equality is the antithesis of arbitrariness It is thereby conclusively held by this Court that the principles of natural justice are part of article 14 and the procedure prescribed by law must be just fair and reasonable In Delhi Transport Corpn vs D T C Mazdoor Congress and Ors 1991 Suppl 1 SCC 600 this court held that right to public employment and its concomitant right to livelihood received protective umbrella under the can copy of articles 14 and 21 etc All matters relating to employment includes the right to continue in service till the employee reaches superannuation or until his service is duly terminated in accordance with just fair and reasonable procedure prescribed under the provisions of the constitution and the rules made under the provisions of the constitution and the rules made under proviso to article 309 of the Constitution or the statutory provisions or the rules regulations or instructions having statutory flavour They must be conformable to the rights guaranteed in Part III and IV of the Constitution article 21 guarantees right to life which includes right to livelihood the deprivation thereof must be in accordance with just and fair procedure prescribed by law conformable to articles 14 and 21 so as to be just fair and reasonable and not fanciful oppressive or at vagary The principles of natural 942 justice is an integral part of the Guarantee of equality assured by article 14 Any law made or action taken by an employer must be fairjust and reasonable The power to terminate the service of an employeeworkman in accordance with just fair and reasonable procedure is an essential inbuilt of natural justice articles 14 strikes at arbitrary action It is not the form of the action but the substance of the order that is to be looked into It is open to the court to lift the veil and gauge the effect of the impugned action to find whether it is the foundation to impose punishment or is only a motive Fair play is to secure justice procedural as well as substantive The substance of the order is the soul and the affect thereof is the end result It is thus well settled law that right to life enshrined under article 21 of the Constitution would include right to livelihood The order of termination of the service of an employeeworkman visits with civil consequences of jeopardising not only hisher livelihood but also career and livelihood of dependents Therefore before taking any action putting an end to the tenure of an employeeworkman fair play requires that a reasonable opportunity to put forth his case is given and domestic enquiry conducted complying with the principles of natural justice In D 7 C vs D TC Mazdoor Congress and Ors supra the constitution bench per majority held that termination of the service of a workman giving one month s notice or pay in lieu thereof without enquiry offended article 14 The order terminating the service of the employees was set aside In this case admittedly no opportunity was given to the appellant and no enquiry was held The appellant s plea put forth at the earliest was that despite his reporting to duty on December 3 1980 and on all subsequent days and readiness to join duty he was prevented to report to duty nor he be permitted to sign the attendance register The Tribunal did not record any conclusive finding in this behalf It concluded that the management had power under Cl 13 of the certified Standing Orders to terminate with the service of the appellant Therefore we hold that the principles of natural justice must be read into the standing order No 13 2 iv Otherwise it would become arbitrary unjust and unfair violating articles 14 When so read the impugned action is violative of the principles of natural justice This conclusion leads us to the question as to what relief the appellant is entitled to The management did not conduct any domestic enquiry nor given the appellant any opportunity to put forth his case Equally the appellant is to blame himself for the impugned action Under those circumstances 50 per cent of the back wages would meet the ends of justice The appeal is accordingly allowed The award of the Labour Court is set aside and the letter dated December 12 1980 943 of the management is quashed There shall be a direction to the respondent to reinstate the appellant forthwith and pay him back wages within a period of three months from the date of the receipt of this order The appeal is allowed accord ingly The parties would bear their own costs NPV Appeal allowed

The appellant alongwith Radhey Shyam and Munni Lal were charged with the murder of Gokaran Prasad on 24111975 at about 5 PM The Trial Court on consideration of the evidence concluded that the prosecution has failed to prove the case beyond reasonable doubts and acquitted the accused persons On appeal the High Court appreciating the facts and circumstances of the case convicted Munni Lal along with the appellant for an offence under Section 302 read with 34 IPC and sentenced each of them to undergo rigorous imprisonment for life During the pendency of the appeal the main accused Radhey Shyam died This appeal is against the High Court s Judgment under Section 379 of the code of Criminal Procedure Allowing the Appeal in part HELD 1 The High Court has rightly pointed out that PW 6 was not connected with the prosecution party in any manner and there was no reason for him to depose falsely claiming to be an eye witness of the occurrence As such his evidence can be taken into consideration to corroborate the evidence of the informant PW 1 587 C 2 The occurrence took place at about 5 PM and the first information report was lodged at 645 PM within two hours the Police Station being at the distance of four miles from the place of occurrence In the first information report the same version of the occurrence was disclosed which has been stated in Court Apart from naming himself PW 1 also named PW 5 and PW 582 6 as eye witness of the occurrence The Investigating Officer reached the place of the occurrence at 9 PM the same evening In such a situation there does not appear to be any scope for concoction of a false case to implicate the accused persons leaving out the real culprits PW 1 being the brother of the deceased his going to the Court of Tehsildar at Sitapur and returning to village with the deceased is most natural His evidence cannot he rejected merely on the ground that he happened to be the brother of the victim It has been repeatedly pointed out by this Court that near relations will be the last persons to leave out the real culprits and to implicate those who have not participated in the crime Taking all facts and circumstances into consideration the prosecution has been able to prove the case as disclosed in FIR against the accused persons 587 E G 3The appellant was a school student and there was no reason on his part to share the common intention of committing the murder of the victim By merely pressing down the victim before the other two accused persons assaulted him it cannot be held that appellant had shared the common intention of causing the death of the victim In the facts and circumstances of the case it has to he held that he shared only the common intention of culpable homicide not amounting to murder He can be attributed with the intention that the injuries which were being caused by the other two accused persons were likely to cause the death of the victim 588 E F 4 The conviction of the appellant under Section 302 read with 34 IPC as well as his sentence to imprisonment for life is set aside He is convicted under Section 304 Part 1 read with Section 34 of the Penal Code sentenced to undergo rigorous imprisonment for ten years 588 G

Appeal No 159 of 1951 Appeal by special leave from the judgment and order dated 13th of April 1951 of the High Court of Judicature at Madras Rajamannar CJ and Somasundaram J in CMP No 12215 of 1950 MC Setalvad C R Pattabhi Raman with him for the appellant CK Daphtary M Natesan with him for the respondent No1 VKT Chari Advocate General of Madras R Ganapathi lyer with him for respondent No 4 1952 March 17 The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J This appeal arises as the result of special leave to appeal granted by this Court on the 1st of May 1951 against an order of the Madras High Court dated 13th April 1951 quashing certain proceedings of the Regional Transport Authority Tanjore and the Cen tral Traffic Board Madras dated 19th January 1950 and 3rd March 585 1950 respectively and an order of the first respondent the State of Madras dated 7th November 1950 and direct ing the issue to Messrs Raman and Raman Ltd Petitioners before the High Court of permits for the five buses in respect of which a joint application had been made original ly by them and one TD Balasubramania Pillai The present appellant G Veerappa Pillai was the fourth respondent in the High Court The present first respondents Messrs Raman and Raman Ltd were the peti tioners before the High Court Present respondents Nos 2 3 and 4 were respectively respondents Nos 1 2 and 3 before the High Court The dispute is between the appellant and Messrs Raman and Raman Ltd who were competing bus proprietors in the Tanjore District and it is over the issues of five perma nent permits for buses Nos MDO 81 MDO 230 MDO 6 MDO 7 and M DO 759 on the route between Kumbakonam and Karaikal It has been a long drawn game with many moves counter moves advances and checkmates both sides display ing unusual assiduity and skill in their manoeuvres for position But it is unnecessary to set out in great detail all the steps taken as they have been narrated in the order of High Court and many of them are of insignificant rele vance for disposal of this appeal I shall state here only what is material The C permits for the five buses stood originally in the name of Balasubramania Pillai The buses were agreed to be purchased from him by Messrs Raman and Raman Ltd and there was a joint application by the transferor and trans feree on 10th March 1944 for transfer of the ownership and of the C permits in the name of the purchasers Two days later Veerappa Pillai proprietor of the Sri Sathi Viias Bus Service who is the appellant before us applied for temporary permits to ply two of his own vehicles over the same route stating that the vehicles of the two agencies which held the permits were mostly out of action It was a fact that out of the five buses sold 586 by Balasubramania Pillai only two were then running the other three were under repairs The permanent permits for the sold buses were suspended by order of the Secretary dated 28th March 1944 Temporary permits for buses MDO 920 894 918 MSC 7632 and 7482 had been issued to Veerappa Pillai during the same month Now we come to another chapter in the story Balasubra mania Pillai resiled from the joint application and repudi ated it as having been got from him by fraud The Secre tary Road Traffic Board thereupon refused to transfer the ownership on the 19th March 1944 and this order was con firmed by the Board on 29th May 1944 Balasubramania Pillai and Veerappa Pillai made a joint application on 10th April 1944 for transfer of the buses and the original permits in favour of Veerappa Pillai who had on the same date agreed to purchase the vehicles The Secretary granted this applica tion on the same date Messrs Raman and Raman Ltd took the matter before the Central Road Traffic Board and they made an order on 16th August 1944 upholding the issue of tempo rary permits to Veerappa Pillai for his buses MDO 920 894918 MSC 7632 and 7482 but setting aside the trans fer of registry of the original buses and the transfer of the permits relating to the same On an application by Veerappa Pillai to review its order dated 16th August 1944 the Central Road Traffic Board allowed on 27th November 1944 only the transfer of the ownership of the buses but not a transfer of the permits Yet another move in the game was this Veerappa Pillai filed a suit in the court of the Subordinate Judge Kumbako nam on 3rd October 1944 for recovery of possession of the original five buses from Messrs Raman and Raman Ltd on the strength of his purchase from Balasubramania Pillai The Subordinate Judge appointed Veerappa Pillai as Receiver on 17th March 1945 and the five disputed buses were deliv ered to him on 26th April 1945 Two of the buses MDO 6 and 7 were repaired by him and put on the route under his temporary permits The suit was decreed in 587 his favour on 2nd May 1946 Later he repaired the other three buses MDO 759 230 and 81 and began to run them on the same route under the temporary permits he held Veerappa Pillai was discharged from receivership on 18th September 1946 On the strength of the Sub Court decree Veerappa Pillai again applied for a permanent transfer of the permits and on 22nd July 1946 the Central Road Traffic Board trans ferred the petition to the Regional Transport Authority with an intimation that it saw no objection to the issue of regular permits to Veerappa Pillai for the disputed buses or to their transfer in his name provided there were valid permits in existence This view appears to have been modi fied later and on 2nd September 1946 the Regional Trans port Officer directed the issue of temporary permits to the buses for the period from 3rd September 1946 to 31st October 1946 subject to the condition that the issue of the permits did not affect the rights of either party in the matter under dispute Thereupon the Government was moved by Veerappa Pillai and also by Messrs Raman and Raman Ltd but the Government declined to interfere and the result was an order on 30th June 1947 by the Regional Transport Authority to the following effect Since the subject matter is on appeal before the High Court the matter will lie over pending the decision of the High Court The temporary permits are continued as is being done A fresh petition by Veerappa Pillai to the Central Road Traffic Board Madras was unsuccessful but a further appeal to the Government of Madras ended in his favour in an order dated 29th March 1949 The order is in these terms Shri Sathi Viias Bus Service Porayar Tanjore dis trict have been permitted by the Regional Transport Author ity Tanjore to run their buses MDO 6 7 81 230 and 750 on the Kumbakonam Karaikal route on temporary permits from 1944 pending 588 the High Court s decision on the question of permanent ownership of the buses Government consider it undesirable to keep these buses running on temporary permits for a long and indefinite period Further Sri Sathi Vilas Bus Service have secured the decision of the Sub Court Kumbako nam in their favour about the permanent ownership of the buses In the circumstances the Regional Transport Authori ty Tanjore is directed to grant permanent permits for the buses of Sri Sathi Vilas Bus Service Porayar referred to above in lieu of the existing temporary permits On the basis of this Government order permanent permits were issued in favour of Veerappa Pillai on 18th April 1949 Getting to know of this last order Messrs Raman and Raman Ltdapproached the Government Madras with a petition praying for clarification of the order by making it expressly subject to the decision of the High Court regarding the title to the said five buses and that in the event of the High Court deciding the appeal in favour of Messrs Raman and Raman Ltd the above said five permanent permits will be taken away from Veerappa Pillai and given to them The Minister of Transport who dealt with the matter stated on the petition that was my inten tion also The High Court reversed the decree of the Sub Court on 2nd September 1949 and came to the conclusion that the title of Messrs Raman and Raman Ltd to the five buses prevailed over that of Veerappa Pillai On 19th September 1949 they applied to the Government for cancellation of the five permits issued to Veerappa Pillai and for grant of the same to them The Government declined to interfere as the Regional Transport Authority was the competent authority vide order dated 16th November 1949 In their application to the Regional Fransport Authority dated 28th November 1949 Messrs Raman and Raman Ltd asked for withdrawal of the permits In the meantime that is on 14th October 1949 Veerappa Pillai applied for renewal of his permanent permits held for his own 589 buses Nos MDO 1357 20 1366 1110 1077 MDO 1368 and MSC7632 which had been substituted for the disputed buses as they had become unroadworthy and useless The application for renewal has under section 58 sub clause 2 of the Act to be treated as a fresh application for new permits This procedure was followed and on 22nd October 1949 a notification was issued inviting objections against the renewal and giving 30th November 1949 as the date of hearing No objections were received and the Secretary renewed the permits for two years from 1st January 1950 This order was dated 3rd January 1950 The Regional Trans port Authority dealing with the application of Messrs Raman and Raman Ltd dated 28th November 1949 resolved on 19th January 1950 that the permanent permits issued to Veerap pa Pillai should be cancelled that the route should be declared vacant in respect of the five buses and fresh applications should be invited and dealt with on the merits The order further stated that in the meanwhile Sri G Veerappa Pillai and Raman and Raman will be given temporary permits for running two and three buses respectively on the route The permanent permits will be cancelled with imme diate effect Raman and Raman should put in the buses as quickly as possible Till then Sri Veerappa Pillai will be given temporary permits so as not to dislocate public traf fic Both the parties were dissatisfied with this order and preferred appeals to the Central Road Traffic Board Madras which dismissed the appeal of Messrs Raman and Raman Ltd and restored the permanent permits of Veerappa Pillai by order dated the 3rd March 1950 Messrs Raman and Raman Ltd moved the Government but it declined to interfere by GO dated 7th November 1950 Thereupon Messrs Raman and Raman Ltd moved the High Court on 4th December 1950 under article 226 of the Constitution in Civil Miscellaneous Petition No 12215 of 1950 for a writ of certiorari for quashing the orders and the proceedings of the 590 Regional Transport Authority the Central Road Traffic Board Madras and the State of Madras dated 19th January 1950 3rd March 1950 and 7th November 1950 respectively and for the issue of a writ of mandamus or other such appro priate directions to the first respondent to transfer issue or grant the five pucca permits in respect of the route Kumbakonam to Karaikkal to the petitioner herein Messrs Raman and Raman Ltd It is on this petition that the order challenged in this appeal was made by the High Court The High Court took the view that throughout all the stages prior to the High Court s decree the parties the transport authorities vested with the power to issue per mits and the Government also proceeded upon the footing that the transfer of the permits was dependent on the title to the buses and that Veerappa Pillai obtained the temporary and permanent permits only in his capacity as transferee and not in his individual right To quote the learned Chief Justicethe conduct of the parties the attitude of the transport authorities including the Government are all explicable only on the assumption that the rights of parties were consequent on the ownership of the five vehicles in question The fourth respondent having obtained the benefit of temporary and permanent permits as a transferee from Balasubramania Pillai all this time cannot be heard now to say after the decision of this Court which has negatived his claim and upheld the claim of the applicant that the appli cant should not enjoy the fruits of his success He further points out that the procedure laid down by the Motor Vehi cles Act and the rules for grant of fresh permits was not followed and that long before the application for renewal was allowed the Regional Transport Authority had been informed of the decision of the High Court The order of the Central Road Traffic Board was in his opinion most unsatis factory as it was based on a quibbling distinction between withdrawal and cancellation of the permits In his view the orders complained against deprived Messrs Raman and Raman Ltd of the fruits of the 591 decree obtained by them at the hands of the High Court after much expenditure of time and money An examination of the relevant sections of the Motor Vehicles Act does not support the view that the issue of a permit for a bus which falls within the definition of a stage carriage is necessarily dependent on the ownership of vehicle All that is required for obtaining a permit is possession of the bus As ownership is not a condition precedent for the grant of permits and as a person can get a permit provided he is in possession of a vehicle which satisfies the requirements of the statute or the rules framed thereunder we have to hold that the parties and the authorities were labouring under a misconception if they entertained a contrary view But the assumption on which they proceeded may perhaps be explained if not justified on the ground that it was supposed that the question of ownership of the vehicles had an important or material bearing on the question as to which of them had a preferen tialclaim for the permits It may well be it Was one of the factors to be taken into account and it seems to us that this was apparently the reason why the question of issue of permanent permits was postponed from time to time till we come to the order of the Government dated 29th March on petitions presented by both the contestants If matters had stood as they were till the Government had made this order something could have been said in favour of Messrs Raman and Raman Ltd in the event of their ultimate success in the High Court as regards the title to the five buses But the said order altered the situation In the order the direction for the grant of permanent permits is not rested solely on the decision of the Sub Court in favour of Veerappa Pillai but another reason was also given namely that Government considered it undesirable to keep the buses running on temporary permits for a long and indefinite period In giving this reason they were stating a policy 77 592 As observed already the High Court by their judg ment dated 2nd September 1949 reversed the decree of the Subordinate Judge and dismissed Veerappa Pillai s suit for possession of the buses based on his title If it were the law that the question of possession based on ownership was decisive as regards the grant of permits and if no other circumstances were available to be taken into account when the question of the issue of permanent permits again came up for consideration it would have been easy to hold that Messrs Raman and Raman Ltd had at least a preferential claim But unfortunately for them both these requisites are not satisfied It has been point ed out already that nowhere do we find in the Act anything to indicate that the issue of permits depends on ownership Other circumstances which had a material bear ing as to which of them was entitled to the permits had come into existence since the date of the original joint application and were taken into account by the transport authorities and by the Government The order of 19th January 1950 of the Regional Transport Authority sought to render rough and ready justice between the par ties by the adoption of what may be called a middle course The terms of the order have already been set out Before disposing of the appeals of both the parties the Central Traffic Board appears to have called for a report from the Regional Transport Officer In this report attention was drawn to the fact that all the five buses had been replaced by new vehicles and that the registration certificates had been cancelled as a result of the replacement After Balasubramania Pillai it was Veerappa Pillai who was running the buses continuously on this route for nearly 5 years and he also obtained the privilege of securing the permanent permits The Central Traffic Board s order of 3rd March 1950 restoring the permanent permits of Veerappa Pillai was based on the fact that Messrs Raman and Raman Ltd asked for withdrawal of the permits and not their cancellation and that no opportunity had been given to Veerappa Pillai to show cause why his permits should not be cancelled and 593 the procedure prescribed for cancellation was not followed When the Government was moved by Messrs Raman and Raman Ltd under section 64 a of the Motor Vehicles Act they had before them a petition for withdrawal of the perma nent permits issued to Veerappa Pillai and for transfer or grant of five pucca permits relating to the five buses The Government granted stay of the appellate order of the Central Road Traffic Board pending disposal of the revision petition and called for a report from the subordinate trans port authorities Two important facts were brought to the notice of the Government in the report Messrs Raman and Raman Ltd did not file any objections to the renewal of the permits sought by Veerappa Pillai What is more important they had no permits from the French authorities enabling them to run any buses on the portion of the route which lay in French territory It was further pointed out that there was no subsisting joint application to support the request for transfer and that the original permits in the name of Bala subramanian had ceased to exist after 31st December 1944 The Government had also before them two petitions dated 8th March 1950 and 25th October 1950 from Messrs Raman and Raman Ltd and two petitions dated 29th March 1950 and 8th June 1950 from Veerappa Pillai It is on the basis of all these materials that the Government de clined to interfere with the decision of the Central Road Traffic Board It is contended for the appellant that in this state of affairs the High Court acting under Article 226 of the Constitution had no right to interfere with the orders of the transport authorities It is unnecessary for the disposal of this appeal to consider and decide on the exact scope and extent of the jurisdiction of the High Court under Article 226 Whether the writs it can issue must be analogous to the writs of habeas corpus mandamus prohibition quo warranto and certiorari specified therein and the power is subject to all the limitations or restrictions 594 imposed on the exercise of this jurisdiction or whether the High Court is at liberty to issue any suitable directions or orders or writs untramelled by any condi tions whenever the interests of justice so require is a large and somewhat difficult problem which does not arise for solution now Mr Setalvad appearing for the appellant urged two narrower grounds as sufficient for his purposes Firstly he urged that however wide the jurisdiction of the High Court might be under Article 226 it could never exer cise its powers under the article in such a manner as to convert itself into a court of appeal sitting in judgment over every tribunal or authority in the State discharging administrative or quasi judicial functions Secondly he maintained that the Motor Vehicles Act with the rules framed thereunder dealing with the grant of permits is a self contained code and that in respect of the rights and liabil ities created by such a statute the manner of enforcement must be sought within the statute itself It was further urged by him that in any event the High Court could not substitute its own view or discretion for the view taken or discretion exercised by the specified authorities even if it was erroneous or unsound Such writs as are referred to in Article 226 are obvi ously intended to enable the High Court to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction or in excess of it or in violation of the principles of natural justice or refuse to exercise a jurisdiction vested in them or there is an error apparent on the face of the record and such act omission error or excess has resulted in manifest injustice However extensive the jurisdiction may be it seems to us that it is not so wide or large as to enable the High Court to convert itself into a Court of appeal and examine for itself the correctness of the decision impugned and decide what is the proper view to be taken or the order to be made Mr Daphtary who appeared for the respondent said nothing to controvert this position His argument 595 was that if all along the authorities and the Government had proceeded upon a particular footing and dealt with the rights of the parties on that basis it was not open to them afterwards to change front and give the go by altogether to the conception of the rights of parties entertained by them till then According to him there was manifest injustice to his client in allowing them to do so and this was the reason which impelled the High Court to make the order which is the subject matter of challenge in this appeal The Motor Vehicles Act is a statute which creates new rights and liabilities and prescribes an elaborate procedure for their regulation No one is entitled to a permit as of right even if he satisfies all the prescribed conditions The grant of a permit is entirely within the discretion of the transport authorities and naturally depends on several circumstances which have to be taken into account The Regional Transport Authority and the Provincial Transport Authority are entrusted under section 42 with this power They may be described as administrative bodies exercising quasijudicial functions in the matter of the grant of per mits Under rule 8 of the Madras Motor Vehicles Rules the Regional Transport Authority is called the Road Traffic Board and the Provincial Transport Authority is called the Central Road Traffic Board These bodies or authorities are constituted by the Provincial Government The matters which are to be taken into account in granting or refusing a stage carriage permit are specified in section 47 By delegation under rule 134 A the Secretary of the Road Traf fic Board may exercise certain powers as regards the grant or refusal of stage carriage permits and under rule 136 there is an appeal to the Board from these orders Similar powers of delegation are vested in the Secretary to the Central Board and an appeal lies to the Central Board under rule 1481 From an original order of the Road Traffic Board there is an appeal to the Central Board and from the original orders of the Central Board to the Government vide rules 147 and 148 An amendment introduced by the Madras Act XX of 1948 596 and found as section 64 A in the Act vests a power of revi sion in the Provincial Government Besides this specific provision there is a general provision in section 43 A that the Provincial Government may issue such orders and direc tions of a general character as it may consider necessary to the Provincial Transport Authority or a Regional Transport Authority in respect of any matter relating to road trans port and such transport authority shall give effect to all such orders and directions There is therefore a regular hierarchy of administrative bodies established to deal with the regulation of transport by means of motor vehicles Thus we have before us a complete and precise scheme for regulating the issue of permits providing what matters are to be taken into consideration as relevant and prescribing appeals and revisions from subordinate bodies to higher authorities The remedies for the redress of grievances or the correction of errors are found in the statute itself and it is to these remedies that resort must generally be had As observed already the issue or refusal of permits is solely within the discretion of the transport authorities and it is not a matter of right We are accordingly of opinion that this was not a case for interference with the discretion that was exercised by the Transport Authorities paying regard to all the facts and the surrounding circumstances Further it will be noticed that the High Court here did not content itself with merely quashing the proceedings it went further and directed the Regional Transport Authority Tanjore to grant to the petitioner permits in respect of the five buses in respect of which a joint application was made originally by the petitioner and Balasubramania Pillai and that in case the above buses have been condemned the petitioner shall be at liberty to provide substitutes within such time as may be prescribed by the authorities Such a direction was clearly in excess of its powers and jurisdic tion 597 For the reasons given above the appeal is allowed and the order of the High Court set aside Each party will bear their own costs of these proceedings throughout Appeal allowed Agent for respondent No 1 MSK Sastri Agent for respondent No 4 PA Mehta

On 1631984 the police raided the business premise and godown of the respondents and sized certain essential commodities which were stored there in contravention of certain orders issued under section 3 read with section 5 of the On the same day the respondents were arrested for the commission of an offence punishable under section 71 a ii of the Act But chargesheet was submitted under section 173 Code of Criminal Procedure on 3091986 after expiry of the period of six months The Special Court constituted under section 12A took cognizance of the offence on 1331987 on the basis of the charge sheet The respondent No 1 moved an application before the Special Court to quash the proceeding since the case was triable as a summon case in view of section 12AA 1 f of the sub section 5 of Section 167 of Code of Criminal Procedure was attracted Relying on the decision in Kanta Dey vs The State of West Bengal 1986 Calcutta Criminal Law Reporter 158 the Special Court rejected the application holding that the provision of section 167 5 of the Code had no application to a case initiated for the commission of an offence punishable under section 71 a ii of the Act 571 Respondents revision application against the order of Special Court was allowed by single judge of the high Court The High Court relying on the decision in public Prosecutor High Court of Hyderabad vs Anjaneyulu held that sub section 5 of section 167 of the Code stood attracted On the High court quashing the prosecution the respondents were discharged The present appeal by special leave was filed by the State against the order of the High Court On the questions 1 whether a Special Court constituted under Section 12A of the is empowered to exercise powers under section 167 5 of the Code of Criminal Procedure 1973 in relation to an accused person forwarded to it under section 12AA 1 b of the Act and ii whether a Special Court can take cognizance of the offence and proceed to try and punish the accused person notwithstanding the fact that the charge sheet is filed after expiry of the period of six months from the date of arrest of the accused person partly allowing the appeal this Court HELD 11 From the plain language of the provisions introduced by Act 18 of 1981 the legislature desired to ensure that all offences under the Act were tried by the Special Court constituted under section 12A in a summary manner applying the provisions of sections 262 to 265 of the Code and further provided that in case of conviction the sentence shall not exceed two years bringing the offence within the definition of a summons case under the Code But for the insertion of section 12A in its present form and section 12AA the offence under section 7 1 a ii of the Act would have attracted the definition of a warrant case 578 D 12 The avowed object of these legislative changes was expeditious disposal of offences under the Act by Special Courts employing summary procedure and applying the provisions of the Code to such trials save as otherwise provided This enabled the special Courts to take cognizance of the offences under the Act without a formal order of commitment 578 C 13 After the constitution of Special Courts all offences under the Act have to he tried by that court in a summary ways by applying the provision of section 262 to 265 both inclusive of the Code The proviso places a fetter on the power of the Court in the matter of passing a sentence on conviction namely notwithstanding the fact that section 71 a ii prescribes a punishment extending upto seven years and fine Special Court shall not pass a sentence of imprisonment for a term exceeding two years It is this proviso which attracts the definition of a summon case the trial whereof must he 572 undertaken in accordance with the procedure outlined in Chapter XX of the Code 579 A B 14Section 167 5says that if in any case triable as a summons casethe investigation is wit concluded within a period of six months from the date on which tile accused came to he arrested the Magistrate shall make an order stopping further investigation into the offence unless the Magistrate for special reasons and in the interest of justice considers it necessary to permit continuation of the investigation 579 C 15 The object of sub section clearly 5 of Section 167 is to ensure prompt investigation into all offence triable as summons case to avoid hardship and harassment to the accused person 646 C 16 The prosecution in question being a summons case triable in a summary manner as per procedure outlined in sections 262 to 265 of the Code which in turn attracts tile procedure meant for summons case it is obvious that the power conferred by sub section 5 of section 167 can be invoked by the Special Court by virtue or clause c of section 12AA 1 of the Act which in terms states that the Special Court may exercise the same powers which a Magistrate may exercise under section 167 of the Code Thus a special Court is expressly empowered by clause c of section 12AA 1 to exercise the same powers which a Megistrate having jurisdiction to try a cast may exercise under section 167 of the Code in relation to an accused person who has been forwarded to him under that provision 579 1 17 The High Court was right in concluding that section 1675 of the Code was attracted in the present case and the Special Court was entitled to exercise the power conferred by that sub section 579 F 18 In the case of an offence punishable under section 7i a ii of the Act which is tried by a Special Court constituted under section 12A the provision of sub section 5 of section 167 of the Code get attracted if tile investigation has not been completed within the period allowed by that subsection 582 F 19 The Special Court was competent to entertain the police report restricted to six months investigation and take cognizance on the basis thereof Therefore the Special Court is directed to proceed with the trial from that stage on wards and complete the same as early as possible in accordance 573 with law 582 G Kanta Dev vs The State of west Bengal 1986 Calcutta Criminal Law Reporter 158 1986 1 CHN 267 and Babulal Agarwal vs State 1987 1 CHN 218 overruled 639 B C Jnan Prakesh Agarwala vs State of West Bengal 1992 1 CHN 218 and Public Prosecution High Court of Hyderabad etc vs Ajnaneyulu and etc approved Hussainara Khantoon Ors vs Home Secretary State of Bihar Patna referred to 639 H 647 F

Appeals Nos 380 to 389 391 to 399 401 429 and 431 to 434 of 1958 Appeals from the judgment and decree dated December 19 1956 of the Allahabad High Court in Civil Misc Writs Nos 1574 1575 1576 1577 1578 15791444158415861589 1631 1632 1634 1635 16361694 1695 1697 1704 1707 3726 1647 1948 and 1949 and 1956 M K Nambiyar Shyam Nath Kacker J B Dadachanji section N Andley and Rameshwar Nath for the appellants in C As 380 385 387 389 391 399 and 401 of 1958 SNKacker and J B Dadachanji for the appellant in C A No 38658 Naunit Lal for the appellants in C As 429 431 43458 K B Asthana G N Dikshit for the respondents January 15 The judgment of Das C J and Sinha J was delivered by Das C J The judgment of Bhagwati Subba Rao and Wanchoo JJ was delivered by Subba Rao J DAS C J We have had the advantage of perusing the judgment prepared by our learned Brother Subba Rao and we agree with the order proposed by him namely that all the above appeals should be dismissed with costs although we do not subscribe to all the reasons advanced by him The relevant facts and the several points raised by learned counsel for the appellants and the petitioners in support of the appeals have been fully set out in the judgment which our learned Brother will presently deliver and it is not necessary for us to set out the 12 same here Without committing ourselves to all the reasons adopted by our learned Brother we agree with his following conclusions namely 1 that the Uttar Pradesh Transport Service Development Act 1955 Act IX of 1955 hereinafter referred to as the U P Act did not on the passing of the Motor Vehicles Amendment Act 1956 100 of 1956 hereinafter referred to as the Central Act become wholly void under article 2541 of the Constitution but continued to be a valid and subsisting law supporting the scheme already framed under the U P Act 2 that even if the Central Act be construed as amounting under article 2542 to a repeal of the U P Act such repeal did not destroy or efface the scheme already framed under the U P Act for the provisions of section 6 of the General Clauses Act saved the same 3 that the U P Act did not offend the provisions of article 31 of the Constitution as it stood before the Constitution 4th Amendment Act 1955 for the U P Act and in particular section 115 thereof provided for the payment of adequate compensation These findings are quite sufficient to dispose of the points urged by Mr Nambiyar and Mr Naunit Lal in support of the claims and contentions of their respective clients In view of the aforesaid finding that the U P Act did not infringe the fundamental rights guaranteed by article 31 it is wholly unnecessary to discuss the following questions namely a whether the provisions of Part III of the Constitution enshrining the fundamental rights are mere checks or limitations on the legislative competency conferred on Parliament and the State Legislatures by articles 245 and 246 read with the relevant entries in the Lists in the Seventh Schedule to the Constitution or are an integral part of the provisions defining prescribing and conferring the legislative competency itself and b whether the doc trine of eclipse is applicable only to pre Constitution laws or can apply also to any post Constitution law which falls under article 132 of the Constitution As however our learned Brother has thought fit to embark upon a discussion of these questions we desire to guard ourselves against being understood as 13 accepting or acquiescing in the conclusion that the doctrine of eclipse cannot apply to any post Constitution law A post Constitution law may infringe either a fundamental right conferred on citizens only or a fundamental right conferred on any person citizen or non citizen In the first case the law will not stand in the way of the exercise by the citizens of that fundamental right and therefore will not have any operation on the rights of the citizens but it will be quite effective as regards non citizens In such a case the fundamental right will qua the citizens throw a shadow on the law which will nevertheless be on the Statute Book as a valid law binding on non citizens and if the shadow is removed by a constitutional amendment the law will immediately be applicable even to the citizens without being re enacted The decision in John M Wilkerson vs Charles A Rahrer 1 cited by our learned Brother is squarely in point In other words the doctrine of eclipse as explained by this Court in Bhikaji Narain Dhakras vs The State of Madhya Pradesh 2 also applies to a post Constitution law of this kind Whether a post Constitution law of the other kind namely which infringes a fundamental right guaranteed to all persons irrespective of whether they are citizens or not and which therefore can have no operation at all when it is enacted is to be regarded as a still born law as if it had not been enacted at all and therefore not subject to the doctrine of eclipse is a matter which may be open to discussion On the findings arrived at in this case however a discussion of these aspects of the matter do not call for a considered opinion and we reserve our right to deal with the same if and when it becomes actually necessary to do so SUBBA RAO J These twenty five appeals are by certificate under articles 132 and 133 of the Constitution granted by the High Court of Judicature at Allahabad and raise the question of the validity of the scheme of nationalization of State Transport Service formulated by the State Government and the consequential orders made by it 1 2 1955 2 SCR 589 14 The said appeals arise out Writ Petitions filed by he appellants in the Allahabad High Court challenging the validity of the U P Transport Services Development Act of 1955 being U P Act No IX of 1955 hereinafter referred to as the U P Act and the notifications issued thereunder All the appeals were consolidated by order of the High Court The appellants have been carrying on business as stage carriage operators for a considerable number of years on different routes in Uttar Pradesh under valid permits issued under the along with buses owned by Government The U P Legislature after obtaining the assent of the President on April 23 1955 passed the U P Act and duly published it on April 24 1955 Under section 3 of the U P Act the Government issued a notification dated May 17 1955 whereunder it was directed that the aforesaid routes along with others should be exclucively served by the stage carriages of the Government and the private stage carriages should be excluded from those routes On November 12 1955 the State Government published the notification under section 4 of the U P Act formulating the scheme for the aforesaid routes among others The appellants received notices under section 5 of the U P Act requiring them to file objections if any to the said scheme and after the objections were received they were informed that they would be heard by a Board on January 2 1956 On that date the objections filed by the operators other than those of the Agra region were heard and the inquiry in regard to the Agra region was adjourned to January 7 1956 It appears that the operators of the Agra region did not appear on the 7th The notification issued under section 8 of the U P Act was pub lished in the U P Gazette on June 23 1956 and on June 25 1956 the Secretary to the Regional Transport Authority Agra sent an order purported to have been issued by the Transport Commissioner to the operators of the Agra region prohibiting them from plying their stage carriages on the routes and also informing them that their permits would be transferred to other routes On July 7 1956 a notice was sent to 15 filed Writ Petitions in the Allahabad High Court challenging the validity of the U P Act and the notifications issued thereunder The facts in Civil Appeal No 429 of 1958 are slightly different from those in other appeals and they may be stated The appellant s application for renewal of his permanent permit was rejected in 1953 but on appeal the State Transport Authority Tribunal allowed his appeal on September 61956 and directed his permit to be renewed for three years beginning from November 1 1953 Pursuant to the order of the Tribunal the appellant s pert nit was renewed with effect from November 1 1953 and it was made valid up to October 31 1956 The scheme of nationalisation was initiated and finally approved between the date of the rejection of the appellant s application for renewal and the date when his appeal was allowed The appellant applied on October 11 1956 for the renewal of his permit and he was informed by the Road Transport Authority Allahabad that no action on his application under reference was possible The appellant s contention among others was that the entire proceedings were taken behind his back and therefore the scheme was not binding on him The appellants in thirteen appeals namely Civil Appeals Nos 387 to 389 391 to 394 396 to 399 and 401 and 429 were offered alternative routes Though they tentatively accepted the offer presumably on the ground that it was the lesser of the two evils in fact they obtained stay as an interim arrangement and continued to operate on the old routes The appellants filed applications for permission to urge new grounds in the appeals which were not taken before the High Court The said grounds read i That by reason of the coming into operation of the Motor Vehicles Amendment Act No 100 of 1956 passed by Parliament and published in the Gazette of India Extraordinary dated 31st December 1956 the impugned U P Act No IX of 1955 has become void ii That by reason of Article 254 of the Constitution of India the said impugned Act No IX of 1955 16 being repugnant and inconsistent with the Central Act No 100 of 1956 has become void since the coming into operation of the aforesaid Act No 100 of 1956 The judgment of the Allahabad High Court which is the subject matter of these appeals was delivered on December 19 1956 The Amending Act of 1956 was published on December 31 1956 It is therefore manifest that the appellants could not have raised the aforesaid grounds before the High Court Further the grounds raise only a pure question of law not dependent upon the elucidation of any further facts In the circumstances we thought it to be a fit case for allowing the appellants to raise the new grounds and we accordingly gave them the permission Mr M K Nambiar appearing for some of the appellants raised before us the following points i The Motor Vehicles Amendment Act 100 of 1956 passed by the Parliament is wholly repugnant to the provisions of the U P Act and therefore the latter became void under the provisions of Article 2541 of the Constitution with the result that at the present time there is no valid law whereunder the Government can prohibit the appellants from exercising their fundamental right under the Constitution namely to carry on their business of motor transport ii the scheme framed under the Act being one made to operate in future and from day to day is an instrument within the meaning of section 68B of the Amending Act and therefore the provisions of the Amending Act would prevail over those of the scheme and after the Amending Act came into force it would have no operative force and iii even if the U P Act was valid and continued to be in force in regard to the scheme framed thereunder it would offend the provisions of article 31 of the Constitution as it was before the Constitution Fourth Amendment Act 1955 as though the State had acquired the appellant s interest in a commercial undertaking no compensation for the said interest was given as it should be under the said Article The other learned Counsel who followed Mr Nambiar except Mr Naunit Lal adopted his argument Mr Naunit Lal in addition to the argument 17 advanced by Mr Nambiar in regard to the first point based his contention on the proviso to article 2542 of the Constitution rather than on article 2541 He contended that by reason of the Amending Act the U P Act was repealed in toto and because of section 68B of the Amending Act the operation of the provisions of the General Clauses Act was excluded In addition he contended that in Appeal No 429 of 1958 the scheme in so far as it affected the appellant s route was bad inasmuch as no notice was given to him before the scheme was approved We shall proceed to consider the argument advanced by Mr Nambiar in the order adopted by him but before doing so it would be convenient to dispose of the point raised by the learned Advocate General for it goes to the root of the matter and if it is decided in his favour other questions do not fall for consideration The question raised by the learned Advocate General may be posed thus whether the amendment of the Constitution removing a constitutional limitation on a legislature to make a particular law has the effect of validating the Act made by it when its power was subject to that limitation The present case illustrates the problem presented by the said question The U P Legislature passed the U P Act on April 24 1955 whereunder the State Government was authorized to frame a scheme of nationalization of motor transport After following the procedure prescribed therein the State Government finally published the scheme on June 23 1956 The Constitution Fourth Amendment Act 1955 received the assent of the President on April 27 1955 The State Government framed the scheme under the U P Act after the passing of the Constitution Fourth Amendment Act 1955 Under the said Amendment Act el 2 of article 31 has been amended and cl 2A has been inserted The effect of the amendment is that unless the law provides for the transfer of ownership or right to possession of any property to the State or to a Corporation owned or controlled by the State it shall not be deemed to provide for the compulsory acquisition or 3 18 requisition of property within the meaning of cl 2 of that Article and therefore where there is no such transfer the condition imposed by cl 2 viz that the law Should fix the amount of compensation or specify the principles on which and the manner in which the compensation is to be determined and given is not attracted If the amendment applies to the U P Act as there is no transfer of property to the State no question of compensation arises On the other hand if the unamended Article governs the U P Act the question of compensation will be an important factor in deciding its validity The answer to the problem so presented depends upon the legal effect of a consti tutional limitation of the legislative power on the law made in derogation of that limitation A distinction is sought to be made by the learned Advocate General between the law made in excess of the power conferred on a legislature under the relevant List in the Seventh Schedule and that made in violation of the provisions of Part III of the Constitution The former it is suggested goes to the root of the legislative power whereas the latter it is said operates as a check on that power with the result that the law so made is unenforceable and as soon as the check is removed the law is resuscitated and becomes operative from the date the check is removed by the constitutional amendment Mr Nambiar puts before us the following two propositions in support of his contention that the law so made in either contingency is void ab initio i the paramountcy of fundamental rights over all legislative powers in respect of all the Lists in the Seventh Schedule to the Constitution is secured by the double process of the prohibition laid by article 132 and the restrictions imposed by article 245 unlike the mere implied prohibition implicit in the division of power under article 246 and ii where the provisions of an enactment passed by a legislature after January 26 1950 in whole or in part subject to the doctrine of severability are in conflict with the provisions of Part III the statute in whole or in part is void ab initio This question was subjected to judicial scrutiny by this 19 Court but before we consider the relevant authorities it would be convenient to test its validity on first principles The relevant Articles of the Constitution read as follows Article 245 1Subject to the provision of this Constitution Parliament may make laws for the whole or any part of the territory Of India and the Legislature of a State may make laws for the whole or any part of the State Article 246 1 Notwithstanding anything in clauses 2 and 3 Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule in this Constitution referred to as the Union List 2 Notwithstanding anything in clause 3 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 in the Seventh Schedule in this Constitution referred to as the Concurrent List 3 Subject to clauses 1 and 2 the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule in this Constitution referred to as the State List 4 Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List Article 13 1 All laws in force in the territory of India immediately before the commencement of this Constitution in so far as they are inconsistent with the provisions of this Part shall to the extent of such inconsistency be void 2 The State shall Dot make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall to the extent of the contravention be void 20 Article 31 Before the Constitution Fourth Amendment Act 1955 1 No person shall be deprived of his property save by authority of law 2 No property movable or immovable including any interest in or in any company owning any commercial or industrial undertaking shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation or specifies the principles on which and the manner in which the compensation is to be determined and given The combined effect of the said provisions may be stated thus Parliament and the Legislatures of States have power to make laws in respect of any of the matters enumerated in the relevant lists in the Seventh Schedule and that power to make laws is subject to the provisions of the Constitution including article 13 ie the power is made subject to the limitations imposed by Part III of the Constitution The general power to that extent is limited A Legislature therefore has no power to make any law in derogation of the injunction contained in article 13 Article 131 deals with lawsin force in the territory of India before the commencement of the Constitution and such laws in so far as they are inconsistent with the provisions of Part III shall to the extent of such inconsistency be void The clause therefore recognizes the validity of the pre Constitution laws and only declares that the said laws would be void thereafter to the extent of their inconsistency with Part III whereas cl 2 of that article imposes a prohibition on the State making laws taking away or abridging the rights conferred by Part III and declares that laws made in contravention of this clause shall to the extent of the contravention be void There is a clear distinction between the two clauses Under el 1 a pre Constitution law subsists except to the extent of its inconsistency with the provisions of Part III whereas no post Constitution law 21 can be made contravening the provisions of Part III and therefore the law to that extent though made is a nullity from its inception If this clear distinction is borne in mind much of the cloud raised is dispelled When cl 2 of article 13 says in clear and unambiguous terms that no State shall make any law which takes away or abridges the rights conferred by Part III it will not avail the State to contend either that the clause does not embody a curtailment of the power to legislate or that it imposes only a check but not a prohibition A constitutional prohibition against a State making certain laws cannot be whittled down by analogy or by drawing inspiration from decisions on the provisions of other Constitutions nor can we appreciate the argument that the words any law in the second line of article 132 posits the survival of the law made in the teeth of such prohibition It is said that a law can come into existence only when it is made and therefore any law made in contravention of that clause presupposes that the law made is not a nullity This argument may be subtle but is not sound The words any law in that clause can only mean an Act passed or made factually notwithstanding the prohibition The result of such contravention is stated in that clause A plain reading of the clause indicates without any reasonable doubt that the prohibition goes to the root of the matter and limits the State s power to make law the law made in spite of the prohibition is a still born law Cooley in his book Constitutional Limitations Eighth Edition Volume I states at page 379 From what examination has been given to this subject it appears that whether a statute is constitutional or not is always a question of power that is a question whether the legislature in the particular case in respect to the subject matter of the act the manner in which its object is to be accomplished and the mode of enacting it has kept within the constitutional limits and observed the constitutional conditions The Judicial Committee in The Queen vs Burah 1 observed at page 193 as under 1 1878 LR 5 I A 178 22 The established courts of Justice when a question arises whether the prescribed limits have been exceeded must of necessity determine that question and the only way in which they can properly do so is by looking to the terms of the instrument by which affirmatively the legislative powers were created and by which negatively they are restricted The Judicial Committee again in Attorney General for Ontario vs Attorney General for Canada 1 crisply stated the legal position at page 583 as follows if the text is explicit the text is con clusive alike in what it directs and what it forbids The same idea is lucidly expressed by Mukherjea J as he then was in K C Gajapati Narayan Deo vs The State of Orissa 2 It is stated at page 11 as follows If the Constitution of a State distributes the legislative powers amongst different bodies which have to act within their respective spheres marked out by specific legislative entries or if there are limitations on the legislative authority in the shape of fundamental rights questions do arise as to whether the legislature in a particular case has or has not in respect to the subject_matter of the statute or in the method of enacting it transgressed the limits of its constitutional powers The learned Judge in the aforesaid passage clearly accepts the doctrine that both the transgression of the ambit of the entry or of the limitation provided by the fundamental rights are equally transgressions of the limits of the State s constitutional powers It is therefore manifest that in the construction of the constitutional provisions dealing with the powers of the legislature a distinction cannot be made between an affirmative provision I and a negative provision for both are limitations on the power The Constitution affirmatively confers a power on the legislature to make laws within the ambit of the relevant entries in the lists and negatively prohibits it from making laws infringing the fundamental rights It 1 2 23 goes further and makes the legislative power subject to the prohibition under article 132 Apparent wide power is therefore reduced to the extent of the prohibition If articles 245 and 132 define the ambit of the power to legislate what is the effect of a law made in excess of that power The American Law gives a direct and definite answer to this question Cooley in his Constitutional Limitations Eighth Edition Volume I at page 382 under the heading Consequences if a statute is void says When a statute is adjudged to be unconstitutional it is as if it had never been And what is true of an act void in toto is true also as to any part of an act which is found to be unconstitutional and which consequently is to be regarded as having never at any time been possessed of any legal force In Rottschaefer on Constitutional Law much to the same effect is stated at page 34 The legal status of a legislative provision in so far as its application involves violation of constitutional provisions must however be determined in the light of the theory on which Courts ignore it as law in the decision of cases in which its application produces unconstitutional results That theory implies that the legislative provisions never had legal force as applied to cases within that clause In Willis on Constitutional Law at page 89 A judicial declaration of the unconstitutionality of a statute neither annuls nor repeals the statute but has the effect of ignoring or disregarding it so far as the determination of the rights of private parties is concerned The Courts generally say that the effect of an unconstitutional statute is nothing It is as though it had never been passed Willoughby on Constitution of the United States Second Edition Volume I page 10 The Court does not annul or repeal the statute if it finds it in conflict with the Constitution It simply refuses to recognize it and determines the rights of 24 the parties just as if such statute had no application The validity of a statute is to be tested by the constitutional power of a legislature at the time of its enactment by that legislature and if thus tested it is beyond the legislative power it is not rendered valid without re enactment if later by constitutional amendment the necessary legislative power is granted I An after acquired power cannot ex proprio vigore validate a statute void When enacted However it has been held that where an act is within the general legislative power of the enacting body but is rendered unconstitutional by reason of some adventitious circumstance as for example when a State legislature is prevented from regulating a matter by reason of the fact that the Federal Congress has already legislated upon that matter or by reason of its silence is to be construed as indicating that there should be no regulation the act does not need to be re enacted in order to be enforced if this cause of its unconstitutionality is removed For the former proposition the decision in Newberry vs United States 1 and for the latter proposition the decision in John M Wilkerson vs Charles A Rahrer 2 are cited In Newberry s Case the validity of the Federal Corrupt Practices Act of 1910 as amended by the Act of 1911 fixing the maximum sum which a candidate might spend to procure his nomination at a primary election or convention was challenged At the time of the enactment the Congress had no power to make that law but subsequently by adoption of the 17th Amendment it acquired the said power The question was whether an after acquired power could validate a statute which was void when enacted Mr justice McReynolds delivering the opinion of the court states the principle at page 920 Moreover the criminal statute now relied upon ante dates the 17th Amendment and must be tested by powers possessed at time of its enactment An 1 2 25 after acquired power cannot ex proprio vigore validate a statute void when enacted In Wilkerson s Case 1 the facts were that in June 1890 the petitioner a citizen of the United States and an agent of Maynard Hopkins Co received from his principal intoxicating liquor in packages The packages were shipped from the State of Missouri to various points in the State of Kansas and other States On August 9 1890 the petitioner offered for sale and sold two packages in the State of Kansas The packages sold were a portion of the liquor shipped by Maynard Hopkins Co It was sold in the same packages in which it was received The petitioner was prosecuted for violating the Prohibitory Liquor Law of the State of Kansas for under the said law any person or persons who shall manufacture sell or barter any in toxicating liquors shall be guilty of a misdemeanor On August 8 1890 an Act of Congress was passed to the effect that intoxicating liquors transported into any State should upon arrival in such State be subject to the operation and effect of the laws of such State It will be seen from the aforesaid facts that at the time the State Laws were made they were valid but they did not operate upon packages of liquors imported into the Kansas State in the course of interstate commerce for the regulation of inter State commerce was within the powers of the Congress and that be fore the two sales in the Kansas State the Congress made an Act making intoxicating liquors transported into a State subject to the laws of that State with the result that from that date the State Laws operated on the liquors so transported Under those circumstances the Supreme Court of the United States held It was not necessary after the passage of the Act of Congress of August 8 1890 to re enact the Law of Kansas of 1899 forbidding the sale of intoxicating liquors in that State in order to make such State Law operative on the sale of imported liquors The reason for the decision is found at page 578 1 4 26 This is not the case of a law enacted in the unauthorized exercise of a power exclusively confided to Congress but of a law which it was competent for the State to pass but which could not operate upon articles occupying a certain situation until the passage of the Act of Congress That Act in terms removed the obstacle and we perceive no adequate ground for adjudging that a re enactment of the State Law was required before it could have the effect upon imported which it had always had upon domestic property A reference to these decisions brings out in bold relief the distinction between the two classes of cases referred to therein It will be seen from the two decisions that in the former the Act was Void from its inception and in the latter it was valid when made but it could not operate on certain articles imported in the course of inter State trade On that distinction is based the principle that an after acquired power cannot ex proprio vigore validate a statute in one case and in the other a law validly made would take effect when the obstruction is removed The same principle is enunciated in Carter vs Egg and Egg Pulp Marketing Board 1 Under section 109 of the Australian Constitution when a law of a State is inconsistent with a law of the Commonwealth the latter shall prevail and the former shall to the extent of the inconsistency be invalid Commenting on that section Latham C J observed at page 573 This section applies only in cases Where apart from the operation of the section both the Commonwealth and the State Laws which are in question would be valid If either is invalid ab initio by reason of lack of power no question can arise under the section The word invalid in this section cannot be interpreted as meaning that a State law which is affected by the section becomes ultra vires in whole or in part If the Commonwealth law were repealed the State law would again become operative We shall now proceed to consider the decisions of this Court to ascertain whether the said principles are 1 27 accepted or departed from The earliest case is Keshavan Madhava Menon vs The State of Bombay 1 There the question was whether a prosecution launched under the Indian Press Emergency Powers Act 1931 before the Constitution could be continued after the Constitution was passed The objection taken was that the said law was inconsistent with fundamental rights and therefore was void In the context of the question raised it became necessary for the Court to consider the impact of article 131 on the laws made before the Constitution The Court by a majority held that article 131 of the Indian Constitution did not make existing laws which were inconsistent with fundamental rights void ab initio but only rendered such laws ineffectual and void with respect to the exercise of the fundamental rights on and after the date of the commencement of the Constitution and that it had no retrospective effect Das J as he then was observed at page 233 It will be noticed that all that this clause declares is that all existing laws in so far as they are inconsistent with the provisions of Part III shall to the extent of such inconsistency be void Every statute is prima facie prospective unless it is expressly or by necessary implications made to have retrospective operation At page 234 the learned Judge proceeded to state They are not void for all purposes but they are void only to the extent they come into conflict with the fundamental rights In other words on and after the commencement of the Constitution no existing law will be permitted to stand in the way of the exercise of any of the fundamental rights Therefore the voidness of the existing law is limited to the future exercise of the fundamental rights Such laws exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the Constitution At page 235 the same idea is put in different words thus Article 131 only has the effect of 1 28 nullifying or rendering all inconsistent existing laws ineffectual or nugatory and devoid of any legal force or binding effect only with respect to the exercise Of fundamental rights on and after the date of the commencement of the Constitution At page 236 the learned Judge concludes So far as the past acts are concerned the law exists notwithstanding that it does not exist with respect to the future exercise of fundamental rights Mahajan J as he then was who delivered a separate judgment put the same view in different phraseology at page 251 The effect of Article 131 is only prospective and it operates in respect to the freedoms which are infringed by the State subsequent to the coming into force of the Constitution but the past acts of a person which came within the mischief of the law then in force are Dot affected by Part III of the Constitution The learned Judge when American law was pressed on him in support of the contention that even the pre Constitution law was void observed thus at page 256 It is obvious that if a statute has been enacted and is repugnant to the Constitution the statute is void since its very birth and anything done under it is also void and illegal The courts in America have followed the logical result of this rule and even convictions made under such an unconstitutional statute have been set aside by issuing appropriate writs If a statute is void from its very birth then anything done under it whether closed completed or inchoate will be wholly illegal and relief in one shape or another has to be given to the person affected by such an unconstitutional law This rule however is not applicable in regard to laws which were existing and were constitutional according to the Government of India Act 1935 Of course if any law is made after the 25th January 1950 which is repugnant to the Constitution then the same rule will have to be followed by courts in India as is followed in America and even convictions made under such an unconstitutional law 29 will have to be set aside by resort to exercise of powers given to this court by the Constitution Mukherjea J as he then was in Behram Khurshed Pesikaka vs The State of Bombay 1 says at page 652 much to the same effect We think that it is not a correct proposition that constitutional provisions in Part 11I of our Constitution merely operate as a check on the exercise of legislative power It is axiomatic that when the lawmaking power of a State is restricted by a written fundamental law then any law enacted and opposed to the fundamental law is in excess of the legislative authority and is thus a nullity Both these declarations of unconstitutionality go to the root of the power itself and there is no real distinction between them They represent but two aspects of want of legislative power The legislative power of Parliament and the State Legislatures as conferred by articles 245 and 246 of the Constitution stands curtailed by the fundamental rights chapter of Constitution A mere reference to the provisions of article 132 and articles 245 and 246 is sufficient to indicate that there is no competency in Parliament or a State Legislature to make a law which comes into clash with Part 111 of the Constitution after the coming into force of the Constitution The effect of the decision may be stated thus The learned judges did not finally decide the effect of article 132 of the Constitution on post Constitution laws for the simple reason that the impugned law was a pre Constitution one article 131 was held to be prospective in operation and therefore did not affect the preexisting laws in respect of things done prior to the Constitution As regards the post Constitution period article 131 nullified or rendered all inconsistent existing laws ineffectual nugatory or devoid of any legal force or binding effect with respect to the exercise of the fundamental rights So far as the past acts were concerned the law existed notwithstanding that it did not exist with respect to the future exercise of the said rights As regards the pre Constitution laws 1 30 this decision contains the seed of the doctrine of eclipse developed by my Lord the Chief Justice in Bhikaji Narain Dhakras vs The State of Madhya Pradesh 1 where it was held that as the pre Constitution law was validly made it existed for certain purposes even during the post Constitution period This principle has no application to post Constitution laws infringing the fundamental rights as they would be ab initio void in toto or to the extent of their contravention of the fundamental rights The observations of the learned judges made in the decision cited above bring out the distinction between pre and post Constitution laws which are repugnant to the Constitution and the impact of article 13 on the said laws In Behram Khurshed Pesikaka s Case2 this Court considered the legal effect of the declaration made in the case of The State of Bombay vs F N Balsara 3 that clause b of section 13 of the Bombay Prohibition Act Bom XXV of 1949 is void under article 131 of the Constitution in so far as it affects the consumption or use of liquid medicinal or toilet preparations containing alcohol and held that it was to render part of section 13b of the Bombay Prohibition Act inoperative ineffective and ineffectual and thus unenforceable Bhagwati J at page 620 cited all the relevant passages from textbooks on Constitutional Law and presumably accepted the view laid down therein to the effect that an unconstitutional Act in legal contemplation is as though it had never been passed Jagannadhadas J at page 629 noticed the distinction between the scope of cls 1 and 2 of article 13 of the Constitution After citing a passage from Willoughby on Constitution of the United States the learned Judge observed This and other similar passages from other treatises relate however to cases where the entire legislation is unconstitutional from the very commencement of the Act a situation which falls within the scope of article 132 of our Constitution They do not directly cover a situation which falls within 1 2 31951 SC R 682 31 article 131 The question is what is the effect of article 131 on a pre existing valid statute which in respect of a severable part thereof violates fundamental rights Under article 131 such part is void from the date of the commencement of the Constitution while the other part continues to be valid Two views of the result brought about by this voidness are possible viz 1 the said severable part becomes unenforceable while it remains part of the Act or 2 the said part goes out of the Act and the Act stands appropriately amended pro tanto The first is the view which appears to have been adopted by my learned brother Justice Venkatarama Aiyar on the basis of certain American decisions I feel inclined to agree with it This aspect however was not fully presented by either side and was only suggested from the Bench in the course of arguments We have not had the benefit of all the relevant material being placed before us by the learned advocates on either side The second view was the basis of the arguments before us It is therefore necessary and desirable to deal with this case on that assumption This passage shows that his opinion though a tentative one was that the severable part became unenforceable while it remained part of the Act But the learned Judge made an incidental observation that the American view applied to cases that fall within the scope of article 132 of the Constitution ie the entire legislation would be unconstitutional from the very commencement of the Act Venkatarama Aiyar J founded his decision on a broader basis At page 639 the learned Judge observed Another point of distinction noticed by American jurists between unconstitutionality arising by reason of lack of legislative competence and that arising by reason of a check imposed on a competent Legislature may also be mentioned While a statute passed by a Legislature which had no competence cannot acquire validity when the Legislature subsequently acquires competence a statute which was within the competence of the Legislature at the time of its enactment but which infringes a constitutional 32 prohibition could be enforced Proprio vigore when once the prohibition is removed On the basis of this distinction the learned Judge held that article 131 of the Constitution only placed a check on a competent legislature and therefore the word void in that article meant relatively void ie the law only condemned the Act as wrong to individuals and refused to enforce it against them In support of the said conclusion the learned Judge cited a passage from Willoughby on the Constitution of the United States A comparison of the passage cited with that in the text book discloses that one important sentence which makes all the difference to the legal position is omitted by mistake and that sentence is An after acquired power cannot ex proprio vigore validate a statute void when enacted The second paragraph in the extract on which the learned Judge placed reliance and also the decision relied upon by him did not support his conclusion As already stated the decision and the passage dealt not with a case where the State had no power to make the law but with a case where the law lay dormant till a law of the Federal Congress removed the conflict between the State Law and the Federal Law That case may by analogy be applied to article 131 in respect of laws validly made before the Constitution but cannot be invoked in the case of a statute which was void when enacted By a subsequent order this Court granted the review and reopened the case to enable the Bench to obtain the opinion of a larger Bench on the Constitutional points raised in the judgment delivered by the learned Judges That matter came up before a Con stitutional Bench and Mahajan C J who was a party to the decision in Keshavan Madhava Menon s Case 1 explained the majority view therein on the meaning of the word void in article 131 thus at page 651 The majority however held that the word void in article 131 so far as existing laws Were concerned could not be held to obliterate them from the statute book and could not make such laws void altogether because in its opinion article 13 had not been given any 1 33 retrospective effect The majority however held that after the coming into force of the Constitution the effect of article 131 on such repugnant laws was that it nullified them and made them ineffectual and nugatory and devoid of any legal force or binding effect It was further pointed out in one of the judgments representing the majority view that the American rule that if a statute is repugnant to the Constitution the statute is void from its birth has no application to cases concerning obligations incurred or rights accrued in accordance with an existing law that was constitutional in its inception but that if any law was made after the 26th January 1950 which was repugnant to the Constitution then the same rule shall have to be followed in India as followed in America The result therefore of this pronouncement is that the part of the section of an existing law which is unconstitutional is not law and is null and void For determining the rights and obligations of citizens the part declared void should be notionally taken to be obliterated from the section for all intents and purposes though it may remain written on the statute book and be a good law when a question arises for determination of rights and obligations incurred prior to 26th January 1950 and also for the determination of rights of persons who have not been given fundamental rights by the Constitution Thus in this situation there is no scope for introducing terms like relatively void coined by American Judges in construing a Constitution which is not drawn up in similar language and the implications of which are not quite familiar in this country The learned Judge as we have already pointed out rejected the distinction made by Venkatarama Aiyar J between lack of legislative power and the abridgment of the fundamental rights Though that question did not directly arise the learned Judge expressed his view on the scope of article 132 at page 653 thus The authority thus conferred by Articles 245 and 246 to make laws subjectwise in the different Legislatures is qualified by the declaration made in 5 34 article 132 That power can only be exercised subject to the prohibition contained in article 132 On the construction of article 132 there was no divergence of opinion between the majority and the minority in Keshava Madhava Menon vs The State of Bombay supra It was only on the construction of article 131 that the difference arose because it was felt that that article could not retrospectively invalidate laws which when made were constitutional according to the Constitution then in force Das J as he then was in his dissenting judgment differed from the majority on other points but does not appear to have differed from the aforesaid views expressed by Mahajan C J as regards the scope of Keshava Madhava Menon s Case on the meaning of the word void in article 131 This judgment is therefore an authority on two points and contains a weighty observation on the third i when the law making power of a State is restricted by written fundamental law then any law opposed to the fundamental law is in excess of the legislative authority and is thus a nullity ii even in the case of a statute to which article 131 applies though the law is on the statute book and be a good law when a question arises for determination of rights and obligations incurred prior to January 26 1950 the part declared void should be nationally taken to be obliterated from the section for all intents and purposes and iii on the construction of article 132 the law made in contravention of that clause is a nullity from its inception The next case is a direct one on the point and that is Sag hir Ahmad vs The State of U P 1 There the UPRoad Transport Act 11 of 1951 was passed enabling the State to run stage carriage service on a route or routes to the exclusion of others Under that Act the State Government made a declaration extending the Act to a particular area and issued a notification setting out what purported to be a scheme for the operation of the stage carriage service on certain routes At the time the said Act was passed the State had no such power to deprive a citizen of his 1 35 right to carry on his transport service But after the Act article 191 was amended by the Constitution First AmendmentAct 1951 enabling the State to carry on any trade or business either by itself or through corporations owned or controlled by the State to the exclusion of private citizens wholly or in part One of the questions raised was whether the amendment of the Constitution could be invoked to validate the earlier legislation The Court held that the Act when passed was unconstitutional and therefore it was still born and could not be vitalised by the subsequent amendment of the Constitution removing the constitutional objections but must be re enacted At page 728 Mukherjea J as he then was who delivered the judgment of the Court has given the reasons for the said view As Professor Cooley has stated in his work on Constitutional Limitations Vol 1 page 304 note a statute void for unconstitutionality is dead and cannot be vitalised by a subsequent amendment of the Constitution removing the constitutional objection but must be re enacted We think that this is sound law and our conclusion is that the legislation in question which violates the fundamental right of the appellants under article 191 g of the Constitution and is not shown to be protected by clause 6 of the article as it stood at the time of the enactment must be held to be void under article 132 of the Constitution This is a direct authority on the point without a dis senting voice and we are bound by it The decision given in Bhikaji Narain s Case 1 is strongly relied upon by the learned Advocate General in support of his contention Shortly stated the facts in that case were Before the Constitution the C P Berar Motor Vehicles Amendment Act 1947 C P III of 1948 amended the Central Act IV of 1939 and conferred extensive powers on the Provincial Government including the power to create a monopoly of the motor transport business in its favour to the exclusion of all motor transport operators It was contended by the affected parties that by reason of article 131 of the Constitution 1 36 the Act became void On behalf of the State it was argued that the Constitution First Amendment Act 1951 and the Constitution Fourth Amendment Act 1955 had the effect of removing the inconsistency and the Amendment Act III of 1948 became operative again This Court unanimously accepted the contention of the State This decision is one given on a construction of article 131 of the Constitution and it is no authority on the construction and scope of article 132 of the Constitution The reason for the decision is found in the following passages in the judgment at page 598 on and after the commencement of the Constitution the existing law as a result of its becoming inconsistent with the provisions of article 191g read with clause 6 as it then stood could not be permitted to stand in the way of the exercise of that fundamental right Article 131 by reason of its language cannot be read as having obliterated the entire operation of the inconsistent law or having wiped it out altogether from the statute book In short article 131 had the effect of nullifying or rendering the existing law which had become inconsistent with article 191 g read with clause 6 as it then stood ineffectual nugatory and devoid of any legal force or binding effect only with respect to the exercise of the fundamental right on and after the date of the commencement of the Constitution Therefore between the 26th January 1950 and 18th June 1951 the impugned Act could not stand in the way of the exercise of the fundamental right of a citizen under Article 191g The true position is that the impugned law became as it were eclipsed for the time being by the fundamental right The American authorities refer only to post Constitution laws which were inconsistent with the provisions of the Constitution Such laws never came to life but were still born as it were Such laws were not dead for all purposes They existed for the purposes of pre Constitution rights and liabilities and they remained operative even after the Constitution as against non citizens It is only as 37 against the citizens that they remained in a dormant or moribund condition The aforesaid passages are only the restatement of the law as enunciated in Keshavan Madhava Menon s a Case1 reaffirmed in Pesikaka s Case 2 and an extension of the same to meet a different situation A pre Constitution law stating in the words of Das J as he then was exists notwithstanding that it does not exist with respect to the future exercise of the fundamental rights That principle has been extended in this decision by invoking the doctrine of eclipse As the law existed on the statute book to support pre Constitution acts the Court held that the said law was eclipsed for the time being by one or other of the fundamental rights and when the shadow was removed by the amendment of the Constitution the impugned Act became free from all blemish or infirmity The Legislature was competent to make the law with which Pesikaka s Case 2 was concerned at the time it was made It was not a case of want of legislative power at the time the Act was passed but one where in the case of a valid law supervening circumstances cast a cloud To the other class of cases to which article 13 2 will apply the views expressed by the American authorities by Mahajan J as he then was in Pesikaka s Case and by Mukherjea J as he then was in Saghir Ahmad s Case 3 directly apply To the facts in Bhikaji Narain s Case 4 the principle laid down in Keshavan Madhava Menon s Case is attracted But it is said that the observations of the learned Judges are wide enough to cover the case falling under article 13 2 of the Constitution and further that a logical extension of the principle laid down would take in also a case falling under article 132 The first contention is based upon the following passage But apart from this distinction between pre Constitution and post Constitution laws on which however we need not rest our decision it must be held that these American authorities could have no application to our Constitution All laws existing or future 1 2 3 4 38 which are inconsistent with the provisions of Part III of our Constitution are by express provisions of article 13 rendered void to the extent of such inconsistency Such laws were not dead for all purposes They existed for the purposes of pre Constitution rights and liabilities and they remained operative even after the Constitution as against non citizens It is only as against the citizens that they remained in a dormant or moribund condition The first part of the said observation states nothing more than the plain import of the provisions of article 131 and 2 namely that they render laws void only I to the extent of such inconsistency The second part of the observation directly applies only to a case covered by article 131 for the learned Judges say that the laws exist for the purposes of pre Constitution rights and liabilities and they remain operative even after the Constitution as against non citizens The said observation could not obviously apply to post Constitution laws Even so it is said that by a parity of reasoning the post Constitution laws are also void to the extent of their repugnancy and therefore the law in respect of non citizens will be oil the statute book and by the application of the doctrine of eclipse the same result should flow in its case also There is some plausibility in this argument but it ignores one vital principle viz the existence or the non existence of legislative power or competency at the time the law is made governs the situation There is no scope for applying the doctrine of eclipse to a case where the law is void ab initio in whole or in part That apart in the present case we do not base our decision on that article 311 infringed by the Act applies to all persons irrespective of whether they are citizens or non citizens and therefore the entire law was void ab initio That judgment therefore does not support the respondent as it has bearing only on the construction of article 131 of the Constitution In Ram Chandra Palai vs State of Orissa 1 this Court followed the decision in Bhikaji Narain s Case 2 in the case of a pre Constitution Act In Pannalal 1 2 39 Binjraj vs Union of India 1 Bhagwati J quoted with approval the extract from Keshavan Madhava Menon s Case 2 wherein it was held that article 131 has only the effect of nullifying or rendering all inconsistent existing laws ineffectual or nugatory or devoid of any legal force or binding effect only with respect to the fundamental rights on or after the commencement of the Constitution The learned Advocate General relied upon certain decisions in support of his contention that the word void in articles 131 and 13 2 means only unenforceable against persons claiming fundamental rights and the law continues to be in the statute book irrespective of the fact that it was made in infringement of the fundamental rights The observations of Mukherjea J as he then was in Chiranjit Lal Chowdhuri vs The Union of India 3 are relied on and they are Article 32 as its provisions show is not directly concerned with the determination of constitutional validity of particular legislative enactments What it aims at is the enforcing of fundamental rights guaranteed by the Constitution no matter whether the necessity for such enforcement arises out of an action of the executive or of the legislature The rights that could be enforced under article 32 must ordinarily be the rights of the petitioner himself who complains of infraction of such rights and approaches the court for relief He also relies upon the decision of Das J as he then was in The State of Madras vs Srimathi ChamPakam Dorairajan 4 wherein the learned Judge states thus at page 531 The directive principles of the State Policy which by article 37 are expressly made unenforceable by a Court cannot override the provisions found in Part III which notwithstanding other provisions are expressly made enforceable by appropriate Writs Orders or directions under article 32 Basing his argument on the aforesaid two observations 1 2 3 899 4 40 it is contended that in the case of both the directive principles and the fundamental rights it must be held that the infringement of either does not invalidate the law but only makes the law unenforceable This argument if we may say so mixes up the Constitutional invalidity of a statute with the procedure to be followed to enforce the fundamental rights of an individual The Constitutional validity of a statute depends upon the existence of legislative power in the State and the right of a person to approach the Supreme Court depends upon his possessing the fundamental right ie he cannot apply for the enforcement of his right unless it is infringed by any law The cases already considered supra clearly establish that a law whether pre Constitution or post Constitution would be void and nugatory in so far as it infringed the fundamental rights We do not see any relevancy in the reference to the directive principles for the legislative power of a State is only guided by the directive principles of State Policy The directions even if disobeyed by the State cannot affect the legislative power of the State as they are only directory in scope and operation The result of the aforesaid discussion may be summarized in the following propositions i whether the Constitution affirmatively confers power on the legislature to make laws subject wise or negatively prohibits it from infringing any fundamental right they represent only two aspects of want of legislative power ii the Constitution in express terms makes the power of a legislature to make laws in regard to the entries in the Lists of the Seventh Schedule subject to the other provisions of the Constitution and thereby circum cribes or reduces the said power by the limitations laid down in Part III of the Constitution iii it follows from the premises that a law made in derogation or in excess of that power would be ab initio void wholly or to the extent of the contravention as the case may be and iv the doctrine of eclipse can be invoked only in the case of a law valid when made but a shadow is cast on it by supervening constitutional inconsistency orsupervening existing statutory 41 inconsistency when the shadow is removed the impugned Act is freed from all blemish or infirmity Applying the aforesaid principles to the present case we hold that the validity of the Act could not be tested on the basis of the Constitution Fourth Amendment Act 1955 but only on the terms of the relevant Articles as they existed prior to the Amendment We shall now proceed to consider the first contention of Mr Nambiar He contends that the Motor Vehicles Amendment Act 100 of 1956 passed by Parliament was wholly repugnant to the provisions of the U P Act and therefore the law became void under the provisions of article 2541 of the Constitution with the result that at the present time there is no valid law whereunder the State can prohibit the appellants exercising their fundamental right under the Constitution namely carrying on the business of motor transport Mr Naunit Lal bases his case on the proviso to article 2542 of the Constitution rather than on cl 1 thereof He contends that by reason of the Amending Act the U P Act was repealed in toto and because of Section 68B the operation of the provisions of the General Clauses Act saving things done under the repealed Act was excluded The learned Advocate General attempted to meet the double attack by pressing on us to hold that there was no repugnancy at all between the provisions of the Central Act and the U P Act and therefore the U P Act had neither become void nor was repealed by necessary implication by the Central Act We shall now examine the provisions of article 2541 and 2542 Article 254 1 If any provisions of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List then subject to the provisions of clause 2 the law made by Parliament whether passed before or after the law made by the Legislature of 6 42 such State or as the case may be the existing law shall prevail and the law made by the Legislature of the State shall to the extent of the repugnancy be void 2 Where a law made by the Legislature of a State 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 Parliament or an existing law with respect to that matter then the law so made by the Legislature of such State shall if it has been reserved for the consideration of the President and has received his as sent 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 Article 2541 lays down a general rule Clause 2 is an exception to that Article and the proviso qualifies the exception If there is repugnancy between the law made by the State and that made by Parliament with respect to one of the matters enumerated in the Concurrent List the law made by Parliament shall prevail to the extent of the repugnancy and the law made by the State shall to the extent of such repugnancy be void Under cl 2 if the Legislature of a State makes a provision repugnant to the provisions of the law made by Parliament it would prevail if the legislation of the State received the assent of the President Even in such a case Parliament may subsequently either amend vary or repeal the law made by the Legislature of a State In the present case the Uttar Pradesh Legislative Assembly after obtaining the assent of the President on April 23 1955 passed the U P Act Parliament subsequently passed the Motor Vehicles Amendment Act 100 of 1956 Therefore both the clauses of article 254 would apply to the situation The first question is whether the provisions of the Union law ie the Motor Vehicles Amendment Act 100 of 1956 are repugnant to the provisions of the U P Act and if so to 43 what extent Before we proceed to examine the provisions of the two Acts it may be convenient to notice the law pertaining to the rule of repugnancy Nicholas in his Australian Constitution 2nd Edition page 303 refers to three tests of inconsistency or repugnancy 1 There may be inconsistency in the actual terms of the 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 exhaustive code and 3 Even in the absence of intention a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject matter This Court in Ch Tika Ramji vs The State of Uttar Pradesh 1 accepted the said three rules among others as useful guides to test the question of repugnancy In Zaverbhai Amaidas vs The State of Bombay 2 this Court laid down a similar test At page 807 it is stated The principle embodied in section 1072 and Article 2542 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 Repugnancy between two statutes may thus be ascertained on the basis of the following three principles 1 Whether there is direct conflict between the two provisions 2 Whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature and 3 Whether the law made by Parliament and the law made by the State Legislature occupy the same field We shall now examine the provisions of both the Acts in some detail in order to ascertain the extent of the repugnancy between them The Scheme of 1 2 1955 1 SCR 799 44 the U P Act may be summarized thus Under the U P Act State Road Transport Service is defined to mean transport service by a public service vehicle owned by the State Government Under section 3 Where the State Government is of the opinion that it is necessary in the interests of the general public and for subserving the common good or for maintaining and developing efficient road transport system so to direct it may by notification in the official Gazette declare that the road transport services in general or any particular class of such service on any route or portion thereof as may be specified shall be run and operated exclusively by the State Government or by he state Government in conjunction with railways or be run and operated partly by the State Government and partly by others under and in accordance with the provisions of the Act After the publication of the notification under section 3 the State Government or if the State Government so directs the Transport Commissioner publishes in such manner as may be specified a scheme as to the State Road Transport Service providing for all or any of the matters enumerated in cl 2 of section 4 Clause 2 of section 4 directs that among others the scheme should provide the particulars of the routes or portions thereof over which and the date on which the State Transport Service will commence to operate the roads in regard to which private persons may be allowed to operate upon the routes that will be served by the State Government in conjunction with railways the curtailment of the routes covered by the existing permits or transfer of the permits to other route or routes Section 5 enjoins the Transport Commissioner to give notice to the permit holder requiring him to lodge a statement in writing whether he agrees to the transfer of the permit and in cl 2 thereof it is prescribed that in case he accepts the transfer he is nit entitled to any compensation but if he does not agree to the transferhis permit will be cancelled subject to his right to get compensation under the Act Under section 6 any person whose interests are affected may within 30 days from the publication of the scheme file objections 45 on it before the Transport Commissioner who shall forward them to the Board constituted under section 7 consisting of the Commissioner of a Division Secretary to Government in the Transport Department and the Transport Commissioner The Board shall consider the objections if any forwarded under section 6 and may either confirm modify or alter the scheme The Scheme so confirmed or modified or altered under section 7 shall be published in the Official Gazette Any scheme published under section 8 may at any time be cancelled or modified or altered by the State Government Section 10 gives the consequences of the publication under section 8 Section 11 provides compensation for premature cancellation of permits or curtailment of route or routes as may be determined in accordance with the principles specified in Schedule 1 In Schedule 1 compensation is payable as follows 1 For every complete month or Rupees one part of a month exceeding fifteen days of hundred the unexpired period of the permit 2 For part of a month not exceed Rupees ing fifteen days of the unexpired fifty period of a permit Provided always that the amount of compensation shall in no case be less than rupees two hundred Section 12 authorises the State Government in a case where the permit has been cancelled to purchase the motor vehicle covered by it if the holder of the permit offers to sell upon terms and conditions laid down in Schedule 11 provided the vehicle is of the type of manufacture and model notified by the State Government and provided secondly that the vehicle is mechanically in a sound condition or otherwise declared fit by the Transport Commissioner or his nominee Sections 13 to 18 provide for a State Machinery for the development of motor transport industry Sections 19 to 22 are provisions which are consequential in nature Shortly stated under the U P Act the State Government initiate a scheme providing for the nationalization of the road transport in whole or in part the objections filed by the persons affected by the scheme are heard by a 46 Board of three officers appointed by the State Government the Board after hearing the objections may confirm modify or alter the scheme the scheme so confirmed may be cancelled modified or altered by the State Government by following the same procedure adopted for framing the original scheme and the holders of permits cancelled may be given new permits if they choose to accept and if not they will be paid such compensation as prescribed under the Act Under the Amendment Act 100 of 1956 whereby a new chapter was inserted in the of 1939 the procedure prescribed is different Under section 68 A of that Act State Transport Undertaking is defined to mean any undertaking providing road transport service where such undertaking is carried on by i the Central Government or a State Government ii any Road Transport Corporation established under section 3 of the Road Transport Corporation Act 1950 iii the Delhi Transport Authority established under section 3 of the Delhi Road Transport Authority Act 1950 and iv any municipality or any corporation or company owned or controlled by the State Government Under section 68C the State Transport Undertaking initiates a scheme if it is of opinion that for the purpose of providing an efficient adequate economical and properly coordinated road transport service it is necessary in the public interest that road transport service in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State Transport Undertaking whether to the exclusion complete or partial of other persons or otherwise Section 68D says that any person affected by the Scheme may file objections to the said Scheme before the State Government the State Government may after considering the objections and after giving an opportunity to the objectors or their representatives and the representatives of the State Transport Undertaking to be heard in the matter approve or modify the Scheme Any Scheme published may at any time be cancelled or modified by the State Transport Undertaking following the same procedure for the purpose of giving effect 47 to the Scheme the Regional Transport Authority inter alia may cancel the existing permits or modify the terms of the existing permits Section 68G lays down the principles and method of determination of compensation Under that section compensation is payable for every completed month or part of a month exceeding fifteen days of the unexpired period of the permits at Rs 200 and for part of a month not exceeding fifteen days of the unexpired period of the permit at Rs 100 Under the Amending Act the gist of the provisions is that the Scheme is initiated by the State Transport Undertaking carried on by any of the four institutions mentioned in section 68A including the State Government objections are filed by the affected parties to the Scheme the affected parties and the Undertaking are heard by the State Government which after hearing the objections approves or modifies the Scheme There is no provision for transfer of permits to some other routes or for the purchase of the buses by the State Government Compensation payable is twice that fixed under the U P Act One important thing to be noticed is that the U P Act is prospective i e comes into force only from the date of the passing of the Amending Act and the procedure prescribed applies only to schemes that are initiated under the provisions of the U P Act A comparison of the aforesaid provisions of the U P Act and the Amending Act indicates that both the Acts are intended to operate in respect of the same subject matter in the same field The unamended of 1939 did not make any provision for the nationalization of transport services but the States introduced amendments to implement the scheme of nationalization of road transport Presumably Parliament with a view to introduce a uniform law throughout the country avoiding defects found in practice passed the Amending Act inserting Chapter IV A in the This object would be frustrated if the argument that both the U P Act and the Amending Act should co exist in respect of schemes to be framed after the Amending Act is accepted Further the authority to initiate 48 the scheme the manner of doing it the authority to hear the objections the principles regarding payment of compensation under the two Acts differ in import ant details from one another While in the U P Act the scheme is initiated by the State Government in the Amendment Act it is proposed by the State Transport Undertaking The fact that a particular undertaking may be carried on by the State Government also cannot be a reason to equate the undertaking with the State Government for under section 68A the undertaking may be carried on not only by the State Government but by five other different institutions The undertaking is made a statutory authority under the Amending Act with a right to initiate the scheme and to be heard by the State Government in regard to objections filed by the persons affected by the scheme While in the U P Act a Board hears the objections under the Amending Act the State Government decides the disputes The provisions of the scheme the principles of compensation and the manner of its payment also differ in the two Acts It is therefore manifest that the Amending Act occupies the same field in respect of the schemes initiated after the Amending Act and therefore to that extent the State Act must yield its place to the Central Act But the same cannot be said of the schemes framed under the U P Act before the Amending Act came into force Under article 2541 the law made by Parliament whether passed before or after the law made by the Legislature of such State shall prevail and the law made by the legislature of the State shall to the extent of the repugnancy be void Mr Nambiar contends that as the U P Act and the Amending Act operate in the same field in respect of the same subject matter i e the nationalization of bus transport the U P Act becomes void under article 2541 of the Constitution This argument ignores the crucial words to the extent of the repugnancy in the said clause What is void is not the entire Act but only to the extent of its repugnancy with the law made by Parliament The identity of the field may relate to the pith and substance of the subject matter 49 and also the period of its operation When both coincide the repugnancy is complete and the whole of the State Act becomes void The operation of the Union Law may be entirely prospective leaving the State Law to be effective in regard to thing already done Sections 68C 68D and 68E inserted by the Amending Act clearly show that those sections are concerned only with a scheme initiated after the Amending Act came into force None of the sections either expressly or by necessary implication indicates that the schemes already finalised should be reopened and fresh schemes be framed pursuant to the procedure prescribed thereunder Therefore under article 2541 the law under the U P Act subsists to support the schemes framed thereunder and it becomes void only in respect of schemes framed under the Central Act A similar question arose in the context of the application of article 131 to a pre Constitution law which infringed the fundamental rights given under the Constitution In Keshavan Madhava Menon s Case 1 which we have referred to in a different context the question was whether Indian Press Emergency Powers Act 1931 was void as infringing the provisions of article 131 of the Constitution and the Court held that the said Act was valid and would continue to be in force to sustain a prosecution launched for an act done be fore the Constitution In the words of Das J as he then was Such laws exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the Constitution p 234 So far as the past acts are concerned the law exists notwithstanding that it does not exist with respect to the future exercise of fundamental rights pp 235 236 Article 131 so far as it is relevant to the present in quiry is pari materia with the provisions of article 2541 of the Constitution While under article 131 all the pre Constitution laws to the extent of their inconsistency with the provisions of Part III are void under 1 7 50 article 2541 the State Law to the extent of its repugnancy to the law made byParliament is void If the pre Constitution law exists for the post Constitution period for all the past transactions by the same parity of reasoning the State law subsists after the making of the law by Parliament for past transactions In this view both the laws can co exist to operate during different periods The same decision also affords a solution to the question mooted namely whether if the law was void all the completed transactions fall with it Mahajan J as he then was draws a distinction between a void Act and a repealed Act vis a vis their impact on past transactions At page 251 the learned Judge says The expression is void has no larger effect on the statute so declared than the word repeal The expression repeal according to common law rule obliterates a statute completely as if it had never been passed and thus operates retrospectively on past transactions in the absence of a saving clause or in the absence of provisions such as are contained in the Interpretation Act 1889 or in the while a provision in a statute that with effect from a particular date an existing law would be void to the extent of the repugnancy has no such retrospective operation and cannot affect pending pro secutions or actions taken under such laws There is in such a situation no necessity of introducing a saving clause and it does not need the aid of a legislative provision of the nature contained in the Interpretation Act or the To hold that a prospective declaration that a statute is void affects pending oases is to give it indirectly retrospective operation and that result is repugnant to the clear phraseology employed in the various articles in of the Constitution The said observation directly applies to a situation created by Art2541 As the U P Act was void from the date of the Amending Act actions taken before that date cannot be affected In whichever way it is looked at we are satisfied that in the present case the scheme already framed subsists and the 51 State law exists to sustain it even after the Parliament made the law In this view we reject the contention of Mr Nambiar based on Art 2541of the Constitution The alternative argument advanced by Mr Naunit Lal may now be considered It is not disputed that under the proviso to article 2542 the Parliament can repeal the law made by the Legislature of a State and that Parliament can repeal the repugnant State law whether directly or by necessary implication Assuming that Parliament in the present case by enacting the Amending Act repugnant to the State law with respect to the same subject matter i e nationalization of road transport impliedly repealed the State law would it have the effect of effacing the scheme already made If there was a repeal the provisions of section 6 of the of 1897 are directly attracted The relevant part of section 6 of the reads Where this Act or any Central Act or Regulation made after the commencement of this Act repeals any enactment hitherto made or hereafter to be made then unless a different intention appears the repeal shall not a revive anything not in force or existing at the time at which the repeal takes effect or b affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder The express words used in clause bcertainly take in the scheme framed under the repealed Act It was a thing duly done under the repealed Act But it is said that a comparison of the provisions of section 6 with those of section 24 would indicate that anything duly done excludes the scheme Section 24 deals with the continuation of orders schemes rules forms or bye laws made or issued under the repealed Act But that section applies only to the repeal of a Central Act but not a State Act But the exclusion of the scheme is sought to be supported on the basis of the argument that in the case of a repeal of a Central Act both the sections apply and in that context a reasonable 52 interpretation would be to exclude what is specifically provided for from the general words used in section 6 Whatever justification there may be in that context there is none when we are concerned with the repeal of a State Act to which section 24 does not apply In that situation we have to look to the plain words of section 6 and ascertain whether those words are comprehensive enough to take in a scheme already framed We have no doubt that a scheme framed is a thing done under the repealed Act A further contention is raised on the basis of the provisions of section 68B to achieve the same result namely that the said section indicates a different intention within the meaning of section 6 of the Section 68B reads The provisions of this Chapter and rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in Chapter IV of this Act or in any other law for the time being in force or in any instrument having effect by virtue of any such law This section embodies nothing more than the bare statement that the provisions of this Act should prevail notwithstanding the fact that they are inconsistent with any other law We have expressed our view that the provisions of this Act are prospective in operation and therefore nothing in those sections which we have already analysed is inconsistent with the provisions of the State law in regard to its operation with respect to transactions completed thereunder Assuming without deciding that the word instrument in section 68B includes a scheme we do not see any provisions in the Act which are inconsistent with the scheme framed under the State Act The provisions starting from section 68C only contemplate a scheme initiated after the Amending Act came into force and therefore they cannot obviously be inconsistent with a scheme already framed under the State Act before the Amending Act came into force We therefore hold that section 6 of the saves the scheme framed under the U P Act The next contention of the learned Counsel Mr 53 Nambiar namely that the scheme being a prescription for the future it has a continuous operation even after the Amending Act became law with the result that after the Amending Act there was no valid law to sustain it need not detain us for we have held that the State law subsists even after the Amending Act to sustain the things done under the former Act This leads us to the contention of the learned Advocate General that even if the Constitution Fourth Amendment Act 1955 could not be relied on to sustain the validity of the U P Act there was no deprivation of property of the appellants within the meaning of the decisions of this Court in The State of West Bengal vs Subodh Gopal Bose 1 Dwarkadas Shrinivas of Bombay vs The Sholapur Spinning Weaving Co Ltd 2 and Saghir Ahmad s Case 3 Those cases have held that cls 1 and 2 of article 31 relate to the same subject matter and that though there is no actual transfer of property to the State if by the Act of the State an individual has been substantially dispossessed or where his right to use and enjoy his property has been seriously impaired or the value of the property has been materially reduced it would be acquisition or taking possession within the meaning of el 2 of the said Article After a faint attempt to raise this question the learned Advocate General conceded that in view of the decision in Saghir Ahmad s Case he could not support his argument to the effect that the State did not deprive the petitioners of their interest in a commercial undertaking In the said case this Court held in express terms that U P Transport Act 1951 which in effect prohibited the petitioners therein from doing their motor transport business deprived them of their property or interest in a commercial undertaking within the meaning of article 312 of the Constitution Mukherjea J as he then was observed at page 728 It is not seriously disputed on behalf of the respondents that the appellants right to ply motor vehicles for gain is in any event an interest in a 1 2 3 54 commercial undertaking There is no doubt also that the appellants have been deprived of this interest The learned Judge proceeded to state at page 729 In view of that majority decision it must be taken to be settled now that clauses 1 and 2 of article 31 are not mutually exclusive in scope but should be read together as dealing with the same subject namely the protection of the right to property by means of limitations on the State spowers the deprivation contemplated in clause 1 being no other than acquisition or taking possession of the property referred to in clause 2 The learned Advocate General conceded this to be the true legal position after the pronouncements of this Court referred to above The fact that the buses belonging to the appellants have not been acquired by the Government is also not material The property of a business may be both tangible and intangible Under the statute the Government may not deprive the appellants of their buses or any other tangible property but they are depriving them of the business of running buses on hire on public roads We think therefore that in these circumstances the legislation does conflict with the provisions of article 312 of the Constitution and as the requirements of that clause have not been complied with it should be held to be invalid on that ground The above observations are clear and unambiguous and they do not give scope for further argument on the subject It follows that if the Act does not provide for compensation the Act would be invalid being in conflict with the provisions of article 312 of the Constitution The next question is whether in fact the provisions of article 312 of the Constitution before the Constitution Fourth Amendment Act 1955 were complied with Under article 312 no property shall be taken possession of or acquired save for a public purpose and save by authority of law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which and the manner in which the compensation is to be determined and 55 given In The State of West Bengal vs Mrs Bela Banerjee 1 Patanjali Sastri C J has defined the meaning of the word I compensation at page 563 as under While it is true that the legislature is given the discretionary power of laying down the principles which should govern the determination of the amount to be given to the owner for the property appropriated such principles must ensure that what is determined as payable must be compensation that is a just equivalent of what the owner has been deprived of Within the limits of this basic requirement of full indemnification of the expropriated owner the Constitution allows free play to the legislative judgment as to what principles should guide the determination of the amount payable Whether such principles take into account all the elements which make up the true value of the property appropriated and exclude matters which are to be neglected is a justiciable issue to be adjudicated by the Court This indeed was not disputed On the basis of the aforesaid principle Mr Nambiar contends that the U P Act does not provide for com pensation in the sense of giving the operator deprived of his interest a just equivalent of what he has been deprived of or fix any principles to guide the determination of the amount payable The UP Act the argument proceeds does not provide at all for compensation payable in respect of the interest of the operator in a commercial undertaking but only gives compensation for the unexpired period of the permit On the other hand the learned Advocate General contends that the appellants would be entitled only to just equivalent of the interest that they are deprived of namely the interest in a commercial undertaking and that the cumulative effect of the provisions of the U P Act is that just equivalent of the said interest is given As it is common case that what the Act should give is just compensation for the interest of the operator in a commercial undertaking we Shall now examine the provisions of the U P Act to ascertain whether it 1 56 provides a quid pro quo for the interest the operator is deprived of The provisions of the U P Act relating to compensation pay usefully be read at this stage Section 5 1 Where the scheme published under section 4 provides for cancellation of any existing permit granted under Chapter IV of the or for the transfer of such permit to any other route or routes the Transport Commissioner shall cause notice thereof to be served on the permit holder concerned and on any other persons to whom in his opinion special notice should be given The notice shall also require the permit holder to lodge a statement in writing within the period to be specified therein whether he agrees to the transfer of the permit 2 If the permit holder agrees to the transfer of his permit he shall provided the permit is actually so transferred ultimately be not entitled to claim com pensation under section 11 but the transference of the permit shall be deemed to be in lieu of compensation and complete discharge therefor of the State Government Where however the permit holder does not agree to the transfer the permit shall without prejudice to the right of the permit holder to get compensation under the said section be liable to be cancelled Section 11 1 Where in pursuance of the Scheme published under section 8 any existing permit granted under Chapter IV of the is or is deemed to have been cancelled or the route or routes covered by it are curtailed or are deemed to have been curtailed the permit holder shall except in cases where transfer of the permit has been agreed to under sub section 2 of section 5 be entitled to receive and be paid such compensation by the State Government for and in respect of the premature cancellation of the permit or as the case may be for curtailment of the route or routes covered by the permit as may be determined in accordance with the principles speci fied in Schedule I 2 The compensation payable under this section shall be due as from the date of order of cancellation 57 of the permit or curtailment of the route covered by the permit 3 There shall be paid by the State Government on the amount of compensation determined under subsection 1 interest at the rate of two and one half per cent from the date of order of cancellation or curtailment of route to the date of determination of compensation as aforesaid 4The compensation payable under this section shall be given in cash 5 The amount of compensation to be given in accordance with the provisions of sub section 1 shall be determined by the Transport Commissioner and shall be offered to the permit holder in full satisfaction of the compensation payable under this Act and if the amount so offered is not acceptable to the permit holder the Transport Commissioner may within such time and in such manner as may be prescribed refer the matter to the District Judge whose decision in the matter shall be final and shall not be called in question in any Court Section 12 Where a permit granted under Chapter IV of the has been cancelled or the route to which the permit relates has been curtailed in pursuance of the scheme published under section 8 the State Government may if the holder of the permit offers to sell choose to purchase the motor vehicles covered by the permit upon terms and conditions laid down in Schedule II Provided firstly that the vehicle is of a type manufacture and model notified by the State Government and Provided secondly that the vehicle is in a mechanically sound condition and is otherwise declared fit by the Transport Commissioner or his nominee SCHEDULE I Paragraph 1 The compensation payable under section 11 of the Act for cancellation of a contract carriage or stage carriage or public carrier s permit under clause e of sub section 1 of section 10 of the 8 58 Act shall be computed for every vehicle covered by the permit as follows namely 1 For every complete month or part Rupees One Rupees of a month exceeding fifteen hundred days of one the unexpired period of the permit 2 For part of a month not exceeding Rupees fifteen days of the unexpired period fifty of a permit Provided always that the amount of compensation shall in no case be less than rupees two hundred Paragraph 2 The compensation payable under section 1 1 for curtailment of the route or routes covered by a stage carriage or public carrier permit under clause d of sub section 1 of section 10 of the Act shall be an amount computed in accordance with the following formula Y x A R In this formula Y means the length in mile by which the route is curtailed A means the amount computed in accordance with Paragraph 1 above R means the total length in miles of the route covered by the permit The aforesaid provisions constitute an integrated scheme for paying compensation to the person whose permit is cancelled The gist of the provisions may be stated thus The scheme made by the State Government may provide for the cancellation of a permit for curtailment of the route or routes or for transfer of the permit to other routes Where a transfer of the permit is accepted by the operator he will not be entitled to any compensation if he does not accept compensation will be paid to him with interest in respect of the premature cancellation of the permit or as the case may be for the curtailment of the route or routes covered by the permit The amount of compensation to be given shall be deter mined by the Transport Commissioner in accordance with the provisions of the Act and if the amount so 59 offered is not acceptable to the permit holder the Transport Commissioner may within such time and in such manner as may be prescribed refer the matter to the District Judge whose decision in the matter shall he final There is also a provision enabling the Government to purchase the motor vehicles covered by the permit if the holder of the permit offers to sell and if the vehicles satisfy the specifications laid down in the Act The question is whether these provisions offer a quid pro quo for the interest of the petitioners in the commercial undertaking ie business in motor transport Let us examine the question from the standpoint of a business deal If the transport business is sold the seller gets his value for the assets minus the liabilities and for his good will In the case of a scheme framed under the Act the assets are left with the holder of the permit and under certain con ditions the State purchases them As the scheme is a phased one it cannot be said though there will be difficulties that the assets cannot be sold to other operators If a permit is not cancelled but only transferred to another route it may be assumed that if the transfer is voluntarily accepted by the permit holder he is satisfied that the route given to him is as good as that on which he was doing his business On the other hand if he chooses to reject the transfer of his permit to another route and takes compensation the question is whether the compensation provided by section 11 is anything like an equivalent or quid pro quo for the interest in the commercial undertaking acquired by the State If cl 5 of section 11 had not been there we would have had no hesitation to hold that a flat rate of Rs 100 or less irrespective of the real loss to the holder would not be compensation within the meaning of article 312 But in our view section 115 gives a different complexion to the entire question of compensation Under that clause a permit holder aggrieved by the amount of compensation given by the Transport Commissioner may ask for referring the matter to the District Judge for his decision in regard to the adequacy of the compensation This clause is susceptible of both a strict as well as a 60 liberal interpretation If it is strictly construed it may be held that what the District Judge can give as compensation is only that which the Transport Commissioner can under the provisions of section 111 i e at the rates mentioned in the Schedule But a liberal interpretation as contended by the learned Advocate General can be given to that clause without doing violence to the language used therein and that interpretation will carry out the intention of the legislature If the jurisdiction of the District Judge relates only to the calculation of figures the said clause becomes meaningless in the present context Section 11 read with the Schedule gives the rate of compensation the rate of interest the dates from which and up to which the said compensation is to be paid with interest The duty of calculating the said amount is entrusted to the Transport Commissioner who will be a fairly senior officer of the Government If he made any mistake in mere calculations he would certainly correct it if the permit holder pointed out the mistake to him In the circumstances is it reasonable to assume that the legislature gave a remedy for the permit holder to approach the District Judge for the mere correction of the calculated figures It is more reasonable to assume that the intention of the legislature was to provide prima facie for compensation at flat rate and realising the inadequacy of the rule of thumb to meet varying situations it entrusted the duty of the final determination of compensation to a judicial officer of the rank of a District Judge The provisions of section 115 in our view are certainly susceptible of such an inter pretation as to carry out the intention of the legislature indicated by the general scheme of the provisions The crucial words are if the amount so offered is not acceptable to the permit holder The amount offered is no doubt the amount calculated in accordance with s111 But a duty is cast on the Transport Commissioner to refer the matter to the District Judge if the amount offered is not acceptable to the permit holder The word acceptable is of very wide connotation and it does not limit the objection only to the wrong calculation under section 111 The permit holder may 61 not accept the amount on the ground that compensation offered is inadequate and is not a quid pro quo for the interest of which he is deprived It is therefore for the District Judge on the evidence adduced by both the parties to decide the proper compensation to be paid to him in respect of the right of which he is deprived by the cancellation of the permit The language of section 115 not only bears the aforesaid construction but also carries out the intention of the legislature for it cannot be imputed to the legislature that it intended to deprive a valuable interest by giving a nominal amount to the permit holder Section 115 speaks of the time limit within which such reference may be made to the District Judge but no such rule has been brought to our notice We hope and trust that without standing on any such technicality the Transport Commissioner if so required will refer the matter of compensation to the District Judge Having regard to the entire scheme of compensation provided by the Act we hold that the Act provided for adequate compensation for the interest acquired within the meaning of article 311 of the Constitution It is said that out of the twenty five appeals appellants in thirteen appeals had accepted to take a transfer of the permits to different routes but on behalf of the appellants it is denied that the acceptance was unequivocal and final They say that it was conditional and that as a matter of fact they have not been plying the buses on the transferred routes and indeed have been operating them only on the old routes In these circumstances we cannot hold that the said appellants accepted the alternative routes If they or some of them choose to accept any alternative routes they are at liberty to do so in which event they will not be entitled to any compensation Lastly the learned Counsel for the appellants contends that el 2 of section 3 of the U P Act infringes their fundamental rights under article 312 inasmuch as it prevents them from questioning the validity of the scheme on the ground that it is not for public purpose Section 3 reads 62 1 Where the State Government is of the opinion that it is necessary in the interest of the general public and for subserving the common good or for maintaining and developing efficient road transport system so to direct it may by notification in the official Gazette declare that the road transport services in general or any particular class of such service on any route or portion thereof as may be specified shall be run and operated exclusively by the State Government or by the State Government in conjunction with railways or be run and operated partly by the State Government and partly by others under and in accordance with the provisions of this Act 2 The notification under sub section 1 shall be conclusive evidence of the facts stated therein The argument of the learned Counsel on the interpretation of this section appears to be an after thought for the records do not disclose that the appellants attempted to question the said fact before the Government and they were precluded from doing so on the basis of cl 2 of section 3 We are not therefore prepared to allow the appellants to raise the contention for the first time before us The last contention which is special to Civil Appeal No 429 of 1958 is that during the crucial period when the scheme of nationalization was put through the appellant had no permit it having been cancelled by the order of the appropriate tribunal but subsequently after the scheme was finalised the said order was set aside by the Appellate Tribunal retrospectively and therefore the order of the State Government made behind the back of the appellant does not bind him The appellant s permit was not renewed by the Regional Transport Authority Against the said order he preferred an appeal to the State Transport Tribunal which by an order dated September 6 1956 allowed the appeal and directed that the appellant s permit be renewed for three years beginning from November 1 1953 In disposing of the appear the State Transport Tribunal observed We are told that in the meantime this route has been notified and the Government buses are plying 63 on it The effect of this order will be that the appellant shall be deemed to be in possession of a valid permit and he shall have to be displaced after following the usual procedure prescribed by the U P Road Transport Services Development Act Pursuant to their order it appears that the Regional Transport Authority renewed his permit on October 11 1956 with effect from November 1 1953 to October 31 1956 In the circumstances as the petitioner was not a permit holder when the Government made the order no relief can be given to him in this appeal This order will not preclude the appellant in Civil Appeal No 429 of 1958 if he has any right to take appropriate proceedings against the State Government In the result all the appeals are dismissed with one set of costs to the State of Uttar Pradesh Appeals dismissed

The respondent company terminated the appellant s services on the ground that since he had willingly absented from duty continuously for more than 5 days from December 3 1980 without leave or prior information of intimation or previous permission of the management he had been deemed to have left the service of the company on his own and lost the lien and the appointment with effect from December 3 1980 It relied on clause 132 iv of the Certified Standing Order in support of its action The appellant s plea that despite his reporting to duty on December 3 1980 and every day continuously thereafter he was prevented entry at the gate and was not allowed to sign the attendance register and that he was not permitted to join duty without assigning any reasons was not accepted The Labour Court upheld the termination order as legal and valid It held that the appellant had failed to prove his case that the action of the respondent was in accordance with the Standing Orders and it was not a termination nor retrenchment under the and that the appellant in terms of Standing Orders lost his lien on his appointment and was not entitled to reinstatement Allowing the appeal of the employee this Court HELD11 The action of the management in terminating the appellant s service is violative of the principles of natural justice Under clause 13 2 iv of Certified Standing Orders on completion of eight calendar days absence from duty an employee shall be deemed to have abandoned the services and lost his lien on his appointment Thereafter the management is empowered to strike off the name from the Muster Rolls But it is not correct to say that expiry of eight days absence from duty brings about automatic loss of lien on the post and nothing more need be done by the management to pass an order terminating the service and per force termination is automatic The prin ciples of natural justice must be read into the Standing Order No 13 2 iv Otherwise it would become arbitrary unjust and unfair violating Article 14 Keshwanand Bharti vs Union of India and State Bank of India vs Workmen of State Bank of India and Anr referred to 12 In the instant caseadmittedlythe management did not conduct any domestic enquiry nor gave the appellant any opportunity to put forth his case 932 The Labour Court did not record any findings on the appellant s plea that despite his reporting to duty on December 31980 and on all subsequent days and readiness to join duty he was prevented from reporting to duty nor he was permitted to sign the attendance register but held that the management had power under clause 13 of the Certified Standing Orders to terminate the service of the appellant Under the circumstances the award of the Labour Court is set aside The respondent should reinstate the appellant forthwith with 50 per cent of the back wages Certified Standing Orders have statutory force which do not expressly exclude the application of the principles of natural justice Conversely the made exceptions for the application of principles of natural justice by necessary implication from specific provisions in the Act like Sections 25F 25FF 25FFF etc The need for temporary hands to cope with sudden and temporary spurt of work demands appointment temporarily to a service of such temporary workmen to meet such exigencies and as soon as the work or service is completed the need to dispense with the services may arise In that situation on compliance of the provisions of Section 25F resort could be had to retrench the employees in conformity therewith Particular statute or statutory rules or orders having statutory flavour may also exclude the application of the principles of natural justice expressly or by necessary implication In other respects the principles of natural justice would apply unless the employer should justify the exclusion on given special and exceptional exigencies Col JN Sinha vs Union of India Anr 1971 1 SCR 791 relied on Application of the principles of natural justice that no man should be condemned unheard intends to prevent the authority to act arbitrarily affecting the rights of the concerned person No decision must be taken which will affect the right of any person without first being informed of the case and be given himher an opportunity of putting forward hisher case An order involving civil consequences must he made consistently with the rules of natural justice It is not so much to act judicially but to act fairly namely the procedure adopted must he just fair and reasonable in the particular circumstances of the case The procedure prescribed for depriving a person of livelihood must meet the challenge of Article 14 of the Constitution and such law would be liable to be tested on the anvil of Article 14 The procedure prescribed by a 933 statute or statutory rule or rules or orders affecting the civil rights or result in civil consequences would have to answer the requirement of the Article The manner of exercise of the power and its impact on the rights of the person affected would be in conformity with the principles of natural justice Article 14 has a pervasive processual potency and versatile quality equalitarian it its soul and allergic to discriminatory dictates Equality is the antithesis of arbitrariness Therefore the principles of natural justice are part of Article 14 and the procedure prescribed by law must be right just fair and reasonable and not arbitrary fanciful or oppressive Mohinder Singh Gill Anr vs The Chief Election Commissioner Ors State of Orissa vs Dr Miss Binapani Dei Ors State of West Bengal vs Anwar Ali Sarkar and Maneka Gandhi vs Union of India 1978 2 SCR 621 relied on Blak s law Dictionary 4th Edn p 1487 referred to Article 21 of the Constitution clubs life with liberty dignity of person with means of livelihood without which the glorious content of dignity of person would be reduced to animal existence When it is interpreted that the colour and content of procedure established by law must be in conformity with the minimum fairness and processual justice it would relieve legislative callousness despising opportunity of being heard and fair opportunities of defence The order of termination of the service of an employeeworkman visits with civil consequences of jeopardising not only hisher livelihood but also career and livelihood of dependents Therefore before taking any action putting an end to the tenure of an employeeworkman fair play requires that a reasonable opportunity to put forth his case is given and domestic enquiry conducted complying with the principles of natural justice Delhi Transport Corpn vs D TC Mazdoor Congress and Ors 1991 Suppl 1 SCC 600 relied on The aim of the rule of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice These rules operate in the area not covered by law validly made or expressly excluded There can be no distinction between a quasi judicial function and an administrative function for the purpose of principles of natural justice The aim of both administrative inquiry as well as the quasi judicial enquiry is to 934 arrive at a just decision and if a rule of natural justice is calculated to secure justice or to put it negatively to prevent miscarriage of justice it must logically be applicable both to quasi judicial enquiry and administrative enquiry and not only to quasi judicial enquiry A K Kriapak and Ors vs Union of India Ors relied on An authoritative law laid after considering all the relevant provisions and the previous precedents is no longer open to be recanvassed on new grounds or reasons that may be put forth in its support unless the Court deemed it appropriate to refer to a larger bench in the larger public interest to advance the cause of justice Ambika Prasad Mishra vs State of U P Ors 10 and Keshwanand Bharti vs Union of India relied on The Constitution Bench in fact went into the self same question visa vis the right of the employer to fall back upon the relevant provision of the Certified Standing Orders to terminate the service of the workmanemployee Therefore it is not correct to say that since the present appeal was deleted from the Constitution Bench to be dealt with separately the finding of the Constitution Bench deprived the respondent of putting forth the plea based on clause 13 of the Certified Standing Order to support the action in question and the respondent is entitled to canvass afresh the correctness of the view of the Constitution Bench The definition of retrenchment in Section 2oo of the is a comprehensive one intended to cover any action of the management to put an end to the employment of an employee for any reason whatsoever Punjab Land Development and Reclamation Corpn Ltd Chandigarh vs Presiding Officer Labour Court Chandigarh and Ors State Bank of India vs Sri N Sundara Mani Delhi Cloth General Mills Ltd vs Shambhu Nath Mukherjee Ors 1978 1 SCR 591 Hindustan Steel Ltd vs The Presiding Officer Labour Court Robert D Souza vs Executive Engineer Southern Railway and Anr and HD Singh vs Reserve Bank of India Ors 1985 4 SCC201 referred to 935

Appeal No 1452 of 1987 From the Judgment and Order dated 1071986 of the Kamataka High Court in ITRC No 198 of 1987 WITH CA Nos 446289 1822 1902 146587 675 658 446189 609390 6204 90 6092 and 6092 A of 1990 H Salve PH Parekh Ms Meenakshi Grover R Nariman Ms R Gill and Ms Simi Kr for the Appellants BB Ahuja Ranbir Chandra and Ms A Subhasini for the Respondent The Judgment of the Court was delivered by BP JEEVAN REDDY J These appeals are preferred against the judgment of the Karnataka High Court answering the question referred to it at the instance of the revenue in favour of the revenue and against the assessee The question referred under section 256 of the Income Tax Act 196 1 read as follows Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the sum of Rs 1 79 742 could not be disallowed under section 40 c of the Income Tax Act 1961 The above question related to Assessment Year 1974 75 The question referred for AY 1975 76 was identical except in the matter of amount Since the facts in all the appeals are identical it would be sufficient to notice the facts in CA Nos 6092 and 6092A90 Prakash Beedies P Lid vs Commr of Income Tax Karnataka Bangalore Prior to 1571992 a partnership firm called KM Anand Prabhu Sons Mangalore consisting of three partners KM Vishnudas Prabhu KM Ramdas Prabhu and KM Shankar Prabhu was engaged inter alia in the business of manufacturing and sale of beedies under the brand name Mangalore Prakash Beedies On May 20 1972 a Private limited company called Prakash Beedies 609 Limited the assessee appellant herein was incorporated with its registered off ice at Manoalore One of its objects was to take over business of the aforesaid firm Under an agreement dated July 15 1972 between the firm and the company the firm sold its rights and assets to the company on the terms and conditions set out therein Clause 4a of the agreement which alone is material for the purposes of these appeals reads a For the use of the trade name the Company shall pay royalty to the Vendor at the rate of 10ps for every thousand beedies sold by the Company by using the trade name of the Vendor The royalty shall be worked out at the end of each quarter ending on March June September and December on the sales made during each quarter The royalty fixed hereby shall not be varied for a period of one year and may be reviewed andor revised thereafter wards from time to time The assessee was making payments to the firm every year on account of royalty in terms of said clause The three partners aforesaid of the firm were also the directors of the assessee company For the assessment years 1974 75 and 1975 76 the assessee claimed deduction of the amount paid by it to the firm on account of royalty in terms of clause 4a of the agreement The amounts paid during the accounting years relevant to the said assessment years were Rs 3 16 526 and Rs 3 95 742 respectively The ITO allowed the deductions as claimed In exercise of the powers conferred on him by Section 263 the Commissioner of Income Tax initiated suo moto proceedings for revising the said assessments in so far as the aforesaid deductions were concerned After hearing the assessee he passed orders on September 16 1976 whereunder he disallowed payments to the firm over and above the ceiling prescribed in Section 40c The assessee preferred appeals to the Tribunal against the orders of the ITO The appeals were allowed and the orders of the ITO restored On reference the High Court answered to question in the negative ie in favour of the revenue and against the assessee on the following reasoning the three directors of the assessee company were also the partners in the firm to which royalty payments were made In law a firm has no separate legal existence it is not a juristic person or a distinct legal entity It is merely a collection or association of the individuals for carrying 610 on a business Merely because the firm is an assessable entity under the Income Tax Act it does not follow that it is a juristic or legal entity It must therefore be held that the payments made to the firm are in reality payments made to the directors Such payments clearly attract and fall within the mischief of Section 40c The Commissioner was right in saying so and the opinion of the Tribunal to the contrary is unsustainable in law In these appeals SShri Harish NSalve and Rohinton Nariman assailed the correctness of the view taken by the High Court They submitted firstly that the payments were made not to the directors of the assessee but to a firm which was a separate entity A payment to a firm is not ipso facto a payment to the partners directly or indirectly In a firm there may be other partners besides the directors of the assessee company It may also happen that the firm has no income to distribute because of the losses incurred by it which are set off against the income so received The High Court was in error in holding that payment to a firm is a payment to the partners Assuming that a partnership firm is not a separate juristic entity distinct from its partners even so the payments were made to the said three persons not in their capacity as directors qua directors but in consideration of a valuable right parted by them in favour of the assessee company Such payments do not and cannot fall within the mischief of Section4Oc Section 40c was never intended to take in such payments A company may take on lease the house of its directors for its legitimate business purposes and pay rent which is reasonable having regard to the market conditions or it may pay even less than the market rate of rent Whether the rent paid by the company to its director in such a case falls within Section 40c ask the counsel Another illustration given by the counsel is where a director supplies raw material to the assessee company for a price which is the appropriate market price Would such payment also fall under section 40c they ask The Budget speech of the Finance Minister in the Parliament while introducing the said provision is relied upon in support of their contention It is also argued that the words remuneration benefit or amenity occurring in Section 40c must be read having regard to the context in which they occur applying the principle NOSCITORA SPCOOS recognition of associated words If so read the payments in question can never fall within the ambit of the said words Shri Ahuja the learned counsel for the Revenue justified the reasoning and approach of the High Court having regard to the clear language employed in clause c The genuineness or validity of the agreement between the assessee company and the firm is not disputed The factum of payments made on account of royalty in terms of clause 4a of the said agreement is also not disputed It is also 611 not disputed that in the beedi trade brand name carries significant business value It is necessary to keep this factual context in mind while examining the question at issue Section 40c read as follows during the relevant assessment years 40 Notwithstanding anything to the contrary in sections 30 to 39 the following amounts shall not be deducted in computing the income charge able under the head profits and gains of business or profession a b c in the case of any company i any expenditure which results directly or indirectly in the provision of any remuneration of benefit or amenity to director or to a person who has a substantial interest in the company or to a relative of the director or of such person as the case may be ii any expenditure or allowance in respect of any assets of the company used by any person referred to in sub clause i either wholly or partly for his own purposes of benefit if in the opinion of the Income tax Officer any such expenditure or allowance as is mentioned in sub clause i and ii is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom so however that the deduction in respect of the aggregate of such expenditure and allowance in respect of any one person referred to in sub clause i shall in no case exceed A where such expenditure or allowance relates to a period exceeding eleven months comprised in the previous year the amount of seventy two thousand rupees B where such expenditure of allowance relates to a period not exceeding eleven months comprised in the previous year an amount calculated at the rate of six thousand rupees for each month or part thereof comprised in that period 612 Provided that in case where such person is also and employee of the company for any period comprised in the previous year expenditure of the nature referred to in clauses i ii iii and iv of the second proviso to clause a of sub section 5 of section 40A shall not be taken into account for the purposes of sub clause A or subclause B as the case may be iii Explanation The provisions of this clause shall apply notwithstanding that any amount not to be allowed under this clause is included in the total income of any person referred to in sub clause i The Budget speech of the Finance Minister in so far as it mentions the reasons for introduction of clause c of Section 40 reads as follows I am firmly of the view that the fiscal instrument must be deployed to discourage payment of high salaries and remunerations which go ill with the norms of egalitarian society I accordingly propose to impose a calling on the remuneration of company employees which would be deductible in the computation of taxable profits The ceiling is being set at Rs 5000 per month Together with the existing ceiling of Rs 1000 per month in the case of perquisites the allowable overall ceiling on remuneration and perquisites for purposes of taxation will be at Rs 6000 per month The object behind the provision undoubtedly was to discourage and disallow payment of high salaries and remunerations which go ill with the norms of egalitarian society The provision was of course not confined to the directors It took in relatives of directors persons having substantial interest in the company and their relatives The clause vested in the ITO the power to determine whether any such expenditure or allowances as is mentioned in the said clause was excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom In addition to it a ceiling was also prescribed beyond which such expenditure or allowance could not go in any event At this juncture it would be appropriate to notice the provision contained in sub section 2 of Sec 40A Clause A provides that where the assessee incurs any expenditure in respect of which payment has been made or is to be made to any 613 person referred to in clause b of the sub section and the Income tax Officer is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction Clause b mentions the categories of persons to whom the provision in clause a applies It includes directors of the company and their relatives among others Clause b also takes in any payment to any company firm association of persons or Hindu undivided family of which a director partner or member as the case may be has substantial interest in the business or profession of the assessee In short the net is cast very wide to ensure that excessive or unreasonable payments are not made to the persons in control of the affairs of the assessee in the name of paying for the goods services and facilities rendered supplied or extended by them as the case may be That the payments made by the assessee company to the firm on account of royalty in terms of clause 4 a of the agreement fall within the meaning of the expression expenditure in sub clause i of clause c is not disputed The observations in CIT Bombay vs Ms Indian Engineering and Commercial Corporation Private Uinited Civil Appeal Nos 1583 and 1584 NT of 1977 decided on 1341993 by us reported in do not say otherwise That case arose under Section 40A 5 The payments in question were made to the directors by way of commission on sales The question was whether the said payments fell within sub clause ii of clause a of sub section 5 of section 40A It was held that they did not While holding so it was observed that it is difficult to say that payment of certain cash amount by way of commission on sales directly to an employee can be said to fall within the words where the assessee incurs any expenditure which results directly or indirectly The said observations were made in response to the Revenue s argument that the said payment constituted perquisites within the meaning of sub clause ii of clause a of Section 40A 5 The observations are clearly confined to the said sub clause and have no relevance to any other provision in the Act The observations cannot be read dissociated from their context Coming back to the provisions of Section 4Oc and the facts of the case before us the only question is whether the royalty payments to the firm fell within clause c We assume for the purpose of this argument that in this case payments to firm were payments to partners Even so we think that the said payments did not fall within clause C The payments were made in consideration of a valuable right parted by the partners directors of the assessee company in favour of the assessee SO long a the agreement whereunder the said payments were made is not held to be a mere 614 device or a mere screen the said payments cannot be treated as payments made to the directors as directors qua directors The payments were made by way of consideration for allowing the assessee to use a valuable right belonging to them viz the brand name Such a payment may be liable to be scrutinised under subsection 2 of Section 40A but it certainly did not fall within the four corners of Section 40c In T T Ltd vs LTO Bangalore 1 a Bench of Karnataka High Court comprising DM Chandrashekhar CJ and ES VenkataramiahJ has taken a view which accords with the one taken by us Speaking for the Bench ES Venkataramiah J as he then was observed A close reading of the above provision shows that section 40c refers to an expenditure in curred by making periodical payments to person mentioned in that clause apparently for any personal service that may be rendered by him It cannot have any reference to payments made by the assessee for all kinds of services or facilities referred to in section 4OA2 a It is argued that the proviso thereto suggests that any expenditure incurred for any kind of service which is referred to in the main part of section 40A 2 a and the expenditure referred to in section 40c belong to the same category This contention is not correct The expression services in section 40A 2 a is an expression of wider import If the remuneration benefit or amenity referred to in section 40c is treated as the same as what is paid in return for the goods services or facilities then irrespective of the fair market value of the goods services and facilities provided by a person who may be a director or a person who has a substantial interest in the company or a relative of the director or of such person as the case may be only a maximum of Rs 72000 can be allowed to be deducted in computing the income of the company in any one year We do not think that Parliament ever intended that such a result should follow The goods services and facilities referred to in section 40A 2 a are those which have a market value and which are commercial in character Many of the services and facilities referred to above are those which are nowadays provided by independent organisations The said decision has been followed by the Punjab and Haryana High Court in Commissioner of Income Tax Patiala vs Avon Cycles P Ltd The Calcutta High Court has also taken a similar view in India Jute Co Ltd vs 615 Commr of Income Tax Mr Ahuja learned counsel for the Revenue submitted that the argument of the assessee that only the payments made to directors as directors fall within clause c and not the other payments becomes inapt when the payments are made to the relative of the directors or to persons holding substantial interest in the assessee company or their relatives The ceilinG prescribed in clause c cannot also be applied to such persons says the counsel The answer perhaps lies in the clause itself in the power vested in the ITO to determine whether any expenditure or allowance is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by the assessee or accruing therefrom Any payment to a relative of a director or other persons mentioned in clause c will necessarily be examined applying the above test and if it is found that they are unwarranted unreasonable or excessive they will be disallowed Since such a situation does not arise herein we need not pursue the argument further For the above reasons we are of the opinion that the judgment under appeal cannot be sustained It must he held that the payments in question did not fall within section 40c Accordingly the appeals are allowed the judgment of the High Court is set aside and the question referred to the High Court is answered in the affirmative ie in favour of the assessee and against the revenue No costs UJ R Appeal allowed

The writs referred to in article 226 are intended to enable the High Court to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction or in excess of it or in violation of the principles of natural justice or refuse to exercise a jurisdiction vested in them or there is an error apparent on the face of the record and such act omission or error or excess has resulted in manifest injustice However exten sive the jurisdiction may be it is not so wide or large as to enable the High Court to convert itself into a court of appeal and examine for itself the correctness of the deci sions impugned and decide what is the proper view to be taken or the order to be made The Motor Vehicles Act contains a complete and precise scheme for regulating the issue of permits providing what matters are to be taken into consideration as relevant and prescribing appeals and revisions from subordinate bodies to higher authorities and the issue or refusal of permits is solely within the discretion of the transport authorities it is not a matter of right Where in a dispute between two rival claimants for running through a particular route five buses which each of them alleged he had purchased from a third person the Central Road Traffic Board Madras after calling for a report from the Regional Transport Officer and considering several circumstances that had a material bearing on the case restored the permanent permits which had been granted to one of the claimants but on an application by the other claimant under article 226 of the Constitution to the High Court of Madras for a writ of certiorari quashing the orders of the Regional Transport Authority the Central Road Traffic Board and the State of Madras and for a writ of mandamus to the respondents to transfer issue or grant 584 permanent permits to the petitioner the High Court set aside the order of the Central Traffic Board relying mainly on the fact that the petitioner s title to the five buses had been established and directed the Regional Traffic Authority to grant to the petitioner permits in respect of the five buses Held that under the Motor Vehicles Act the issue of a permit for a bus was not dependent on the ownership of the bus but on other considerations also and as the Central Traffic Board had issued an order granting permits to one of the claimants after considering all circumstances the High Court acted erroneously in interfering with the Order of Traffic Board on an application under article 226 and in any event the order of the High Court issuing a direction to the Regional Transport Authority to grant permits to the other party was clearly in excess of its powers and jurisdiction The Motor Vehicles Act is a statute which creates new rights and liabilities and prescribes an elaborate procedure for their regulation No one is entitled to a permit as of right even if he satisfies all the prescribed conditions The grant of a permit is entirely within the discretion of the transport authorities and naturally depends on several circumstances which have to be taken into account

iminal Appeal No 400 of 1993 From the Judgment land order dated 36 1992 of the Punjab and Haryana High Court in Criminal Revision No 443 of 1990 P Chadambaram Mukul Rohtagi Ms Bina Gupta and Ms Monika Mohil for the Appellants NN Goswamy YD Mahajan and ND Garg for the Respondent The Judgments of the Court were delivered by K RAMASWAMYJ Special leave granted The appellant accused No 2 in p CBI No 402 dated February 18 1985 FIR No RC No 2 to 41983 dated March 41983 and PS SPECBICTU E INew Delhi Dist Delhi and four other namely VP Anand Baldev Raj Sharma Bansi La and Ranjit KumarMarwah are accused in the said case It is the prosecution case that the accused hatched a conspiracy at Chandigarh to cheat Punjab National Bank for short PNB In furtherance thereof VP Anand floated three New Link Enterprises and Ms Moonlight Industries in the name of Baldev Raj Sharms his employee and Ms Guru Nanak Industries in the name of Bansi Lal yet another employee He opened current accounts in their respective names in the PNB at Chandigarh In furtherance of the conspiracy and in confabulation with VP Anand the appellant Ajay Aggarwal a non resident Indian at Dubai who is running Ms Sales International Dubai agreed to and got credit facility by way of Foreign Letters of Credit Nos 4069 p 4070 p and 4084 p issued proforma invoices of the said concern and addresses to PNB through Guru Nanak Industries and New Link Enterprises Ranjit Marwah the 5th accused Manager of PNB In charge of foreign exchange department confabulated with the accused issued Foreign Letter of Credit in violation of import policy The Bills of Lading were addressed to PNB at Chandigarh The cable confirmation of PNB was sent to M s Sales International by PNB Chandigarh for confirmation of discrepancy The appellant had confirmed correctness thereof in the name of VP Anand Placing reliance thereon authority letter was issued by PNB Chandigarh and cables were sent subsequent thereto to remit the amounts to Emirates National Bank Ltd through Irving Trust Company VP Anand was present on September 16 1981 at Dubai and at his instance the Emirats National Bank Dubai informed the 551 PNB Chandigarh that the discrepancy in the document adeptable to VP Anand and claimed to have inspected the goods on board in vessel MV Atefeh On receipt of the information from the Sales International Dubai full amount in US Dollars 4 39200 was credited against all the three Letters of Credit on discount basis During investigation it was found that Vessel MV Atefeh was a nonexistent one and three Foreicn Letters of Credit were fabricated on the basis of false and forged shipping documents submitted by the appellant Ajay Aggarwal to the Emirates National Bank Dubai Thus the PN B was cheated of an amount of Rs 4030329 Accordingly charge sheet was laid against the appellant and others for offences punishable under sections 120B read with Sections 420 Cheating 468 Forgery and 471 using as genuine Forged documents IPC The Chief Judicial Magistrate Chandigarh by his order dated January 11 1990 discharged all the accused of the offences on the ground that conspiracy and the acts done in furtherance thereof had taken place outside India and therefore the sanction under section 188 Criminal Procedure Code 1973 for short the Code is mandatory Since no such sanction was produced the prosecution is not maintainable On revision the High Court of Punjab and Haryana in Criminal Revision No 443 of 1990 by order dated June 3 1992 held that the conspiracy had taken place at Chandigarh The overt acts committed in pursuance of that conspiracy at Dubai constituted offences under sections 420 467 and 471 IPC are all triable at Chandigarh without previous sanction of the central Govt The order of discharge therefore was set aside and the appellant and other accused were directed to be present through their counsel in person in the Trial Court on July 171992 to enable the court to take further proceedings in accordance with law This appeal has been filed by the appellant alone under article 136 of the constitution Sri Chidambaram learned Senior counsel contended that the appellant was not a privy to the conspiracy He was an NIR businessman at Dubai He never visited Chandigarh Even assuming for the sake of argument that conspiracy had taken place and all act committed in furtherance thereof were also at Dubai The transaction through bank is only bank to bank transaction Even assuming that some of the offences were committed in India since as per the prosecution case itself that part of the conspiracy and related offences were committed at Dubai by operation of Section 188 read with the proviso thereto with a non obstanti clause absence of sanction by the Central Govt knocks of the bottom of the jurisdiction of the courts in India to take cognisance of or to enquire into of try the accused He placed strong reliance on 1 Fakhrulla khan and Ors vs Emperor AIR 1935 Mad 326 In re ML Verghese AIR 1947 MAD 352 kailash Sharma vs State 1973 Crl Law Journal 1021 and K Satwant Singh vs State of Punjab Sri Goswami the learned senior counsel for the respondents contended that the conspiracy to cheat PNB was hatched at Chandigarh All the accused committed 552 overt acts in furtherance All the accused committed overt acts in furtherance on the conspiracy at Chandigarh and therefore the sanction of the Central Govt is not necessary The High Court had rightly recorded those findings There is no need to obtain sanction under section 188 of the Code The diverse contentions give rise to the primary question whether the sanction of the Central Govt as required under proviso to section 188 of the Code is necessary Section 188 of the Code reads thus Offence committed outside India when an offence is committed outside India a by a citizen of India whether on the high seas or elsewhere or b by a person not being such citizen on any ship or aircraft registered in India he may be dealt with in respect of such offence asif it had been committed at any place within India at which he may be found Provided that notwithstanding anything in any of the preceding sections of this Chapter no such offence shall be inquired into or tried in India except with the previous sanction of the Central Government Section 3 IPC prescribes punishment of offences committed beyond but which by law may be tried with India It provided that any person liable by any Indian law to be tried for an offence committed beyond India shall be dealt with according to the provisions of this Code for any act committed beyond India in the same manner as if such act had been committed within India Section 4 extends its territorial operation postulating that IPC shall apply to any offence committed by 1 any citizen of India in any place without any beyond India 2 any person on any ship or aircraft registered in India wherever it may be Explanation in this section the word offence includes every act committed outside India which if committed in India would be punishable under this Code 553 Illustration A who is a citizen of India commits a Murder in Uganda He can be tried and convicted of murder in any place in India in which he may be found The Code of Criminal Procedure extends to whole of India except the State of Jammu Kashmir and except chapters 8 10 and 11 the other provisions of the Code shall not apply to the State of Nagaland and to the tribal area However the State Govt has been empowered by a notification to apply all other provisions of the Code or any of them to the whole or part of the State of Nagaland and such other tribal areas with supplemental incidental or consequential modifications as may be specified in the notification Therefore the Code also has territorial operation The Code is to consolidate and amend the law relating to criminal procedure Section 188 was suitably amended pursuant to the recommendation made by the Law Commission Chapter VIII deals with jurisdiction of the courts in inquiries and trials Section 177 postulates that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed but exceptions have been engrafted in subsequent sections in the Chapter Section 179 provides venue for trial or enquiry at the place where the act is done or consequences ensued So inquiry or trial may be had by a Court within whose local jurisdiction such thing has been done or such consequence has ensued Section 188 by fiction dealt offences conumitted by a citizen of India or a foreigner outside India or on high seas or elsewhere or on any ship or aircraft registered in India Such person was directed to be dealt with in respect of such offences as if be had committed at any place within India at which he may be found But the proviso thereto puts and embargo that notwithstanding anything in any of the preceding sections of this Chapter have been done such offences shall not be inquired into or tried in India except with the previous sanction of the Central Govt Judicial power of a State extends to the punishment of all offences against the municipal laws of the State by whomsoever committed within the territory It also has the power to punish all such offences wherever committed by its citizen The general principle of international law is that every person be it a citizen or foreigner who is found within a foreign State is subjected to and is punishable by its law Otherwise the criminal law could not be administered according to any civilised system of jurisprudence Sections 177 to 186 deal with the venue or the place of the enquiry or trial of crimes Section 177 reiterates the well established common law rule that the proper and ordinary situs for the trial of a crime is the area of jurisdiction in which the acts occurred and are alleged to constitute the crime But this rule is subject to several well recognised exceptions and some of those exceptions have been engrafted in subsequent sections in the chapter of the Code 554 Therefore the provisions in Chapter VIII are elastic and not peremptory In consequence there with Sections 218 to 223 of the code would also deal with exceptions engrafted in the Code Therefore they do permit enquiry or trial of a particular offence along with other offences at a common trial in one court so that the court having jurisdiction to try an offence gets jurisdiction to try other offence committed or consequences thereof has ensued The procedure is hand maid to substantive justice namely to bring the offenders to justice to meet out punishment under IPC or special law as the case may be in accordance with the procedure prescribed under the Code or special procedure under that Act constituting the offence The question is whether prior sanction of the Central Govt Is necessary for the offence of conspiracy under proviso to section 188 of the Code to take cognizance of an offence punishable under section 120 B etc IPC or to proceed with trial In Chapter VA conspiracy was brought on statute by the Amendment Act 1913 8 of 1913 Section 120 A of the IPC defines conspiracy to mean that when two or more persons agree to do or cause to be done an ilegal act or an act which is not illegal by illegal means such an agreement is designated as criminal conspiracy No agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof Section 120 B of the IPC prescribes punishment for criminal conspiracy It is not necessary that each conspirator must know all the details or the scheme nor be a participant at every stage It is necessary that they should agree for design or object of the conspiracy Conspiracy is conceived as having three elements 1 agreement 2 between two or more persons by whom the agreement is effected and 3 a criminal object which may be either the ultimate aim of the agreement or may constitute the means or one of the means by which that aim is to be accomplished It is immaterial whether this is found in the ultimate objects The common law definition of criminal conspiracy was stated first by Lord Denman in jones case that an indictment for conspiracy must charge a conspiracy to do an unlawful act by unlawful means and was elaborated by Willies J on behalf of the judges while referring the question to the House of Lords in Mulcahy vs Reg and the House of Lords in unanimous decision reiterated in Quinn vs Leathem at 528 as under A conspiracy consists not merely in the intention of two or more but in the agreement of two or more to do in unlawful act or to do a lawful act by unlawful means So long as such a design rests in intention only it is not indictable When two agree to carry it into 555 effect the very plot is an act in itself and the act of each of the parties promise against promise actus contra actum capable of being enforced if lawful punishable of for a criminal object or for the use of criminal means This Court in B G Barsay vs The State of Bombay 1962 2 SCR at 229 held The list of the offence is an agreement to break the law The parties to such an agreement will be guilty of criminal conspiracy though the illegal act agreed to be done has not been done So too it is an ingredient of the offence that all the parties should agree to do a single illegal act It may comprise the commission of a number of acts Under section 43 of the Indian Penal Code an act would be illegal if fit is an offence or if it is prohibited by law In Yashpal vs State of Punjab the rule was laid as follows The very agreement concert or league is the ingredient of the offence It is not necessary that all the conspirators must know each and every detail of the conspiracy as long as they are co participators in the main object of the conspiracy There may be so many devices and techniques adopted to achieve the common goal of the conspiracy and there may be division of performances in the chain of actions with one object to achieve the real end of which every collaborator must be aware and in which each one of them must be interested There must be unity of object or purpose but there may be plurality of means sometimes even unknown to one another amongst the conspirators In achieving the goal several offences may be committed by some of the conspirators even unknown to the others The only relevant factor is that all means adopted and illegal acts done must be and purported to be in furtherance of the object of the conspiracy even though there may be sometimes misfire or over shooting by some of the conspirators In Mohammed Usman Mohammad Hussain Manivar Anr vs State of Maharashtra it was held that for an offence under section 120B IPC the prosecution need not necessarily prove that the conspirators expressly 556 agreed to do or cause to be done the illegal act the agreement may be proved by necessary implication In Noor Mohammed Yusuf Momin vs State of Maharashtra it was held that section 120 B IPC makes the criminal conspiracy as a substantive offence which offence postulates an agreement between two or more persons to do or cause to be done an act by illegal means If the offence itself is to commit an offence no further steps are needed to be proved to carry the agreement into effect In R K Dalmia Anr vs The Delhi Administration It 963 1 SCR 253 it was further held that it is not necessary that each member of a conspiracy must know all the details of the conspiracy In Shivanarayan Laxminarayan Ors State of Mahrashtra Ors this court emphasized that a conspiracy is always hatched in secrecy and it is impossible to adduce direct evidence of the same The offence can be only proved largely from the inferences drawn from acts or illegal omission committed by the conspirators in pursuance of a common design The question then is whether conspiracy is continuing offence Conspiracy to commit crime it self is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment independent of the conspiracy Yet in our considered view the agreement does not come to an end with its making but would endure till it is accomplished or abandoned or proved abortive Being a continuing offence if any acts or omissions which constitutes an offence are done in India or outside its territory the conspirators continuing to be parties to the conspiracy and since part of the acts were done in India they would obviate the need to obtain sanction of the Central Govt all of them need not be present in India nor continue to remain in India In lennart Schussler Anr vs Director of Enforcement Anr a Constitution Bench of this Court was to consider the question of conspiracy in the setting of the facts stated thus A 2 was the Managing Director of the Rayala Corporation Ltd Which manufactures Halda Typewriters A 1 was an Export Manager of ASSAB A 1 and A2 conspired that A2 would purchase material on behalf of his Company from ASSAB instead of Ms Atvidaberos which provided raw material A2 was to over invoice the value of the goods by 40 per cent of true value and that he should be paid the difference of 40 per cent on account of the aforesaid over invoicing by crediting it to A2 s personal account at Stockholm in a Swedish Bank and requested A 1 to help him in opening the account in Swenska Handles Banken Sweden and to have further 557 deposits to his personal account from ASSAB A 1 agreed to act as requested by A2 and A2 made arrangements with ASSAB to intimate to A 1 the various amounts credited to A2 s account and asked A 1 to keep a watch over the correctness of the account and to further intimate to him the account position from time to time through unofficial channels and whenever A 1 come to India A 1 agreed to comply with this request This agreement was entered into between the parties in the year 1963 at Stockholm and again in Madras in the year 1965 The question was whether Sec 120 B of the Indian Penal Code was attracted to these facts Per majority Jaganmohan Reddy J held that the gist of the offence defined in section 120 A IPC which is itself punishable as a substantive offence is the very agreement between two or more persons to do or cause to be done an illegal act or legal act by illegal means subject however to the proviso that where the agreement is not an agreement to commit an offence the agreement does not amount to a conspiracy unless it is followed up by an overt act done by one or more persons in pursuance of such an agreement There must be a meeting of minds in the doing of the illegal act or the doing of a legal act by illegal means in furtherance of the conspiracy certain persons are induced to do an unlawful act without the knowledge of the conspiracy or the plot they cannot be held to be conspirators though they may be guilty of an offence pertaining to the specific unlawful act The offence of conspiracy is complete when two or more conspirators have agreed to do or cause to be done an act which is itself an offence in which case no overt act need be established It was contended in that regard that several acts which constitute to make an offence under section 120 B may be split up in parts and the criminal liability of A 1 must only be judged with regard to the part played by him He merely agreed to help A2 to open an account in the Swedish Bank having the amounts lying to the credit of A2 with Atvidaberg to that account and to help A2 by keeping a watch over the account Therefore it does not amount to a criminal conspiracy While negating the argument this court held thus It appears to us that this is not a justifiable contention because what has to be seen is whether the agreement between A 1 and A2 is a conspiracy to do or continue to do something which is illegal and if it is it is immaterial whether the agreement to do any of the acts in furtherance of the commission of the offence do not strictly amount to an offence the entire agreement must be viewed as a whole and it has to be ascertained as to what in fact the conspirators intended to do or the object they wanted to achieve 558 Thus this court though not in the context of jurisdictional issue held that the agreement not illegal at its inception would become illegal by subsequent conduct and an agreement to do an illegal act or to do a legal act by illegal means must be viewed as a whole and not in isolation It was also implied that the agreement shall continuing till the object is achieved The agreement does not get terminated by merely entering into an agreement but it continues to subsist till the object is either achieved or terminated or abandoned In Abdul Kader vs State AIR 1964 Bombay 133 a conspiracy was formed in South Africa by appellants to cheat persons by dishonestly inducing them to deliver money in the Indian currency by using forced documents and the acts of cheating were committed in India When the accused were charged with the offence of conspiracy it was contended that the conspiracy was entered into and was completed in South Africa and therefore the Indian Courts had no jurisdiction to try the accused for the offence of conspiracy The Division Bench held that though the conspiracy was entered in a foreign country and was completed as soon as the agreement was made yet it was treated to be a continuous offence and the persons continued to be parties to the conspiracy when they committed acts in India Accordingly it was held that the Indian Courts had jurisdiction to try the offence of conspiracy In US vs Kissal Holmes J held that conspiracy is a continuous offence and stated is a perversion of natural thought and of natural language to call such continuous co operation of a cinema to graphic series of distinct conspiracies rather than to call it a single one a conspiracy is a partnership in criminal purposes That as such it may have continuation in time is shown by the rule that overt act by one partner may be the act of all without any new agreement specifically directed to that act In Ford vs U section at 620 to 622 Tuft CJ held that conspiracy is a continuing offence In Director of public Prosecutions vs Door and Ors 1973 Appeal Cases 807 HL the five respondents hatched a plan abroad ie Belgium and Morocco and worked out the details to import cannabis into the United States via England In pursuance thereof two vans with cannabis concealed in them were shipped from Morocco to Southampton the other van was traced at Liverspool from where the vans were to have been shipped to America and the cannabis in it was found They were charged among other offences with conspiracy to import dangerous drugs At the trial the respondents contended that the Courts in England had no jurisdiction to try them on the count of conspiracy since the conspiracy had been entered into abroad While rejecting the contention Lord Wilberforce held at page 817 The present case involves international elements the accused are 559 aliens and the conspiracy was initiated abroad but there can be no question here of any breach of any rules of international law if the are prosecuted in this country Under the objective territorial principle use the terminology of the Harward Research in Inter national Law or the principle of University For the prevention of the trade in narcotics falls within this descriptionor both the courts of this country have a clear right if not a duty to prosecute in accordance with our municipal law The position as it is under the international law it not however determinative of the question whether unde r our municipal law the acts committed amount to a crime That has to be decided on different principles If conspiracy to import drugs were a statutory offence the question whether foreign conspiracies were included would be decided upon the terms of the statute Since it is if at all a common law offence this question must be decided upon principle and authority In my opinion the key to a decision for or against the offence charged can be found in an answer to the question why the common law treats certain actions as crimes And one answer must certainly be because the actions in question are a threat to the Queen s peace or as we would now perhaps say to society Judged by this test there is every reason for and none that I can see against the prosecution Con spiracies are intended to be carried into effect and one reason why in addition to individual prosecution of each participant conspiracy charges are brought is because criminal action organised and executed in concert is more dangerous than an individual breach of law Why then restrain from prosecution where the relevant concert was initially formed outside the United Kingoom The truth is that in the normal case of a conspiracy carried out or partly carried out in this country the location of the formation of the agreement is irrelevant the attack upon the laws of this country is identical wherever the conspirators happened to commit the conspiracy is a complex formed indeed but not separately completed at the first meeting of the plotters Viscount Dilhorne at page 823 laid the rule that a conspiracy does not end with the making of the agreement It will continue so long as there are two or more parties to it intending to carry out the design It would be highly unreal to say that the conspiracy to carry out the Gunpower plot was completed when the conspirators met and agreed to the plot at Catesby 561 in my view be considered contrary to the rules of international comity for the forces of law and order in England to protect the Queen s peace by arresting them and putting them in trial for conspiracy whether they are British subjects or foreigners and whether or not conspiracy is a crime under the law of the country in which the conspiracy was born At page 835 it was held that the respondents conspired together in England notwithstanding the fact that they were abroad when they entered into the agreement which was the essence of the conspiracy That agreement was and remained a continuing agreement and they continued to conspire until the offence they were conspiring to commit was in fact committed Accordingly it was held that the conspiracy though entered into abroad was committed in England and the courts in England and jurisdiction The ratio emphasizes that acts done in furtherance of continuing conspiracy constitute part of the cause of action and performance of it gives jurisdiction for English Courts to try the accused In Trecy vs Director of Public Prosecutions 1971 Appeal Cases 537 at 563 to H L the facts of the case were that the appellant therein posted in the Isle of Wright a letter written by him and addressed to Mrs X in West Germany demanding money with menaces The letter was received by Mrs X in West Germany The appellant was charged with black mail indictable section 21 of the Theft Act 1968 While denying the offence it was contended that the courts in England were devoted of jurisdiction Over ruling the said objection Lord Diplock at page 562 observed The State is under a correlative duty to those who owe obedience to its laws to protect their interests and one of the purposes of criminal law is to afford such protection by determining by threat of punishment conducted by other persons which is calculated to hand to those interests Comity gives no right to a State to insist that any person may with immunity do physical acts in its own territory which have harmful consequences to persons within the territory of another state It may be under no obligation in comity to punish those acts itself but it has no ground from complaint in international law if the State in which the harmful consequences had their effect punishes when they do enter its territories persons who did such acts Prof Williams Glanville in his article Venue and the Ambit of Criminal Law at 528 stated thus 562 Sometimes the problem of determining the place of the crime is assisted by the doctrine of the continuing crime Some crimes are regarded as being of a continuing nature and they may accordingly be prosecuted in any jurisdiction in which they are partly committed the partial commission being in the eye of the law a total commission In the context of conspiracy under the caption inchoate crimes It was stated The general principle seems to be that jurisdiction over an inchoate crime appertains to the State that would have had jurisdiction had the crime been consummated Commenting upon the ratio laid down in Board of Trade vs Owen 1957 Appeal Cases 602 he stated at page 534 thus The seems to follow owen as logical corollary that our courts will assume jurisdiction to punish a conspiracy entered into abroad to commit a crime here Although the general principle is that crime committed abroad do not become punishable here merely because their evil effects occur here there may be an exception for inchoate crimes aimed against persons in this country Since conspiracy is the widest and vaguest of the inchoate crimes it seems clearly that the rule for conspiracy must apply to more limited crimes of incitement and attempt also At page 535 he further stated that the rule of inchoate crimes is therefore an exception from the general principle of territorial jurisdiction The crime is wholly committed in the State A yet is justiciable also in State B At page 535 he elucidated that certain exceptions are recognised or suggested Lord Tucker in own s case supra illustrated that a conspiracy D 2 England to violate the laws of a foreign country might be justiciable here if the preferments the conspiracy charged would produce a public mischief within the State or injure a person here by causing him damage abroad At page 536 be stated that as another exception from the rule in Board of Trade vs Owen supra it seems from the earlier decision that a conspiracy entered into here will be punishable if the conspirators contem plates that the illegality may be performed either within British jurisdiction or abroad even though in the event the illegality is performed abroad His statement of law now receives acceptance by House of Lords in Doot s case 563 In Halsbury s Law of England third edition vol 10 page 327 para 602 while dealing with continuing offence it was stated as under A criminal enterprise may consist of continuing act which is done in more places than one or of a series of acts which are done in several places In such cases though there is one criminal enterprise there may be several crimes and a crime is committed in each place where a complete criminal act is performed although the act may be only a part of the enterprise It was further elucidated in para 603 that What constitutes a complete criminal act is determined by the nature of the crime Thus as regards continuing acts in the case of sending by post or otherwise a libellous or threatening letter or a letter to provoke a breach of the peace a crime is committed both where the letter is posted or otherwise sent and also where it is received and the venue may be laid in either place Archbold in Criminal Pleadings Evidence and Practice 42nd edition 1985 Chapter 23 in para 28 32 at p 2281 Wright on Conspiracies and Agreements at pages 73 74 Smith on Crimes at page 239 and Russel on Crime 12th edition page 613 stated that conspiracy is a continuing offence and liable to prosecution at the place of making the agreement and also in the country where the acts are committed Thus an agreement between two or more persons to do an illegal act or legal acts by illegal means is criminal conspiracy If the agreement is not an agreement to commit an offence it does not amount to conspiracy unless it is followed up by an overt act done by one or more persons in furtherance of the agreement The offence is complete as soon as there is meeting of minds and unity of purpose between the conspirators to do that illegal act or legal act by illegal means Conspiracy itself is a substantive offence and is distinct from the offence to commit which the conspiracy is entered into It is undoubted that the general conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy Each act constitutes separate offence punishable independent of the conspiracy The law had developed several or different models or technics to broach the scope of conspiracy One such model is that of a chain where each party performs even without knowledge of other a role that aids succeeding parties in accomplishing the criminal objectives of the conspiracy An illustration of a single conspiracy its parts bound together as links in a chain is 564 the process of procuring and distributing narcotics or an illegal foreign drug for sale in different parts of the lobe In such a case smugglers middlemen and retailers are privies to a single conspiracy to smuggle and distribute narcotics The smugglers knew that the middlemen must sell to retailers and the retailers knew that the middlemen must buy of importers of someone or another Thus the conspirators at one end of the chain knew that the unlawful business would not and could not stop with their buyers and those at the other end knew that it had not begun with their settlers The accused embarked upon a venture in all parts of which each was a participant and an abettor in the sense that the success of the part with which he was immediately concerned was dependent upon the success of the whole It should also be considered as a spoke in the hub There is a rim to bind all the spokes to gather in a single conspiracy It is not material that a rim is found only when there is proof that each spoke was aware of one another s existence but that all promoted in furtherance of some single illegal objective The traditional concept of single agreement can also accommodate the situation where a well defined group conspires to commit multiple crimes so long as all these crimes are the objects of the same agreement or continuous conspiratorial relationship and the conspiracy continues to subsist though it was entered in the first instance Take for instance that three persons hatched a conspiracy in country A to kill D in country B with explosive substance As far as conspiracy is concerned it is complete in country A one of them pursuant thereto carried the explosive substance and hands it over to third one in the country B who implants at a place where D frequents and got exploded with remote control D may be killed or escape or may be diffused The conspiracy continues till it is executed in country B or frustrated Therefore it is a continuing act and all are liable for conspiracy in country B though first two are liable to murder with aid of section 120 B and the last one is liable under section 302 or 307 IPC as the case may be Conspiracy may be considered to be a march under a banner and a person may join or drop out in the march without the necessity of the change in the text on the banner In the comity of International Law in these days committing offences on international scale is a common feature The offence of conspiracy would be a useful weapon and there would exist no conflict in municipal laws and the doctrine of autrefoes convict or acquit would extend to such offences The comity of nations are duty bound to apprehend the conspirators as soon as they set their feet on the country territorial limits and nip the offence in the bud A conspiracy thus is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of acts So long aits performance continues it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity A crime is complete as soon as the agreement is made but it is not a thing of the moment It does not end with the making of the 565 agreement It will continue so long as there are two or more parties to it intending to carry into effect the design Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so The conspiracy designed or agreed abroad will have the same effect as in India when part of the acts pursuant to the agreement are agreed to be finalised or done attempted or even frustrated and vice versa In K Satwant Singh vs The State of Punjab a Constitution Bench of this Court was to consider as to when section 188 of the Code would be applicable to a case The facts therein was that the appellant had cheated the Govt of Burma whose office was at Shimla punishable under section 420 IPC The accused contended that the part of the act was done at Kohlapur where payment was to be made and on that basis the court at Shimla had no jurisdiction to try the offence without prior sanction of the political agent Considering that question this court held that if the offence of cheating was committed outside British India the sanction would be necessary but on facts it was held that It seems to us on the facts established in this case that no part of the offence of cheating was committed by the appellant outside British India His false representation to the Govt of Burma that money was due to him was at a place in British India which induced that govt to order payment of his claims In fact he was paid at Lahore at his own request by means of cheques on the Branch of the Imperial Bank of India at Lahore The delivery of the property of the Govt of Burma namely the money was made at Lahore a place in Brithsh India an d we cannot regard in the circumstances of the present case the posting of the cheques at Kohlapur either as delivery of property to the appellant at Kohlapur or payment of his claims at Kohlapur The entire argument founded on the provisions of section 188 of the Code therefore fails Far from helping the appellant the ratio establishes that if an offence was committed in India the need to obtain sanction under section 188 is obviated In Purshottamdas Dalmia vs Stale of West Bengal this court when the appellant was charged with offences punishable under sections 120B 466 and 477 the appellant contended that offence of conspiracy was entered into at Calcutta the offences of using the forged documents was committed at Madras Therefore the court at Calcutta had no jurisdiction to try the offence under section 471 read with section 466 EPC even though committed in pursuance of the conspiracy and in course of the same transaction This court held that the desirability of trying the offences of alit 566 he overt acts committed in pursuance of a conspiracy together is obvious and sections 177 and 239 of the Code leave no manner of doubt that the court which has the jurisdiction to try the offence of criminal conspiracy has also the jurisdiction to try all the overt acts committed in pursuance of it even though outside its territorial jurisdiction In LN Mukherjee vs The State of Madras it was further held that the court having jurisdiction to try the offences committed in pursuance of the conspiracy has also the jurisdiction to try the offence of criminal conspiracy even though it was committed outside its territorial jurisdiction This view was further reiterated in RK Dalmia vs Delhi Administration at 273 and Banwari Lal Jhunjhunwala and Ors vs Union of India and Anr 1963 supp 2 SCR 338 Therein it was held that the court trying an accused for offence of conspiracy is competent to try him for offences committed in pursuance of that conspiracy irrespective of the fact whether or not overt acts have been committed within its territorial jurisdiction The charges framed therein under section 409 read with sections 120B 420 IPC and section 51 D read with section 52 of the Prevention of Corruption Act were upheld Thus we hold that sanction under section 188 is not a condition precedent to take cognizance of the offence If need be it could be obtained before trial begins Conspiracy was initially hatched at Chandigarh and though itself is a completed offence being continuing offence even accepting appellant s case that he was at Dubai and part of conspiracy and overt acts in furtherance thereof had taken place at Dubai and partly at Chandigarh and in consequence thereof other offences had been ensued Since the offences have been committed during the continuing course of transaction culminated in cheating PNB at Chandigarh the need to obtain sanction for various offences under proviso to section 188 is obviated Therefore there is no need to obtain sanction from Central Govt The case may be different if the offences were committed out side India and are completed in themselves without conspiracy Perhaps that question may be different for which we express no opinion on the facts of this case The ratio in Fakhruila Khan has no application to the facts in this case Therein the accused were charged for offences under section 420 419 467 and 468 and the offences were committed in native State Mysore As a result the courts in British India ie Madras province had no jurisdiction to try the offence without prior sanction Equally in Verghese s case the offences charged under section 409 IPC had also been taken place outside British India Therefore it was held that the sanction under s 188 was necessary The ratio in Kailash Sharma s case is not good at law The appeal is accordingly dismissed RM SAHAI J While agreeing with Brother Ramaswamy J I propose to add a few words Prosecution of the appellant under Section 120B read with Section 420 and 471 of the Indian Penal Code in brief IPC was assailed for 567 absence of sanction under Section 188 of the Criminal Procedure Code in brief Cr P C Two submissions were advanced one that even though criminal conspiracy was itself an offence but if another offence was committed in pursuance of it outside India then sanction was necessary second an offence is constituted of a number of ingredients and even if one of them was committed outside the country Section 188 of the Cr PC was attracted Language of the section is plain and simple It operates where an offence is committed by a citizen of India outside the country Requirements are therefore one commission of an offence second by an Indian citizen and third that it should have been committed outside the country Out of the three there is no dispute that the appellant is an Indian citizen But so far the other two are concerned the allegations in the complaint are that the conspiracy to forge and cheat the bank was hatched by the appellant and others in India Whether it was so or not cannot be gone into at this stage What is the claim then Two fold one the appellant was in Dubai at the relevant time when the offence is alleged to have been committed Second since the bills of lading and exchange were prepared and were submitted to the Emirates National Bank at Dubai and the Payment too was received at Emirates National Bank in Dubai the alleged offence of forgery and cheating were committed outside India Is that so Can the offence of conspiracy or cheating or forgery on these allegations be said to have been committed outside the country Substantive law of extra territory in respect of criminal offences is provided for by Section 4 of the IPC and the procedure to inquire and try it is contained the Section 188 Cr PC Effect of these sections is that an offence committed by an Indian citizen outside the country is deemed to have been committed in India Proviso to Section 188 Cr PC however provides the safeguard for the NRI to guard against any unwarranted harassment by directing that notwithstanding anything in any of the preceding sections of this Chapter no such offence shall be inquired into or tried in India except with the previous sanction of the Central Government Since the proviso begins with a non obstinate clause its observance is mandatory But is would come into play only if the principal clause is applicable namely it is established that an offence as defined in clause n of Section 2 of the Cr PC has been committed and it has been committed outside the country What has to be examined at this stage is if the claim of the appellant that the offence under Section 120B read with Section 420 and Section 471 of the IPC were committed outside the country An offence is defined in the Cr PC to mean an 568 act or omission made punishable by any law for the time being in force None of the offences for which the appellant has been charged has residence as one of its ingredients The jurisdiction to inquire or try vests under Section 177 in the Court in whose local jurisdiction the offence is committed It is thus the commission of offence and not the residence of the accused which is decisive of jurisdiction When two or more persons agree to do or cause to be done an illegal act or an act which is illegal by illegal means such agreement is designated a criminal conspiracy under Section 120A of the IPC The ingredients of the offence is agreement and not the residence meeting of minds of more than two persons is the primary requirement Even if it is assumed that the appellant was at Dubai and he entered into an agreement with his counterpart sitting in India to do an illegal act in India the offence of conspiracy came into being when agreement was reached between the two The two minds met when talks oral or in writing took place in India Therefore the offence of conspiracy cannot be said to have been committed outside the country In Mobarik Ali Ahmed vs The State of Bombay this court while dealing with the question of jurisdiction of the Courts to try an offence of cheating committed by a foreign national held that the offence of cheating took place only when representation was made by the accused sitting in Karachi to the complaints sitting in Bombay The argument founded on corporeal presence was rejected and it was observed What is therefore to be seen is whether there is any reason to think that a foreigner not corporeally present at the time of the commission of the commission of the offence does not fall within the range of persons punishable therefor under the Code It appears to us that the answer must be in the negative unless there is any recognised legal principle on which such exclusion can be founded or the language of the Code compels such a construction If a foreign national is amenable to jurisdiction under Section 179 of the Cr PC a NRI cannot claim that the offence shall be deemed to have been committed outside the country merely because he was not physically present Preparation of bill of lading at Dubai or payment at Dubai were not isolated acts They were part of chain activities between the appellant and his associates with whom he entered into agreement to cheat the bank at Chandigarh Any isolated act or omission committed at Dubai was insufficient to constitute an offence The illegal act of dishonestly inducing the bank at Chandigarh was committed not by preparation of bill at Dubai but its presentation in pursuance of agreement to cheat The submission thus founded was on residence or on preparation of bills of lading or encashment at Dubai are of no consequence 569 Nor is there any merit in the submission that even part of the offence would attract Section 189 as the section operates when offence is committed outside India An offence is committed when all the ingredients are satisfied The section having used the word offence it cannot be understood as part of the offence Section 179 Cr PC empowers a court to try an offence either at a place where the offence is committed or the consequences ensue On the allegations in the complaint the act or omissions were committed in India In any case the consequence of conspiracy cheating and forging having taken place at Chandigarh the offence was not committed outside the country therefore the provisions of Sec 188 Cr PC were not attracted ORDER For reasons given by us in our concurring but separate orders the appeal fails and is dismissed Parties shall bear their own costs Appeal dismissed

These appeals impugned the constitutionality of the Uttar Pradesh Transport Service Development Act 1955 U P IX Of 1955 passed by the State Legislature after obtaining the assent of the President and the validity of the scheme of nationalisation framed and the notifications issued by the State Government under it The appellants as permit holders under the were plying buses on different routes in Uttar Pradesh along with buses owned by the State Government The State Government issued a notification under section 3 Of the impugned Act directing that the said routes along with others should be exclusively served by the State buses and followed up that notification by others under ss 4 and 8 of the Act The appellants moved the High Court under article 226 of the Constitution challenging the validity of the said Act and the notifications thereunder The High Court rejected their petitions and thereafter came into force the Motor Vehicles Amendment Act 100 Of 1956 inserting Ch IVA into the Act which provided for nationalisation of transport services The contentions raised on behalf of the appellants were 1 that the passing of the Amending Act made the impugned Act wholly void under article 2541 Of the Constitution 2 that the scheme framed under the impugned Act fell within the purview of section 68B of the Amending Act and ceased to be operative and 3 that even assuming that the impugned Act was valid in so far as the scheme was concerned it violated article 31 as it stood before the Constitution Fourth Amendment Act 1955 A further contention on the basis of the proviso to article 2542 was that the impugned Act stood wholly repealed by the Amending Act section 68B of the latter excluding the operation of the General Clauses Act It was contended inter alia on behalf of the State that the amendment of article 31 by the Constitution Fourth Amendment Act 1955 having removed before the scheme under the impugned Act had 9 yet been framed the constitutional limitation which that Article had imposed on the Legislature when it passed the impugned Act had the effect of validating that Act passed by it at a time when it was subject to the limitation Held per curiam that the Uttar Pradesh Transport Service Development Act 1955 did not on the passing of the Motor Vehicles Amendment Act 1956 100 of 1956 become wholly void under article 2541 Of the Constitution but continued to be a valid and subsisting law supporting the scheme already framed under the UP Act Even assuming that the Amending Act had the effect under article 2542 of repealing the State Act such repeal could not nullify the scheme already framed under that Act for the provisions of section 6 of the General Clauses Act would operate to save it Nor could it be said having regard to the provisions of the impugned Act and particularly section II5 thereof that it offended article 31 of the Constitution as it stood before the Constitution Fourth Amendment Act 1955 by failing to provide for the payment of adequate compensation Per Das CJ and Sinha J There was no reason why the doctrine of eclipse as explained in Bhikaji Narain Dhakras vs The State of Madhya Pradesh could not also apply to a post Constitution law that infringed a fundamental right conferred on citizens alone Such a law though shadowed and rendered ineffective by the fundamental right so far as the citizens were concerned would remain effective so far as noncitizens were concerned The moment the shadow was removed by a constitutional amendment the law would apply to citizens without re enactment John M Wilkerson vs Charles A Rahrer and Bhikaji Nayain Dhakras vs The State of Madhya Pradesh referred to The question whether a post Constitution law that infringed a fundamental right guaranteed to all persons citizens or noncitizens would be subject to that doctrine should however be left open Held per Bhagwati Subba Rao and Wanchoo jj that it was apparent from the provisions of articles 254 246 and 13 of the Constitution read together that the power of Parliament and the State Legislature to make laws with regard to any of the matters enumerated in the relevant list in the Seventh Schedule was subject to the provisions of the Constitution including article 13 There was a clear distinction between the two clauses of article I3 Under cl 1 pre Constitution law subsisted except to the extent of its inconsistency with the provisions of Part III whereas under Cl 2 any post Constitution law contravening those provisions was a nullity from its inception to the extent of such contravention The words any law in the second line of 2 Cl 2 meant an Act factually passed in spite of the prohibition contained therein and did not pre suppose that the law made was not a nullity That prohibition went to the root and limited the State s power of legislation and law made in spite of it was a still born one In construing the constitutional provisions relating to the powers of the legislature embodied in articles 245 and 132 of the Constitution no distinction should be made as between an affirmative and a negative provision for both are limitations on that power K C Gajapati Narayan Deo vs The State of Orissa referred to A distinction well recognised in judicial decisions had however to be made in judging the effect of law made in transgression of the limits fixed by articles 245 and I32 between an Act that was void from its inception and one that though valid when made was rendered unconstitutional later on On that distinction was based the principle that an after acquired power could not validate a statute and a law validly made could take effect when the obstruction was removed A review of the relevant authorities and judicial decisions clearly established 1 that affirmative conferment of power to make laws subject wise and the negative prohibition from infringing any fundamental rights were but twoaspects of want of legislative power 2 that by expressly making the power to legislate on the entries in the Seventh Schedule subject to other provisions of the Constitution that power was subjected to the limitations laid down in Part III of the Constitution 3 that therefore a law in derogation or in excess of such power would be void ab initio either wholly or to the extent of the contravention and that 4 the doctrine of eclipse could be invoked only in the case of a law that was valid when made but was rendered invalid by a supervening constitutional inconsistency Newberry vs United State 65 L Ed 9I3 John M Wilkerson vs Charyles A Rahrer 1891 140 U section 545 Carter vs Egg and Egg Pulp Marketing Board Keshavan Madhava Menon vs The State of Bombay Behram Khurshed Pesikaka vs The State Of Bombay 1955 1 SCR 589 Saghir Ahmed vs The State of U P Ram Chandra Balai vs State of Orissa and Pannalal Binjraj vs Union of India referred to and discussed The tests of repugnancy between two statutes one passed by the Parliament and the other by the State Legislature were 1 whether there was a direct conflict between them 2 whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature and 3 whether both the laws occupied the same field A comparison of the provisions of the two Acts indicated 11 that both were intended to operate in respect of the same subject matter and the same field but only in respect of the schemes initiated after the Amending Act had come into force the latter Act having no retrospective effect The State Act must therefore yield place to the Central Act to that extent and become void only in respect of schemes framed under the Central Act Keshavan Madhava Menon vs The State of Bombay 1951 SCR 228 applied

Appeal No241 of 1993 From the Judgment and Order dated 9101991 of the Punjab and Haryana High Court in Civil Writ Petition No 5727 of 1991 Harish N Salve Jagdish Singh Kuhar and AK Mahajan for the Appellant Ujagar Singh Ms Naresh Bakshi RS Yadav and GK Bansal for the Respondents The Judgment of the Court was delivered by SC AGRAWAL J This appeal relates to the inter se seniority of the appellant and respondent No 3 in the punjab Superior Judicial Service hereinafter referred to as The Service The appellant and respondent No 3 were both appointed to the Service on May 26 1986 on the basis of selection by direct recruitment The appellant belongs to the general category whereas respondent No 3 is a Mazhbi Sikh which is a Schedule Caste in Punjab The recruitment to the Service is governed by Punjab Superior Judicial Service Rules 1963 hereinafter referred to as The Rules By Rule 8 A which was inserted in the rules by notification dated June 141977 the instructions issued by the State Government from time to time in relation to reservation of appointments or posts for Scheduled Castes and Backward Classes were made applicable for the purpose of making appointments to the posts in the Service The orders of the State Government relating to persons belonging to Scheduled Castes in this regard which have a bearing in this appeal are as follows 1 Letter dated June 6 1974 from the Secretary to the Government of Punjab Welfare of Scheduled Castes and Backward Classes Department to all Heads of Department etc It was communicated that it had been decided to increase the percentage of reservation in direct recruitment in all services from 20 to 25 in the case of members of Scheduled Castes and from 2 to 5 in the case of members belonging to Backward Classes In the said letter it was also indicated 599 that the vacancies to be reserved for the members of Scheduled Castes in a lot of 100 vacancies would be at the points specified below 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 8 1 85 89 93 and 97 and so on It was also directed that the Roster already existing would not be abondoned but would now be maintained in continuation from the vacancy in the existing Roster last filled up according to the new pattern of reservation that has been prescribed in the earlier paragraphs in the said letter 2 Circular dated November 191974 relates to carrying forward of reservation for members of Scheduled CastesBackward Classes It was directed that the reservation should be carried forward from vacancy to vacancy in the same block until a Scheduled Caste or a Backward Class person as the case may be is appointed or promoted in the same block It was further directed that if all the vacancies in any block determined on the basis of prescribed Roster are filled up by other category person due to non availability of Scheduled Castes or Backward Classes persons the reservation should be carried forward to the subsequent blocks The said letter required that the reservation should be carried forward from vacancy to vacancy in each block and from block to block until the carried forward vacancies are filled up by the members of the Scheduled Castes or Backward Classes It was also provided that only one reserved vacancy out of the carried forward vacancies should be filled in a block of appropriate Roster in addition to the normal reserved point of the block 3 Letter dated May 5 1975 from the Secretary to the Government Punjab Welfare of Scheduled Castes Backward Classes Department addressed to all Heads of Departments etc It was communicated that the Government have decided that henceforth 50 vacancies of the quota reserved for Scheduled Casstes should be offered to Balmikis and Mazhbi Sikhs if available as a first preference from amongst the Scheduled Castes candidates 4 Letter dated April 8 1980 addressed by the Under Secretary to the Government of Punjab Welfare Department Reservation Cell to all Heads of Departments etc The position with regard to the implementation of instructions regarding reservation for Mazhbi Sikhs and Balmikis under the letter dated May 5 1975 was clarified as follows i Combined merit list can be disturbed while giving appointment 600 to the candidate belonging to Balmikis and Mazhbi Sikhs ii On the basis of 50 reservation the first reserved vacancy can be offered to Balmikis and Mazhbi Sikhs although his name may be below in the merit list iiiOn the basis of 50 reservation Balmikis and Mazhbi Sikhs 1 3 5 and so on reserved vacancies shall go to the candidates of these castes if available and 24 6 and so on reserved vacancies shall go to other Scheduled Castes candidates It is clarified here that these instructions are to be implemented when the names of the candidates of Balmikis and Mazhbi Sikhs are included in the merit list after selection If no candidate belonging to these communities has been selected or less candidate selected then the reserved vacancy should be filled up from amongst the other Scheduled Castes candidates meaning thereby no reserve vacancy reserved for Balmkis and Mazhbi Sikhs should be carried forward After the introduction of Rule 8 A in the Rules four persons were appointed by way of direct recruitment to the Service in the year 1979 One out of them Shri Balwant Rai belonged to a Scheduled Caste other than Balmikis or Mazhbi Sikhs Thereafter in 1981 one post fell vacant but no person belonging to a Scheduled Caste could be selected and the candidate belonging to general category was appointed against the said post In the year 1982 selection was made for two posts but only one person could be selected and he also belonged to the general category and no person belonging to a Scheduled Caste was available for appointment In 1986 six persons including the appellant and respondent No3 were appointed on the basis of direct recruitment Out of those six persons four belonged to the general category and two belonged to Scheduled Caste One of the two persons was Shri GS Sarma who belonged to a Scheduled Caste other then Balmikis or Mazhbi Sikhs In the merit list for the said selection the appellant was placed at No 1 Shri GS Sarma was at No 2 and respondent No 3 was at No 5 As per the Roster Shri GS Samra was placed at Point No7 the appellant at Point No8 and respondent No 3 at Point No 9 After joining the Service Shri GS Samra resigned from the same and had ceased to be a member of the Service prior to April 1 1988 In the tentative seniority list of the members of the Service as on April 1 601 1988 the appellant was placed at Serial No 52 and respondent No 3 was placed at Serial No53 Respondent No3 submitted a representation against his placement in the seniority list and claimed that he should be placed against the post reserved for Scheduled Caste at Serial No 5 in the Roster and on that basis he should be given the seniority of the year of 198 1 He also submitted that since he is a Mazhbi Sikh he is entitled to preference over Shri GS Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs and he claimed that he should have been placed at Point No7 in the Roster and Shri GS Samra should have been placed at Point No 9 and on that basis also respondent No 3 is senior to the appellant Representation was also invited from the appellant in this regard After considering the said representations the High Court on its administrative side decided that the respondent No 3 was entitled to be placed above Shri GS Samra in view of the Circular Letter dated May 5 1975 and that he should have been placed against Point No 7 in the roster and Shri GS Samra should have been placed against Point No9 in the Roster On that basis the seniority list was revised and respondent No3 was placed at Serial No 52 while the appellant were placed at Serial No 53 Feeling aggrieved by the revision in the seniority the appellant filed a writ petition in the High Court which was dismissed by the High Court by judgment and order October 9 199 1 This appeal is directed against the said judgment of the High Court There is no dispute that appellant has been rightly assigned Point No 8 If Respondent No 3 has to be assigned Point No7 as found by the High Court then he would be senior to the appellant but if Respondent No 3 is assigned Point No 9 then appellant would be senior to Respondent No 3 It is therefore necessary to determine whether respondent No 3 is entitled to be placed at Point No 7 in the Roster in place of Shri GS Samra who should be placed at Point No9 or that the respondent no3 should be assigned Point No9 of the Roster The said question requires consideration of the various orders relating to reservation for Scheduled Castes to which reference has been made earlier As indicated earlier by letter dated June 6 1974 points 1 5 9 13 17 21 25 29 33 3741 45 49 53 57 6 1 65 69 73 77 81 85 89 93 and 97 in the Roster are reserved for members of Scheduled Castes By letter dated May 5 1975 50 of the vacancies of the quota reserved for Scheduled Castes are required to be offered to Balmikis and Mazhbi Sikhs if available as a first preference from amongst the Scheduled Castes candidates In view of the clarifications contained in the letter dated April 8 1980 on the basis of 50 reservation the first reserved vacancy can be offered to Balmikis and Mazhbi Sikhs although his name may be below in the merit list and on the basis of 50 reservation amongst the vacancies reserved for Scheduled Caste vacancies 1 3 5 and so on would go to Balmikis and Mazhbi Sikhs if available and reserved vacancies 2 4 6 and so on would go to other Scheduled 602 Castes candidates It has also been clarified that if no candidate belonging to the communities of Balmikis and Mazhbi Sikhs was selected or less number of candidates were selected then the reserved vacancies should be filled up amongst the other Scheduled Castes candidates and that no vacancy reserved for Balmikis and Mazhbi Sikhs should be carried forward In view of the aforesaid clarifications out of the posts reserved for Scheduled Castes in the Roster there was reservation for Balmikis and Mazhbi Sikhs on the posts against the following points in the Roster 1 9 17 25 33 41 49 57 65 73 81 89 and 97 There was reservation for members of Scheduled Castes other than Balmikis and Mazhbi Sikhs on the posts against the following points in the Roster 5 13 21 29 37 45 53 61 69 77 85 and 93 The learned counsel for the appellant has urged that since these orders relating to reservation for Scheduled Castes became applicable to the Service with effect from June 14 1977 when Rule 8 A was inserted all appointments to the Service after June 14 1977 have to be made in accordance with these orders The submission is that the first appointment by direct recruitment of a person belonging to the Scheduled Castes was of Shri Balwant Rai made in 1979 That was at point No 1 in the Roster That should have gone to a Balmiki or a Mazhbi Sikh but since no person belonging to those communities was available Shri Balwant Rai who belongs to a Scheduled Caste other than Balmikis and Mazhbi Sikhs was appointed It has been further urged that in view of the clarification contained in the letter dated April 8 1980 a vacancy reserved for Balmikis and Mazhbi Sikhs is not required to be carried forward and the Balmikis and Mazhbi Sikhs cannot claim reservation in respect of the next vacancy at Point No 5 which was reserved for Scheduled Castes other than Balmikis and Mazhbi Sikhs and they can only claim the vacancy that was reserved for Balmikis or Mazhbi Sikhs at point No9 It was submitted that Shri GS Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs was entitled to be appointed against the reserved vacancy at Point No5 reserved for a candidate belonging to a Scheduled Caste other than Balmikis and mazhbi Sikhs but since at the time of selections that were made in the years 1981 and 1982 no person belonging to a Scheduled Caste was available The vacancy at Point No 5 reserved for Scheduled Castes was carried forward to point No 7 and Shri GS Samra had to be adjusted at point No7 in the Roster The submission is that respondent No 3 being a Mazhbi Sikh could not claim to be placed at point No 7 in the Roster against a vacancy which was reserved for a candidate belonging to a Scheduled Castes other than Balmikis and 603 Mazhbi Sikhs and he could be only placed against the vacancy at point No9 in the Roster The learned counsel for the respondent No3 on the other hand has urged that in view of the order dated May 5 1975 50 vacancies of the quota reserved for Scheduled Castes have to be offered to Balmikis and Mazhbi Sikhs and since Shri Balwant Rai belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs had been appointed in 1979 the next post should go to Balmikis and Mazhbi Sikhs and on that basis respondent No3 was entitled to be appointed against the second post at point No 7 of the Roster and Shri GS Samra could only be appointed against third post at point No9 in the roster In the alternative it was urged that the order dated April 8 1980 could only have prospective operation with effect from the date of issue of the said order and the sub roster indicated by the said order could be given effect to only from that date and on that basis the first post reserved for Scheduled Castes should go to Balmikis or Mazhbi Sikhs and on that basis also respondent No3 was entitled to be placed against point No7 in the 100point roster and Shri GS Samra against point No9 in the said roster From a parusal of the letter dated April 81980 we find that it gives clarifications on certain doubts that had been created by some Departments in the matter of implementation of the instructions contained in the earlier letter dated May 51975 Since the said letter dated April 81980 is only clarificatory in nature there is no question of its having an operation independent of the instructions contained in the letter dated May 5 1975 and the clarifications contained in the letter dated April 8 1980 have to be read as a part of the instructions contained in the earlier letter dated May 5 1975 In this context it may be stated that according to the principles of statutory construction a statute which is explanatory or clarificatory of the earlier enactment is usually held to be restrospective See Craies on Statute Law 7th Ed p 58 It must therefore be held that all appointments against vacancies reserved for Scheduled Castes made after May 5 1975 after May 14 1977 in so far as the Service is concerned have to be made in accordance with the instructions as contained in the letter dated May 5 1975 as clarified by letter dated April 8 1980 On that view the appointment of Shri Balwant Rai in 1979 has to be treated to be an appointment made under the said instructions and operation of these instructions cannot be postponed till April 8 1980 If the matter is considered in this light then the sub roster as indicated in the letter dated April 8 1980 would have to be applied in respect of the post on which Shri Balwant Rai was appointed in 1979 and the said appointment has to be regarded as having been made against the vacancy at point No 1 in the the roster which was reserved for Balmikis or Mazhbi Sikhs but since no Balmiki or Mazhbi 604 Sikh was selected for that post the said vacancy was assigned to Shri Balwant Rai who belonged to a scheduled Caste other than a Balmiki or Mazhbi Sikh The said vacancy which was reserved for Balmikis or Mazhbi Sikhs could not be carried forward in view of the directions contained in the letter dated April 8 1980 The next post reserved for Scheduled Castes at point No 5 in the roster was meant for a person belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs In the selections that were made in 1981 and 1982 no person belonging to a Scheduled Caste was selected and therefore posts at Points nos 5 and 6 in the Roster became available to candidates in the general category and the vacancy at Point no5 reserved for Scheduled Castes was carried forward to point No7 In 1986 two persons belonging to Scheduled Castes namely Shri GS Samra and respondent No3 were selected Shri GS Samra belonged to a Scheduled Caste other than Balmiki and Mazhbi Sikh whereas respondent No 3 was a Mazhbi Sikh Since the post at point No5 which had been carried forward to point No7 was reserved for a candidate belonging to a Scheduled Caste other than Balmiki or Mazhbi Sikh it had to be assigned to Shri GS Samra falling in that category and respondent No 3 who was a azhbi Sikh could only be appointed against the reserved vacancy at point No9 in the Roster Respondent No 3 can not claim that the vacancy at Point No7 should be assigned to him If respondent No3 is adjusted against the vacancy at Point No 9 in the Roster he has to be placed in seniority below the appellant who was appointed against point No 8 in the Roster In the judgment under appeal the High Court has placed reliance on the instructions dated March 6 1961 and the decision of this Court in Jagjit Singh vs State of Punjab The instructions dated March 6 1961 deal with a situation where the services of a Government Servant belonging to Scheduled CastesTribes and Backward Classes are terminated and a resultant vacant occurred It has been directed as under With a view to safeguard the interests of the members of the Scheduled CastesTribes and Backward Classes it has been decided that if the services of a Government Servant belonging to Scheduled CastesTribes or Backward Classes are terminated the resultant vacancy should not be included in the normal pool of vacancies to be filled in accordance with the Block System but should be filled up on ad hoc basis from the candidates belonging to these castes and classes In other words the intention is that the posts vacated by members of Scheduled CastesTribes and Backward classes should remain earmarked and be filled up by members belonging to these Classes 605 In Jagjit Singh s case this Court was dealing with appointments to the Punjab Civil Service Executive Branch These selection was made for appointment against 12 vacancies in the said Service and other vacancies in the Allied Services Two of the vacancies in the Punjab Civil Service were reserved for Scheduled Castes candidates Three persons were selected from among the members of Scheduled Castes The appellant in the said appeal was at third place in the merit list of the Scheduled Castes candidates The first two candidates on the merit list were appointed and the appellant was appointed on the post of A Class Tehsildar in one of the Allied Services Subsequently one of the two candidates who had been appointed to the Punjab Civil Service resigned his office and a question arose as to whether the appellant was entitled to be appointed to the Punjab Civil Service against the vacancy arising on account of resignation of the Scheduled Castes candidate who had been appointed earlier The appellant laid his claim for such appointment on the basis of the instructions contained in the circular of March 6 196 1 The said claim of the appellant was upheld by this Court and it was held that the resultant vacancy caused by resignation of one of the Scheduled Castes candidate should have gone to the appellant The Circular dated March 6 1961 and the decision in Jagjit Singh vs State of Punjab supra do not have a bearing on the question in controversy in the instant case because here there is no dispute that the respondent No3 has been appointed against the post reserved for members of Scheduled Castes and the question is about the inter se placement of two persons appointed against vacancies reserved for Scheduled Caste candidates The Circular dated March 6 1961 does not deal with the said question and it has to be dealt with on the basis of the instructions contained in the orders dated May 5 1975 and April 8 1980 For the reasons aforementioned the appeal is allowed the judgment and the order of the High Court dated October 9 1991 is set aside The Civil Writ Petition filed by the appellant in the High Court is allowed and it is declared that respondent No3 can only be treated to have been appointed against the vacancy at Point no9 in the Roster and on that basis he must be placed below the appellant in the seniority list Respondent No2 is directed to revise the seniority list of the members of the Service accordingly The appellant would be entitled to conse quential benefits if any accruing to him as a result of such revision in the seniority The parties are left to bear their own costs NVK Appeal allowed

A partnership firm consisting of three partners was engaged inter alia in the business of manufacturing and sale of beedies under the brand name Mangalore Prakash Beedies On May 201972 a private limited company called prakash beedies Ltd the assessee appellant was incorporated One of its objects was to take over the business of the aforesaid firms which it did under an agreement dated 15 July 1972 whereby the firms sold its rights and assets to the company For the use of the trade name a royalty at 10p for every 1000 beedies was to be paid by the company to the firm This payment was made ever year by the assesse on account of royalty The three partners of the firms were also directors of the company The relevant assessment years were 1974 75 and 1975 76 The facts in the other appeals are similar The assessee claimed deduction of the amount paid by it as royalty The ITO allowed the deductions as claimed The CIT in stio motu proceedings disallow the aforesaid deductions On appeal the tribunal restored the order of the ITO On reference the High Court answered in fanour of the revenue as the three directors of the assessee company were also partners in the firm It held that in law a firm is merely a collection or association of individuals for carrying on a business Merely because the firm is an assessable entity under the Income Tax Act it does not follow that it is a juristic or legal entity It must therefore be held that the payments to the firm were in reality made to the 607 directors thus attracting section 40 c Before this Court it was contended for the assessee that payment to a firm is not ipso fact payment to the partners directly or indirectly In any event the payments were made to the three persons not in their capacity of directors qua directors but in consideration of a valuable right parted by them in favour of the assessee company section 40c was never intended to take in such payments They relied on the budget speech of the Finance Minister and argued that the principle of interpretation noscitor a sociis must be applied to the words remuneration benefit or amenity The genuineness or validity of the agreement the factum of payments as royalty and that the brand name carries significant business value was not disputed The question before this Court was whether the royalty payments fail within section 40c Allowing the appeal this Court HELD 1 Even assuming that the payments to firm were payments to partners the said payments did not fall within section 40c The payment were made In consideration of a valuable right parted by the firmpartners directors of the assessee company in favour of the assessee So long as the agreement whereunder the said payments were made is not held to be a mere device or a mere screen the said payments cannot be treated as payments made to the directors qua directors 613 H 614 A The payments were made by way of consideration for allowing the to use a valuable right belonging to them viz the brand name Such a payment may be liable to be scrutinised under sub section 2 of section 40 A but it certainly did not fall within the four corners of section 40c 614 A TT Pvt Ltd vs ITO Bangalore approved CIT Patiale vs Avon Cycles p Ltd and India Jute Co Ltd vs CIT referred to 2 The power vested in the ITO is to determine whether any expenditure of allowance is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by the assessee or 608 accruing therefrom Any payment to a relative of a director or other persons mentioned in clause c will necessarily be examined applying the above test and if it is found that they are unwarranted unreasonable or excessive they will be disallowed Such a situation does not arise herein 615 C CIT Bombay vs Ms Indian Engineering and Commercial Corporation p Ltd 1983 distinguished JT 683

DICTION Civil Appeal No 8670 of 1983 From the JudGment and Order dated 3 9 1982 of the Punjab and Haryana HiGh Court in ReGular First Appeal No 1 105 of 198 1 WITH CA Nos 8634 to 86 5883 and 8660 6283 8665 to 866983 and 8671 72 83 Prem Prasad Juneja and RS Sodhi for the Appellants HM Singh for GK Bansal for the Respondents 648 The Judgment of the Court was delivered by K RAMASWAMY J The common questions of law arose for decision in these appeals Hence they are disposed of together Notification under section 4 1 of the Land Acquisition Act 1 of 1984 was published in the Punjab State Gazette on January 27 1978 acquiring 89 acres 4 canals and 12 marlas of land situated in Dhuri village for public purpose namely to set up new Mandi Township The appellants claimed at the rate of Rs 30000 per Bighabut Land Acquisition Officer after classifying the lands into six blocks A to F awarded market value ranging between Rs 30000 to Rs 6000 acre On reference under section 18 of the Act the District Judge Sangrur in his judgment dated May 13 1981 disagreed with the classification and found that all the lands are possessed of the same quality Relying on sale deeds exhibit p 3 dated September41972 p 5 dated June 141976 p 2 dated February 23 1977 and p 4 dated July 15 1977 all small extents he calculated at an average of Rs 1300 per Biswa and awarded to the lands belonging to Jaswant Kaur Baldev Singh and Gurdev Singh at the rate of Rs 1000 per Biswael finding that their lands are abutting Abadi village and for the rest awarded at the rate of Rs 800 per Biswa with statutory solatium at 15 and interest of 6 per annum on enhanced compensation Dissatisfied therewith the State filed the appeals and against disallowed claims the claimants in one batch filed appeals and in another batch filed cross objections The learned Single Judge relied on exhibit p3 and p 5 filed by the claimants and exhibit R 4 and R 6 filed by the State as comparable instances and calculated the average which worked out at Rs 750 per Biswa He found that the lands are possessed of potential value for further building purposes Therefore he carved out belting at a depth of 100 ft from the main road to those lands deducted 13rd towards developmental charges and awarded the market value at the rate of Rs 750 to the land situated abutting to the main road to the depth of 100 ft and for the balance lands at the rate of Rs500 per Biswa The State appeals were allowed and of the claimants and cross objection were dismissed The Division Bench confirmed the judgment of the learned Single Judge The claimants filed these appeals by special leave In the first batch no witness has been examined but in the second batch witnesses were said to have been examined in proof of these documents but their evidence was not made part of the record Equally of the sale deeds It is seen that the documents in the second batch p top 1 include those filed in the first batch exhibit p 5 is dated Sept 4 1972 in which 20 Biswas of land was sold for Ice Factory It was situated in the town itself The price fetched therein was Rs 20000 Therefore it worked out at the rate of Rs 1000 per Biswa exhibit p10 is dated August 25 1975 7 Biswas of land in Dhaula village was sold for Rs 649 75000 which works out at rate of Rs 1071 per Biswa exhibit p 7 is dated June 14 19763 Bighas 16 Biswas of land situated at Dhularoad side was sold for Rs 4500 which works out at the rate of Rs 1285 per Biswa Exp 8 dated June 15 1977 is for 4 Biswas of land at Dhula road sold for Rs 4000 which works out at Rs 1000 per Biswa exhibit p 4 is dated Feb 23 19773 Biswas of land in the heart of the town Dhuri was sold for Rs 6000 which works out to Rs 2000 per Biswa exhibit p 6 is dated may 181977 one Bigha7 Biswas were sold for Rs 1000 which works out to Rs 370 per Biswa This land is away from the town and also from the acquired land exhibit p 9 is dated July 12 1977 15 Biswas of land were sold for Rs 24000 working out at the rate of Rs 1600 per Biswa Based thereon it was contended that exhibit p 9 fetches the highest market value and is nearer to the date of notification and would offer comparable price The High Court ought to have fixed market value at that rate The High Court committed illegality in relying on two sale deeds of the claimants and two mutation entries on behalf of the state in working out the average Therefore fixation of the market value is illegal The mutations are not admissible as neither sale deeds were filed not any body connected with them are examined The question therefore is whether these sale transactions would reflect the prevailing market value of the land of the total extent of 90 acres It is seen that in the first batch no one was examined to prove the documents In the second batch though witnesses were said to have been examined the evidence is not on record Neither the reference court nor the High Court discussed the evidence and no finding was given So we do not have the advantage of any findings in that behalf The state filed 5 mutation entries which were marked The sale entries exhibit R 6 is of October 41977 and exhibit R 5 of November 13 1977 The rates of lands in Saledeeds executed between March 7 1977 to November 13 1977 ie R 2 on 7377 R 3 on 8677 R 4 on 31877 and R 5 on 301177 work out between Rs 83 to Rs 450 per Biswa It is settled law that to determine the market value of the land under section 231 of the Act the sales of the land under requisition if any or the sales in the neighbourhood lands that possessed of same or similar potentialities or fertility or other advantageous features would furnish basis to determine just and fair market value on the premise of hypothetical willing vendor and willing vendee The willing vendor who would offer the land and willing vendee who would agree to purchase the land as a prudent man in normal market conditions as on the date of the notification or near about the date of the notification is the acid test It is also settled law that the sale and purchase of lands at a throw away price at arm s length or depressed sales or fecal of sales brought into existence in quick succession to inflate the market value would not offer any basis to determine just market value In order to adjudge whether sales are bonafide sales between willing vendor and 650 willing vendee and whether the consideration mentioned in deed was in fact and really passed on under transaction whether the lands covered by sale deeds and relied on possessed of same or similar potentialities or fertilities or advantageous features would be brought on record only by examining the vendor or the vendee or if neither of them is available the attesting witness who has personal knowledge of the bargain and passing of the consideration are mandatory Vide Periyar Pareekanni Rubbers Ltd vs State of Kerala wherein this court surveyed the entire case Law in that respect Since none has been examined in the first batch the sale transactions referred to either by the state or by the claimants cannot be relied upon In the second batch since the evidence has not been referred to by the courts below nor discussed by them nor we have the advantage to go through the same we cannot rely on the same to further enhance the market value Therefore we are left with no option but to reject those sale deeds Moreover except exhibit p 9 all other sale deeds are of very small extents This court consistently has taken the view in Collecior of Lakhimpur vs Bhuban Chandra Dutta AIR 1971 SC 2015 Mirza Naushery voan Khan Anr vs Collector Land Acquisition Hyderbad Rain Rattan Ors vs State of U P Smt Kaushalya Devi Bogra Orsv Land Acquisition officer Aurangabad Anr Padma Uppal vs State of Punjab Ors Administrator General of West Bengal vs Collector Varanasi and Special Tehsildar Land Acquisition vs A Mangala Glowri 19914 SCC 218 that sale deeds of small extents being retail price do not offer comparable basis to fix compensation when large block of land is acquired To an intending bonafide purchaser if such block of 90 acre is offered for sale would he agree to purchase at retail price or far less value Under no circumstance he would agree to purchase at retail prices mentioned above In view of the settled legal position the saledeeds sought to be relied upon do not give us any basis to determine the market value Every endeavour would be made to fix fair and reasonable market value If sale transactions relate to the lands under acquisition and if found to be genuine and bonafide transaction between willing vendor and vendee then it may be considered but reasonable margin must be given in fixing whole sale price Therefore all the documents except p 9 are rejected The next contention is that the sale deed exhibit p 9 by which 15 Biswas were sold for Rs 24000 which works out at the rate of Rs 1600 per Biswa and whether this hiohest price should be given to the appellants As stated earlier we have no evidence before us as to under what circumstances this document came to be executed and what is the distance between the lands and for what purpose the land was sold and what is the 651 comparable nature of the land fertility and potentialities of the land etc The contention relying on state of Madras vAMRanjan Anr 1976 3SCR35 that highest value should be fixed cannot be accepted in view of the consistent late view of this court In Collector of lakhimppur s case supra this court accepted the principle of average but however rejected the small extent of the lands arid enhancement based on the average at Rs 15000 per Bigha was reduced to Rs 10000 per Bicha In Smt Kausalya Devi s case supra this court noted that large extent of land in the developed Aurangabad town was acquired for Medical College accepted the principle of average worked out by the reference court varying between Rs 225 to Rs 500 per sq yard and this court ultimately fixed the market value at the rate of Rs 150 per sq yard In Administrator General of West Bengal s case supra this court upheld rejection of the small plots of lands and accepted two sale deeds of large extent working out the average rate at Rs 500 per Decimal and ultimately reference court fixed the market value at the rate of Rs 200 per Decimal It is therefore clear that the court in the first instance has to determine as to which of the sale deeds are relevant proximate in point of time and offer comparable base to determine market value Thereafter the average price has to be worked out It would be seen that this court has taken consistent view of working out average and further deductions have been made in fixing just and fair market value when large chunk of the land was acquired We respectfully agree and adhere to the principle and we find no compelling reason to divert the stream or arrest the consistence The question then is whether the reduction of the market value by the learned Single Judge is warranted on facts and under law In his judoment the learned Judge found that the acquired lands are situated between railway line on the one side and link road going from Dhuri to Sarona on the other side On the third side it is surrounded by the in habited area of Dhuri town A small portion in Khasra No 2585 was abutting the Dhola road and the rest of the acquired land is just behind the inhabited area While acquiring these lands the Govt have excluded the built up area He also found that there is tendency of extension of Abadi village towards acquired lands Therefore he found that the lands arepossessed of Potential value for being housed for urban purpose in the near future and therefore had to be valued as such Thus we have the evidence that the lands are possessed of potential value for being used for building purposes In fact the acquisition itself is for construction of Mandi Township The principle of belting is perfectly legal and unexception 652 ble as the lands abutting the main road upto a specified depth depending on actual material on record would fetch higher market rate than the lands situated a interior area However on facts of this case the belting is not warranted for the reason that as seen on three sides there exist roads and abutting the village As per the plan as found by the High Court there exists a road cutting across the acquired lands Therefore there is not only access on three sides but also to interior lands Thus in our view belting and fixation of differential rates of value is not justified The next question is what would be the reasonable and just market value the lands were likely to fetch In view of the fact that there is no evidence available and since the High Court found that the lands are possessed of potential value the rate of Rs 1000 per Biswa as awarded by civil court to the lands abutting abadi and the lands upto a depth of 100 ft is upheld In view of the preceding finding we hold that the fixation of uniform rate of Rs 1000 per Biswa is legal It is seen that this acquired land of 90 acres is undoubtedly undeveloped area and necessarily requires development by laying the roads parks drainage lighting and other civic amenities In Brig Sahib Singh Kalha Ors vs Amritsar Improvement Trust Ors and Administrator General of West Bengal s case supra this court deducted 53 of the undeveloped lands towards developmental charges while fixing market value at decimal rate etc towards amenities In Special Tehsildar Land Acquisition Vishakapatnam s casesupra this court made deduction at 13rd The appellant placed reliance on Bhagwathula Swamnana Ors vs Special Tahsildar Land Acquisition Visakhapatnam where this court did not deduct any land towards developmental charges But in that case it was found that the lands acquired are situated in fully developed area On those circumstances this court did not deduct any land towards developmental charges It is seen that the consistent view of this court now is that deduction of at least 13rd is necessary towards developmental charges Therefore we uphold deduction of 13rd towards development charges from the market value and determine the market value at Rs 670 per Biswa The learned judge while deducting 13rd fixed market value at Rs 759 of frontage lands and Rs 500 to interior land Rs 750 is obvious mistake but the state did not take any action to have itch corrected not filed appeals Fixation of Rs 750 per Biswa of lands from road upto a depth of 100 ft became final So we cannot interfere or correct it in claimants appeal But for the rest of the lands we award Rs 670 per Biswa with solatium at 15 and interest at 6 on the enhanced market value from the date of taking possession till date of payment 653 The appeals are accordingly allowed to the above extent In the circum stances parties are directed to bear their own costs

The prosecution case was that the appellant a non resident Indian at Dubai hatched a conspiracy along with four others to cheat the Bank at Chandigarh in furtherance of the conspiracy the appellant got credit facility by way of Foreign Letters of Credit and issued proforma invoices of his concern and addressed to the Bank through the establishments of other accused The Manager of the Bank another accused in confabulation with 544 the appellant and other accused being in charge of foreign exchange department issued Foreign letter of Credit in violation of import policy The Bills of Lading were addressed to the Bank The cable confirmation of the Bank was sent to appellant s concern at Dubai for confirmation of discrepancy The appellant confirmed correctness thereof Placing reliance thereon authority letter was issued by the Bank and cables were sent subsequent thereto to remit the amount to the Dubai Bank through one Irving Trust Company At the instance of accused Anand The Dubai Bank informed the Bankat Chandigarh that the discrepancy in the document adaptable to accused Anand and claimed to have inspected the goods on board in the vessel On receipt of the information from the appellant s concern at Dubai full amount is US Dollars 439200 was credited against all the three Letters of Credit on discount basis The investigation established that the vessel was a non existent one and three Foreign Letters of Credit were fabricated on the basis of false and forged shipping documents submitted by the appellant to the Dubai Bank Thus the Bank at Chandigarh was cheated of an amount of Rs 4030329 The accused were charge sheeted under section read with sections 420 468 and 471 IPC The Trial Court discharged all the accused of the offenses on the ground that conspiracy and the acts done in furtherance thereof had taken place outside India and as no sanction under section 188 Code of Criminal Procedure 1973 was produced the prosecution was not maintainable The High Court in revision held that the conspiracy took place at Chandigarh and the overt acts committed In pursuance of that conspiracy at Dubai constituted offences under sections 420467 and 471 IPC and they were triable at Chandigarh without previous sanction of the Central Govt The High Court setting aside the order of discharge of the trial Court directed to continue further proceedings in accordance with law That order of the High Court was challenged under this appeal under Article 136 of the Constitution The appellant contended that he was not a privy to the conspiracy and the conspiracy did not take place at Chandigarh and that even assuming that some of the offences were committed in India by operation of section 188 read with the proviso thereto with a non obstanti clause absence of sanction by the 545 Central Govt barred the jurisdiction of the Courts in India to take cognisance of or to enquire into or try the accused The respondents submitted that the conspiracy to cheat the Bank was hatched at Chandigarh that all the accused committed over acts in furtherance of the conspiracy at Chandigarh and therefore the sanction of the Central Govt was not necessary Dismissing the appeal this Court HELD Per K Ramaswarmy J 101 Judicial power of a State extends to the punishment of all offences against the municipal laws of the State by whomsoever committed within the territory It also has the power to punish all such offences wherever committed by its citizen The general principle of international law is that every person be it a citizen or foreigner who is found within a foreign State is subjected to and is punishable by its law Otherwise the criminal law could not be administered according to any civilised system of jurisprudence 553F 102 Conspiracy may he considered to be a march under a banner and a person may join or drop out in the march without the necessity of the change in the text on the banner In the comity of International Law in these days commiting offences on international scale is a common feature The offence of conspiracy would be a useful weapon and there would exist no contact in municipal laws and the doctrine of autrefois convict or acquit would extend to such offences The comity of nations are duty bound to apprehend the conspirators as soon as they set their feet on the country territorial limits and nip the offence in the bud 564 F G 201 Section 120 A of the IPC defines conspiracy to mean that when two or more persons agree to do or cause to be done an illegal act or an act which is not illegal by illegal means such an agreement is designated as criminal conspiracy No agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof 557 C 546 202 Section 120 B of the IPC prescribes punishment for criminal conspiracy It is not necessary that each conspirator must know all the details of the scheme nor be a participant at every state It is necessary that they should agree for design or object of the conspiracy Conspiracy is conceived as having three elements 1 agreement 2 between two or more persons by whom the agreement is effected and 3 a criminal object which may be either the ultimate aim of the agreement or may constitute the means or one of the means by which that aim is to be accomplished It is immaterial whether this is found in the ultimate objects 554 E 203 Conspiracy to commit a crime itself is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment independent of the conspiracy 556 D 204 The agreement does not come to an end with it making but would endure till it is accomplished or abandoned or proved abortive Being a continuing offence if any acts or omissions which constitute an offence are done in India or outside its territory the conspirators continuing to be parties to the conspiracy and since part of the acts were done in India they would obviate the need to obtain sanction of the Central Govt All of them need not he present in India nor continue to remain in India 556 E 205 An agreement between two or more persons to do an illegal act or legal acts by illegal means is criminal conspiracy If the agreement is not an agreement to commit an offence it does not amount to conspiracy unless it is followed up by an overt act done by one or more persons in furtherance of the agreement The offence is complete as soon as there is meeting of minds and unity of purpose between the conspirators to de that illegal act or legal act by illegal means Conspiracy itself is a substantive offence and is distinct from the offence to commit which the conspiracy is entered into It is undoubted that the general conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy Each act constitutes separate offence punishable independent of the conspiracy 563 F G Jones Case 1832 B A D 345 Mulcahy vs Reg 1868 LR Quinn vs Leathem at 528 BG Barsay vs The State of Bombay Yashpal vs The State of Punjab Mohammed Usman Mohamned Hussain Manivar Anrv State of Maharashtra 1981 3SCR 68Noor 547 Mohammad Yasuf Monin vs State of Maharashtra RK Dalmia Anr vs The Delhi Administration Shivanarayan Laxminarayan Ors vs State of Maharashtra Ors and Lennari Schussler Anr vs Director of Enforcement Anr 1197012SCR 760 referred to 206 A conspiracy is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of facts So long as it performance continues it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity A crime is complete as soon as the agreement is made but it is not a thing of the moment It does not end with the making of the agreement It will continue so long as there are two or more parties to it intending to carry into effect the design Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so The conspiracy designed or agreed abroad will have the same effect as in India when part of the acts pursuant to the agreement are agreed to be finalised or done attempted or even frustrated and vice versa 564 H 565 A Abdul Kader vs State AIR 1964 Bombay 133 US vs Kissal Ford vs US at 620 to 622 Director of Public Prosecutions vs Doot and Ors 1973 Appeal Cases 807 HL Treacy vs Director of Public Prosecutions 1971 Appeal Cases 537 at 563 HL and Board of Trade vs Owen 1957 Appeal Cases 602 referred to Prof Williams Glanville Vanue and the Ambit of Criminal Law at 528 Halsbury s Law of England third edition Vol page 327 Para 6O2 ArchoboldCriminal pleadings Evidence and Practice 42nd edition 1985 Chapter 23 In para 28 32 at page 2281 Writ Conspiracies and Agreements at pages 73 74 Smith Crimes at page 239 and Russel Crime 12th edition page 613 referred to 207 Sanction under section 188 is not a condition precedent to take cognizance of the offence If need be it could he obtained before trial begins Conspiracy was initially hatcher at Chandigarh and though its elf is a completed offence being continuing offence even accepting appellant s case that he was at Dubai and part of conspiracy and overt acts in furtherance 548 thereof had taken place at Dubai and partly at Chandigar and in consequence thereof other offences had been ensued Since the offences have been committed during the continuing course of transaction culminates in cheating PNB at Chandigarh the need to obtain sanction for various officer under proviso to section 188 is obviated Therefore there is no need to obtain sanction from Central Govt The case may he different if the offences were committed out side India and are completed in themselves without conspiracy 566 D E K Satwant Singh vs The State of Punjab In Re M L Verghese AIR 1947 Mad 352 T Fakhulla Khan and Ors vs Emperor AIR 1935 Mad 326 Kailash Sharma vs State 1973 Crl law journal 1021 distinguished Purshottamdas Dalmia vs State of Bengal LN Mukherjee vs The State of Madras RK Dalmia vs Delhi Administration at 273 Banwari Lal Jhunjhunwala and Ors vs Union of India and Anr 1963 Supp 2 SCR 338 referred to Per RM Sahai J Concurring 11 Language of the section 188 Code of Criminal Procedure is plain and simple It operates where an offence is committed by a citizen of India outside the country Requirements are therefore one commission of an offence second by an Indian citizen and third that it should have been committed outside the country 567 D 12 Substantive law of extra territory in respect of criminal offences is provided for by Section 4 of the IPC and the procedure to inquire and try it is contained in Section 1 88 Cr PC Effect of these sections is that an offence committed by an Indian citizen outside the country is deemed to have been committed in India 567 E 13 Since the proviso to Section 188 Cr PC begin with a non obstinate clause its observance is mandatory But it would come into play only if the principal clause is applicable namely it is established that an offence as defined in dause n of Section 2 of the Cr PC has been committed and it has been committed outside the country 567 G 549 14 What has to be examined at this stage is if the claim of the appellant that the offence under Section 120B read with Section 420 and Section 471 of the IPC were committed outside the country An offence is deemed in the Cr PC to mean an Act or omission made punishable by any law for the time being in force None of the offences for which the appellant has been charged has residence as one of its ingredients 567 H 568 A 15 The jurisdiction to inquire or try vests under Section 177 in the Court in whose local jurisdiction the offence is committed It is thus the commission of offence and not the residence of the accused which is decisive of jurisdiction When two or more persons agree to do or cause to be done an illegal act or an act which is illegal by illegal means such agreement is designated a criminal conspiracy under Section 120A of the IPC The ingredients of the offence is agreement and not the residence Meeting of minds of more than two persons is the primary requirement Even if it is assumed that the appellant was at Dubai and he entered into an agreement with his counterpart sifting in India to do an illegal act in India the offence of conspiracy came into being when agreement was reached between the two The two minds met when talks oral or in writing took place in India Therefore the offence of conspiracy cannot be said to have been committed outside the country 568 B C 16 If a foreign national is amenable to jurisdiction under Section 179 of the Cr PC a NRI cannot claim that the offence shall be deemed to have been committed outside the country merely because he was not physically present 568 F Mobarik Ali Ahmed vs The State of Bombay referred to An offence is committed when all the ingredients are satisfied The section having used the word offence it cannot be understood as part of the offence Section 179 Cr PC empowers a court to try an offence either at a place where the offence is committed or the consequences ensue On the allegations in the complaint the act or omissions were committed in India In any case the consequence of conspiracy cheating and forging having taken place at Chandigarh the offence was not committed outside the country therefore the provisions of Sec 188 Cr PC were not attracted 569 B

Appeal No 2544 of 1993 From the judgment and Order dated 75 1992 of the Calcutta High Court in Appeal No Nil of 1992 in Matter No 21 of 1991 PS Poti and SK Nandy for the Appellant K Parasaran AK Ganouli GK Banerjee and Som Mandal for the Respondent RM SAHAI J The short and the only question of law that arises for consideration in this appeal is if an appeal was maintainable against an order passed by the Learned Single Judge under Section 391 of the either under Section 392 of the Act or under the Letters patent jurisdiction Facts are not in dispute Since the State did not appoint any arbitrator as provided for in clause 25 of the agreement despite letters by the respondent to the Chief Engineer Public Works Department PWD and the Secretary PWD the respondent approached the High Court and a Learned Single Judge by order dated 6th September 1991 revoked the authority of the Chief Engineer to act as an arbitrator and directed one Shri DK Roy Chowdhury to act as the sole arbitrator as suggested by the respondent Against this order State filed an appeal which has been dismissed by the Division Bench upholding the objection of the respondent as not maintainable It has been held that the appeal was not maintainable either under Section 392 or under Letters Patent It is the correctness of this view that has been assailed in this appeal Section 39 of the came up for consideration in Union of India vs Mohindra Supply Company 19621 3 SCR 497 The Court after going into detail and examining various authorities given by different High Courts held that no second appeal lay under Section 39 2 against a decision given by a Learned Single Judge under Section 391 In respect of the jurisdiction under Letters Patent the Court observed that since was a consolidating and amending act relating to arbitration it must be construed without any assumption that it was not intended to alter the law relating to appeals The Court held that in view of bar created by sub section 2 of Section 3 9 debarring an second appeal from an order passed in appeal under sub section 1 the conclusion was 643 inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39 Therefore so far the second part is concerned namely the maintainability of the appeal under Letters Patent it stands concluded by this decision The Learned counsel for the appellant vehemently argued that since the decision by the Supreme Court was in respect of an appeal directed against an order passed by a Learned Single Judge in exercise of appellate jurisdiction no second appeal lay but that principle could not be applied where the order of Learned Single Judge was passed not in exercise of appellate jurisdiction but original jurisdiction The argument appears to be without any substance as Sub section 1 of Section 39 which is extracted below 1 An appeal shall lie from the following orders passed under this Act and from no others to the Court authorised by law to hear appeals from original decrees of the Court passing the order An order i superseding an arbitration ii on an award stated in form of a special case iii modifying or correcting an award iv filing or refusing to file an arbitration agreement v staying or refusing to stay legal proceedings where there is an arbitratio n agreement vi setting aside or refusing to set aside an award Provided that the provisions of this section shall not apply to any order passed by Small Cause Court 2 No second appeal shall lie from an order passed in appeal under this section but nothing in this section shall affect or take away any right to appeal to the Supreme Court 644 provides that an appeal could lie only from the orders mentioned in the subsection itself Since the order passed by Learned Singe Judge revoking the authority of the Chief Engineer on his failure to act as an arbitrator was not covered in either of the six clauses mentioned in Section 39 it is obvious that no appeal could be filed against the order of the Learned Single Judge Reliance was placed on certain orders passed by this Court and it was urged that settlement of dispute under clause 25 of the agreement being in exclusive domain of the Chief Engineer the High Court was not empowered to appoint anyone else The submission is devoid of any merit It is not made out from the agreement Rather clause 25 itself permits appointment of another arbitrator if the Chief Engineer fails or omits to act as such Relevant portion of the agreement is extracted below Should the Chief Engineer be for any reason unwiling or unable to act as such Arbitrator such questions and disputes shall be referred to an Arbitrator to be appointed by the Arbitrator shall be final conclusive and binding on all the parties to this contract In one of the decisions given by this Court the order of the High Court was set aside as the dispute being technical in nature the appointment of anon technical arbitrator was not justified Here in this the High Court has appointed a retired Chief Engineer and not a non technical man No allegation has been made against him Therefore the order of the learned Single Judge also does not suffer from any infirmity In the Circumstances the view taken by the Division Bench dismissing the appeal as not maintainable appears to be well founded The appeal accordingly fails and is dismissed with costs SK Appeal dismissed

Recruitment to the Punjab Superior Judicial Service was governed by the Punjab Superior Judicial Service Rules 1963 Rule 8 A inserted in the said rules by notification dated June 14 1977 provided that instructions issued by the State Government from time to time in relation to reservation of appointments for posts for Scheduled Castes and Backward Classes were applicable for appointments to posts in the Service The Secretary to the Government of Punjab Welfare of Scheduled Castes and Backward Classes Department by letter dated June 6 1974 Informed all Heads of Department etc that it had been decided to increase the percentage of reservation in direct recruitment in all services from 20 to 25 in the case of members of Scheduled Castes and from 2 to 5 in the case of members belonging to Backward Classes and Indicated the vacancies to be reserved for the members of Scheduled Castes in a lot of 100 vacancies and specified the points It also directed that the Roster already existing would not be abandoned but would now be maintained in continuation from the vacancy in the existing Roster last filled up according to the new pattern of reservation Circular dated November 19 1974 made provision for carrying forward of reservation for members of Scheduled CastesBackward Classes and directed that the reservation should be carried forward form vacancy to vacancy in the same block until a Scheduled Caste or a Backward Class person is appointed or promoted in the same block and that the reservation should be carried from vacancy to vacancy in each Mock and from block to block until the carried forward vacancies are filled up 594 By letter dated May 51975 the Secretary to the Government Welfare Department Communicated to all Heads of Department that the Government has decided that henceforth 50 vacancies of the quata reserved for Scheduled Castes should be offered to Balmikis and Mazhbi Sikhs as a first preference from amongst the Scheduled Castes candidate The Under Secretary Welfare Department Reservation Cell by his letter dated April 81980 clarified the position with regard to the implementation of instructions regarding reservation for Mazhbi Sikhs and Balmikis contained in the aforesaid letter dated May 51975 the Clarification was to the effect that 1 the combined merit list can be disturbed while giving appointment to the candidate belonging to Balmikis and MazhbiSikhs ii the first reserved vacancy can he offered to Balmikis and Mazhbi Sikhs although their name may be below in the merit list and iii on the basis of 50 reservation Bal mikis and Mazhbi Sikhs 135 and so on reserved vacancies shall go to the candidates of these castes if available and 246 and so on reserved vacancies shall go to other Scheduled Castes candidates After introduction of Rule 8 A in the Punjab Superior Judicial Service Rules four persons were appointed by way of direct recruitment to the Service in the year 1979 One of them Shri Balwant Rai belonged to a Scheduled Caste other then Balmikis or Mazhbi Sikhs Thereafter in 1981 one post fell vacant but no person belonging to a Scheduled Caste could be selected and candidate belonging to general category was appointed against the said post In 1982 selection was made for two posts but only one person could he selected and he also belonged to the general category and no person belonging to a Scheduled Caste was available for appointment In 1986 six persons including the appellant and respondent No 3 were appointed on the basis of direct recruitment Out of those six persons four belonged to the general category and two belonged to Scheduled Castes One of the two persons was Shri GS Samra who belonged to a Scheduled Caste other than Balmikis or Mazhbi Sikh In the merit list for the said selection the appellant was placed at No 1 Shri GS Samra at No 2 and respondent No 3 at No 5 As per the Roster Shri GS Samra was placed at Point No 7 the appellant at Point No 8 and respondent No 3 at Point No 9 After joining the Service Shri GS Samra resigned and had ceased to be a member of the service prior to April 1 1988 In the tentative seniority list as on April 1 1988the appellant was placed at serial No 52 and respondent No3 was placed at serial No 53 Respondent 595 No 3 submitted a representation against his placement in the seniority list and claimed that he should be placed against the post reserved for scheduled castes at Serial No 5 in the Roster and on that basis be given the seniority of the year of 1981 and that since he is a Mazhbi Sikh he is entitled to preference over Shri GS Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs and he claimed that he should have been placed at Point No 7 in the Roster and Shri GS Samra should have been placed at Point No 9 and on that basis also respondent No 3 is senior to the appellant Representation was also invited from the appellant in this regard After considering the representations the High Court decided that respondent No 3 was entitled to he placed above Shri GS Samra in view of the Circular Letter dated May 5 1975 and that he should have been placed against Point No 7 in the roster and Shri GS Samra should have been placed against Point No 9 in the Roster In the revised seniority list Respondent No 3 was placed at Serial No 52 while the appellant was placed at Serial No 53 Aggrieved by the aforesaid decision the appellant filed a Writ petition in the High Court which was dismissed The appellant appealed to this Court and contended that the first appointment by direct recruitment of a person belonging to the Scheduled Castes was of Shri Balwant Rai made in 1979 that was at Point No 1 in the Roster and should have gone to a Balmiki or Mazhbi Sikh but since no person belonging to these communities was available Shri Balwant Rai who belonged to a Scheduled Caste was appointed Relying on the clarification contained in the letter dated April 8 1980 it was submitted that the vacancy at Point No 5 reserved for Scheduled Castes was to be carried forwarded to point No 7 and Shri GS Samra had to he adjusted at Point No 7 in the Roster that respondent No3 being a Mazhbi Sikh could not claim to be placed at Point No 7 against a vacancy which was reserved for a candidate belonging to Scheduled Castes other than Balmikis and Mazhbi Sikhs and that he could the before be only placed against the vacancy at Point No 9 in the Roster The appeal was contested on behalf of Respondent No 3 who urged that in view of the order dated May 5197550 vacancies of the quota reserved for Scheduled Castes have to be offered to Balmikis and Mazhbi Sikhs and since Shri Balwant Rai belonging to a Scheduled Coste other than Balmikis Mazhbi Sikhs had been appointed in 1979 the next post should go to Balmikis and Mazhbi sikhs and on that basis respondent No 3 was entitled to be appointed against the second post at point No7 of the Roster and Shri 596 GS Samra could only be appointed against third post at Point No 9 in the Roster It was also urged that the clarification contained in the letter dated April 8 1980 could only have prospective operation with effect from the date of its issue and the sub roster indicated therein could be given effect to only from that date and on that basis also respondent No3 was entitled to be placed against Point No 7 in the 100 point roster and Shri GS Samra against Point No 9 in the said roster Allowing the appeal and setting aside the judgment of the High Court this Court HELD 1 a There is no dispute in the instant case that respondent No3 has been appointed against the post reserved for members of Scheduled Castes and the question is about the inter se placement of two persons appointed against vacancies reserved for Scheduled Caste candidates The Circular dated March 6 1961 does not deal with the said question and it has to be dealt with on the basis of the instructions contained in the orders dated May 51975 and April 81980 605 E Jagjit Singh vs State of Punjab explained and distinguished 1b Respondent No3 can only be treated to have been appointed against the vacancy at point No 9 in the Roster and on that basis he must be placid below the appellant in the seniority list Respondent No 2 is directed to revise the seniority list of the members of the Service accordingly The appellant would be entitled to consequential benefits accruing as a result of revision in the seniority 605 F 2 The letter dated April 8 1980 gives clarifications on certain doubts that had been created by some Departments in the matter of implementation of the instructions contained in the earlier letter dated May 51975 Since the said letter dated April 8 1980 is only clarificatory in nature there is no question of its having an operation independent of the instructions contained in the letter dated May 5 1975 and the clarifications contained in the letter dated April 81980 have to be read as a part of the instructions contained in the earlier letter dated May 5 1975 603 E 3 A statute which is explanatory or clarificatory of the earlier enactment is usually held to be retrospective 597 Craies on Statute Law 7th Edn p 58 relied on 603 F 4 All appointments against vacancies reserved for Scheduled Castes made after May 51975 after May 141977 in so far as the Punjab Superior Judicial Service is concerned have to be made in accordance with the instructions as contained in the letter dated May 5 1975 as clarified by letter dated April 8 1980 603 F 5 The appointment of Shri Balwant Rai in 1979 has to be treated to be an appointment made under the said instructions and operation of these instructions cannot be postponed till April 8 1980 The sub roster as indicated in the letter dated April 8 1980 would have to be applied in respect of the post on which Shri Balwant Rai was appointed in 1979 and the said appointment has to be regarded as having been made against the vacancy at Point No 1 in the roster which was reserved for Balmikis or Mazhbi Sikhs but since no Balmiki or Mazhbi Sikh was selected for that post the said vacancy was assigned to Shri Balwant Rai who belonged to a Scheduled Caste other than a Balmiki or Sikh 603 H 604 A 6 The vacancy at Point No 1 which was reserved for Balmikis or Mazhbi Sikhs could not he carried forward in view of the directions contained in the letter dated April 8 1980 604 A 7 The next post reserved for Scheduled Castes at Point No 5 in the roster was meant for a person belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs 604 A 8 In the selections that were made in 1981 and 1982 no person belonging to a Scheduled Caste was selected and therefore posts at Point Nos 5 and 6 in the Roster became available to candidates in the general category and the vacancy at Point No 5 reserved for Scheduled Castes was carried forward to point No 7 604 B 9 In 1986 two persons belonging to Scheduled Castes namely Shri GS Samra and respondent No 3 were selected 604 B 10 Since the post appoint No 5 which had been carried forward to point No 7 was reserved for a candidate belonging to a Scheduled Caste other than Balmiki or Mazhbi Sikh it had to be assigned to Shri GS Samra falling in that category and respondent No3 who was a Mazhbi Sikh could only be ap 598 pointed against the reserved vacancy at Point No 9 in the Roster Respondent No3 can not claim that the vacancy at Point No7 should be assigned to him If respondent No3 is adjusted against the vacancy at Point No9 in the Roster he has to be placed in seniority below the appellant who was appointed against Point No 8 in the Roster 604 C

6 etc Civil Appeal No 1527 from the Judgment and Order dated 781984 of the Andhra Pradesh High Court in Writ petition No 8173 of 1984 AK Ganguly MB Shetye A Subha Rao B Kanta Rao TVSN Chari Ms Bharathi Reddy and Ms Promila for the appearing parties as amended by Act 24 of 1994 providing for imposition of entertainments tax it respect of entertainments held in cinema theatres located in the State of Andhra Pradesh The Act has been enacted to provide for the levy of taxes on amusements and other attainments Prior to January 1 1984 Section 4 of the Act provided for levy of entertainment tax at a rate fixed on the basis of percentage of the payment made by a person for admission to any entertainment In addition there was a provision in Section 4 A for levy of a fixed amount by way of show tax for each show By Act 59 of 1976 Section 4 C was introduced in the Act and Section 5 of the Act was substituted under Section 4 C it was provided that in respect of entertain 623 ments held within tile jurisdiction of any local authority whose population did not exceed 25000 a tax for every entertainment show would be levied not on the basis of each payment for admission but at a certain percentage of the gross collection capacity per show The percentages for such levy were fixed according to the population of the local authority within the jurisdiction of which the entertainments were held Gross collection capacity per show was defined in the Explanation to Section 4 C to mean the notional aggregate of all payments for admission the proprietor would realise per show if all the seats or accommodation as determined by the licensing authority under the Andhra Pradesh Cinemas Regulation Act 1966 in respect of the place of entertainment are occupied and calculated at the maximum rate of payments for admission as determined by the said licensing authority The levy of tax in the manner as prescribed under Section 4 C could be dispensed with if the proprietor of the theatre opted for the composition scheme contemplated by Section 5 whereunder it was open to a proprietor to enter into an agreement with the prescribed authority to compound the tax payable under Section 4 C for a fixed sum which was to be arrived at in accordance with the formula prescribed under Section 5 According to this formula the tax was payable on the basis of a percentage of the gross collection capacity per show for the fixed rounds of shows for the whole year and the number of shows was fixed on the basis of the number of shows exhibited in the previous year This arrangement continued till December 31 1983 whereafter the provisions of Sections 44 A and 5 were amended by Act No 24 of 1984 The provisions of Sections 44 A and 5 as amended by Act 24 of 1984 were as follows Section 4 1 There shall be levied and paid to the State Government a tax on the gross collection capacity on every show hereinafter referred to as the entertainments tax in respect of entertainments held in the theatres specified in column 2 of the table below and located in the located areas specified in the corresponding entry in column 1 of the said table calculated at the rates specified in the corresponding entry in column 3 thereof THE TABLE __________________________________________________________ Local Area Theatre Rate of tax on the gross collection ca pacity per show _________________________________________________________ 1 2 3 _________________________________________________________ 624 a Municipal corporations iAir conditioned 29 per cent and the Secunderabad Cantonment area and ii Air cooled 28 per cent the contiguous area iiiOrdinary 25 per cent thereof other than air conditioned and air cooled b Selection grade muni i Air conditioned 28 per cent cipalities and contiguors area of iiAir cooled 27 per cent two Kilometres iiiordinary other 24 per cent thereof than air conditioned 27 per cent and air cooled c Special tirade munici i Air conditioned 27 per cent palities and contiguous ii Air cooled 26 per cent area of two Kilometres iii Ordinary 23 per cent thereof other than air conditioned and air cooled d First grade munici palities and conti i Air conditioned 26 per cent guous area of two ii Air cooled 25 per cent Kilometres thereof iii Ordinary other 22 per cent than air conditioned and air cooled e Second grade munici All categories 21 per cent palities and contiguous area of two Kilometres thereof f Third grade municipalities All categories 20 per cent and contiguous area of two Kilometres thereof g Gram panchayats selec i Permanent and 19 per cent tion grade gram panchayats semi permanent 20 per cent townships and any other ii Touring and local areas temporary Explanation For the purpose of this section and section 5 the term gross collection capacity per show shall mean the notional aggregate of all payments for admission the proprietor would realise per show if all the seats or accommodation as determined by 625 the licensing authority under the Andhra Pradesh Cinemas Regulation Act 1955 in respect of the place of entertainment are occupied and calculated at the maximum rate of payments for admission as determined by the said licensing authority The amount of tax under sub section 1 shall be payable by the proprietor on the actual number of shows held by him in a week Section 4 A 1 In addition to the tax under Section 4 there shall be levied and paid to the State Government in the case of entertain ments held in the local areas specified in column 1 of the Table below a tax calculated at the rates specified in the corresponding entry in column 2 thereof THE TABLE Local Areas Rate of tax for every show a Municipal Corporation and the Six rupees Secunderabad cantonment area and contiguous area of two Kilometers thereof b Selection grade Special grade and the Six rupees first grade municipalities and contiguous area of two kilometers thereof c Second grade and Third grade Four rupees municipalities and contiguous area of two kilometers thereof d Gram Panchayats selection grade Two rupees gram panchayats townships and any other local areas 2 The tax leviable under sub section 1 shall be recoverable from the proprietor 3 The provisions of this Act other than Sections 4 6 and 13 shall so far as may be apply in relation to the tax payable under subsection 1 as they apply in relation to th e tax payable under Section 4 626 Section 5 1 In lieu of the tax payable under section 4 in the case of the entertainments held in the theatres specified in column 2 of the table below and located in the local areas specified in the corresponding entry in column 1 of the said table the proprietor thereof may at his option and subject to such conditions as may be prescribed pay the amount of tax to the State Government every week as specified in the corresponding entry in column 3 thereof THE TABLE Local Area Theatre Amount of tax 1 2 3 a Municipal corpora i Air conditioned 24 per cent tions and the of the gross Secunderabad canton collection capacity ment area and the per show multi contiguous area of plied by 22 two kilometrers thereof ii Air cooled 23per cent of the gross collection capacity per show multiplied by 22 iii Ordinary 20 per cent of the other than air gross collection conditioned and capacity per show air cooled multiplied by 22 bSelection grade muni i Air conditi 23 per cent of the cipalities and contiguous aned gross collection area of two kilometrers show multiplied by thereof ii Air cooled 22 per cent of the gross collec tion capacity per show multiplied by 22 iii Ordinary 19 per cent of the other than air gross collection conditioned and capacity per air cooled show multiplied by 22 cSpecial grade munici i Air conditi 22 per cent of the 627 palities and contiguous oned gross show multi area of two kilo lied by 21 metrers thereof ii Air cooled 21 per cent of the gross collection capacity per show multiplied by 21 iii Ordinary 18 per cent of the other than air gross collection conditioned and capacity per show air cooled multiplied by 21 dFirst grade municipali i Air conditi 21 per cent of ties and contiguous oned gross show area of two kilo multilied by 21 metrers thereof ii Air cooled 20 per cent of the gross collection capacity per show multiplied by 21 iii Ordinary 17 per cent of the other than air gross collection conditioned and capacity per show air colled multiplied by 21 e Second grade muni All cate ores 16 per cent of the cipalities and conti gross collection guors area of two capacity per Kilometres there of show f Third grade muni All categores 15 per cent of the cipalities and gross Collection contiguous area of capacity per show two Kilometres multiplied by 17 thereof g Gram panchayats i Permanent 15 per cent of the selection grade gram and semi gross collection panchayats townships permanent capacity per and any other show multi local areas plied by 14 ii Touring 14 per cent of the and temporary gross collection capacity per show multiplied by 7 628 Explanation For the purposes of computing the gross collection capacity per show in respect of any place of entertainment the maximum seating capacity or accommodation and the maximum rate of payment for admission determined by the licensing authority under the Andhra Pradesh Cinemas Regulation Act 1955 as on the date when the proprietor is permitted to pay tax under this section shall be taken into account 2The amount of tax under sub section 1 shall be payable by the proprietor irrespective of the actual number of shows held by him in a week 3Any proprietor who opts to pay tax under this section shall apply in the prescribed form to the prescribed authority to be permitted to pay the tax under this section 4On being so permitted such proprietor shall pay the tax for every week as specified in sub section 1 5The option permitted under this section shall continue to be in force till the end of the financial year in which such option is permitted 6It shall be lawful for the prescribed authority to vary the amount of tax payable by the proprietor under sub section 1 during the period of option permitted under this section any time if there is an increase in the gross collection capacity per show in respect of the place of entertainment by virtue of an upward revision of the rate of payment for admission therein or of the seating capacity or accommodation thereof or where the local area in respect of which permission is granted is upgraded or if it is found for any reason that the amount of tax has been fixed lower than the correct amount 7Every proprietor who has been permitted to pay the tax under this section shall intimate to the prescribed authority forthwith such increase in the gross collection capacity per show in respect of the place of entertainment failing which it shall be open to the pre scribed authority by giving fifteen days notice to cancel the option so permitted 629 8Where a proprietor fails to pay the amount of tax on the due date such amount of tax shall be recoverable with interest calculated at such rate as may be prescribed 9 The amount of tax due under this section shall be rounded of to the nearest rupee and for this purpose where such amount contains part of a rupee consisting of paise then if such part if fifty paise or more it shall be increased to one rupee and if such part is less then fifty paise it shall be ignored As a result of the said amendments the earlier mode of levy of tax on the basis of the percentage of each payment for admission prescribed in Section 4 was replaced by a mode similar to that provided in Section 4 C ie on the basis as prescribed percentage of the gross collection capacity per show In the table appended below sub section 1 of section 4 rates were fixed on the basis of a percentage of the gross collection capacity per show varying with the category of the local area in which the theatre was situated as well as on the nature of the theatre viz air conditioned and air cooled or ordinary other than air conditioned and air cooled or permanent semi permanent including touring and temporary theatres In the Explanation to sub section 1 of section 4 the term gross collection capacity per show was defined in the same terms as in the Explanation to Section 4 C to mean the full collection per show if all the seats in the theatre are occupied In sub section 2 of section 4 it was specifically provided that the amount of tax under sub section 1 shall be payable by the proprietor on the actual number of shows held by him in a week Section 5 gave an option to the proprietor to pay a weekly consolidated amount irrespective of the number of shows actually held by him and the said amount was fixed on the basis of the prescribed number of shows per week The number of shows varied with the nature of the theatre as well as the category of the local area in which it was situate In section 4 A a fixed amount was leviable by way of show tax on each show A number of writ petitions were filed in the High Court to challenge the validity of sections 4 4 A and 5 of the Act as amended by Act 24 of 1984 The said writ petitions were decided by a division bench of the High Court by judgment dated July 19 1984 The constitutional validity of the provisions was challenged on three grounds viz i the levy of entertainment tax on the basis of gross collection capacity without reference to the actual amount collected or the actual number of tickets sold or the number of persons admitted was ultra vires the legislative power 630 conferred on the State Legislature under entry 62 of List II of the Seventh Schedule ii section 4 was hit by Article 14 of the Constitution inasmuch as by treating unequals as equals it gave rise to discrirmination amongst different theatres situate within the same local area and iii the levy of entertainment tax under section 4 being exproprietory amounts to an unreasonable restriction on the right guaranteed to the petitioners by Article 19 1 of the Constitution and was not saved by clause 6 of Article 19 Relying upon the decisions of this Court in Western India Theatres vs Contonment Board 1959 Supp 2 SCR 63 Y V Srinivasamurthy vs State of Mysore AIR 1959 SC 894 and State of Bombay vs RMD Chamarbaugwala the High Court has held that the State Legislature was competent to levy the impugned tax under entry 62 of list 11 of the Seventh Schedule to the Constitution since the said head of legislative power empowers imposition of tax upon entertainments and amusements and not on the persons entertained or the persons provided amusement and it has to be paid by the persons who provides the entertainment or amusement The High Court further held that so long as the tax levied retains the character of entertainment tax the Legislature is competent to adopt such basis or such measure or such method of levy as it thinks appropriate The High Court rejected the contention that the only method in which Legislature can levy the entertainment tax is that prescribed in the old Section 4 ie on the basis of the payment of admission The challenge on the around of Article 14 was negatived by the High Court on the view that wide discretion is allowed to the Legislature in the matter of classification and in the matter of selection of persons to be taxed and that the two fold classification made by section 4 could not be said to be either discriminatory or arbitrary much less could it be said that it metes out hostile discrimination to certain theatres The High Court also observed that since it was not possible to predicate absolute equality between two theatres and also because the situation and economics of each theatre are different it is impossible to expect or call upon the Legislature to evolve such classification which would meet every conceivable case and which would not result in prejudice even to a single theatre It was observed that different rates have been prescribed for different local areas and for different types of theatres ie ordinary air cooled and air conditioned and the Legislature took note of the fact that rate of occupancy in villages will be lower compared to towns and similarly in bigger towns there will be greater rate of occupancy and finally in cities the rate of occupancy would be even higher and it could not be said that this expectation was unrealistic or seunreasonable as to call for interference by the court As regards the challenge based on Article 19 1 g the High Court has taken note of the letter dated July 26 1983 addressed by the Andhra Pradesh Film Chamber of Commerce to the Hon ble Chief Minister of Andhra Pradesh wherein the exhibitors not only asked 631 tax which suggestion was accepted by the Government with certain modifications varying from 2 to 4 over the rates suggested by the Association The High Court observed that the rates of tax that were prescribed under section 4 based on an average expected occupancy rate of less than 50 per cent to 66 per cent could not be said to be either unreasonable or exproprietory The High Court however held that the agreements which had already been entered into by the proprietors of cinema theatres under section 5 as it stood prior to January 1 1984 would be effective and valid for the period for which they were entered into The High Court has also observed that merely because the form for exercise of option as contemplated under sub section 3 of section 5 had not been prescribed it could not be said that section 5 had not come into operation or was unenforceable and that it was open for the proprietor to send an intimation on an ordinary paper and the authority would be bound to treat it as proper intimation The High Court rejected the contention that section 5 was discriminatory inasmuch as it did not provide for reduction of the composition amount in case of reduction of seating capacity of a theatre during the period of one year for which the option was exercised although under sub section 6 of section 5 the provision had been made for enhancement of the composition amount in case the seating capacityaccommodation or the rates of payment for admission were enhanced The High Court observed that section 5 was only optional and no one was compelled to be governed by it or to opt for the composition scheme contained in section 5 and that according to the said scheme the option once exercised was in force till the end of the financial year in which such option was permitted and that if a person opts to be governed by section 5 he does so with his eyes open and he must be deemed to have accepted all the conditions and features of the scheme and it was not open to him to say that he would avail of the beneficial provisions of the scheme while rejecting those features which are not advantageous to him CANos 4642 4784193 2218522285 22385224 2885 229 232 34 85 146885 and 1469 7085 have been filed against the said decision of the High Court dated July 19 1984 CA Nos 572285 152786 and SLP C No 3127 85 have been filed against the decision of the High Court dated August 7 1984 which is based on the earlier decision dated July 19 1984 and similarly CA Nos 185889 and 479889 are directed against the decisions dated February 12 1986 and March 30 1998 based on the earlier decision dated July 19 1984 During the pendency of these appeals the Act was amended by AP Act 23 of 1988 and AP Act 16 of 1991 whereby the Tables below Sections 44 A and 5 were substituted and sub Section 6 A was inserted in Section 5 whereby 632 provision was made for reduction of the amount of tax payable by the proprietor during the financial year if there is a reduction in the seating capacity or in the accommodation of the place of entertainment at any time during the period of six months commencing from the 1st day of April and ending with 30th day of September or from the 1st day of October and ending with 31st day of March of any financial year The learned counsel appearing for the appellants have assailed the constitutional validity of sections 4 and 5 on two grounds viz 1 that the impugned provisions do not fall within the ambit of the legislative power conferred on the State Legislature under Entry 62 of List II of the Seventh Schedule of the Constitution and 2 that the impugned provisions were violative of the right to equality guaranteed under Article 14 of the Constitution inasmuch as they treated unequals as equal by imposing tax at a uniform rate on a particular class of cinema theatres irrespective of their location and occupancy While considering the question as to legislative competence of the State Legislature it is necessary to bear in mind that the impugned provisions provide fir imposition of a tax and a tax has two distinct elements viz subject of the tax and the measure of the tax The subject of the tax is the person thing or activity on which the tax is imposed and the measure of the tax is the standard by which the amount of tax is measured The competence of the Legislature to enact a law imposing a tax under a particular head of the legislative list has to be examined in the context of the subject of the tax If the subject of the tax falls within the ambit of the legislative power conferred by the head of legislative entry it would be within the competence of the Legislature to impose such a tax It is therefore necessary to examine the scope of the legislative entry viz Entry 62 of List II which is invoked in support of the competence of the State Legislature to impose the tax and ascertain whether the subject of the tax imposed by the impugned provisions falls within the ambit of the said entry Entry 62 of List 11 is as follows 62 Taxes on luxuries including taxes on entertainments amusements betting and gambling The said entry is in pari materia with entry 50 of the Provincial List in the Seventh Schedule to the Government of India Act 1935 Construing the said entry this Court in the Western India Theatres vs Cantonment Board supra has rejected the contention that the entry contemplates a law imposing taxes on persons who receive or enjoy the luxuries or the entertainments or the amusements 633 and has held The entry contemplates luxuries entertainments and amusements as objects on which the tax is to be imposed The entry a we have said contemplates a law with respect to the matters regarded as objects and law which imposes tax on the act of entertaining is within the entry whether it falls on the giver or the receiver of that entertainment p69 In that case the Cantonment Board had imposed entertainment tax of Rs 10 per show on the cinema houses of the appellant in the said appeal and Rs 5 per show on others Upholding the said imposition this Court has held It is a tax imposed on every show that is to say on every instance of the exercise of a particular trade calling or employment If there is no show there is no tax The impugned tax is a tax on the entertainment resulting in a show p 69 70 Similarly in Y V Srinivasamurthy vs State of Mysore supra upholding the provisions of the Mysore Cinematograph Shows Act 1951 enacted under the Constitution which authorised levy of tax on conematograph shows at rates prescribed in a rising scale according to the seating accommodation and the cities where the cinematograph show was held this Court following the decision in Western India Theatres case supra held that the said Act was validly enacted in exercise of the legislative power conferred by entry 62 of List II In the instant case we find that prior to the enactment of Act 24 of 1984 Section 4 provided for levy of entertainment tax on the basis of each payment for admission to the cinema theatre and under Section 4 C in respect of entertainments held within the jurisdiction of a local authority whose population did not exceed 25000 the tax was levied on the basis of the prescribed percentage of the gross collection capacity per show In other words there were two modes for levy of the tax one on the basis of the actual number of persons admitted to each show and the other on the basis of the percentage of the gross collection capacity per show As a result of the amendments introduced by Act 24 of 1984 the system for levy of tax on the basis of number of persons actually admitted to each show was dispensed with and the tax was to be levied on the basis of the percentage of the gross collection capacity per show and different percentages were prescribed depending on the type of the theatre and the nature of the local area where it was situated Under section 5 an option was given to pay a tax on the basis of the 634 prescribed percentage fixed for a fixed number of shows in a week irrespective of the number of shows actually held It is not disputed that the tax as it was being levied prior to January 1 1984 ie before the amendment of Section 4 by Act 24 of 1984 was a tax on entertainment falling within the ambit of entry 62 of List 11 The question is whether the alteration in the said mode of levy of tax by Act 24 of 1984 has the effect of altering the nature of the tax in a way that it has ceased to be a tax on entertainments and falls beyond the field of legislative competence conferred on the State Legislature by Entry 62 of List 11 In our view the said question must be answered in the negative The fact that instead of tax being levied on the basis of the payment for admission made by the persons actually admitted in the theatre it is being levied on the basis of the gross collection capacity per show calculated on the basis of the notional aggregate of all the payments for admission which the proprietor would realise per show if all the seats or accommodation in respect of the place of entertainment are occupied and calculated at the maximum rate of payments for admission would not in our opinion alter the nature of the tax or the subject matter of the tax which continues to be a tax on entertainment The mode of levy based on per payment for admission prescribed under Section 41 prior to amendment by Act 24 of 1984 necessitated enquiry into the number of shows held at the theatre and the number of persons admitted to a cinematheatre for each show and gave room for abuse both on the part of proprietor as well as other officers incharge of assessment and collection of tax The mode of levy or measure of the tax prescribed under section 41 and substituted by Act 24 of 1984 is a more convenient mode of levy of the tax inasmuch as it dispenses with the need to verify or enquire into the number of persons admitted to each show and to verify the correctness or otherwise of the return submitted by the proprietor containing the number of persons admitted to each show and the amount of tax collected Prior to the enactment of Act 24 of 1984 tax was leviable on the basis of either of the two modes under Section 41 and4 C On an examination of the rates prescribed under both the modes the High Court found that under the system of consolidated levy prescribed under Section 4 C the proprietor could break even if the average rate of occupancy was 40 As regards the rates prescribed under Section 4 and 5 as amended by Act 24 of 1984 the High Court has observed that the said rates are based on an average expected occupancy rate of less than 50 or 66 depending upon the area in which the theatre is situated This would mean that the entertainment tax that would be collected over and above the average occupancy rate would constitute the profit of the proprietor In the circumstances it cannot be said that the adoption of the system of consolidated levy in Section 41 as amended by Act 24 of 1984 alters the nature of tax and it has ceased to be a tax on entertainments 635 It has been urged that since both the modes of levy of tax were prevalent prior to the enactment of Act 24 of 1984 an option should have been given to the proprietor of a cinema theatre to choose between either of the two modes and that under the impugned provisions the choice is confined to two modes of assessment under the same system of consolidated levy based on the gross collection capacity per show one on the basis on the gross collection capacity per show under Section 41 and other on the basis of gross collection capacity per show for a prescribed number of shows per week under section 5 We find no substance in this contention Once it is held that tax on entertainment could be levied by either of the two modes viz per payment of admission or gross collection capacity per show it is for the legislature to decide the particular mode or modes of levy to be adopted and whether a choice should be available to the proprietor of the cinema theatre in this regard The legislature does not transgress the limits of its legislative power conferred on it under Entry 02 of List 11 if it decides that consolidated levy on the basis of gross collection capacity per show shall be the only mode for levy of tax on entertainments We are therefore unable to accept the contention urged on behalf of the appellants that the impugned provisions contained in Section 4 and 5 as amended by Act 24 of 1984 are ultra vires the legislative power conferred on the State Legislature under Entry 62 of List II The challenge to the impugned provisions on the basis of Article 14 is grounded on the principle that discrimination would result if unequals are treated equally are reliance is placed on the decision of this Court in K T Moopil Nair vs The State of Kerala Anr It has been urged that under section 4 as substituted by Act 24 of 1984 a uniform rate has been prescribed for cinema theatres of a particular class situate in different parts of the same local area although the average rate of occupancy in the cinema theatres located in different parts of the same local area is not the same and a cinema theatre which is located in the central part of the local area would have better rate of occupancy as compared to a theatre located in a remote part and further that the occupancy in the theatre depends on various of the factors which have not been taken into account We find it difficult to accept the contention Article 14 enjoins the State not to deny to any person equality before the law or the equal protection of the laws The phrase equality before the law contains the declaration of equality of the civil rights of all persons within the territories of India It is a basic principle of republicanism The phrase equal protection of laws is adopted from the Fourteenth Amendment to US Constitution The right 636 conferred by Article 14 postulates that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed Since the State in exercise of its governmental power has of necessity to make laws operating differently on different groups of persons within its territory to attain particular ends in giving effect to its policies it is recognised that the State must possess the power of distinguishing and classifying persons or things to be subjected to such laws It is however required that the classification must satisfy two conditions namely i it is founded on an intelligible differentia which distinguishes those that are grouped together from others and ii the differentia must have a rational relation to the object sought to be achieved by the Act It is not the requirement that the classification should be scientifically perfect or logically complete Classification would be justified if it is not palpably arbitrary See Re Special Courts Bill at pp 534 5361 It there is equality and uniformity within each group the law will not be condemned as discriminative thou oh due to some fortuitous circumstance arising out of a peculiar situation some included in a class get and advantage over others so long as they are not singled out for special treatment See Khandige Sham Bhat vs Agricultural Income Tax Officer at p 8 171 Since in the present case we are dealing with a taxation measure it is necessary to point out that in the field of taxation the decisions of this Court have permitted the legislature to exercise an extremely wide direcretion in classifying items for tax purposes so long as it refrains from clear and hostile discrimination against particular persons or classes See East India Tobacco Co vs State of AP 19631 1 SCR 404 at p 411 PM Ashwathanarayanan Shetty vs State of karnataka 1988 Supp 3 SCR 155 at p 188 Federation of Hotel Restaurant Association of India vs Union of India at p 949 Kerala Hotel Restaurant Association vs State of Kerala at p 530 and Gannon Dunkerley and Co vs State of Rajasthan at p 3971 Reference in this context may also be made to the decision of the US Supreme Court in San Antonio Independent School District vs Bodrigues 41 at p 41 wherein Justice Stewart speaking for the majority has observed 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 637 Just a difference in treatment of persons similarly situate leads of discrimination so also discrimination can arise if persons who are unequals ie differently placed are treated similarly In such a case failure on the part of the legislature to classify the persons who are dissimilar in separate categories and applying the same law irrespective of the differences brings about the same consequence as in a case where the law makes a distinction between persons who are similarly placed A law providing for equal treatment of unequal objects transactions or persons would be condemned as discriminatory if there is absence of rational relation to the object intended to be achieved by the law In K T Moopil Nair vs State of Kerala supra this Court was dealing with a law providing for imposition of uniform land tax at a flat rate without having regard to the quality of the land or its productive capacity The law was held to be violative of Article 14 of the constitution of the ground that lack of classification had created inequality The said decision in K T Moopil Nair s case supra has been explained by this Court is Jalan Trading Co Pvt Ltd vs Mill Mazdoor Union in the context of challenge to the validity of section 10 of the providing for payment of a minimum bonus of 4 by all industrial establishments irrespective of the fact whether they were making profit This Court held that the judgment in Moopil Nair s case supra has not enunciated any broad proposition that when persons or objects which are unequals are treated in the same manner and are subjected to the same burden or liability discrimination inevitably results It was observed It was not said by the Court in that case that imposition of uniform liability upon persons objects or transactions which are unequal must of necessity lead to discrimination Ordinarily it may be predicated of unproductive agricultural land that it is incapable of being put to profitable agricultural use at any time But that cannot be so predicated of an industrial establishment which has suffered loss in the accounting year or even over several years successively Such an establishment may suffer loss in one year and make profit in another p35 It was further observed Equal treatment of unequal objects transactions or persons is not liable to be struck down as discriminatory unless there is simulta 638 neously absence of a rational relation to the object intended to be achieved by the law p36 The limitations of the application of the principle that discrimination would result if unequals are treated as equal in the field of taxation have been pointed out by this Court in Twyford Tea Co Ltd Anr vs The State of Kerala Anr 1970 3SCR 383 wherein tax at a uniform rate was imposed on plantations Hidayatullah CJ speaking for the majority while upholding the tax has observed It may also be conceded that the uniform tax falls more heavily on some plantations than on others because the profits ire widely discrepant But does that involve a discrimination If the answer be in the affirmative hardly any tax direct or indirect would escape the same ensure for taxes touch purses of different lengths and the very uniformity of the tax and its equal treatment would become its undoing The rich and the poor pay the same taxes irrespective of their incomes in many instances such as the sales tax and the profession tax etc pp 389 390 It was further observed The burden is on a person complaining of discrimination The burden is proving not possible inequality but hostile unequal treatment This is more so when uniform taxes are levied It is not proved to us how the different plantations can be said to be hostilely or unequally treated A uniform wheel tax on cars does not take into account the value of the car the mileage it runs or in the case of taxis the profits it makes and the miles per gallon it delivers An ambassador taxi and a fiat tasi give different out turns in terms of money and mileage Cinemas pay the same show fee We do not take a doctrinaire view of equality p393 94 In the instant case we find that the legislature has prescribed different rates of tax by classifying theatres into different classes namely air conditioned air cooled ordinary other than air conditioned and air cooled permanent and semipermanent and touring and temporary The theatres have further been categorized on the basis of the type of the local area in which they are situate It cannot therefore be said that there has been no attempt on the part of the legislature to classify the cinema theatres taking into consideration the differentiating circum 639 stances for the purpose of imposition of tax The grievance of the appellants is that the classification is not perfect What they want is that there should have been further classification amongst the theatres falling in the same class on the basis of the location of the theatre is each local area We do not think that such a contention is well founded In relation to cinema theatres it can be said that the attendance in the various cinema theatres within a local area would not be uniform and would depend on factors which may very from time to time But this does not mean that cinema theatres in a particular category of local area will always be at a disadvantage so as to be prejudicely affected by a uniform rate as compared to cinema theatres having a better location in the local area It is therefore not possible to accept the contention that the impugned provisions are violative of right to equality guaranteed under Article 14 of the Constitution on the basis that unequals are being treated equally Another contention that has been urged on behalf of the appellants is that while provision was made under sub section 6 of section 5 for enhancement of the amount of tax in the event of increase in the amount of gross collection capacity there was no corresponding provision for reduction for the amount of tax in the event of reduction in the gross collection capacity The said provision for enhancement contained in sub section 6 of section 5 relates to the cases where the proprietor of a cinema theatre opts for payment of weekly consolidated amount Since the proprietor has the option to opt for the said scheme he cannot complain that the scheme suffers from inequality on account of absence of a corresponding provision for reduction of amount of tax In any event the said grievance has how been removed by the introduction of sub section 6 A in section 5 by amendments introduced in the Act by AP Act 23 of 1988 and AP Act 16 of 199 1 In the result we find no merit in these appeals and the special leave petition and they are accordingly dismissed The parties are however left to bear their own costs VPR Appeals dismissed

Notification under section 4 for acquisition of 89 Acres 4 Kanals and 12 Marlas of land in a village in Punjab published on January 27 1978 Appellants claimed compensation Rs 30000 per Bigha ie Rs 1500 per Biswa on the ground that 15 Biswas of land situated near the acquired land had been sold on July 121977 for Rs 24000 which works out to Rs 1600 per Biswa Land Acquisition Collector classified the acquired land In 6 blocks and awarded Market Value ranging between Rs 30000 to Rs 6000 per acre In reference under Section 18 the District Judge disagreed with classification The learned Judge relying on sale deeds dated September 41972 June 14 1976 February 23 1977 and July 15 1977 all for small extents awarded compensation Rs 800 for the rest of land besides solatium and interest Appeals filed in the High Court by State of Punjab and by one batch of claimants Another batch of claimants filed cross objections The learned Single Judge allowed appeals filed by the State and dismissed appeals and cross objections of the claimants Market Value was determined on working out average price on the basis of sale deeds dated September 41972 and June 14 1976 filed by claimants and mutation entries dated August 31 1977 and October 41977 filed by the State Belting was carved at depth of 100 Ft from main road and deduction of 13rd was made towards development charges Consequently market value determined Rs 750 per Biswa for land abutting main road and Rs 500 per Biswa for the rest of land Judgment and order of the learned Single Judge was confirmed by Division Bench Claimants by special leave petition filed appeals for higher compensation This court determined market value at Rs 1000 per Biswa and allowing the appeals to that extent HELD It is settled law that to determine market value of the land the sales of land under requisition if any or the sales in the neighborhood lands 646 that possessed of same or similar features or fertility or other advantageous features would furnish basis to fix just and fair market value 649 E The price for which the willing vender would offer the land and willing vendee would agree to purchase it as a prudent man in normal market conditions as on date of notification or near about the date is acid test to fix market value Sales and purchases of land at throw away price at arms length or depressed sales or facade of sales made in quick succession to inflate market value do not offer any basis to determine just Market Value 649 F In order to adjudge whether sales are bonafide whether consideration mentioned in the deed was infect and really passed whether the lands covered by sale deeds and relied on possessed of same or similar potentialities or fertilities or advantageous features would be brought out on record only by examination of the vendor or the vendee or if neither of them is available the attesting witness who has personal knowledge of the bargain and passing of consideration Hence it is mandatory 650 A Periyar Pareekanni Rubbers Ltd vs State of Kerala Sale deeds of small extents being retail price do not offer comparable basis to fix compensation when large block is acquired If sale transactions relate to the lands under acquisition and if found to be genuine and bonafide transactions then it may be considered but reasonable margin must be given in fixing wholesale price 650 E Collector of Lakhimpur vs Bhuban Chandra Dutta AIR 1971 SC 2015 Mirza Nausherwoan Khan Another vs Collector Land Acquisition Hyderabad Ram Rattan Others vs State of Uttar Pradesh Smt Kaushalya Devi Bogra Others vs Land Acquisition Officer Aurangabad Others Administrator General of West Bengal vs Collector Varanasi and Special Tehsildar Land Acquisition vs A Mangal Gowri Court in the first instance has to determine as to which of the sale deeds are relevant proximate in point of time and offer comparable base to 647 determine market value The after average price has to be worked out and the contention that highest value should be fixed cannot he accepted 651 D State of Madras vs AM Ranjan Another Collector of Lakhimpur vs Bhuban Chandra Dutta AIR 1971 SC 2015 Sint Kaushalva Devi Bogra Others vs Land Acquisition Officer Aurangabad Another and Administrator General of West Bangal vs Collector Varanasi The Principle of belting is perfectly legal and unexceptionable as the lands abutting the main road up to a specified depth depending on factual material on record would fetch higher market value than lands situated in interior area 652 A If the acquired land is undeveloped deduction of at least 1 3rd is necessary towards development charges 652 F Brig Sahib Singh Kalha Others vs Amritsar Improvement Trust Others Administrator General of West Bengal vs Collector Varanasi Special Tehsildar Land Acquisition vs A Mangal Gowri and Bhagwathula Swamnanna Others vs Special Tehsildar Land Acquisition Visakhapatnam

Civil No 71 of 1992 WITH Writ Petition Civil No 323 of 1993 Under Article 32 of the Constitution of India JP Bhatacharjee NR Choudhry and Somnath Mukherjee for the Petitioners in WPNo 7193 SN Mukherjee for the Petitioners in WP No 32393 Ms B Sunita Rao for VK Verma for the Respondents The Judgment of the Court was delivered by RMSAHAIJ Casual labourers of South Eastern Railway alleged to have been appointed between 1964 69 and retrenched between 1975 78 have approached this Court for a direction to opposite parties to include their names in the 753 live casual labourer register after due screening and give them reemployment according to their seniority Further prayer is to restrain the opposite parties from filling vacancies from open market Basis of their claim is two fold one circulars issued by the Railway Board on 8th June and 18th June 1981 laying guideline regarding recruitment retrenchment and employment of the casual labourers second Judgments delivered by this Court in 1985 and 1987 directing the opposite parties to prepare a scheme and absorb the casual labourers in accordance with their seniority Issuing of circulars by the Railway Board or decisions by this Court could not and has not been disputed Nor it is disputed that in pursuance of the orders passed by this Court the opposite parties framed a scheme in 1987 for employing retrenched casual labourers On 23 1987 a letter was issued from the Railway Establishment addressed to the General Managers for employing casual labourer retrenched before 1981 if they satisfied the requirements mentioned therein which is extracted below Pursuant to directions given by the Hon ble Supreme Court in their order dated 2321987 in WP No 332 of 1986 the Ministry desire that the cases of project casual labour who had worked as such before 1 181 and who were discharged due to completion of work or for want of further work may also be considered for the purpose of implementation of the scheme contained in the Ministry s letter of even No dated 1684 and 25684 as modified in the letter dated 1191986 Representation along with documentary proof reaching the office mentioned above after 3131987 of those which are incomplete and also those not made with reference to these instructions will not be considered The petitioners who claim to have been retrenched due to completion of Halda project appear to have made a representation in 1990 to the authorities The representation runs as under Respected sir 1 on behalf of the Fetrenched Labour Congress Union IO 754 Tamluk Rly Station Midnaporoe beg to humbly submit that the above quoted Circulars are not obeyed by DEN Con TMZ DIZHA SE Rly KGP and they do not follow the orders of they Supreme Court High Court of Calcutta and Central Administrative Tribunal Calcutta Bench As a result of their indifference the project casual labour who are retrenched from service on or before 111981 are in great difficulties and they are not getting scope of absorption All the applications deposited in the office of the DEN CON KGI in terms of Memo No PDEA579A837 in reference to CE CGRC dated 2551987 are to be approved In such circumstances I beg to request you to intervene in the matter as expeditiously as humble Needless to say if your grievances are not sympathetically admitted and the retrenched labour be not absorbed We shall have no alternative way except launching vigorous movement in the next stage Your faithfully BHUDEV JALUA The representation does not give any detail It is not mentioned if the scheme was given due publicity or not No explanation is given as to why the petitioners did not approach till 1990 Nor it is stated if any of the casual labourer Not it is stated if any of the casual labourer of the project were reemployed or not It is vague and was lacking in material particulars Two questions arise one if the petitioners are entitled as a matter of law for reemployment and other if they have lost their right if any due to delay Right of casual labourer employed in projects to be reemployed in railways has been recognized both by the Railways and this Court But unfortunately the petitioners did not take any step to enforce their claim before the Railways except sending a vague representation nor did they even care to produce any material to satisfy this Court that they were covered in the scheme framed by the Railways It was urged by the learned counsel for petitioners that they may be permitted to produce their identify cards etc before opposite parties who may accept or reject the same after 755 verification We are afraid it would be too dangerous to permit this exercise A writ is issued by this Court in favour of a person who has some right And not for sake of roving enquiry leaving scope for maneuvering Delay itself deprives a person of his remedy available is law In absence of any fresh cause of action or any legislation a person who has lost his remedy by lapse of time loses his right as well From the date of retrenchment if it is assumed to be correct a period of more than 15 years has expired and in case we accept the prayer of petitioner we would be depriving a host of others who in the meantime have become eligible and are entitled to claim to be employed We would have been persuaded to take a sympathetic view but in absence of any positive material to establish that these Petitioners were in fact appointed and working as alleged by them it would not be proper exercise of discretion to direct opposite parties to verify the correctness of the statement made by the petitioners that they were employed between 1964 to 1969 and retrenched between 1975 to 1979 The writ petitions accordingly fail and are dismissed But there shall be no orders as to costs UR Petitions dismissed

Despite several letters by the respondent to the Chief Engineer Public works Department the State did not appoint any Arbitrator as provided in Clause 25 of the agreement Shri DK Roy Choudhry who was appointed as a sole Arbitrator by the learned Single Judge revoking the authority of the Chief Engineer to act as an Arbitrator under the agreement On appeal by the State under Section 392 of the Act or under Letters Patent The High Court dismissed the appeal as not maintainable This appeal is against the judgment of the High Court Appeal dismissed HELD 1Section 39 of the came upon for consideration in UOI vs Mohindra Supply Company 19623 SCC 497 and the Court held that no Second Appeal lay under section 392 against a decision given by a learned Single Judge under Section 391 is a consolidating and amending act relating to arbitration it must be construed without any assumption that it was not intended to alter the law relating to appeals The Court held that in view of bar created by sub section 2 of Section 39 debarring a second appeal from an order passed in appeal under sub section 1 that the conclusion was inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39 Therefore the maintainability of the appeal under Letters Patent it stands concluded by this 641 decision 642 G H 2 Sub section 1 of Section 39 of the is extracted below 1 An appeal shall lie from the following orders passed under this Act and from no others to the Court authorised by law to hear appeals from original decisions of the Court passing the order An order 1 superseding an arbitration ii on an award stated in the form of a special case iii modifying or correcting an award IV filing or refusing to file an arbitration agreement v staying or refusing to stay legal proceedings where there is an arbitration agreement vi setting aside or refusing to set aside an award Provided that the provisions of this Section shall not apply to any order passed by a Small Causes Court _ 2 No second appeal shall lie from an order passed in appeal under this Section but nothing in this Section shall affect or take away any right to appeal to the Supreme Court 643 D E GH provides that an appeal could lie only from the orders mentioned in the sub Section itself Since the order passed by learned Single Judge revoking the authority of the Chief Engineer on his failure to act as an Arbitrator was not covered in either of the six clauses mentioned in Section 39 it is obvious that no appeal could be filed against the order of the learned Single Judge 644 642

Appeal No 2684 NM 93 etc From the Judgment and Order dated 24 92 274 92 of the Bombay High Court in WP No 27 of 1990 658 Harish N Salve RP Bhatt AK Ganguli Dr Nitin Kantawala Ms Hemantika Wahi TVSN Chari Ms Tanuja Sheel Mrs Sheela section Rao P Parmeswar and EC Agrawala Ranjit Kumar R Venkataramani Mrs M Qamaruddin Abhijat P Medh for the appearing parties The Judgment of the Court was delivered by BP JEEVAN REDDYJ Leave granted Heard counsel for the parties These appeals arise from the common judgment and order of the Bombay High Court in a batch of writ petitions The question is whether the photographic machinery imported by the appellants falls under Customs Tariff Heading No 9801 If it falls under it it is entitled to a concessional rate of duty If not it is chargeable to a higher duty The was enacted by Parliament with a view to consolidate and amend the law relating to customs duties It repealed the Indian Tariff Act 1934 and Indian Tariff Amendment Act 1949 Section 2 says that the rates at which duties and customs shall be levied under the are those specified in the First and Second Schedules Section 3 levies additional duty equal to excise duty Chapter 98 was introduced in the Schedule with effect from February 28 1986 It relates to Project Imports Laboratory Chemicals Passengers Baggage Personal Importation by air or post Ship Stores Chapter 98 provides a concessional rate of duty in respect of articles and items specified therein Chapter Note 1 declares this chapter is to be taken to apply to all goods which satisfy the conditions prescribed therein even though they may be covered by a more specific heading elsewhere in this Schedule In other words if a particular article mentioned in Chapter 98 also falls under some other chapter heading still such item will be governed by chapter 98 and not by that other chapterheading So far as photographic machinery is concerned it is not disputed that it falls under chapter 90 where the rate of duty is far higher Chapter Note 2 which is of crucial relevance herein reads Heading No 9801 is to be taken to apply to all goods which are imported in accordance with the regulations made under section 157 of the 52 of 1962 and expressions used in this heading shall have the meaning assigned to them in the said regulations emphasis added 659 Heading 9801 Sub Heading 980100 being relevant for our purpose must also be set out Heading Sub Description of Rate of duty No heading article Standard No Prefential Areas 9801 980100 All items of machinery 60 including prime movers instruments apparatus and appliance control gear and transmission equipment auxiliary equipment including those required for research and development purposes test and quality control as well as all components whether finished or not or raw materials for the manufacture of the aforesaid items and their components required for the intial setting up of a unit or the substantial expansion of an existing unit of a specified 1Industrial plant 2 irrigation project 3 power project 4 mining project 5 project for the exploration or oil or other minerals and 6 such other projects as Central Government may having regard to the economic development of the country notify in the official Gazette in this behalf and spare parts other raw materials including semifinished material or consumable stores not exceeding 10 of the value of the goods specified above 660 provided that such spare parts raw materials or consumable stores are essential for the maintenance of the plant or project mentioned in to 6 above emphasis added The expression industrial plant is not defined in the or for that matter in the Chapter Note 2 of Chapter 98 which it must be emphasized is apart of statute itself says that the expressions used in heading No 9801 shall have the meaning assigned to them by the regulations made under Section 157 of the and further that heading No 9801 shall apply to all goods which are imported in accordance with such regulations As contemplated by Chapter Note 2 of Chapter 98 of the the Central Government framed the Project Imports Regulations under Section 157 of the contained in notification No 23086 Cus dated April 3 1986 They came into force on the same day Regulation 1 of these Regulations says that they shall be called Project Imports Regulations 1986 and shall come into force on April 3 1986 Regulation 2 says that the said Regulations shall apply for assessment and clearance of goods falling under heading No 9801 Regulation 3 defines certain expressions including the expression industrial Plant The definition reads as follows Industrial Plant means an industrial system designed to be employed directly in the performance of any process or series of processes necessary for manufacture production or extraction of a commodity but does not include i establishments designed to offer services of any description such as hotels hospitals photographic studios photographic film pro cessing laboratories photocopying studios laundries garages and workshops or iia single machine or a composite machine within the meaning assigned to it in Notes 3 and 4 to section XVI of the said Firs t Schedule A perusal of the definition of industrial plant makes it clear that it seeks to exclude industrial systems meant for establishment designed to offer services of 661 any description It mentions certain service establishments by way of illustration Photographic studios and photographic film processing laboratories happen to be mentioned specifically as some of the establishments designed to offer services Once the Project Imports Regulations came into force the Customs authorities refused to treat the photographic equipment imported by the appellants and others as industrial plant falling under heading 9801 of the customs Tariff Act They sought to levy duty thereon under Chapter 90 In view of the refusal of the Customs authorities to treat the photographic machinery imported by them as industrial plant within the meaning of Chapter 98 the appellants approached the Bombay High Court by way of the batch of writ petitions Their contention was that until April 3 1986 photographic machinery was included within the expression industrial plant occurring in heading 9801 as well as in tariff heading 8466 of the old tariff This fact was affirmed by the Government of India when a doubt was raised in their letter bearing NoF 5265283 Cus TU dated November 4 1988 Even according to the normal meaning and connotation of the expression industrial plant photographic machinery falls within its purview This is the sense in which the said expression is used in the Tariff Entry 980 1 If so the ambit and field of the said expression cannot be cut down by a regulation made under Section 157 of the If any particular machinery or equipment is to be excluded from the purview of the industrial plant it can and should be done only by the Act itself but not by a subordinate legislation like regulations It was submitted that the 1986 regulations are outside the purview of Section 157 and are incompetent The contentions were negatived and writ petitions dismissed by the Division Bench In these appeals SSri Harish Salve and Kantawaala urged the following contention 1 A perusal of the discloses its scheme The Act specifies the articles and things subjected to duty as also the rate to duty Specification of articles is not left to be done by a delegate It is true that power of exemption is conferred upon the Central government under Section 25 of the but it is relevant to notice that a notification of exemption issued under Section 25 is required to be laid on the floor of both the houses of parliament by Section 159 of the Act This shows the close control which the Parliament intended to exercise over the specification of articles and the rate of duty thereon The Regulations made under Section 157 are not subject to Parliament s scrutiny in the sense that they are not required to be laid on the floor of the houses of Parliament under Section 159 Evidently Regulations were not supposed to deal 662 with any matters of substance 2 While enacting Section 157 Parliament could never have contemplated delegating to the Board the power to cut down the field and ambit occupied by the provisions of the or Regulations made by the Board stand on an inferior footing to the rules made by the Central Government under Section 156 The regulation making power was intended to be utilised for the purpose of providing procedural and peripheral provisions but certainly not for making a substantive provision cutting down the content and ambit of the provisions of the Act 3 Even if it is held for some reason that such a power was intended to be and was delegated to the Board it would be bad since it amounts to excessive delegation of legislative power Regulation 3 of the new Regulations which defines the expression industrial plant is clearly outside the province of regulation making power conferred by Section 157 The legislative history of tariff entry 98 militates against any such power being exercised by the Board The Board cannot take away what the Parliament has given The regulation in effect have the effect of amending the provision in the Act They take away under the garb of defining the expression industrial plant the beneficial rate of duty provided by Parliament in the interest of industrial progress of the country The Regulations are inconsistent with the provisions of the SSri Ganguly and TVSN Chari learned counsel appearing for the Central Government on the other hand fully supported the validity of the said regulations They pointed out that the validity of chapter Note 2 was not questioned before the High Court has been expressly recorded in the judgment under appeal They submitted that the appellants should not be permitted to do so at this stage Once Chapter Note 2 is taken as good the challenge to the 1986 Regulations must fail The said note is not bad as amounting to excessive delegation of legislative power In short they refuted each and every submission made by the learned counsel for the appellants and are complimentary to each other Section 157 of the confers upon the Central Board of Excise and Customs constituted under the the power to make regulations consistent with this Act and Rules generally to carry out the purposes of this Act Sub section 2 particularises certain matters with respect to which regulations can be made The specification of certain matters in sub section 2 is without prejudice to the generality of the power conferred by 663 Sub section 1 This is consistent with the standard legislative practice Section 157 reads 157 Central power to make regulations 1 Without prejudice to any power to make regulations contained elsewhere in this Act the Board may make regulations consistent with this Act and the rulesgenerally to carry out the purposes of this Act 2 In particular and without prejudice to the generality of the foregoing power such regulations may provide for all or any of the following matters namely a the form of a bill of entry shipping bill bill of export import manifest import reports export manifest export report bill or transshipment boat note and bill of coastal goods b the conditions subject to which the transshipment of all or any goods under sub section 3 of Section 54 the transportation of all or any goods under Section 56 and the removal of ware housed goods from one warehouse to another under section 67 may be allowed without payment of duty c the conditions subject to which any manufacturing process or other operations may be carried on in a warehouse under Section 65 section 156 confers upon the Central Government the power to make rules consistent with this Act generally to carry out the purposes of this Act SubSection 2 of Section 156 again Specifies certain matters with respect to which rules can be made The specification in sub section 2 is without prejudice to the generality of the power conferred by sub section 1 The Parliament has appointed two authorities ie central government and the Board to make rulesregulations to carry out the purposes of the Act generally The character of Rules and of the Regulations made under Sections 156 and 157 respectively is the same both constitute delegated legislation The Regulations are subject to an additional limitation viz they should not be contrary to the Rules 664 made under Section 156 The purpose of sub section 2 in both the sections is inter alia to allocate certain matters to each of them exclusively subject to these subsections both the delegates can exercise the power vested in them for carrying out the purposes of the Act No established legislative practice of any considerable duration has been brought to our notice to read any further limitation into the regulation making power under Section 157 assuming that a legislative practice can be read as a limitation We cannot therefore accept the contention that regulation making power under Section 157 should be confined only to peripheral andor procedural matters It is not necessary for the purposes of this case to emphasis the need or the growing relevance of delegated legislation Moreover enactments like customs Act and are not merely taxing statues but are also potent instruments in the hands of the Government for regulating the economy and the industrial development of the country The economic ministries had the establishments allied to them keep a close watch on the economy closely monitoring its behaviour Power of taxation is one of weapons in the Government s armoury to regulate the economy A certain industry may require encouragement while another may not Yet another sector may require to be controlled nay discouraged on some occasions In an under developed country like ours the emphasis is bound to be more on capital goods industry rather than on consumer goods industry The domestic industry has also to be protected and encouraged in certain situations In 1986 the government which expression in this discussion includes the Board evidently thought that import of industrial systems meant for establishments designed to offer services of any description such as hotels hospitals photographic studios photographic film processing laboratories etc needs no encouragement in the shape of concessional custom tariff and they said so through the said Regulations made in April 1986 It is not for the court to question the wisdom of the government s or for that matter of Board s policy Board is a part of the government It is in direct charge of the administration of the Act along with the government Probably it is for this reason that the Parliament has through Chapter Note 2 vested the power to define the expressions occurring in Chapter 98 in the Board In this scheme of things we cannot accept the argument of Sri Salve with respect to some kind of an inherent limitation upon the regulation making power of the Board We cannot say that the said power is confined only to what the learned counsel calls peripheral andor procedural matters There is another and perhaps more simpler answer to the attack upon the validity of the said Regulations They are relatable not only to Section 157 of the but more 665 particularly to Chapter Note 2 of Chapter 98 of the Chapter Note 2 expressly states that the expressions used in Heading 9801 shall have the meaning assigned to them in the said regulations In accordance with the said Chapter Note Project Imports Regulations have been made excluding establishments designed to offer services of any description from the purview of industrial plant If the said regulations are good any valid there can be no escape from what they say the photographic equipment does not fall within the ambit of industrial plant In this view of the matter the relevance of the alleged legislative practice with respect to regulation making power or of the situation obtaining prior to the framing of the said regulations is very little The express power conferred by Chapter Note 2 of Chapter 98 cannot be curtailed or abridged with reference to alleged legislative practice relating to regulation making power assuming that such a practice is established and is relevant The only question which really arises is whether Chapter Note 2 amounts to excessive delegation of legislative power As rightly pointed out by ThommenJ In Supreme Court Employees Welfare Association vs Union of India where the validity of a subordinate legislation whether made directly under the constitution or statute is in question the court has to consider the nature objects and scheme of the instrument as a whole and on the basis of that examination it has to consider what exactly was the area over which and the purposes for which power has been delegated by the governing law In statutes like and one has also to keep in mind that such legislation can be properly administered only by constantly adjusting it to the needs of the situation This calls for a good amount of discretion to be allowed to the delegate As is often pointed out flexibility is essential in law making and it is one of the advantages of rules and regulations that they can be altered much more quickly and easily than can acts of Parliament We have pointed out hereinbefore the necessity of constant and continuous monitoring of the nation s economy by the government and its various institutions and the relevance of these enactments as a means of ensuring a proper and healthy growth Looked at from this angle we are unable to see any substance in the argument that Chapter Note 2 amounts to excessive delegation of the Parliament s essential legislative function Chapter 98 provides a concessional tariff inter alia to industrial plant The expression industrial plant is a term of wide connotation All kind of industrial plants may not require to be encouraged Some may others may not Decisions of this nature have to be made from time to time Parliament cannot obviously do this It has therefore left the function to the Board which as emphasised hereinbefore is in immediate direct charge of the administration of the Act along with and subject to the guidance of the central 666 government In Vasantlal Maganbhai Sanjanwala vs State of Bombay it is observed by this Court that self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation At the same time it is held it is for a court to hold on a fair generous and liberal construction of an impugned statute whether the legislature exceeded such limits But the said liberal construction should not be carried by the Courts to the extent of always trying to discover a dormant or a latent legislative policy to sustain an arbitrary power conferred an executive authorities It is the duty of the Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature These words were quoted with approval in a subsequent decision of the Constitution Bench in Devidas vs State of Punjab Krishna lyer J emphasised this very aspect in the context of a taxing statute in Avinder Singh vs Punjab The learned Judge said the legislature cannot self efface its personality and make over in terms plenary the essential legislative functions The legislature is responsible and responsive to the people and its representatives the delegate may not be and that is why excessive delegation and legislative hara kiri have been frowned upon by constitutional law This is a trite proposition but the complexities of modem administration are so bafflingly intricate and bristle with details urgencies difficulties and need for flexibility that our massive legislatures may not get off to a start if they must directly and comprehensively handle legislative business in all their plenitude proliferation and particularisation Delegation of such part of legislative power becomes a compulsive necessity for viability If the 500 odd parliamentarians are to focus on every minuscule of legislative detail leaving nothing to subordinate agencies the annual output may be both unsatisfactory and negligible The law making is not a turnkey project readymade in all detail and once this situation is grasped the dynamics of delegation easily follow Thus we reach the second constitutional rule that the essentials of legislative functions shall not be delegated but the inessentials however numerous and significant they be may well be made over to appropriate agencies of course every delegate is subject to the authority and control of the principal and exercise of delegated power can always be directed corrected or cancelled by the principal 667 Applying the principles aforesaid we cannot say that the Parliament has by empowering the Board to define the expression industrial plant occurring in Chapter 98 delegated its essential legislative function Indeed we see no self abnegation on the part of the Parliament The power conferred by Chapter Note 2 is undoubtedly different from the power of exemption conferred by Section 25 It makes little difference in principle that while an exemption notification is required to be laid on the floor of the Parliament Regulations made under Section 157 are not so required Absence of such requirement does not mean absence of control by the Parliament over the acts of the delegate Nor are we satisfied that by excluding the industrial systems meant for establishments designed to offer services of any description the Board has travelled beyond its brief Reference may be had in this connection to the decision of this court in State of Tamil Nadu vs Hind Stone Section 15 of the empowers the State Government to make rules for regulating the grant of quarry lease mining lease and other mineral concessions in respect of minor minerals and purposes connected therewith In exercise of the said power the Government of Tamil Nadu framed Tamil Nadu Minor Mineral concession Rules 1959 Rule 8 of the Rules prescribed the procedure for lease of quarries to private persons Rule 8C which was introduced in the year 1977 imposed a prohibition on the grant of lease of quarries in respect of black granite to private persons The Rule provided that notwithstanding anything to the contrary contained in the said rules no lease for quarrying black granite shall be granted to private persons on or after7th December 1977 It could be ranted only to the State Government or to a corporation wholly owned by it The validity of Rule 8C was challenged on the ground that it travels beyond the purview of the Act inasmuch as the power to make rules conferred upon the State Government by Section 15 was meant for regulating the rant of quarry leases in respect of minor minerals but not for prohibiting it for creating a monopoly in itself State Government It was also argued that since the decision contained in Rule 8C involved a major change of policy it could be done only by the legislature and not by a subordinate legislative body Both these arguments were rejected Following observations are apposite It was pointed out by the Privy Council in Commonwealth of Australia vs Bank of New South Wales and we agree with what was stated therein that the problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved not so much legal as political social or economic consideration Each case it was said must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic 668 activities and at same Stage of social development prohibition with a view to State monopoly was the only practical and reasonable manner of regulation Another of the submission of the learned counsel was that the GOMs No 1312 dated December 2 1977 involved a major change of policy which was a legislative function and therefore beyond the competence of a subordinate legislating body We do not agree with the submission Whenever there is as witch over from private sector to public sector it does not necessarily follow that a change of policy requiring express legislative sanction is involved It depends on the subject and the statute For example if a decision is taken to impose a general and complete ban on private mining of all minor minerals such a ban may involve the reversal of a major policy and so it may require Legislative sanction But if a decision is taken to ban private mining of a single minor mineral for the purpose of conserving it such a ban if it is otherwise within the bounds of the authority Given to the Government by the Statute cannot be said to involve any change of policy The statement of law is clear and we agree with it respectfully We are therefore of the considered opinion that Chapter Note 2 cannot be faulted as an instance of excessive delegation of essential legislative function nor can the Project Imports Regulations be faulted on the ground of travelling beyond the purview of the statute For the above reasons the appeals fail and are dismissed No costs Appeals failed

Prior to January 1 1984 the Andhra Pradesh Entertainment Tax Act 1989 in Section 4 provided for levy of entertainment tax at a rate fixed on the has is of percentage of payment made by a person for admission to any entertainment In section 4 C in respect of entertainments held within the jurisdiction if any local authority where population did nit exceed 25 000 tax was levied at a certain percentage of the gross collection capacity per show and the percentage for such levy were fixed according to the population of the local authority within the jurisdiction of which the entertainment held The Amending Act 24 of 1984 replaced the earlier mode of levy of tax prescribed in Section 4 and introduced a mode of levy of tax on the has is of a prescribed percentage of the gross collection capacity per show The rates 617 were fixed on the basis of a percentage of the gross collection capacity per show varying with the category of the local area in which the theatre was situated as well as on the nature of the theatre viz air conditioned air cooled or other than air conditioned and air cooledor permanentsemi permanent including touring and temporary the atres The proprietor was given an option to pay a weekly consolidated amount irrespective of the number of shows actually held by him and the said amount was fixed on the basis of the prescribed number of shows per week The number of show varied with the nature of the theatre as well as the category of the local area in which it was situate A fixed amount was also leviable by way of show tax on each show Before the High Court a number of writ petitions were filed challenging the validity of sections 44 A and 5 of the Andhra Pradesh Entertainments Tax Act 1939 as amended by Act 24 of 1984 on the grounds that i the levy of entertainment tax on the basis of gross collection capacity without reference to the actual amount collected or the actual number of tickets sold or the number of persons admitted was ultra vires the legislative power conferred on the State Legislature under Entry 62 of List 11 of the Seventh Schedule of the Constitution ii section 4 was hit by Article 14 of the Constitution as it gave rise to discrimination amongst different theatres situate within the same local area and that iii the levy of entertainment tax under section 4 being exproprietory amounted to an unreasonable restriction on the right guaranteed to the petitioners by Article 191 g of the Constitution and was not saved under Article 196 Relying upon the decisions in Western India Theatres vs Cantonment Board 1959 Supp 2 SCR 63 YV Srinivasamurthy vs State of Mysor AIR 1959 SC 894 and State of bombay vs RMD Chamarbaugwala A I R the High Court dismissing the writ petitions held that the State Legislature was competent to levy the tax under Entry 62 of List 11 of the Seventh Schedule that as the tax levied retained the character of entertainment tax the Legislature was competent to adopt such basis or such measure or such method of levy that wide discretion was allowed to the Legislature in the matter of classification and in the matter of selection of persons to be taxed and that the two fold classification made by section 4 was neither discriminatory nor arbitrary or it did not mete out hostile discrimination to certain theatres that the rates of tax that were prescribed under section 4 based on an average expected occupancy rate of less than 50 per cent to 66 per cent was neither unreasonable nor expropriatory that section 5 was only optional and no one was compelled to be governed by it or to opt for the composition scheme and if a person opted to be governed by section 5 he must be deemed 618 to have accepted all the conditions and features of the scheme During the pendency of these appeals Special leave petition in this court the Act of 1939 was amended by AP Act 23 of 1988 and AI Act 16 of 1991 whereby the Tables below sections 4 4 A and 5 were substituted and subsection 6A was inserted in section 5 Before this Court the appellants and the petitioners reiterated two contentions raised before the High Court while assailing the constitutional validity of sections 4 and 5 of the Act namely 1 that the impugned provisions did not fall within the ambit of the legislavite power conferred on the St Ate Legislature under Entry 62 of List 11 of the Seventh Schedule of the Constitution ii that the impugned provisions were violative of Article 14 of the Constitution as they provided for imposing tax at a uniform rate in a particular class of Cinema theaters irrespective of their location and occupancy Dismissing the appeal and the Special Leave petition this Court HELD 11 While considering the question as to legislative competence of the State Legislature it is necessary to bear in mind that the impugned provisions provide for imposition of a tax and a tax has two distinct elements viz subject of the tax and the measure of the tax The subject of the tax is the person think or activity on which the tax is imposed and the measure of the tax is the standard by which the amount of tax is measured 632 1 12 The competence of the Legislature to enact a law imposing a tax under a particular head of the legislative list has to be examined in the context of the subject of the tax It the subject of the tax falls within the ambit of the legislative power conferred by the head of legislative entry it would be within the competence of the Legislature to impose such as tax 632 E 13 Prior to the enactment of Act 24 of 1984 there were two modes for levy of the tax one on the basis of the actual number of persons admitted to each show and the other on the basis of the percentage of the grows collection capacity per show As a result of the amendments introduced by Act 24 of 1984 the system for levy of tax on the basis of number of persons actually admitted to each show was dispensed with and the tax was to be levied on the basis of the percentage of the gross collection capacity per show and different percentages were prescribed depending on the type of the theatre and the 619 nature of the local area where it was situated 633 F H 14 The question whether the alteration in the said mode of levy of tax by Act 24 of 1984 has the effect of altering the nature of the tax in a way that it has ceased to he a tax on entertainments and falls beyond the field of legislative competence conferred in the State Legislature by Entry 62 of List 11 must he answered in the negative The fact that instead of tax being levied on the basis of the payment for admission made by the persons actually admitted in the theater it is being levied on the basis of the gross collection capacity per show calculated on the basis of the notional aggregate of all the payments fair admission which the proprietor would realise per show if all the seats or accommodation in respect of the place of entertainment are occupied and calculated at the maximum rate of payments for admission would not alter the nature of the tax or the subject matter of the tax which continues to he a tax on entertainment 634 B D 15 The mode of levy based on per payment for admission proscribed under Section 41 prior to amendment by Act 24 of 1984 necessitated enquiry into the number of shows held at the theatre and the number of persons admitted to a cinema theatre for each show and gave room for abuse both on the part of proprietor as well as other officers incharge of assessment and collection of tax The mode of levy or measure of the tax prescribed under section 41as substituted by Act24 of 1984 is a more convenient mode of levy of the tax inasmuch as it dispenses with the need to verify or enquire into the number of persons admitted to each show and to verify the correctness or otherwise of the returns submitted by the proprietor containing the number of persons admitted A each show and the amount of tax collected 634 E 16 On an examination of the rates prescribed under both the modes it is found that under the system of consolidated levy prescribed under Section 4 C the proprietor could break even if the average rate of occupancy was 40 As regards the rates prescribed under Sections 4 and 5 as amended by Act 24 of 1984 they are based on an average expected occupancy rate of less than 50 or 66 depending upon the area in which the theatre is situated This would mean that the entertainment tax that would be collected over and above the average occupancy rate would constitute the profit of the proprietor In the circumstances it cannot be said that the adoption of the system of consolidated levy in Section 41 as amended by Act 24 of 1984 alters the nature of tax and it has ceased to be a tax on entertainments 634 F H 620 17 Once it is held that tax in entertainment could be levied either of the two modes viz per payments of admission or gross collection capacity per show it is for the legislature to decide the particular mode or modes of levy to be adopted and whether a choice should he available to the proprietor of the cinema theatre in this regard The legislature does not transgress the limit of its legislative power confer red on it under Entry 62 of List 11 if it decides that consolidated levy on the basis of gross collection capacity per show shall be the only mode for levy of tax on entertainments 635 C 18 The impugned provisions contained in Sections 4 and 5 as amended by Act 24 of 1984 are not ultra vires the legislative power conferred on tile State Legislature under Entry 62 of List 11 635 D Western India Theatres vs Cantonment Board 1959 Supp 2 SCR 63 and Y V Srinivasamurthy vs State of Mysore AIR 1959 SC 894 explained 201 The right conferred by Article 14 postulates that all persons similarly circumstanced shall he treated alike both in privileges conferred and liabilities imposed Since the State in exercise of its governmental power has of necessity to make laws operating differently on different groups of persons within its territory to attain particular ends in giving effect to its policies it is recognised that the State must possess the power of distinguishing and classifying persons or things to be subjected to such laws It is however required that the classification must satisfy two conditions namely iit is founded on an intelligible different is which distinguishes those that are grouped together from others and ii the differential must have a rational relation to the object sought to be achieved by the Act It is not the requirement that the classification should be scientifically perfect or logically complete Classification would be justified if it is not palpable arbitrary 636 A C Re Special Courts Bill at pp 534 536 and Khandige Sham Bhat vs Agricultural Income Tax Officer at p 817 followed In the field of taxation the legislature exercises an extremely wide discretion in classifying items for the purposes so long as it refrains from clear and hostile discrimination against particular persons or classes 636 E 621 East India Tobacco Co vs State of AP at p 411 PM Ashwathanarayana Shetty vs State of Karnataka 1988 Supp3 SCR 155 at pm 188 Federation of Hotel Restaurant Association of India vs Union of India at p 949 Kerala Hotel Restaurant Association vs State of Kerala at p 530 Gannon Dunkerley and Co vs State of Rajasthan at 397 and San Antonio Independent School District vs Bodriques at p 41 referred to just as a difference in the treatment of persons similarly situate leads to discrimination so also discrimination can arise if persons who are unequals ie differently placed are treated similarly In such a case failure on the part of the legislature to classify the persons who are dissimilar in separate categories and applying the same law irrespective of the differences brings about the same consequence as in a case where the law makes a distinction between persons who are similarly placed A law providing for equal treatment of unequal objects transactions or persons would he condemned as discriminatory if there is absence of rational relation to the object intended to he achieved by the law 637 A B K T Moopil Nair vs The State of Kerala Anr distinguished Jalan Trading Co pvt Ltd vs Mill Mazdoor Union and Twyford Tea Co Ltd Anr vs The State of Kerala Anr referred to In the instant case the legislature has prescribed different rates of tax by classifying theatres in the different classes namely air conditionedair cooled ordinary other than air conditioned and air cooled permanent and semi permanent and touring and temporary The theatre have further been categorized on the basis of the type of the local area in which they are situate It cannot therefore be said that there has been no attempt on the part of the legislature to classify the cinema theatres taking into consideration the differentiating circumstances for the purpose of imposition of tax 638 G H 205 In relation to cinema theatres it can he said that the attendance in the various cinema theatres within a local area would not be uniform and would depend on factors which may vary from time to time But this does not mean that cinema theatres in a particular category of local area will always 622 be at a disadvantage so as to be prejudicially affected by a uniform rate as compared to cinema theatres having a better location in the same local area The contention that the impugned provisions are violative of right to equality guaranteed under Article 14 if the Constitution on the basis that unequals are being treated equally cannot be accepted 639 B C 3 The provision for enhancement contained in sub section 16 of section 5 relates to the cases There the proprietor of a cinema theatre opts for payment of weekly consolidated amount Since the proprietor has the option to opt for the said scheme he cannot complain that the scheme suffers from inequality on account of absence of a corresponding provision for reduction of amount of tax 639 E

Appeal No 266 NT of 1980 From the Judgment and Order dt 14121979 of the Allahabad High Court in Sales Tax Rev No 214 of 1979 Harish N Salve PP Singh and Ms Meenakshi Grover for the Appellant RC Verma and Ms section Mukherjee for RB Misra for the Respondent The Judgment of the Court was delivered by YOGESHWAR DAYAL J This appeal is directed against the judgment of the Single Judge of the Allahabad High Court passed in Sales Tax Revision No 214 of 1979 dated 14th December 1979 By the impugned judgment the High Court set aside the order of the Judge Revisions Sales Tax UP Lucknow holding that the Phosphorous Bronze which the assesseeappellant herein have been manufacturing fell within the ambit of Notification No ST II 333X 10121971 dated the 15th November 1971 issued in exercise of the powers under the second proviso to sub section 2 of section 3 A of the UP Sales Tax Act 1948 UP Act No XV of 1948 and took the view that the relevant entry at serial No 2a of the said Notification did not cover the goods prepared by the appellant herein and was thus liable to be taxed as an unclassified commodity at the rate of 35The relevant entry reads as under SI No Description of goods Rate of tax 1 2 a Copper tin nickel or zinc 1 per centm or any other alloy containing any of these metals only b The contention on behalf of the appellant is that Phosphorous Bronze manufactured and marketed by them is covered under the aforesaid entry According to the appellant the said Phosphorous Bronze is made of tin and copper only It is further contended on behalf of the appellant that the small quantity of Phosphorous is used to deoxidise the metal and as such the Phosphorous is not an 721 essential substance of Phosphorous Bronze It is however admitted case of the parties that without the use of Phosphorous the Phosphorous Bronze cannot be produced and certain quantity of Phosphorous still remains in the Phosphorous Bronze The contention of the respondent is that Phosphorous Bronze is an alloy containing not only the metals mentioned in the aforesaid entry but Phosphorous also and as such it is not covered under the aforesaid entry The words other alloy containing any of these metals only mean that the alloy made of these metals ie copper tin nickel or zinc only and that alone is covered under the said entry It was submitted that if any other metal or substance is included in such an alloy the same would not be covered under the aforesaid entry A similar question arose in the case of Commissioner of Sales Tax U P vs Hindustan Metal Works Hathras reported in 1964 15 Sales Tax Cases 97 wherein it was held as under The Notification exempts tax on sale of alloys prepared from the solution of two or more of the metals enumerated therein On account of the word only the sale of an alloy prepared from the solution of two or more of those metals and some other substance or substances would not be exempt from tax The assesse sold an alloy called phosphorous bronze which was prepared from the solution of copper tin phosphorous and lead Phosphorous and lead are not mentioned in the notification They are deliberately added by the assessee as per agreement between the parties The sale is therefore prime facie liable to be taxed We were referred to various dictionary meanings of the words Phosphorous Bronze which have been noticed by the learned Judge dealing with case in the High Court We are really concerned with the interpretation of the entry The emphasis in the entry is either it should be pure copper tin nickel or zinc and if it is an alloy containing two or more metals it must be an alloy containing these metals only The expression only is very material for understanding the meaning of the entry Since the alloy in dispute contains Phosphorous may be in a very small quantity it cannot fall within entry 2a of the aforesaid Notification The appeal consequently fails and is dismissed with costs UR Appeal dismissed

The petitioners claimed to he casual labourers of the South Eastern Railway appointed between 1964 69 and retrenched between 1975 78 They prayed 1 for inclusion of their names in the live casual register and reemployment according to their seniority and 2 for restraining the filling of vacancies from the open market They relied on two circulars issued by the Railway Board laying down guidelines for the recruitment retrenchment and employment of casual labourers They also relied on two judgments of this court in 1985 and 1987 which directed the preparation of a scheme and absorption of casual labourers in accordance with their scheme A scheme was framed in 1987 for employing casual labourers retrenched before 1981 subject to demonstrating suitability before 31st March 1987 In 1990 the petitioners made their representation to be considered The questions before this court were a whether the petitioners were entitled as a matter of law to reemployment and b if they had lost their right if any due to delay 752 Dismissing the petitions this court HELD 1 Right of casual labourers employed in projects to be reemployed in railways has been recognised both by the Railways and this Court But the petitioners only sent in a vague representation and there was absence of positive material that they were in fact appointed and working as claimed 754 G 2 A writ is issued by this court in favour of a person who has some right and not for the sake of a roving enquiry leaving scope for manoeuver Delay itself deprives a person of big remedy available in law In the absence of any fresh cause of action of any legislation a person who has lost his remedy by lapse of time loses his right as well 755 A 4 In any event more than 15 years have expired and a host of others who have in the meantime become eligible and entitled to claim to be employed would he deprived if the petitioners claim were accepted 755 B

Appeal No 139 of 1959 Appeal by special leave from the judgment and order dated January 8 1959 of the Patna High Court in Election Appeal No I of 1958 arising out of the judgment and order dated November 30 1957 of the Election Tribunal Patna in Election Petition No 353 of 1957 B K P Sinha and D P Singh for the appellant G C Mathur and Dipak D Choudhri for respondent No 1 R H Dhebar for respondent No 3 1959 April 14 The Judgment of the Court was delivered by GAJENDRAGADKAR J This appeal by special leave arises from the election petition filed by respondent I No 353 of 1957 in which he claimed a declaration that the election of the appellant as a member of the 537 Bihar Legislative Assembly Maner Constituency should be declared to be void In the last General Election for the said constituency which was held in February March 1957 there were three candidates the appellant respondent I and respondent 2 The last date for filing nomination papers at the said election was January 29 1957 the said papers were scrutinised on February 1 1957 Respondent I had challenged the validity of the appellant s nomination paper at the said scrutiny but the returning officer had overruled the objection raised by respondent I and had accepted the nomination paper of the appellant along with those of the two other candidates After the counting of votes was done on March 3 1957 the appellant was declared duly elected at the election inasmuch as he had got 9826 votes while res pondents I and 2 had got 7526 and 49 votes respectively Thereupon respondent I filed his election petition under section 81 of the Representation of the People Act 1951 hereinafter called the Act In his petition respondent 1 challenged the election of the appellant on several grounds all of which were controverted by the appellant On the allegations of the parties the tribunal had framed several issues and parties had led evidence on them At the stage of arguments however only a few issues were pressed by respondent I and all of them were found against him and in favour of the appellant In the result the tribunal dismissed the election petition on November 30 1957 Against the said decision of the tribunal respondent I preferred an appeal in the High Court of Judicature at Patna and in his appeal he pressed only issue No 1 This issue was whether the nomination of the appellant was hit by the provision of section 7d of the Act and as such whether the said nomination had been improperly accepted On this issue the tribunal had found in favour of the appellant but the High Court reversed the said finding and accepted the plea of respondent 1 As a result of this finding the High Court allowed the appeal preferred by respondent I and 68 538 declared on January 8 1959 that the election of the appellant was void under section 1001a of the Act The validity of the appellant s nomination has been challenged under section 7d of the Act on the ground that at the date of the nomination he had an interest in a contract for the execution of works undertaken by the Bihar Government There is no doubt that if a person is interested in a contract for the execution of any work undertaken by the appropriate Government he is disqualified for membership of the State Legislature in question The appellant however denied that the disqualification imposed by section 7d could be invoked against him His case was that the contracts in question had not been undertaken by the Bihar Government but they bad been undertaken by the Central Government and he also urged that he had not taken the said contracts individually in his personal capacity but as the Mukhiya of the Jeorakhan Tola Gram Panchayat On both these issues the Election Tribunal and the High Court have differed and it is the said two issues that arise for our decision in the present appeal It is clear that if the appellant succeeds in showing that he had entered into the impugned contracts not individually but on behalf of the Panchayat of which he was the Mukhiya it would be un necessary to consider whether the works covered by the said contracts had been undertaken by the Government of Bihar Let us therefore first consider that point The impugned contracts are five in number They were for the execution of works under local development works programme envisaged under the Second Five Year Plan formulated by the Government of India These contracts are evidenced by five documents Exs 16 A B C D E The first is for the construction of Beyapore Jeorakhan Tola Road the second for the construction of the Beyapore M E School the third for the construction of a Dispensary at Jeorakhan Tola the fourth for the construction of the Gram Panchayat building and the last for the construction of a well at the said village It is admitted by the appellant that these contracts had not been completed at the time of his nomination 539 In considering the appellant s plea that he had executed these contracts as a Mukhiya of the Village Panchayat of his village it would be necessary to bear in mind the background of the scheme in pursuance of which these works were undertaken The Second Five Year Plan published by the Planning Commission in 1956 shows that the programme of starting these works was treated as a part of the co operative movement and the Commission had therefore recommended that the States were to sponsor and assist actively in the Organisation and development of Village Panchayats which was an important constituent of the programme of fostering corporate life in the rural areas as it would promote among the rural community active interest in the development programmes of the villages The object of this programme which would operate in areas not yet reached by the National Extension Service was to enable village communities to undertake works of local benefit mainly with their own labour The Commission realised that the resources of all the States taken together would fall far short of the requirements of this Plan and so it recommended large transfers of resources from the Centre to the States In this connection the conclusion of the Commission was that out of Rs 200 chores sanctioned for the year 1957 58 12 cores would be required for the Centre for schemes undertaken or directly sponsored by the Community Project Administration and 180 crores were to form part of the balance for the States Thus it is obvious that the basic idea underlying the Plan was to evoke popular response to the community projects undertaken in pursuance of the Plan and to leave the execution of different works adopted under the Plan to be fulfilled by popular local agencies like Village Panchayats This policy was emphasised by the Secretary of the Planning Commission in his communication to all State Governments No PCPub5253 dated August 11 1953 H 1 This communication set out the seven categories of work which were most suitable for assistance and it said that the local contribution in cash or kind or through voluntary labour together 540 with any contribution that the State Government or a local body might make should be a minimum of 50 of the total cost of each work The intention was to spread the benefit over as wide an area and to as many people as possible The State Governments were accordingly requested to arrange for a detailed scrutiny of the schemes before they were accepted and for making adequate provisions providing for their pro per execution They were also required to nominate a liaison officer for each district or other suitable unit for the purpose of checking the execution of the works and for maintenance of such initial accounts as might be necessary This communication makes detailed provisions about financing and accounting procedures to be followed and required the State Governments to make progress reports from time to time It appears that the Government of India was aware that the District Boards whose primary responsibility it was to sponsor these undertakings would find the project beyond their financial resources and so it accepted the recommendation of the Planning Commission to contribute 50 of the cost of each of the schemes on the condition that the remaining half had to be found by the District Board or by the public to be benefited by it in the form of cash or voluntary labour The five impugned contracts related to community projects of the kind envisaged by this programme By its letter dated February 27 1954 H 2 the Bihar Government had advised all the District Local Boards to assist the execution of such projects and to afford all facilities to and co operate with the district officers in the execution of the programmes undertaken by these projects without charging any remuneration for the same The idea clearly was that if the Village Panchayats sponsored works undertaken under these programmes they should encourage people to contribute labour and even money The result would be that the works undertaken would benefit the community at large and if any saving was made in executing the contract it would enure for the benefit of the village Panchayats that were usually expected to be the sponsoring units 541 It is in the light of this background that we have to consider the question whether the contracts in question had been executed by the appellant in his individual capacity as contended by respondent I or in his capacity as the Mukhiya of the Village Panchayat as urged by the appellant The four contracts evidenced by Exs 16A C D and E are all similarly executed whereas contract 16 B which is in respect of the construction of the Beyapore M E School is somewhat differently worded With regard to this latter contract both the Election Tribunal and the High Court are agreed that it had been executed by the appellant as the Secretary of the Beyapore Madhyamik Vidyalaya and that in this con tract the appellant was not personally interested The Election Tribunal took the view that the other contracts are substantially of the same character whereas the High Court has held that they are entirely different and that the appellant has personally executed them The question which we have now to decide is whether this view of the High Court is right We would take exhibit 16 A as typical of the remaining four contracts The material terms of this contract are 8 in number and they are all in the prescribed form At the commencement of the contract the appellant has described himself by his name and he has stated that he belongs to the village of Jeorakhan Tola and that his profession is cultivation The preamble to the contract shows that the appellant undertook to carry out the construction of the development project under local works programme mentioned in the contract as per estimate attached thereto and he agreed to execute the work according to and subject to the terms and conditions contained therein and he also undertook to contribute 50 of the cost in cash and labour At the end the appellant has signed as Mukhiya and has given his address as Jeorakhan Tola Gram Panchayat The High Court took the view that the description of the appellant given by him at the time when he signed the contract was not a term of the contract and could not therefore support his plea that he had executed the contract as Mukhiya of 542 the Panchayat It is on this ground that the High Court distinguished this and the other three allied contracts from the school contract exhibit 16 B In this latter contract the appellant has described himself as the Secretary Madhyamik Vidyalaya both at the commencement of the document and at the end where the appellant has signed In our opinion the distinction made by the High Court between the two sets of contracts is not valid We do not see any reason to take the view that the description given by the appellant about his status while he signed the contract is no part of the contract itself Incidentally we may observe that the contract is accepted by the officer who signs as the section D O Dinapore The designation of the officer given by him while signing the acceptance of the contract indicates the character in which the officer has accepted the contract Similarly the description given by the appellant about his status and character when he signed the contract should be taken to denote the character in which he executed the contract The High Court also thought that cls 4 and 7 by which the appellant undertook liability to execute the contract as required and to become liable for payment of any fine imposed by the local government officer in case of his default clearly showed obligations of a personal type which were inconsistent with his plea that he had entered into the contract as the Mukhiya of the Panchayat We think that this argument has no force If the nature of the liability undertaken by these two clauses necessarily involves the conclusion that the execution of the contract must be by an individual person then it is significant that the same two clauses occur in the school contract and yet the High Court has held that the said contract has been executed by the appellant not in his individual capacity but as the Secretary of the Madhyamik Vidvalava Therefore too much reliance cannot be placed upon these two clauses to support the view that the contract has been executed by the appellant personally Besides the High Court has not properly considered the term of the contract by which the contracting 543 party undertakes to contribute 50 of the cost of the work in cash or labour In other words the contracting party becomes a sponsoring agent of the contract and agrees to undertake 50 of its cost It is very difficult to appreciate the suggestion that the appellant personally and in his individual character agreed to contribute 50 of the cost in cash or labour In ordinary course a person who undertakes to carry out a building contract expects to make profit and would never agree to contribute 50 of the cost of the contemplated work This clause clearly indicates that the sponsoring of the contract was really done by the Village Panchayat which agreed through its Mukhiya that it would contribute 50 of the cost either in cash or in labour Consistently with the general policy of Plan the Village Panchayat became a sponsoring agent and hoped and expected to obtain popular response from the villagers who would contribute their labour and thus make up the 50 of the cost of the intended work Therefore in our opinion if the contract in question is considered in the light of the background of the Plan of which it forms one item and all its conditions are taken into account together there can be no doubt that the appellant as the Mukhiya of the Village Panchayat acted as its agent when he signed the contract and not as an individual acting in his personal capacity This position is also corroborated by the record kept by the Village Panchayat in respect of these contracts This record consists of the several proceedings before the Village Panchayat the budgets adopted by it and the resolutions passed by it from time to time in respect of these contracts It had been alleged by respondent 1 that the whole of this record had been fabricated for the purpose of the present proceedings The Election Tribunal has made a definite finding against respondent I on this point It has considered the oral evidence given by the appellant and other witnesses in proving the said record It has examined the entries themselves on their merits and has taken into account the fact that some of the exhibits showed that they had been signed and 544 approved by the District Panchayat Officer from time to time The tribunal therefore thought that it was impossible to believe that all persons who purported to sign the record had helped the appellant to manufacture it simply because the appellant was the Mukhiya of the village The judgment of the High Court shows that it was not prepared to reverse this finding in terms It has however made certain observations in respect of this record which would show that it was not prepared to attach any importance to it The papers says the judgment do not inspire much confidence and cannot be relied upon in proof of the facts disclosed by them It is unfortunate that when a serious allegation was made against the whole of the record alleged to have been kept by the Village Panchayat and it had been categorically rejected by the Election Tribunal the High Court should not have made its own finding on the point in clear and unambiguous terms The oral evidence led by the appellant in support of the record and the other material circumstances considered by the Election Tribunal do not appear to have been properly taken into account by the High Court in dealing with this point The High Court was however impressed by what it called two defects in respect of this record It observed that the accounts had not been audited as required by r 20 of the Bihar Gram Panchayat Account Rules 1949 and that the cash balance had not been kept by the Mukhiya in the nearest Post Office Savings Bank or in any recognised Co operative Bank or a Government Treasury in the name of the Panchayat as required by r 8 These two defects may undoubtedly suggest that the officers of the Panchayat including the appellant had not acted properly and had not complied with the obligations imposed by the said rules but it is difficult to understand how the said two defects can have a material and direct bearing on the question as to whether the record had been fabricated If the High Court intended to hold that the record bad in fact been fabricated it should have considered the relevant evidence and the material circumstances 545 more carefully and should have made a definite finding in that behalf To say that the record bore only the signatures of the appellant and his clerk and to seek to draw an adverse inference from that fact is in our opinion adopting a wrong approach to the question If the appellant was the Mukhiya he was bound to sign the record and so was the clerk bound to write it that cannot therefore be treated as a suspicious circumstance by itself We have carefully examined this question and we do not see any reason why the well considered finding of the Election Tribunal on this point should not have been accepted Therefore we must assume that the Panchayat record produced by the appellant is not shown to have been fabricated Besides the High Court itself appears to have assumed that this record showed that there was an understanding between the appellant and the Village Panchayat in regard to the financial obligations involved in the execution of the impugned contracts It might well be says the judgment that the loss or the profit was ultimately to be borne or pocketed by the Gram Panchayat itself but that according to the High Court does not take away the effect of the contract itself which on the face of it was entered into by the appellant himself If the Panchayat agreed to bear the loss or take the profit flowing from the performance of the contract then it clearly supports the appellant s case that he had executed the contract as the Mukhiya of the Panchayat The arrangement to which the High Court refers if genuine would be wholly inconsistent with the case set up by respondent I that the contract had been executed by the appellant personally The High Court has also held that the appellant had not made out this specific case either before the returning officer when his nomination was challenged or in the present proceedings when he filed his written statement The appellant had no doubt stated in reply that he had no interest in any contract undertaken by the State Government According to the 69 546 High Court his failure to add the further particular that the contract had been executedby him on behalf of the Panchayat shows that the said plea is an afterthought We are unable to see the force of this criticism But apart from it the question raised by the appellant relates to the construction of the contract and we do not see how the construction of a document can be prejudicially affected by the failure of the party to make a more specific and more precise plea in his written statement We have no doubt that if the contract is considered as a whole it would show that the appellant had executed it as the Mukhiya of the Village Panchayat and this conclusion cannot be affected by the alleged defect in the plea taken by him in the written statement The High Court has also relied on the fact that if the contract was intended to be executed by the appellant on behalf of the Panchayat it should have been executed in the name of the corporate body as required by section 6 of the Bihar Panchayat Raj Act Bihar Act 7 of 1958 It may be that the Gram Panchayat is a body corporate by the name specified in the notification under sub section 1 of section 3 and has a perpetual succession and a common seal and so has power to contract in the name of the body corporate but as the judgment of the High Court itself points out the invalidity of the contract would not affect the merits of the issue raised under section 7d of the Act That is the view taken by this Court in Chatturbhuj Vithaldas Jasani vs Moreshwar Parashram 1 and that in fact is the point made by the High Court in rejecting the appellant s contention that since the contract was invalid he could not be said to be interested in it under section 7d of the Act Therefore the invalidity of the contract cannot help us in deciding the question as to whether on its true construction the contract can be said to have been executed by the appellant in his personal capacity or as the Mukhiya of the Village Panchayat Our conclusion therefore is that the four impugned contracts have been executed by the appellant as the Mukhiya of the Village 1 547 Panchayat just in the same way as he had executed the school contract as the Secretary of the Vidyalaya in question That being so section 7d cannot be invoked against him In view of this conclusion it is unnecessary to decide whether the works in question had been undertaken by the Government of Bihar or by the Central Government The result is that the appeal must be allowed the order passed by the High Court set aside and that of the tribunal restored respondent I shall pay the costs of the appellant throughout and the Election Commission shall bear their own We would like to add that after this appeal was argued before us on April 2 1959 we had announced our decision that the appeal would be allowed and that the judgment would be delivered later on in due course It is in pursuance of that order that the present judgment has been delivered Appeal allowed

The by its First and Second Schedules provided the rates of and custom duties to be levied under the Chapter 98 introduced in Second Schedule prescribed a concessional rate of duty in respect of articles and items specified therein As per Chapter 655 Note 1 if a particular article mentioned in Chapter 98 also fell under some other Chapterheading still such item would be governed by Chapter 98 and not by that other chapterheading Photographic machinery was covered under Chapter 90 wherein the rate of duty was far higher but for purposes of duty it was claimed as industrial plant under Chapter 9801 The expression industrial plant was defined neither in nor in Chapter Note 2 of Chapter 98 of the laid down that Heading 9801 would apply to all goods imported in accordance with the regulations made under section 157 of the Act and the expressions used in heading 9801 should have the meaning assigned to them in the said regulations Accordingly the Project Import Regulations 1986 were framed Regulation 3 of said Regulations defined industrial plant exduding from its purview industrial systems meant for establishments designed to offer services of any description such as photographic studios photographic film processing laboratories etc On coming into force of the Project Import Regulations the Customs authorities refused to treat the photographic equipment imported by the appellants as industrial plant falling under heading 9801 and sought to levy duty thereon under Chapter 90 of the The appellant filed writ petitions before the High Court challenging the validity of the Project Import Regulations 1986 The writ petitions were dismissed Hence the appeals by special leave The appellant contended that regulations made by the Central Board of customs and Excise under section 157 of the not being subject to Parliament s scrutiny in the sense that they were not required to be laid on the floor of the Houses of Parliament under section 159 stand on an inferior footing to rules made by the Central Government under section 156 and therefore the regulation making power was confined only to peripheral and procedural matters and not for making substantive provisions the Act specified the articles and things subjected to duty as also the rates of duty and such A power was not left to be exercised by a delegate the Parliament did not contemplate delegating to the Board the power to cut down the field and ambit occupied by the provisions of the or the and such a power if delegated to the Board would amount to excessive delegation of legislative power Regulation 3 of the Project Imports Regu 656 lation defining Industrial plant was outside the purview of the regulation making power conferred by section 157 as the same took away under the garb of defining the said expression the beneficial rate of duty provided by the Parliament in the interest of industrial progress of the country Dismissing the appeals this Court HELD 1 The regulation making power conferred on the Central Board of Customs and Excise by section 157 of the customs Act 1962 is not confined only to peripheral andor procedural matters The Parliament has appointed the Central Government and the Board to make rulesregulations to carry out purposes of the Act The character of Rules and of the Regulations made under sections 156 and 157 of the Act respectively Is the same both constitute delegated legislation The Regulations are subject to an additional limitation viz they should not be contrary to the Rules made under section 156 The purpose of sub section 2 in both the sections is to allocate certain matters to each of them exclusively subject to these sub sections both the delegates can exercise the power vested in them for carrying out the purposes of the Act 662G H 663 G H 664 A 21 It is not for the Court to question the wisdom of the Government sor for that matter of Board s policy Enactments like and are not merely taxing statutes but are also potent instruments in the hands of the Government for regulating the economy and the industrial development of the country Power of taxation is one of the weapons in the Government s armoury to regulate the economy A certain industry may require encouragement while another may not Such legislations can be properly administered only by constantly adjusting them to the needs of the situation This calls for a good amount of discretion to be allowed to the delegate Flexibility is essential in law making and it is one of the advantages of rules and regulations that they can be altered much more quickly and easily than can Acts of Parliament Probably it is for this reason that the Parliament has through Chapter Note 2 vested the power to define the expressions occurring in Chapter 98 in the Board which is a part of the Government and is in immediate direct charge of the administration of the Act alongwith and subject to the guidance of the Central Government Looked at from this angle it cannot be said that Chapter Note 2 amounts to excessive delegation of the Parliament s essentialle legislative function 665 D G Chapter 98 of the provides a concessional tariff to industrial plant The expression industrial plant is a term of wide 657 connotation All kinds of Industrial plants may not require to be encouraged Some may others may not Decisions of this nature have to be made from time to time Parliament cannot obviously do this It has therefore rightly left the function to the Board In 1986 the Government which expression includes the Board thought that import of industrial systems meant for establishments designed to offer services of any description such as hotels hospitals photographicstudios photographic film processing laboratories etc need no encouragement in the shape of concessional custom tariff and they said so through the Project Imports Regulations 1986 which cannot he said to have travelled beyond the purview of the statute Nor can it be said that the Board has travelled beyond its brief by excluding the Establishments designed to offer services of any description from the preview of industrial plant as defined under Regulation 3 of the Project Imports Regulations Accordingly photographic equipment does not fall within the ambit of industrial plant 665 G H 666 A 668 E 23 It cannot be said that the Parliament has by empowering the Board to define the expression industrial plant occurring in Chapter 98 delegated its essential legislative function There is indeed no self abnegation on the part of the Parlimaent The express power conferred by Chapter Note 2 of Chapter 98 of is undoubtedly different from the power of exemption conferred by Section 25 It makes little difference in principle that while an exception notification is required to be laid on the floor of the parliament Regulations made under Section 157 are not so required Absence of such requirement does not mean absence of control by the Parliament over the acts of the delegate 661 G H Supreme Court Employee Welfare Association vs Union of lndia Avinder Singh vs Punjab State of Tamil Nadu vs Hind Stone relied on Vasantial Maganbhai Sanjanwala vs State of Bombay Devidas vs State of Punjab referred to

c No 715 of 1990 Under Article 32 of the Constitution of India Gobinda Mukhoty RK Jain Yusuf H Machhale Ms K Amreswari NP RN Sachthey NN Goswamy Ashwani kumar Mukesh KGiri AK Sharma BK Prasad NP Ms Anil Katiyar Ms Niranjana Singh section Wasim A Qadri BK PrasadNafis Ahmad SiddiquiAsoar Ali KhanAS Bhasme EMS Anam Sakil Ahmed Syed Anil K Jha Raj Kumar Mehta SK Agnihotri BR Jad Anip Sachthey Syed Ali Ahmed Syed Tanweer Ahmad Mohan Pandey M Veerappa KH Nobin Singh section K Mehta Dhruv Mehta Aman Vachher P K Manohar B B Singh Aruneshwar Gupta and RMohan for the appearing parties The Judgment of the Court was delivered by RM SAHAI J Imamsincharge of religious activities of the mosque 1 have approached this court by way of this representative petition under Article 32 of the Constitution for enforcement of fundamental right against their exploitation by Wakf Boards Relief sought is direction to Central and State Wakf Boards to treat the petitioner as employees of the Board and to pay them basic wages to enable them to survive Basis of claim is glaring disparity between the nature of work and amount of remuneration Higher pay scale is claimed for degree holders Imams perform the duty of offering prayer Namaz for congregation in mosques Essentially the mosque is a centre of community worship where Muslims perform ritual prayers and where historically they have also gathered for political social and cultural functions 2 The functions of the mosque is summarised by the 13th Century jurist Ibn Taymiyah as a place of fathering where prayer was celebrated and when public affairs were conducted 3 All mosques are where Muslim men on an equalitarian basis rich or poor noble or humble stand in rows to perform their prayers behind the imam 4 Imams are expected to look after the cleanliness of mosque call azans from the balcony of the minarets to the whole religious meetings and propagate the Islamic faith They are expected to be 745 well versed in the Shariat the holy Quran the Hadiths ethics philosophy social economic and religious aspects Imam or prayer leader is the most important appointee In the early days the ruler himself filled this role he was leader imam of the government of war and of the common salat ritual prayer Under the Abbasids when the caliph no longer conducted prayers on a regular basis a paid imam was appointed While any prominent or learned Muslim can have the honor of leading prayers each mosque specifically appoints a man well versed in theological matters to act as its imam He is in charge of the religious activities of the mosque and it is his duty to conduct prayers five times a day in front of Mihyab 5 On nature of the duties performed by the imams there is no dispute But both the Union of India and various State Wakf Boards of different States which have put in appearance in response to the notice issued by this Court have seriously disputed the manner of their appointment right to receive any payment and absence of any relationship of master and servant It is stated that the imams or muazzins are appointed by the Mutwallis According to them the Wakf Boards have nothing to do either with their appointment or working It is claimed that under lslamic religious practice they are not entitled to any emoluments as a matter of right as the Islamic law ordains the imams to offer voluntary service They are said to be paid some money out of the donations received in mosques or by the Mutwallis of the Boards Their job is stated to be honorary and not paid Nature of duty under Islamic Sharjat is stated to lead prayers which is performed voluntarily by any suitable Muslim without any monetary benefit Some of the affidavits claim that they are appointed by people of the locality The Union Government has specifically stated that the Islam does not recognise the concept of priesthood as in other religions and the selection of imams is the sole prerogative of the members of the local community or the managing committee if any of the mosque According to Karnataka Wakf Board Imamate in the mosque is not considered to be employment The allegation of the petitioners that due to meagre payment they are humiliated or insulted in the society is denied and it is claimed that they are respectable persons who carry on the duty of Imamate as a part of religious activity and not for earning bread and butter The Delhi Wakf Board pointed out that the honorarium is paid to an imam as a consideration for his five time presence in the mosque regularly and punctually The Board has denied any right to exercise an authority over the mosque where imams and muazzins are appointed by the mutwallis or by the managing committees It is stated that holding of a certificate from a registered institution to enable a person to lead the prayer is not necessary as the only requirement for being an imam under the Sharjat is to 1 to 5 The Encyclopedia of Religion Vol 10 p 121 122 746 have a thorough knowledge of the holy Quaran and the rites rules and obligations required for offering prayers according to the principles laid down by the Kuran and Sunnah The affidavit filed on behalf of Wakf Board has pointed out that mosque can be categorised in five categories one which are under direct control or management of the Government such as Mecca Masjid or the mosque situated in public garden which are not governed or regulated by the Muslim Wakf Board second mosques which are under the direct management of Wakf Board third mosques which are under the control of mutwallis under various Wakfs according to the wishes of the Wakf as the creator of the Wakf fourth mosques which are not registered with the Wakf Board and are managed by local inhabitants and are under the management of the public who offer prayers regularly in a particular mosque and fifth mosques which are not managed by mutwallis or the Muslin is of the locality It is claimed that imams of fourth and fifth category are not regular and any Muslim can lead the prayers whereas under the third category mosques are having regular imams Financial difficulty of the Wakf Board to meet the demand has also been pointed out The Pondicherry Wakf Board has pointed that there is not even one employee except a peon working therein and therefore it is not possible to meet the demand of the imam It is also claimed that the Board has no control over the pesh imams as they are considered to be well dignified personality of the society and they are given due respect by the Muslim community as a whole In the counter affidavit filed by the Punjab Wakf Board it has been stated that imams of mosques in Punjab were being paid on basis of their qualification Imam Nazara Muntaii grade are in the scale of Rs 380 20 58O25 830 30 980 whereas Imams Hafiz Wasti gradeare paid Rs 445 20 645 25895 30 1045 and Imam Alim Muntaii grade are paid Rs 520 20 720 25 97030 1120 They are also paid Rs30 per month medical allowance and muazzins are paid Rs 310 per month These scales were revised in 1992 According to them imams of all the mosques in Punjab Haryana and Himachal Pradesh which come under the Punjab Wakf Board are being paid regularly and they are treated as regular employees The Sunni Central Wakf Board of Uttar Pradesh filed only a Written submission stating that all the sunni mosques were managed by mutwallis of the concerned managing committees and not by the Wakf Board The mosque differs from a church or a temple in many respects Ceremonies and service connected with marriages and birth are never performed in mosques Tile rites that are important and integral functions of many churches such as confessions penitencies and confirmations do not exist in the mosques 6 Nor any offerings are made as is common in Hindu temples In Muslims countries mosques are subsidized by the States hence no collection of money from the community is permitted The Ministry of Wakf Endowments appoints the 747 servant preachers and readers of the Koran Mosques in non Muslim countries are subsidised by individuals They are administered by their founder or by their special fund A caretaker is appointed to keep the place clean The muazzin cells to prayer five times a day from the minaret 7 In our country in 1954 was passed by the Parliament for better administration and supervision of Wakfs To achieve the objective of the Act Section 9 provides for establishment of a Wakf Board the functions of which are detailed in Section 15 Sub section 1 of it reads as under 1 Subject to any rules that may be made under this Act the general superintendence of all wakfs in State in relation to all matters except those which are expressly required by this Act to be dealt with by the Wakf Commissioner shall vest in the Boar d established for the State and it shall be the duty of the Board so to exercise its powers under this Act as to ensure that the Wakfs under its superintendence are properly maintained controlled and administered and the income thereof is duly applied to the objects and for the purposes for the objects and for the purposes for which such wakfs were created or intended Provided that in exercising its powers under this Act in respect of any wakf the Board shall act in conformity with the directions of the Wakf the purposes of the wakf and any usage or custom of the wakf sanctioned by the Muslim law Clause b of Sub section 2 obliges the board to ensure that the income and other property of a wakf are applied to the objects and for the purposes for which that wakf was created or intended The board is vested not only with supervisory and administrative powers over the wakfs but even the financial power vests in it One of its primary duties is to ensure that the income from the wakf is spent on carrying out the purposes for which wakf was created Mosques are wakfs and are required to be registered under the Act over which the board exercises control Purpose of their creation is community worship Namaz or Salat is the mandatory practice observed in every mosque Among the Five Pillars arkan so rukn of Islam it holds the second most import position immediately after the declaration of faith shahadah 8 The 6 7 Encyclopedia Britannica Vol 8 The Encyclopedia of Religion Vol 748 principal functionary to undertake it is the Imam The objective and purpose of every mosque being community worship and it being the obligation of board under the Act to ensure that the objective of the wakf is carried on the Board cannot escape from its responsibility for proper maintenance of religious service in a mosque To say therefore that the Board has no control over the mosque or Imam is not correct Absence of any provision in the Act or the rules providing for appointment of Imam or laying down condition of their service is probably because they are not considered as employees At the same time it cannot be disputed that due to change in social and economic set up they too need sustenance Nature of their job is such thatthey may be required to be present in the mosque nearly for the whole day There may be some who may perform the duty as part of their religious observance Still others may be ordained by the community to do so But there are large number of such persons who have no other occupation or profession or service for their livelihood except doing duty as Imam What should be their fate Should they be paid any remuneration and if so how much and by whom According to the Board they are appointed by the mutwallis and therefore any payment by the board was out of question Primafacie it is not correct as the letter of appointments issued in some states are from the Board But assuming that they are appointed by the Mutwallis the Board cannot escape from its responsibility as the mutwallis too section 36 of the Act are under the supervision and control of the Board In series of decisions rendered by this Court it has been held that right to life enshrined in Article 21 means right to live with human dignity It is too late in the day therefore to claim or urge that since Imams perform religious duties they are not entitled to any emoluments Whatever may leave been the ancient concept but it has undergone change and even in Muslim countries mosques are subsidised and the Imams are paid their remuneration We are therefore not willing to accept the submission that in our set up or in absence of any statutory provision in the the imams who look after the religious activities of mosques are not entitled to any remuneration Much was argued on behalf of Union and the Wakf Boards that their financial position was not such that they can meet the obligations of paying the imams as they are being paid in the State of Punjab It was also urged that the number of mosques is so large that it would entail heavy expenditure which the boards of different States would not be able to bear We do not find any co relation between the two Financial difficulties of the institution cannot be above fundamental right of a citizen If the boards have been entrusted with the responsibility of supervision and administering the wakf then it is their duty to harness resources to pay those persons who perform the most important duty namely of leading community prayer in a mosque the very purpose or which it is created 749 In the circumstances we allow this petitions and issue following directions i The Union of India and the Central Wakf Board will prepare a scheme within a period of six months in respect of different types of mosques some detail of which has been furnished in the counter affidavit filed by the Delhi Wakf Board ii Mosques which are under control of the Government shall not be governed by this order But if their imams are not paid any remuneration and they have no independent income The Government may fix their emoluments on the basis as the Central Wakf Board may do for other mosques in pursuance of our order iii For other mosques except those which are nonregistered with the Board of their respective States or which are not manned by members of Islamic faith the scheme shall provide for payment of remuneration to such Imams taking guidance from the scale of pay prevalent in the State of Punjab and Haryana iv The State Board shall ascertain income of each mosque the number and nature of Imams required by it namely full time or part time v For the full time Punjab Wakf Board may be treated as a guideline That shall also furnish guideline for payment to part time imam vi In all those mosques where full time Imams are working they shall be paid the remuneration determined in pursuance of this order vii Part time and honorary Imam shall be paid such remuneration and allowance as is determined under the scheme viii The scheme shall also take into account those mosques which are small or are in the rural area or are such as mentioned in the affidavit of Pondichery Board and have no source of income and find out ways and means to raise its income ix The exercise should be completed and the scheme be enforced within six months x Our order for payment to Imams shall come into operation from 1st Dec 750 1993 In case the scheme it not prepared within the time allowed then it shall operate retrospectively from 1st December 1993 xi The scheme framed by the Central Wakf Board shall be implemented by every State Board The Writ Petition is decided accordingly Parties shall bear their own costs UR Petition allowed

By Notification No ST 11 333X 1012 1971 dated 15 November 1971 entry 2a copper tin nickel zinc or any other alloy containing any of these metals only were made exigible at a reduced rate of sales tax of I The Judge Revisions Sales Tax UP Lucknow held that phosphorous bronze falls within this notification The Single Judge of the Allahabad High Court took a contrary view and held that it was taxable as an unclassified commodity at 35 Before this court it was contended that phosphorous bronze is made of tin and copper only that a small quantity of phosphorous is used to deoxidize the metal and that it is not an essential substance of the phosphorous bronze It was however admitted that without the use of phosphorous phosphorous bronze cannot he produced and a certain quantity remains in the phosphorous bronze Dismissing the appeal this Court HELD 1 The emphasis in the entry is that it must contain even if an alloy only copper tin nickel or zinc The expression only is very material for understanding the meaning of the entry Since the alloy in dispute contains phosphorous may he in a very small quantity it cannot fall within entry 2a of the notification 721 G Commissioner of Sales Tax vs Hindustan Metal Works 1964 15 STC 97 720 referred to

Jurisprudentee the Assistants having been promoted to the Grade of Superintendents Grade 11 after those already working as Superintendents Grade 11 would naturally rank junior to them There is no rule of seniority vis a vis for promotes to Superintendent Grade 11 with effect from 1st August 1981 for calculating seniority and normal rule of service Jurisprudence of length of service will apply 718 D CIVIL APPELLATE JURISDICTION Civil Appeal Nos 4604 to 4609 of 1992 From the Judgment and Order dated 228 1989 of the Central Administrative Tribunal Madras in OA No 145 to 15087 AS Nambiar PK Manohar and Shanti Vasudevan for the Appellant R Venkataramni VG Praoasani and SM Garg for the Respondents The Judgment of the Court was delivered by 714 YOGESHWAR DAYALJ These six appeals have been filed against the decision of the Central Administrative Tribunal Madras Bench dated 22nd August 1989 while disposing of Original Application Nos 145 to 150 of 1987 Those were filed in seriatem by B Jayaraman A Kanakasena Rao M Venkatachalam A Sherfudeen K Viswanathan and P Madhavan Adiyodi The respondents in all these six matters before the Tribunal were the same namely respondent No 1 was Union of India whereas respondent Nos 2 to 13 were the erstwhile Secretarial Assistants promoted as Superintendents Grade 11 and further promoted as Superintendents Grade I in the Secretariat of the Government of Pondicherry and governed by the Government of Pondicherry Group C Non Gazetted Ministerial Posts Recruitment Rules 1981 hereinafter referred to as the Rules The petitioners before the Tribunal had challenged the promotion of respondents 2 to 13 therein who were promoted from Secretarial Assistants to Superintendents Grade II and further promoted as Superintendents Grade I before them inspite of the fact that the petitioners had already been working as Superintendents Grade II prior to the promotion of the erstwhile Assistants as Superintendents Grade II The promotion of respondents before the Tribunal was alleged to be based on tentative seniority list wherein respondent No 1 had included the feeder service rendered by the Assistants between 1 1 1973 and 3171981 for computing the seniority in the grade of Superintendent Grade 11 The plea of the petitioners before the Tribunal was that from 181981 respondents 2 to 13 who were Assistants and were in a distinctly lower scale of pay as compared to the applicants they could not be promoted to the post of Superintendent Grade I before the petitioners The Tribunal allowed the applications OA Nos 145 to 150 of 1987 and held It appears to us that there has been some confusion between a liberal provision which has been deliberately made for conferring eligibility for consideration for promotion to the next higher post with reckoning of the period of service rendered in the post of Assistant for the purpose of counting seniority in the post of Superintendent Grade II The tentative seniority lists based on which promotions of respondents 2 to 13 have been made as Superintendents Grade I are based on the application of an erroneous principle of determining seniority which is not backed up any statutory provision That has led to a situation where persons promoted to a higher grade of Superintendent Grade 11 before the Assistants and in which posts they were also confirmed being 715 placed below respondents 2 onwards The Tribunal accordingly set aside the promotions of respondents 2 to 13 before it contained in various orders of the Government of Pondichery dated 781986 2081986 19 1986 and 17111986 Respondent No 1 was further directed to prepare the seniority list in the grade of Superintendent Grade II on the basis of the length of service rendered in that grade and thereafter all the eligible persons may be considered for promotion to the post of Superintendent Grade I and that should include persons like respondents 2 to 13 before it who would Get the benefit of service rendered by them as Assistant between 1 1973 to 31111981 for determining the period of eligibility and not for the purpose of seniority in the cadre of Superintendent Grade 11 Aggrieved by the order of the Tribunal the Union of India had preferred the present appeals It appears the petitioners before the Tribunal were aggrieved by the grant of benefit of service rendered during the period 1 1 1973 to 317 1981 by those who were working in the grade of Assistants towards their seniority in the grade of Superintendent Grade 11 For appreciating the submissions of the learned counsel for the respective parties were may give a statement showing the dates of appointments in various grades and ranking assigned in respect of the petitioners and respondents 2 to 13 in OA Nos 145 to 150 of 1987 before the Tribunal Name of Date of Appointment Seniority in the Asstt SupdtNS Supdt Supdt Supdt Supdt official Gr II Gr I GRIIGr I Applicant in OA 14587 A Kanakasena 101273 1881 171186 113197 Rao Applicant in OA 14687 M Venkatachal 2873 1881 131086 103188 716 am Applicant in OA 14787 A Sherfudeen 30878 1881 7987 140Not Applicant in Assigned OA 14887 K Vishwanathan 7477 1881 20387126207 Applicant in OA 14987 PMadhavan 10276 1881 171286 119 201 AdiyodiAppli cant in OA 15087 R2appointed KC Kumaran 811264 do 14582 7886184176 R3 GRanganathan 11365 do 13182 7886186177 R4 SPushparaj 25565 do 13182 7886187178 R5 Kmeenakshi 9567 do 9783 7886208179 R6 GRadha 19567 do 121827886188180 Krishnan R7 SSethuraman 231168 do 12182 20886190183 R8 section Felixraj 7469 do 1218222886191184 R9 SKuppusamy 14469 do 12182 1986 193185 R 10 RChandra 29170 do 22883 1986212186 sekaranR 11 JPandurangan 9374 Not 21682 171186 195198 R 12appointed SSundarasan Nov 1964 do 30986 171186 183175 The scales of pay for various period for the posts of Assistant Superintendent Grade 11 and Superintendent Grade I may also be noticed NAME OF THE POSTS SCALE OF PAY Pre revised Revised Revised On from 717 prior to wef 181981 1973 1173 Assistant 210 425 425 700 425 700 Superintendent 325 475 550 750 Grade II who have 550 750 Supdt NS passed Hr Accounts Test 270 435 425 700 for others for others Superintendent 350 550 550 900 550 900 Grade I It may be noticed that most of the respondents before the Tribunal were working in the grade of 425 700 when they were promoted to the post of Superintendent Grade II in the pay scale of 550 750 It is thus clear that on general principles of service jurisprudence the Assistants having been promoted to the grade of Superintendent Grade II after those already working Superintendent Grade 11 would naturally rank junior to them The confusion in the Government appears to have been created in view of note and the provision occurring in Schedule VII of the Rules relating to the recruitment to the post of Superintendent Grade 1 In column 11 thereof the recruitment is provided by Promotion from among the Superintendent Grade 11 who have completed five years of service in the said post There is a note and the proviso to the following effect in column 11 Note For computing the five years service the service rendered in the post of Superintendent Non Secretariat and the service rendered after 1st January 1973 and upto 3 1st July 1981 in the post of Assistant shall be taken into account Provided that the Superintendents Non Secretariat in service as on 31st December 1972 Shall enbloc be Seniors to Assistants in service on that date and the Superintendents Non Secretariat and Assistants appointed on or after 1st January 1973 and upto 3 1st July 1981 shall rank inter se with reference to their dates of appointment in the respective posts It is clear that the note merely allows the erstwhile Assistants who were 718 promoted to the post of Superintendent Grade 11 for purposes of counting the period of five years service as Superintendent Grade 11 to include their service rendered as Assistants after 1 1 1973 to 3 17198 1 This note is for no purpose other than for giving them eligibility for consideration for promotion from the cadre of Superintendent Grade II to the cadre of Superintendent Grade I The proviso again is very clear when it says that Superintendents Non Secretariat in service as on 31st December 1972 shall enbloc be seniors to Assistants in service on that date and the Superintendents Non Secretariat and Assistants appointed on or after 1st January 1973 and upto 3 1 St July 1981 shall rank inter se with reference to the dates of appointment in their respective posts All the Superintendents in Grade II who were appointed after 3 1st July 1981 would naturally rank in the seniority on the basis of respective dates of appointment as Superintendent Grade II We are thus in complete agreement with the reasonings and conclusion of the Tribunal and it is declared that the note in column 11 is only for purposes of giving eligibility to the erstwhile Assistants working as Superintendents Grade II for purposes of being considered for promotion to the post of Superintendent Grade I and not for the purpose of seniority at all There is no rule of seniority viz a viz for promotes to Superintendent Grade II with effect from 1st August 1981 for calculating seniority and normal rule of service jurisprudence of length of service will apply With these observations the appeals fail and are dismissed with no order as to costs GS Appeal dismissed

The election of the appellant as a member of the Bihar State Assembly was challenged under section 7d of the Representation of the People Act 951 by the first respondent who was also a candidate for election for the same constituency on the ground that at the date of the nomination the appellant had an interest in contracts for execution of works undertaken by the Bihar Government and that his nomination had been improperly accepted The appellant s plea inter alia was that he had executed the contracts not in his individual capacity but as the Mukhiya of the Village Panchayat and therefore the disqualification imposed by section 7d of the Act could not be invoked against him The contracts in question related to community projects undertaken in pursuance of the Second Five Year Plan under which the execution of different works adopted under the plan was to be by popular local agencies like Village Panchayats The contracts were all in the prescribed form and the appellant at the com 536 mencement of the contract described himself by his name stating that he belonged to the village The preamble to the contract showed that the appellant undertook to carry out the construction of the development project under local works programme mentioned in the contract as per estimate attached thereto that he agreed to execute the work according to and subject to the terms and conditions contained therein and that he undertook to contribute 50 of the cost in cash and labour At the end of the contract he signed as Mukhiya giving his address as the Gram Panchayat The Election Tribunal found in favour of the appellant and dismissed the election petition but on appeal the High Court took the view 1 that the description of the appellant given by him at the time when he signed the contracts was not a term of the contract and could not therefore support his plea that he had executed the contract as Mukhiya of the Panchayat and 2 that the fact that he undertook liability to execute the contracts as required and to become liable for payment of any fine imposed by the local government officer in case of his default showed obligations of a personal character inconsistent with his plea Held that on a proper construction of the contracts taking into account all the terms and conditions as a whole and considering them in the light of the background of the Second Five Year Plan when the appellant signed the contracts as the Mukhiya of the Village Panchayat he acted as its agent and not as an individual acting in his personal capacity

minal Appeal No 830 of 1985 From the Judgment and Order dated 30785 of the Allahabad High Court in Crl Revision No 1937 of 1983 MS Gujral AK Srivastava and Serva Mitter for the Appellant RC Verma and AS Punditfor the Respondent The appellant was convicted under Sections 120 B 419 420 468 and 471 of the Penal Code lie was sentenced to undergo rigorous imprisonments for different periods under the aforesaid Sections The appeal filed on behalf of the appellant was dismissed by the learned additional Sessions Judge Ghaziabad The High Court on revision application being filed on behalf of the appellant set aside his conviction under Section 120 B but the conviction and sentence under other Sections mentioned above passed by the trial Court were affirmed According to the prosecution case the appellant established a firm by the name of Seemak Industrial Corporation at Ghaziabad The account in the bank was opened in the name of one Vijai Kumar and the aforesaid Industrial Corporation was registered in the Sales Tax Department The appellant applied for loan before the UP Small Industries Corporation and got a sum of Rs 3935250 in the name of Seemak Industrial Corporation Later it was discovered that the aforesaid Seemak Industrial Corporation was a fake concern and the appellant had cheated even the UP Small Industries Corporation in respect of the amount advanced by them The Trial Court the Appellate Court as well as the High Court have gone into details of the materials on record for purpose of holding that the charges framed against the appellant had been established and as such there was no occasion to interfere with the conviction and sentence passed against him So far the present appeal is concerned leave was granted as early as in the year 1985 by this Court but it has been listed for hearing after about 8 years The learned Counsel appearing for the appellant after some arguments on merit confined his submissions to the question of sentence only lie pointed out that offences aforesaid had been committed by the appellant as early as in the year 1973 more than 20 years from now and as such a compassionate view should be taken of the whole matter especially when the amount in respect of which the offences are alleged to have been committed is not excessive He pointed out that the appellant has remained in jail for some time in pursuance of the order of conviction and sentence and as such he need not be sent to jail again An affidavit detailing the mitigating circumstances has also been filed by the appellant before us Taking all facts and circumstances into consideration by our order dated 26th April 1993 we directed the appellant to first deposit an amount of Rs 40000 the loan amount with the UP Small Industries Corporation Ltd Pursuant to that order Rs 40000 has been deposited with the UP Small Industries Corporation Ltd on 4 5 1993 and original receipt granted by the Manager of the said Corporation was produced before us The zerox copy of the said original receipt has been kept on record and the original returned to the learned counsel for the appellant An affidavit has also been filed on behalf of the appellant stating about 902 the aforesaid deposit In the peculiar facts and circumstances of the case while maintaining the conviction of the appellant we reduce the sentence of imprisonment under different Sections mentioned above to the period already undergone by him The appellant shall however pay a fine of Rs 2000 and in default of payment thereof he shall undergo rigorous imprisonment for a period of one month The appeal is allowed in part The deposit of Rs 40000 made by the appellant with the UP Small Industries Corporation Ltd shall be adjusted towards the amount advanced by the said Corporation to the appellant The Corporation shall of course be at liberty to take steps for realisation of any further sum which may be due against the appellant UR Appeal partly allowed

A petition was filed in this court by Imams for enforcing their fundamental right against exploitation by Wakf Boards Their claim was based on the glaring disparity between the nature of work and the amount of remuneration The petitioners sought a direction to the Central and State Wakf Boards to pay them basic wages A higher pay scale was claimed for degree holders The Union of India and various State Wakf Boards disputed the manner of their appointment their right to receive any payment and absence of any relationship of master and servant It was variously contended that they were appointed by Mutwallis or in some cases by the people of the locality where the mosques were situated and not by the Wakf Boards that under Islamic religious practice it is voluntary service and there is no entitlement to emoluments that a certificate from a registered institution is not a necessary requirement for leading in prayer It was further contended that the Wakf Boards faced financial difficulties The Punjab Wakf Board stated that Imams of mosques in Punjab Haryana and Himachal Pradesh were paid on the basis of their qualification A pay scale was indicated and the Imams were paid regularly and treated as regular employees Allowing the petition this Court HELD1 By Section 15 of the the Wakf Board is vested not only with supervisory and administrative powers over the Wakfs but even the financial power vests in it One of the primary duties is to ensure that the income from the Wakf is spent on carrying out the purposes for which the 743 Wakf was created Mosques are Wakfs and are required to be registered under the Act over which the Board exercises control Purpose of their creation is community worship The principal functionary to undertake it is the Imam It is the responsibility of the Wakf Board to ensure proper maintenance of religious service in a mosque To say therefore that the Board has no control over the mosque or Imam is not correct 747 G H 748A 2 In a series of decisions rendered by this Court it has been held that right to life enshrined in Article 21 means right to live with human dignity It is too late in the day to urge that since Imams perform religious duties they are not entitled to emoluments 748 E 3 Financial difficulties of the institution cannot be above fundamental right of a citizen If the Boards have been entrusted with the responsibility of supervising and administering the Wakf then it is their duty to harness resources to pay those persons who perform the most important duty namely of leading community prayer in a mosque the very purpose for which it is created 748 H 4 The Union of India and the Central Wakf Board are to prepare a scheme within a period of six months in respect of different types of mosques 7497 H The scheme shall take guidance from the scale of pay prevalent in the State Punjab and Haryana 749 D Mosques under control of the government will not he governed by this order except if their Imams are not paid any remuneration and have no independent means of income The Government may then fix their emoluments on the basis as the Central Wakf Board may do for other mosques 749 C The State Boards shall ascertain the income of each mosque and the number and nature of Imams required full time or part time and their payment is directed 749 E The scheme shall take account of mosques which are small or in the rural area or which have no source of income and find 744 ways to raise income 749 G The order for payment to Imams shall come into operation from 1 December 1993 Every State Board shall implement the scheme 749 H 750 A

Appeal No 2909 of 1993 From the Judgment and Order dated 541990 of the Patna High Court in CWJC No 1465 of 1989 R SB Upadhyay for the Appellant Uday Sinha SK Verma and Ranjit Kumar for the Respondents The following Order of the Court was delivered Special leave granted The controversy in the present case is whether the appellant was qualified to appear for the MD General Medicine Examination as a teacher candidates The High Court by the impugned order has taken the view that he was not on the around that he had not completed 3 years training period including one year of the house job prior to qualifying himself for appearing for the examination 912 The respondents PG Medical Students Association had challenged the permission given to the appellant to appear for the said examination on two rounds The first ground was that he was not a teacher and the second ground was that he had not undergone the necessary training for 2 years and had also not done housemanship in General Medicine for one year The requirement of the relevant regulation is that the candidate must have done one year s housemanship prior to the admission to the Post graduate degree in the same subject in which he wants to appear for the examination or at least six months housemanship in the same Department and the remaining six months in the allied Department The period of training thus shall be 3 years after full registration including one year of the housejob The appellant claimed that he was teacher in the Department of Biochemistry in the Rajendra Medical College RMC and filed an application for his registration as a student in MD The University forwarded the application to the then Principal of Rajendra Medical College cum Dean Faculty of Medicine Dr CJK Singh He objected to his registration on the ground that the appellant was not posted in any of the teaching posts in medical college The then Head of the Department of Medicine Dr section Sinha also wrote to Dr CJK Singh that the appellant though attached to the Department of Medicine was a Bio chemist attached to the Renal Unit and dealt entirely with the subject of Biochemistry The appellant filed a writ petition being CWJC No 755 of 1988 praying for appropriate direction to the University to permit him to submit his thesis in MD Medicine examination The University contested his claim that he was a teacher and took the stand that since he was not a teacher he was not eligible for training in MD General Medicine For this purpose the University relied upon the letters of Dr CJK Singh and Dr section Sinha The Court dismissed the said petition on 23rd May 1988 without deciding the issue as to whether the appellant held a teaching post but recorded a finding that the appellant was not entitled for admission to the examination in MD as he had not submitted his thesis and had also failed to produce a certificate of having undergone satisfactory training The High Court also held that the acceptance of the thesis was a pre requisite for appearing at the examination However thereafter the present petition was filed by the respondent Association when the appellant was granted permission to appear for the said examination being satisfied that the post which he was holding was a teaching post as pointed out by the State Government In this petition the University supported the appellant by asserting that the appellant was appointed against a teaching post 913 in the Department of Medicine The High Court has again not decided the point whether the appellant was appointed against a teaching post in the Department of Medicine For not deciding the point the High Court has given an additional reason viz that many persons who were in fact appointed as teachers would be prejudicially affected since they would become junior to the appellant and they were not before the Court For the purposes of the disposal of the writ petition the High Court presumed that the appellant was teacher in the Department of Medicine in the Rajendra Medical College The Court has however made it clear that this presumption would be confined to the present case only and the appellant would not be entitled to claim any benefit on the basis of the said presumption The High Court has however allowed the respondents petition only on the grounds that the appellant had not undergone training for 3 years prior to his application to appear for the said examination In order to come to the said conclusion the High Court relied on the fact that although the petitioner was registered with Dr SS Prasad as a trainee on 6th February 1986 he had not undergone training with him and it was only from 4th February 1988 onwards that he had undergone the training with another Supervisor viz Dr PR Prasad Hence on the date he made the application for appearing in the examination he had not completed the required 3 years training period In support of its finding that the appellant had not completed 2 years training with Dr Ss Prasad the former Supervisor the High Court has relied upon two facts The first is that Dr SS Prasad had written to the University that appellant had undergone no training under him The second circumstance relied upon is that the second Supervisor viz Dr PR Prasad was not appointed as appellant s Supervisor as per the suggestion of the Dean of the Faculty of Medicine since respondent No 7 to the petition who had recommended Dr PR Prasad was not the Dean of the Faculty of Medicine at the time of the recommendation Hence according to the High Court even the training of the appellant under Dr PR Prasad was not a valid training The record shows that admittedly the appellant was registered as a trainee under the former Supervisor Dr SS Prasad on 6th February 1986 and he continued to be the trainee under him till 4th February 1988 on which date he was changed as a Supervisor at the request of the appellant In his place Dr PR Prasad was appointed as the appellant s Supervisor on 17th December 1988 The appellant thereafter continued to be the trainee under Dr PR Prasad from 19th December 1988 to 3rd August 1989 Thus the petitioner was registered for MD General Medicine examination of the University on 6th February 1986 and by the 3rd August 1989 when he was due to appear for the examination he had completed 3 years training under the two Supervisors 914 Coming to the respondent Association s contention that the earlier Supervisor Dr SS Prasad had denied that the appellant had received any training under him the University has stated that for the purpose of training the Supervisor has nothing more to do than guide the candidate for writing thesis But more than that the letter written by Dr PVP Sinha the Principal of RMC and Dean Faculty of Medicines of the Ranchi University to the Registrar of the Ranchi University on 4th July 1989 speaks volumes on the attitude adopted by Dr SS Prasad towards the appellant This letter is Annexure 11 to the rejoinder of the appellant The letter makes a complaint that Dr SS Prasad by bypassing the office of the Principal RMC had addressed directly to the Registrar of the University two letters on 4th May and 3 1st May 1989 The Principal then states that he examined the original letter meaning thereby the letter dated 4th May 1989 and the connected matter and found that Dr SS Prasad had been telling lie to the University and trying to mislead and that is why he had sent the letter directly to the University Dr Prasad had written another letter to the University on 16th May 1988 regarding the appellant and in that letter he had written that the appellant had been prevented from doing research work connected with his thesis The Principal then proceeds to write that when he asked Dr Prasad in writing vide his letter dated 21st June 1989 to give him the letter of the Principal or the Dean or the University which had authorised him to prevent the appellant from doing his research work Dr Prasad failed to produce any letter Thus according to the Principal it became very clear that Dr Prasad had written the letter dated 1651988 directly to the University to harm the appellant s career The Principal then proceeds to write to University that he would like to bring to the attention of the University that Dr Prasad had signed the thesis and certificate of another doctor viz Dr Ashok Kumar Singh on 16101984 when that doctor was registered as an MD student in General Medicine only on 2671984 and when Dr Prasad was not his guide It was Dr RCN Sahai who named the guide for the said Dr Ashok Kumar Singh The Principal then writes that from the perusal of the records as well as from the reply to the explanation sought by him from Dr Prasad it had become clear that Dr Prasad was not made the guide of Dr Ashok Kumar Singh either by the University or by the Dean or by the Principal and yet he had signed the thesis of Dr Ashok Kumar Singh barely after 3 months and 11 days of his registration The Principal then points out in that letter that a comparison of the two events made it apparent that Dr Prasad had favoured Dr Ashok Kumar Singh by violating all the norms statutes of the University and of the Medical Council of India and that even after the University had appointed Dr PR Prasad as the guide of the appellant Dr SS Prasad was bent upon harming the career of the appellant The Principal then adds that there was no record in his office to show that the appellant was ever suspended by the University for doing his MD General Medicine He had asked Dr SS Prasad to produce any notification of the University regarding the alleged 915 suspension and Dr SS Prasad had failed to do so He then concludes the letter by stating that he would in the circumstances recommend the University to consider the desirability of removing Dr SS Prasad from all examination work of the Ranchi University It is thus apparent that Dr SS Prasad the former Supervisor of the appellant had become hostile to him and was apparently not cooperating with him in his thesis Yet the appellant had proceeded to write a thesis and when it became unbearable he requested for the change of his Supervisor on 4th February 1988 pursuant to which the new Supervisor Dr PR Prasad was appointed on 17th December 1988 However till the new Supervisor was appointed on 17th December 1988 he continued to be registered with Dr SS Prasad and there is no dispute that under the new Supervisor viz Dr PR Prasad he completed his training from 17th December 1988 to 4th August 1989 There is further no dispute that the appellant submitted his thesis prior to the examination As regard the qualification of the 7th respondent to make the appointment of Dr PR Prasad as the guide although the record before us does not show as to who the 7th respondent was we take it that it is the then Principal Dr PVP Sinha who was probably added later as the 7th respondent to the writ petition to whom the High Court has referred to in its judgment It is asserted from the Bar on behalf of the appellant that Dr PVP Sin ha was both the Principal and the Dean of the Faculty of Medicine of the University from a date much prior to 17th December 1988 That statement is not controverted nor does the counter filed by the 1st Respondent make any such point If that is so then on the date that Dr PR Prasad was appointed as a Supervisor he was so appointed by a duly qualified person Since the High Court has not one into the question as to whether the appellant was appointed against a teaching post and has proceeded on the footing that he was so appointed it is not necessary for us to go into the said question The appellant was thus fully qualified for appearing in the said examination and in fact on account of the interim orders passed by the High Court he has appeared for the examination The High Court has however by the impugned decision restrained the University from declaring his results in the examination The facts narrated above would reveal that this was a dispute relating to an individual and turned on the facts There was no question of law involved in it We have therefore not understood how the respondent Association could convert an individual dispute into a public interest litigation We are of the view that cases where what is strictly an individual dispute is sought to be converted into a public interest litigation should not be encouraged The present proceeding is one of the 916 kind The learned counsel appearing for the respondent State wanted to support the respondent Association We did not think it necessary to hear the State since the dispute was essentially with regard to the interpretation of the facts relating to the training of an individual medical officer viz the appellant The University had on the facts of the case accepted the contention of the appellant that he had completed 3 years training We have not been able to understand as to what stake the State has in denying the said factual position It must be remembered in this connection that the State Government itself by its letter of 17th September 1984 written to the Principal RMC and had asserted that the post which the appellant was holding viz that of Bio chemist in the Artificial Kidney Unit of RM College and Hospital was a teaching post and that the appellant was posted to that post since 12th February 1982 The letter further proceeded to state that the Principal and the Head of the Department of Medicine of RM College and Hospital has also given written certificate that the appellant was posted on a teaching post and therefore his teaching experience would be counted with the Kidney Unit A request was therefore made in the letter that the appellant s application for his registration as MD General Medicine candidate Teacher be forwarded to the University and further action in that regard be intimated to the Regional Additional Commissioner cum Principal Secretary There is no dispute further that according to the rules 4 years teaching experience in the College and the Hospital which is always combined with practice in the Hospital is considered equivalent to one year s house job experience It the face of these facts it is difficult to understand the stand taken by the State Government in the present proceedings There is no doubt in our mind that some forces are at work to obstruct the appellant s career on one ground or the other The State Government should not become a party to this came In the circumstances we allow the appeal set aside the decision of the High Court and hold that the appellant was qualified to appear for the MD General Medicine examination as a teacher candidate Hence we direct the University to declare his results in MD General Medicine examination for which he has appeared forthwith There will be no order as to costs VPR Appeal allowed

The petitioners before the Central Administrative Tribunal had been working as Superintendents Grade 11 in the Secretariat of the Government of Pondicherry prior to the promotion of respondents Nos 2 to 13 before the Tribunal the erstwhile Secretariat Assistants as Superintendents Grade 11 Respondent Nos 2 to 13 were further promoted as Superintendents Grade I before the petitioners on the basis of tentative Seniority list wherein the feeder service rendered by the Assistants between 11 1973 and 3171981 had been included for computing the seniority in the Grade of Superintendent Grade II The petitioners before the Tribunal aggrieved by the grant of benefit of service rendered during the period 11 1973 to 3171981 by those who were working in the grade of Assistants towards their seniority in the grade of Superintendent Grade 11 challenged the promotion of respondent Nos 2 to 13 there in who were promoted from Secretarial Assistants to Superintendents Grade II and further promoted as Superintendents Grade I before them inspite of the fact that the petitioners had already been working as Superintendents Grade 11 prior to the promotion of the erstwhile Assistant as Superintendents Grade II It was contended by the petitioners before the Tribunal that from 181981 respondents Nos 2 to 13 who were Assistants and were in a distinctly 713 lower scale of pay as compared to them could not be promoted to the post of Superintendents Grade I before the petitioners The Tribunal allowed the applications and set aside the promotions of respondents No 2 to 13 before it Aggrieved by the order of the Tribunal the Union of India had preferred the present appeals Agreeing with the reasonings and conclusions of the Tribunal HELDThe note in Column 11 is only for purposes of giving eligibility to the erstwhile Assistants working as Superintendents Grade 11 for purposes of being considered for promotion to the post of Superintendent Grade I and not for the purpose of seniority at all The note merely allows the erstwhile Assistants who were promoted to the post of Superintendent Grade 11 to include their service rendered as Assistants after 11 1973 to 317 1981 for purposes of counting the period of five years service as Superintendent Grade 11 This note is for no purpose other than for giving them eligibility for consideration for promotion from the cadre of superintendent Grade 11 to the cadre of Superintendent Grade 1 718 A

minal Appeal No 443 of 1993 From the Judgment and Order dated 22492 of the Calcutta High Court in Crl Revision No 80092 AK Sen SC Ghosh Rajiv K Dutta and BB Tawakley for the Appellant Amlan Ghosh and Ranjan Mukherjee for the Respondents The Judgment of the Court was delivered by MOHAN J leave granted The appellant herein was married to second respondent on 16th January 1990 according to Hindu Rites and Customs They lived together for sometime until second respondent left the matrimonial home to reside with her parents in order to prepare for Higher Secondary Examination which commenced on 5490 920 and continued upto 10590 In the month of April 1990 she conceived on coming to know that she was pregnant the appellant and the family members did not want her to beget a child Therefore she was forced to undergo abortion which was refused by the second respondent During the stay She was meted out cruetreatment both physically and mentally She came back to the matrimonial home during Durga Pooja in the month of October 1990 A female child was born on 3191 She filed a petition under section 125 Cr PC before the Learned Chief Judicial Magistrate Alipore in Misc Case No 143 of 1991 both for herself and the child By an order dated 14891 which was passed ex parte he awarded a sum of Rs 300 per mansum to the mother and Rs 200 to the child Against that order he moved a revision to the High Court That revision is pending as 1837 of 199 1 Thereafter the petitioner filed a Crl Case No 143 of 1991 for blood group test of the second respondent and the child In that proceeding the petitioner herein disputed the paternity of the child and prayed for blood group test of the child to prove that he was not the father of the child According to him if that could be established he would not be liable to pay maintenance That application was dismissed on two grounds i there were other methods in the Evidence Act to disprove the paternity ii moreover it is settled law that medical test cannot be conclusive of paternity Aggrieved by this order a revision was preferred before the High Court Dismissing the revision it was held that section 112 of the Evidence Act says where during the continuance of valid marriage if a child is born that is a conclusive proof about the legitimacy This section would constitute a stumbling block in the way of the petitioner getting his paternity disproved by blood group test The English law permitting blood test for determining the paternity of legitimacy could not be applied in view of section 112 of the Evidence Act Therefore it must be concluded that section 112 read with section 4 of the said Act debars evidence except in cases of non access for disproving the presumption of legitimacy and paternity It is the contention of Mr Ashok Sen learned counsel for the appellant that the only way for the father to disprove the paternity is by blood group test Having regard to the development of medical jurisprudence to deny that request to the appellant will be unreasonable As a matter of fact in England this is commonly resorted to as it will leave no room for doubt In 1968 1 All England Reports p 20 Re 1 it was held that even without the consent of the guardian ad litem the court had power to order an infant be subjected to a blood group test 921 There is no justification for the court below to refuse the same on the ground that section 112 of the Evidence Act would be an obstacle in seeking relief of blood group test Before we deal with the arguments we will examine the law as available in England At the beginning of the century scientists established that human blood had certain characteristics which could be genetically transmitted The first recognised system was ABO blood group The blood group of a child is determined by the parents genetic make up but the number of possibilities is such that it is not possible to prove that certain individuals are the father on the basis of comparing blood groups only that they are not the father By 1930s other immunological test became available As a result the possibility of establishing paternity increased An attempt by way of statutory provision to make blood test compulsory in En land failed in 1938 However in 1957 the Affiliation Proceedings Act was passed Under that Act it was assumed that a man was the father once a sexual relationship with the mother at the time of conception was proven unless he could show another man had intercourse with her at that time Failing the father s attempt the mother s evidence had to be corroborated by facts such as blood test etc Under the Act either party could ask for a blood test and either was entitled to refuse to take part although only the mother can apply for maintenance The Family Reforms Act 1969 conferred powers on the court to direct taking blood test in civil proceedings in paternity cases Courts were able to give directions for the use of the blood test and taking blood samples from the child the mother and any person alleged to be the father Since the passing of 1969 Act the general practice has been to use blood tests when paternity is in issue However it is to be stated the court cannot order a person to submit to tests but can draw adverse inferences from a refusal to do so Now under the Fan lily Reforms Act 1987 in keeping with modern thinking on the continuing and shared responsibility of parenthood parentage rather than paternity has to be determined before the court Fathers as well as mothers can apply for maintenance Therefore contests can include mothers denial of paternity This Act finally removed the legal aid for corroboration of mother s statement of paternity Two cases may be usefully referred to Re L Lord Denning MR 1968 All England Reports p 20 stated thus 922 but they can say positively that a given man cannot be the father because the blood groups of his and the child are so different emphasis supplied In BRB vs JB 1968 2 All England Reports 1023 applied this dictum and held as under The Country court judge will refer it to a High Court Judge as a matter suitable for ancillary relief and the High Court Judge can order the blood test Likewise of course a magistrate s court has no power to order a blood test against the will of the parties The magistrate can only do it by consent of those concerned namely the grown ups and the mother on behalf of the child but nevertheless if any of them does not consent the magistrate can take that refusal into account1 adhere to the view which expressed in Re L that 6 If an adult unreasonably refuses to have a blood test or to allow a child to have one I think that it is open to the court in any civil proceedings no matter whether it be a paternity issue or an affiliation summonsor a custody proceedings to take his refusalas evidence against him and may draw an inference there from adverse to him This is simple common sense The conclusion of the whole matter is that a judge of the High Court has power to order a blood test whenever it is in the best interests of the child The judges can be trusted to exercise this discretion wisely I would set no limit condition or bounds to the way in which judges exercise their discretion To object of the court always is to find out the truth When scientific advances give us fresh means of ascertaining it we should not hesitate to use those means whenever the occasion requires Having heard full argument on the case lam satisfied beyond any reasonable doubt to use the expression used in rebutting the presumption as to legitimacy that LORD DENNING MR was right in saying that such an order may be made in any case where the child is made a party to the proceedings and in the opinion of the judge of the High Court it is in the child s best interests that it should be made 923 As regard United States the law as stated in Forensic Sciences edited by Cyril H Wecht is as under Parentage testing is the major but not the exclusive involvement of forensic serology in civil cases The majority of disputed parentage cases involve disputed paternity although an occasional disputed maternity or baby mix up case does arise and can be solved using the tools of forensic serology described in this chapter Blood typing has been used to help resolve paternity cases since the mid 1920 section According to Latters there were 3000 cases tested in Berlin in 1924 and Schiff and Boyd said that the first case went to court in Berlin in 1924 Ottenberg in this country published paternity exclusion tables in 192 1 as did Dyke in England in 1922 It took somewhat longer to satisfy the courts both in Europe and in country that parentage exclusions based upon blood grouping were completely valid Wiener said that he had obtained an exclusion in a paternity case in this country which reached the courts early in 1933 In January of 1934 Justice Steinbrink of the New York Supreme Court in Brooklyn ordered that blood tests be performed in a disputed paternity action using a s precedent a decision by the Italian Supreme Court of Cassation but his order was reversed upon appeal Soon afterward however laws were passed in a number of states providing the courts with statutory authority to order blood testing in disputed paternity cases Paternity testing has developed somewhat more slowly in the Unitted States than in certain of the European countries but today the differences in the number of systems employed and judicial acceptance of the results are no longer that great A number of authorities have recently reviewed the subject of paternity testing in some detail and in some cases have summarized the results of large number of cases that they have investigated Walker points out that failure to exclude a man even at the 95 percent level of paternity exclusion does not mean that the alleged father is proven to be biologic father because absolute proof of paternity cannot be established by any known blood test available Although this fact is well known and appreciated by workers it the field of blood grouping and by attorneys active in this area it is not generally understood by the lay public However blood group 924 serology using proven genetic marker systems represents the most accurate scientific information concerning paternity and is so recognised in the United States as well as in a number of countries abroad In India there is no special statute governing this Neither the Criminal Procedure Code nor the Evidence Act empowers the court to direct such a test to be made In 1951 1 Madras Law Journal p58O Polavarapu Venkteswarlu minor by guardian and mother Hanwnamma vs Polavarapu Subbayya in that case the application was preferred under section 151 of the Code of Civil Procedure invoking the inherent powers of the Court to direct a blood test The learned judge was of the following view Section 15 1 Civil Procedure Code has been introduced in to the Statute book to give effect to the inherent powers of Courts as expounded by Woodroffe J in Hukum Chand Boid vs Kamalan and Singh Such powers can only be exercised ex debito justice and not on the mere invocation of parties or on the mere volition of courts There is no procedure either in the Civil Procedure Code or in the Indian Evidence Act which provides for a test of the kind sought to be taken by the defendant in the present case It is said by Mr Ramakrishna for the respondent before m e that in England this sort of test is resorted to by Courts where the question of non access in connection with an issue of legitimacy arises for consideration My attention has been drawn by learned counsel to page 69 of Taylor s Principles and Practice of Medical Jurisprudence Volume 2 where it is stated thus In Wilson vs Wilson Lancet 1942 1 570 evidence was given that the husband s group was OM that the wife s was BM and that the child s was ABN The Court held that the husband was not the father of child and granted a decree for nullity It is also pointed out by learned counsel that in the text books on Medical Jurisprudence and Toxicology by Rai Bahadur Jaising P Moi 8th Edition at page 94 reference is made to a case decided by a Criminal Court at Mercare in June 194 1 in which the paternity and maternity of the child being under dispute the Court resorted to the results of the blood grouping test 925 That may be But I am not in any event satisfied that if the parties are unwilling to offer their blood for a test of this kind this Court can force them to do so The same view was taken by the Kerala High Court in Vasu vs Santha 1975 Kerala Law Times p 533 as A special protection is given by the law to the status of legitimacy in India The law is very strict regarding the type of the evidence which can be let in to rebut the presumption of legitimacy of a child Even proof that the mother committed adultery with any number of men will not of itself suffice for proving the illegitimacy of the child If she had access to her husband during the time the child could have been begotten the law will not countenance any attempt on the part of the husband to prove that the child is not actually his The presumption of law of legitimacy of a child will not be lightly repelled It will not be allowed to be broken or shaken by a mere balance of probability The evidence of non access for the purpose of repelling it must be strong distinct satisfactory and conclusive see Morris vs Davies The standard of proof in this regard is similar to the standard of proof of guilt in a criminal case These rigours are justified by considerations of public policy for there are a variety of reasons why a child s status is not to be triffled with The stigma of illegitimacy is very severe and we have not any of the protective legislations as in England t o protect illegitimate children No doubt this may in some cases require a husband to maintain children of whom he is probably not their father But the legislature alone can change the rigour of the law and not the court The court cannot base a conclusion on evidence different from that required by the law or decide on a balance of probability which will be the result if blood test evidence is accepted There is an aspect of the matter also Before a blood test of a person is ordered his consert is required The reason is that this test is a constraint on his personal liberty and cannot be carried out without his consent Whether even a legislature can compel a blood test is doubtful Here no consent is given by any of the respondents It is also doubtful whether a guardian ad litem can give this consent Therefore in these circumstances the learned Munsiff was right in 926 refusing the prayer for a blood test of the appellant and respondents 2 and 3 The learned Judge is also correct in holding that there was no illegality in refusing a blood test The maximum that can be done where a party refuses to have a blood test is to draw an adverse inference see in this connection Subayya Gounder vs Bhoopala AIR 1959 Madras 396 and the earlier decision of the same court in Venkateswarlu vs Subbayya AIR 1951 Madras 910 Such an adverse inference which has only a very little relevance here will not advance the appellants case to any extent He has to prove that he had no opportunity to have any sexual intercourse with the 1st respondent at a time when these children could have been begotten That is the only proof that is permitted under section II 2 to dislodge the conclusive presumption enjoined by the Section In Hargavind Soni vs Ramdulari AIR 1986 MP at 57 held as The blood grouping test is a perfect test to determine questions of disputed paternity of a child and can be relied upon by Courts as a circumstantial evidence But no person can be compelled to give a sample of blood for blood grouping test against his will and no adverse inference can be drawn against him for this refusal Blood grouping test is a useful test to determine the question of disputed paternity It can be relied upon by courts as a circumstantial evidence which ultimately excludes a certain invididual as a father of the child However it requires to be carefully noted no person can be compelled to give sample of blood for analysis against her will and no adverse inference can be drawn against her for this refusal In Raghunath vs Shardabai it was observed blood grouping test have their limitation they cannot possibly establish paternity they can only indicate its possibilities In Bhartiraj vs Sumesh Sachdeo Ors held as Discussing the evidentiary value of blood tests for determining paternity Rayden on Divorce 1983 Vol 1 p 1054 has this to say Medical Science is able to analyse the blood of individuals 927 into definite groups and by examining the blood of a given man and a child to determine whether the man could or could not be the father Blood tests cannot show positively that any man is father but they can show positively that a given man could or could not be the father It is obviously the latter aspect the proves most valuable in determining paternity that is the exclusion aspect for once it is determined that a man could not be the father he is thereby automatically excluded from considerations of paternity When a man is not the father of a child it has been said that there is at least a 70 per cent chance that if blood tests are taken they will show positively he is not the father and in some cases the chance is even higher between two giver men who have had sexual intercourse with the mother at the time of conception both of whom undergo blood tests it has likewise been said that there is a 80 per cent chance that the tests will show that one of them is not the father with the irresistible inference that the other is the father The position which emerges on reference to these authoritative texts is that depending on the type of litigation samples of blood when subjected to skilled scientific examination can sometimes supply helpful evidence on various issues to exclude a particular parentage set up in the case But the consideration remains that the party asserting the claim to have a child and the rival set of parents put to blood test must establish his right so to do The court exercises protective jurisdiction on behalf of an infant In my considered opinion it would be unjust and not fair either to direct a test for a collateral reason to assist a litigant in his or her claim The child cannot be allowed to suffer because of his incapacity the aim is to ensure that he gets his rights If in a case the court has reason to believe that the application for blood test is of a fishing nature or designed for some ulterior motive it would be justified in not acceding to such a prayer The above is the dicta laid down by the various High Courts In matters of this kind the court must have regard to section 112 of the Evidence Act This section is based on the well known maxim pater est quem nuptioe demonstrant he is the father whom the marriage indicates The presumption of legitimacy is this that a child born of a married woman is deemed to be legitimate it throws on the person who is interested in making out the illegitimacy the whole burden of proving it The law presumes both that a marriage ceremony is valid any that every 928 person is legitimate Marriage or filiation parentage may be presumed the law in general presuming against vice and immoratility It is a rebuttable presumption of law that a child born during the lawful wedlock is legitimate and that access occurred between the parents This presumption can only be displaced by a strong preponderannce of evidence and not by a mere balance of probabilities In Smt Dukhtar Jahan vs Mohammed Faroog this court held Section II 2 lays down that if a person was born during the continuance of a valid marriage between his mother and any man or within two hundren and eighty days after its dissolution and the mother remains unmarried it shall be taken as conclusive proof that he is the legitimate son of that man unless it can be shown that the parties to the marriage had no access to each other at anytime when he could have been begotten This rule of law based on the dictates of justice has always made the courts incline towards upholding the legitimacy of a child unless the facts are so compulsive and clinching as to necessarily warrant a finding that the child could not at all have been begotten to the father and as such a legitimation of the child would result in rank injustice to the father Courts have always desisted from lightly or hastily rendering a verdict and that too on the basts of slender materials which will have the effect of branding a child as a bastard and its mother an unchaste woman This section requires the party disputing the paternity to prove non access in order to dispel the presumption Access and non access mean the existence or non existence of opportunities for sexual intercourse it does not mean actual cohabitation The effect of this section is this there is a presumption and a very strong one though a reubttable one Conclusive proof means as laid down under section 4 of the Evidence Act From the above discussion it emerges 1 that courts in India cannot order blood test as matter of course 929 2 wherever applications are made for such prayers in order to have roving inquiry the prayer for blood test cannot be entertained 3 There must be a strong primafacie case in that the husband must establish non access in order to dispel the presumption arising under section 112 of the Evidence Act 4 The court must carefully examine as to what would be the consequence of ordering the blood test whether it will have the effect of branding a child as a bastard and the mother as an unchaste woman 5 No one can be compelled to give sample of blood for analysis Examined in the light of the above we find no difficulty in upholding the impugned order of the High Court confirming the order of the Addl Chief Judicial Magistrate Alipore in rejecting the application for blood test We find the purpose of the application is nothing more than to avoid payment of maintenance without making any ground whatever to have recourse to the test Accordingly Criminal Appeal will stand dismissed Cr MPNo 222493 in SLPcr No 264892 filed by Respondent No 2 will stand allowed She is permitted to withdraw the amount without furnishing any Security RP SLP dismissed

The appellant was charged with cheating the UP Industrial Corporation of Rs 3935250 by registering a take concern and taking in its name Three courts concurrently found the charges against him established On the question of sentence it was contended that more than 20 cars had elapsed the amount involved was not excessive and other mitigating circumstances were placed in the record Partly allowing the appeal this Court HELD1 The appellant had deposited Rs 40000 the loan amount as directed 901 G 2 In the peculiar facts and circumstances of the case conviction maintained but sentence of imprisonment reduced to the period already undergone and a fine of Rs 2000 or one month RI in lieu thereof 902 B

Appeal Nos 2863 65 of 1993 From the Judgment and Order dated 21291 of the Kerala High Court in CMP No 217090 59691 59791 in MFA No 518 of 1981 WITH Civil Appeal No 2960 of 1993 KK Venugopal G Ramaswamy MN Krishnamani KP Dandapani EMS Anam PN Puri ATM Sampath Pravir Choudhary for the Petitioner Appellant Shanti Bhushan Joshph Vellapall vs RKJain A Mariarputham for Ms A Mariarputham and Mrs Aruna Mathur for Mrs Aruna Mathur Co for the respondents The Judgment of the Court was delivered by RM SAHAI J How far could we protect the interests of subscribers who had subscribed to a chit run by a subsidiary company of the appellant ordered to be wound up when allegedly subscriptions were made good by them not merely out of their hard savings but also of sums got by even pledging and selling the jewelleries and ornaments of their wives in the fond hope of getting a lumpsum amount on a future date to meet the expenses of marriages in the family or health hazards of family members and the like is the issue that really bothered us at the hearing of the appeals About 15 years ago the subsidiary company under winding up diverted the amount of rupees ten crores received by it by way of chit subscriptions to its holding company the appellant resulting in its inability to pay the subscribers when they became entitled to yet the prize amounts When some of the subscribers approached the High Court and succeeded in getting the subsidiary company wound up the appellant holding company appeared in Court and prayed for an opportunity to be given to it to revive its subsidiary company That prayer was accepted by a Division Bench of The Kerala High Court in the case of Suarshan Chits India Ltd vs GS Pilai ILR 1983 vol 1 Kerala p 700 The Division 906 Bench approved the scheme of compromise and arrangement under Sec 391 of the Consequently it ordered the winding up order to be held in abeyance on condition that the holding company shall execute a security bond to cover subsidiary company s liability to the extent of a sum of Rs 1040 crores owed to its subscribers It also directed the holding company to pay off that amount within a period of five years Restriction was also placed on alienation of any property by tile holding company without obtaining prior permission of the Court Arrangement was made for managing affairs of the appellant company as well Apart from the Board of Directors an Additional Director was nominated to supervise and keep a watch on the affairs of the company Since than the appellant company is run as directed by the High Court but neither the subscribers are paid as a body of creditors not the entire amount of rupees ten crores and odd is paid by the appellant to the subsidiary company True that out of nearly one lakh subscribers twenty nine thousand and odd subscribers only remain unpaid But that is hardly satisfactory Regret is that more than one third of the subscribers remain unpaid even after ten years from the date the High Court ordered the winding up to be in abeyance Payment of rupees two crores and odd by the holding company which had the benefit of ten crores and odd rupees for the last 15 years which amount by any standard is equivalent to fifty crores of rupees of today we must state is a poor consolation for the holding company to claim that all steps to discharge its obligations is taken Having noticed in brief how matters have proceeded we shall advert to the dispute which has arisen in respect of an offer now made by the holding company to sell 2079 acres of land for paying the creditors Whatever that be one situation which has been brought about is its successful attempt in involving many subscribers who had formed themselves into a creditors association and an owner of a factory adjoining the disputed land in litigation which has reached this Court more than once It is unfortunate that a company which had volunteered to pay ten crores of rupees with in a period of five years has successfully evaded the payment by offering a pittance From the date of offer in 1987 six ears have elapsed but no amount worth consideration appears to have been paid to the subscribers We consider it unnecessary to recount in detail the offer made by Ramaswamy Udayar the appellant in the other appeal counter offer made by the creditors association delay in payment by the association extension of time by this Court for payment by the association withdrawal of offer by the holding company in the meantime as the High Court had after detailed examination accepted the offer of creditors association for purchase of disputed land and rejection of the claim of Udayar Nor do we consider it necessary to deal with rival submission made by learned senior counsel appearing for respective parties although we heard them at length as in our opinion that rupees fifty two lakhs and odd the total amount for which the land 907 has to be sold could hardly be sufficient to relieve the agony of the body of subscribers for whose benefit the entire exercise was undertaken by the High Court As we have understood the matter there may be a grain of truth in the allegation that it is Estate Dealers with vested interests who are interfering and in fact the amount paid by the creditors association is of estate dealers It may also be true that the total membership of the association is not even 5 of the unpaid subscribers In the said circumstances and taking into consideration the board consensus reached among learned counsel as to what needs to be done we decide the two appeals one filed by the holding company for release of the land and other by Udayar for accepting his bid on the following terms and conditions 1The holding company shall deposit with the official Receiver or Assignee concerned a sum equivalent to the deposited sum on which the High Court was pleased to direct sale deed to be executed in favour of the creditors association together with 25 interest minus the interest if any earned by the deposit made calculated on the deposited amount from the date of deposit till 31st July 1993 within a period of three months from today 2 Out of the amount of sale price of the land already deposited by the creditors Association and the interest if any earned thereon plus the sums of money to be deposited by the holding company under the above term and condition 1 a sum equivalent to the amount deposited by creditors Association together with interest at 25 thereon from the date of deposit upto 31s t July 1993 shall be refunded to the creditors association in lieu of their claim for disputed land being given up The balance amount shall remain the benefit of general body of creditors of the subsidiary compa 3 The holding company shall pay the entire outstanding de amounts payable to the subscribers who were members of creditors association on the date when their claim applications w decided by the Kerala High Court together with interest there of 12 percent from the date of decision till 31st July 1993 within same period namely three months This amount too shall deposited with the receiver for immediate payment to those cre 908 tors subscribers for giving discharge of their claims against the subsidiary company 4 In case the above terms and conditions as to deposits to be made by the holding company are complied with within the period allowed for which no extension of time shall be granted then the disputed land offered for sale by the holding company and purchased by creditor s associations shall stand released in its holding company s favour If such deposits are not made the sale in favour of creditors company shall stand confirmed 5 An offer was made by the appellant in Appeal No 6614 of 1991 that the land being adjacent to its factory he was willing to pay even rupees five lakhs per acre Therefore on release if the land is sold it shall be sold as and when such occasion arises for a price not less than five lakhs per acre The amount so realised shall also be deposited by the holding company with the receiver for distribution among general body of creditors of the subsidiary company in discharge of its obligations to pay of the creditors of the subsidiary company 6 a The receiver shall further take steps to see that the holding company fulfils its obligations and pays the entire balance within a period of one year from 31st August 1993 b In case of failure to clear the dues of all the subscribers it shall be open to any unpaid subscriber to approach the High Court for recalling the order passed by the High Court in 1983 directing the winding up to be put in abeyance c It shall also be open to the unpaid subscribers to approach the High Court for th e aforesaid reasons mentioned in clause b to take steps to get the amount realised from assets of the holding company If such an application is made it shall be disposed of by the High Court expeditiously in accordance with law after hearing parties concerned Both the appeals are decided accordingly The parties shall bear their own costs RP Appeals disposed of

The appellant was a teacher in the Department of Biochemistry of Rajendra Medical College He filed an application for his registration as a student in MD The University forwarded the application to the Principal of Rajendra Medical College The Principal objected to appellant s registration as he was not posted in any of the teaching posts in Rajendra Medical College Though the appellant was attached to the Department of Medicine was a Biochemist attached to that Renal Unit dealing with the subject of Biochemistry The appellant filed a writ petition in the High Court for a direction tot he University to permit him to submit his thesis in MD Medicine examination on the ground that he was a teacher The University took the stand that the appellant was not a teacher and he was not eligible for training in MD General Medicine The High Court dismissed the appellants writ petition and held that he was not entitled for admission to the examination in MD as he did not such it 910 his thesis and did not produce a certificate of having undergone satisfactory training The High Court did not decide on the question whether he held a teaching post or not The appellant was granted permission to appear for MD Medicine examination after the University was satisfied that the appellant was holding a teaching post The respondent Association filed a writ petition before the High Court challenging the permission given to the appellant to appear for the said examination contending that he was not a teacher and that he did not undergo the necessary training for 2 years and that he did not do housemanship in General Medicine for one year The High Court allowed the writ petition on the ground that the appellant did not undergo training for 3 years prior to his application to appear for MD Medicine examination In this writ petition also the High Court did not decide whether the appellant was holding a teaching post The appellant filed this appeal by special leave against the High Court s judgment Allowing the appeal this Court HELD 11 On account of the interim order passed by the High Court the appellant appeared for the examination The High Court has however by the impugned decision restrained the University from declaring his results in the examination 915 G 12 Since the High Court has not gone into the question as whether the appellant was appointed against a teaching post and has proceeded on the footing that he was appointed it is not necessary for this Court to go into the said question 915 F 21 The facts of the case would reveal that this was a dispute relating to an individual and turned on the facts There was no question of law involved in it It is not understood how the respondent Association could convert an individual dispute into a public interest litigation 915 H 22 Cases where what is strictly an individual dispute is sought to be 911 converted into a public interest litigation should not be encouraged The present proceeding is one of the kind 915 H 31 The requirement of the relevant regulation is that the candidate must have done one year s housemanship prior to the admission to the Postgraduate degree in the same subject in which he wants to appear for the examination or atleast six months housemanship in the same Department and the remaining six months in the allied Department The period of training thus shall be 3 years after full registration including one year of the housejob912 B 32 According to the rules 4 years teaching experience in the College and the Hospital which is always combined with practice in the Hospital is considered equivalent to one year s house job experience In the face of these facts it is difficult to understand the stand taken by the State Government in the present proceedings 916 D 3 3 The University bad on the facts of the case accepted the contention of the appellant that he had completed 3 years training It is not understood as to what state the State has in denying the said factual position 916 B